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Is child abuse and neglect a continuing offense for purposes of the statute of limitations?

Posted on by Jeff Jaeger

Rimer v. State (Nev. Supreme Ct. – June 11, 2015)

The issue is whether the Nevada Legislature intended for child abuse and neglect to be treated as a continuing offense and therefore the statute of limitations does not begin to run until the last act of abuse or neglect is completed.

Stanley and Colleen Rimer had eight children: Jason, Spencer, Enoch, Quaylyn, Aaron, Crystal, Brandon, and Stanley, III. Their youngest child, Jason, was born on March 11, 2004, and was found dead on June 9, 2008. At the time of Jason’s death, Spencer was 9, Enoch was 11, Quaylyn was 14, Aaron was 15, and Crystal was 17 years old, and Brandon and Stanley were adults.

Jason was born with congenital myotonic dystrophy, a chronic condition that affected his muscles and made it difficult for him to breathe, swallow, talk, and walk. Even at four years old, he walked like a baby, required diapers, and communicated mostly by fussing or screaming. He was treated by a neurologist, a gastroenterologist, a cardiologist, an orthopedist, a speech pathologist, a physical therapist, and a nutritionist. For a while, he was fed through a gastrostomy tube (G-tube) that was inserted through his abdomen so that food could be delivered directly to his stomach. He was happy and liked to play with other children.

During Jason’s lifetime, the Rimer home was frequently cluttered: the kitchen and bathrooms went days without being cleaned, the kitchen sink was often filled with dirty dishes, and the laundry room and bedrooms were normally piled with dirty clothing. There were also occasions where dog and bird excrement dirtied the carpet and remained there for days without being removed. Although the Rimers routinely hired housekeepers and carpet cleaners, the house and its carpets quickly became dirty again.

The clutter increased with the decline of Rimer’s construction business and the financial slump that followed. Rimer closed his office and vacated his storage units and moved their contents into the house. The presence of construction tools and paint buckets in the house created obvious safety hazards. Although the Rimer family tried to reduce some of the clutter and generate revenue through yard sales, the house was extremely cluttered at the time of Jason’s death: the household furniture had been moved or stacked for carpet cleaning, the kitchen sink was full of dirty dishes, and the fish tanks were green with algae.

The Rimer family continuously struggled with lice. The children were often sent home from school because they had head lice. Usually, they were treated with a lice-killing shampoo and sent back to school, where they were inspected by a nurse before being allowed back in the classroom. For a while, the children’s grandmother contributed to this recurring problem by refusing to be treated for lice. There also came a time when the lice-killing shampoo was no longer strong enough to kill the lice, but Rimer was able to find a product online that solved the problem.

The Rimer family did not go hungry. They had refrigerators downstairs in the kitchen and upstairs in the master bedroom. And there were also cases of food in the garage and pallets of food in the living room. They had frozen, refrigerated, canned, and dried food. The children routinely ate food that required little preparation or cooking, and when that sort of food ran out, they went upstairs and asked their parents for more. There was always food downstairs, but sometimes it was only the sort of food that required cooking and no one wanted to cook. Colleen did most of the cooking for the family. On one or two occasions, Quaylyn was punished by receiving only bread and water.

Rimer had a tiered approach to disciplining his children. First, he would place his children in a timeout by requiring them to stand in a corner for 5 to 30 minutes, then he would take away their videogame privileges, and finally he would spank them. But if a timeout was not severe enough for the level of misbehavior, the child might be sent to bed without dinner, and if the child’s misbehavior involved fighting, the initial punishment might be a spanking.

Rimer spanked his children on their behinds with boat paddles, paint sticks, belts, and his bare hands. The number of spanks in a spanking could range from 1 to 50. Rimer had two wooden boat paddles: one was three to four feet long and the other was two to three feet long. He purchased the second paddle to replace the first paddle and drew shark’s teeth on it with a permanent-ink marker. He broke both paddles while spanking his children and repaired them with duct tape. Rimer explained to his children what they did wrong and why they were getting spanked before he spanked them.

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Nevada Supreme Court examines forum non conveniens

Posted on by Jeff Jaeger

Gov’t of Marinduque v. Placer Dome, Inc. (Nev. Supreme Ct. – June 11, 2015)

The issue is whether the district court abused its discretion by dismissing a complaint for forum non conveniens when the events giving rise to the complaint occurred in the Republic of the Philippines and the alternative fora are in Canada.

The Provincial Government of Marinduque (the Province), is a political subdivision of the Republic of the Philippines. Placer Dome, Inc. (PDI), was incorporated under the laws of British Columbia, Canada. Beginning in the 1950s, a predecessor of PDI formed Marcopper Mining Corporation to undertake mining activities in the Province. This predecessor, and later PDI, held a substantial minority of the shares of Marcopper. According to the Province, PDI and its predecessor controlled all aspects of Marcopper’s operations. During the course of Marcopper’s operations, several incidents occurred that caused significant environmental degradation and health hazards to the people living in the Province, who are known as Marinduqueiios.

At the time the Province filed its complaint in the district court, PDI subsidiaries owned mining operations in Nevada. Shortly thereafter, PDI and another business entity amalgamated under the laws of Ontario, Canada, to form Barrick Gold Corporation. Barrick’s subsidiaries have continued substantial mining operations in Nevada. Barrick and PDI contended that only their subsidiaries conduct business in Nevada and personal jurisdiction was therefore lacking. The Province responded that the corporate veils may be pierced to establish personal jurisdiction in Nevada over both Barrick and PDI.

Barrick and PDI moved to dismiss for forum non conveniens, arguing that either British Columbia, where PDI was incorporated, or Ontario, where Barrick was formed, would provide a better forum for this litigation. After analyzing several public and private interest factors, the district court found that dismissal for forum non conveniens was warranted. The Province appealed.

The Nevada Supreme Court found that the district court did not abuse its discretion by finding that the public and private interest factors favored dismissal for forum non conveniens. Specifically, the district court did not abuse its discretion in its analysis of the public interest factors and the court did not abuse its discretion by finding that the private interest factors favored dismissal for forum non conveniens. Furthermore, the Court determined that finding that litigating in Nevada would not harass, oppress, or vex Barrick and PDI did not require the district court to deny the motion to dismiss for forum non conveniens. The Court also determined the district court properly exercised its discretion in imposing conditions on dismissal for forum non conveniens.

Therefore, the Court concluded that the district court properly gave less deference to the Province’s choice of a Nevada forum. Applying this less deference standard, the Court found the district court did not abuse its discretion by dismissing the Province’s complaint for forum non conveniens because, among other reasons, this case lacked any bona fide connection to this state, adequate alternative fora existed, and the burdens of litigating outweighed any convenience to the Province.

Must good cause exist to amend a pleading after the deadline to amend has passed?

Posted on by Jeff Jaeger

Nutton v. Sunset Station, Inc. (Nev. Ct. App. – June 11, 2015)

Rule 15(a) and Rule 16(b) of the Nevada Rules of Civil Procedure (NRCP) govern the procedures for seeking leave to amend pleadings in a civil action. Under NRCP 15(a), a party should be granted leave to amend a pleading when justice so requires and the proposed amendment is not futile. However, when a party seeks to amend a pleading after the deadline previously set for seeking such amendment has expired, NRCP 16(b) requires a showing of good cause for missing the deadline.

The issue is when a motion seeking leave to amend a pleading is filed after the expiration of the deadline for filing such motions, must the district court first determine whether good cause exists for missing the deadline under NRCP 16(b) before the court can consider the merits of the motion under the standards of NRCP 15(a).

Nutton slipped and fell while bowling with some friends at a bowling center operated by Sunset Station Hotel & Casino, shattering his right patella. At the time, Nutton was wearing his street shoes rather than bowling shoes rented from Sunset Station.

Nutton filed a complaint for personal injury against Sunset Station alleging that he slipped on a heavy concentration of lane wax or lane oil improperly applied to the approach area of the bowling lane so thickly his clothes were inundated after the fall. The complaint presented a single claim for negligence alleging that Sunset Station breached its duty of care by improperly placing excessive lane wax or oil in the approach area.

Over the ensuing months of discovery, Nutton repeated in interrogatory responses, as well as his own deposition, that he fell on excessive wax or oil so thick it permeated his clothes. He claimed the oil was thick and clear and based on his experiences, it was lane oil that he slipped on. During his deposition, Nutton was asked whether he had worn bowling shoes or street shoes when the fall occurred. He responded he had rented bowling shoes from Sunset Station on the day of the fall, but did not put them on because no employee of Sunset Station explained the need to do so. Nutton denied his street shoes played any role in the fall, testifying, “I don’t find that bowling shoes would have been a factor in my slipping and because I don’t see how that’s pertinent. . . . I feel as though I would have fallen in the same fashion whether I was wearing my own shoes or the shoes they provide.”

The parties located no other witness who saw or felt excessive wax or oil on the floor. To the contrary, Sunset Station produced an expert report concluding that a study of the bowling alley’s surveillance video revealed no evidence of a foreign substance on the floor and showed other people bowling in the same approach area just before Nutton with no difficulty. Moreover, Nutton retained his own expert witness who agreed Nutton did not slip and fall from oil residue on the approach. These opinions were contained in an expert report prepared before the expiration of the deadline to amend pleadings.

Subsequently, Nutton filed a motion with the district court seeking leave to amend his complaint pursuant to NRCP 15(a). Conceding that his own expert had agreed excessive lane oil did not cause his fall, Nutton sought to amend his theory of liability to instead plead that the fall was caused by his street shoes and Sunset Station had negligently failed to ensure he wore bowling shoes while he bowled. The proposed amended complaint asserted that Sunset Station’s own policies required bowlers to wear bowling shoes at all times while bowling, but employees and agents of Sunset Station breached their duty by failing to enforce the policy and permitting Nutton to bowl without them. Nutton also sought to assert that Sunset Station possessed superior knowledge regarding the risks of bowling in street shoes, yet failed to warn him of any danger.

Nutton’s motion was filed approximately three weeks after the expiration of the deadline to amend pleadings previously imposed by the district court. At the time, the final discovery cutoff date was just over two months away, and trial was set to begin three months after the close of discovery. Nutton’s motion to amend was also filed after the expiration of the statute of limitations period for asserting a negligence claim.

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Does an attorney’s computer malfunction excuse missing a court filing deadline?

Posted on by Jeff Jaeger

Fulbrook v. Allstate Ins. Co. (Nev. Supreme Ct. – June 4, 2015)

The Nevada Supreme Court affirmed the judgments of the district court in an order entered on January 30, 2015. Pursuant to NRAP 40(a)(1), the time for filing a petition for rehearing expired on February 17, 2015. No petition for rehearing was filed, and the remittitur issued on February 24, 2015, as provided in NRAP 41(a)(1).

On February 27, 2015, counsel filed a motion to recall the remittitur. Counsel stated that he did not become aware of the order of affirmance until February 26, 2015, “due to technical difficulties experienced by .. . counsel due to a virus on its servers as well as switching to a new case management system.” Specifically, counsel averred that he had been experiencing difficulties with case files as well as e-mails, and the e-mail notification “slipped through.” Further, counsel stated that his firm had switched to a new case management system, and “all of the client files were not properly loaded into the case management system by its technicians.”

Knowing that there were technical difficulties, counsel stated that his office checked the status of the case on the Nevada Supreme Court website on January 26, 2015, and no order had been issued. The site was not checked again until February 26, 2015, when counsel discovered that the order of affirmance had been entered. By that point, the time for filing a petition for rehearing had passed.

The issue is whether counsel’s technical difficulties are a basis on which the remittitur should be recalled.

The Nevada Supreme Court explained that The Nevada Electronic Filing and Conversion Rules (NEFCR) provide for electronic service of documents. The rule requires that “[w]hen a document is electronically filed, the court. . . must provide notice to all registered users on the case that a document has been filed and is available on the electronic service system document repository. This notice shall be considered as valid and effective service of the document on the registered users and shall have the same legal effect as service of a paper document.” Further, “[t]he notice must be sent by e-mail to the addresses furnished by the registered users under Rule 13(c).”

The required notice to which the rule refers is the notification within the electronic filing system. When a registered user logs in, he or she can see all the notifications in his or her cases. In addition to the official notice within the system, an e-mail is sent to all the e-mail addresses of the attorneys on the case who are registered users and to any additional e-mail addresses those attorneys may list in their profiles. The e-mail notifications are a courtesy, and the official notification of a document filed in this court is the notification within the electronic filing system.

In this case, the Court noted the electronic record reflected that an official notice of the order of affirmance was sent to counsel’s electronic filing account. Additionally, an e-mail was sent to two separate e-mail addresses at counsel’s law firm. Although counsel asserted that he did not receive either of the e-mails sent, he did not indicate that he was unable to access his electronic filing account to check his notifications during this time. Indeed, he successfully accessed the account to electronically file an opening brief and multiple volumes of appendices in an unrelated easel on February 3, 2015, a mere four days after the order of affirmance in this case was entered. The Court reasoned that if counsel had checked the notifications in his account at that time, he would have been aware of the dispositional order. The Court reminded counsel that it is his duty to log in to the electronic filing system and check notifications for his cases as often as is necessary to properly monitor his pending cases.

Counsel informed the Court that he checked the court’s website on January 26, 2015, and again on February 26, 2015. By referring to the court’s “website,” the Court noted that it was not clear whether he was referring to the electronic filing system or the public access portal of the court’s case management system. Either way, the Court determined that he would have learned of the disposition in time to file a petition for rehearing had he checked more frequently than every 30 days.

The Court reiterated the rule that a remittitur will be recalled when, but only when, inadvertence, mistake of fact, or an incomplete knowledge of the circumstances of the case on the part of the court or its officers, whether induced by fraud or otherwise, has resulted in an unjust decision. Here, the Court found the remittitur was regularly issued, and counsel had not demonstrated a basis on which the remittitur should be recalled. Therefore, the Court denied counsel’s motion.

Can a party recover attorney fees and costs that were paid on its behalf by a third party?

Posted on by Jeff Jaeger

Logan v. Abe (Nev. Supreme Ct. – June 4, 2015)

A party who makes an unimproved-upon offer of judgment — an offer that is more favorable to the opposing party than the judgment ultimately rendered by the district court — is entitled to recover costs and reasonable attorney fees incurred after making the offer of judgment. The issue is whether a party can recover these expenses if they were paid by a third party on the party’s behalf.

Robert and Jamie Logan sued Calvin J. Abe, Abe Pacific Heights Properties, LLC (Abe Properties), and Ron Martinson for personal injuries that Robert Logan suffered when he was shot by an employee of a hotel. The Logans alleged that Abe Properties owned the hotel, Abe operated the hotel, and Martinson was the hotel’s general manager.

Before trial, Abe, Abe Properties, and Martinson made an offer of judgment to the Logans in which they offered to pay $55,000 to settle the Logans’ claims. The Logans did not accept this offer, and the case proceeded to a jury trial.

After the jury returned a verdict in their favor, Abe, Abe Properties, and Martinson made a motion for attorney fees and costs, which had been paid by their insurer. The Logans opposed the motion. Reasoning that Abe, Abe Properties, and Martinson were entitled to attorney fees and costs under NRS 17.115 and NRCP 68 because the Logans failed to improve upon their offer of judgment, the district court awarded $71,907.50 in attorney fees and $24,812.60 in costs, including $7,290 for the fees of an expert witness who did not testify. The Logans appealed the award of attorney fees and costs.

The Logans argued that NRS 17.115 and NRCP 68 only allow recovery of attorney fees and costs that a party actually pays or has a legal duty to pay. Thus, they contended that Abe, Abe Properties, and Martinson were not eligible to recover attorney fees and costs because their insurer paid these expenses.

Citing United Servs. Auto Ass’n v. Schlang, 111 Nev. 486, 490, 894 P.2d 967, 969 (1995), the Nevada Supreme Court explained that an expense can only be incurred when one has paid it or becomes legally obligated to pay it. The Court extended Schlang and held that a party can incur an expense that was paid on its behalf if the party would have been liable for the expense regardless of the third party’s payment.

NRS 17.115 and NRCP 68 each authorize a party to recover the reasonable attorney fees and costs that it incurs after it makes an offer of judgment that is not improved upon. Because the statutes are limited to the costs incurred rather than the party who pays them, the Court held that NRS 17.115 and NRCP 68 allow a party to recover qualifying attorney fees and costs that were paid on its behalf by a third party. Thus, Abe, Abe Properties, and Martinson were eligible to recover the post-offer costs and reasonable attorney fees that their insurer paid on their behalf.

Nevada Supreme Court conducts a minimum contacts test

Posted on by Jeff Jaeger

Catholic Diocese, Green Bay v. John Doe 119 (Nev. Supreme Ct. – May 28, 2015)

The issue is whether Nevada courts have personal jurisdiction over a foreign Catholic diocese.

The Catholic Diocese of Green Bay, a religious organization incorporated and headquartered in Wisconsin, employed Father Feeney as a priest. Feeney later served as a priest in California before coming to the Diocese of Reno-Las Vegas.

It was alleged that, during Feeney’s time in Las Vegas, Feeney sexually assaulted John Doe. Doe sued the Diocese of Green Bay for negligently hiring and retaining Feeney, asserting that the Diocese is responsible for injuries caused by the sexual abuse.

The Nevada Supreme Court concluded that the Diocese of Green Bay did not have sufficient contacts with Nevada to show that it purposefully availed itself of the state’s laws and protections. The Court also found that Feeney was not the Diocese’s agent during his ministry in Las Vegas because his promise of obedience to the Diocese of Green Bay, through the ecclesiastical doctrine of incardination, was not sufficient to establish an agency or employment relationship.

Nevada Supreme Court adopts nonmutual claim preclusion

Posted on by Jeff Jaeger

Weddell v. Sharp (Nev. Supreme Ct. – May 28, 2015)

The Nevada Supreme Court adopted the doctrine of nonmutual claim preclusion, meaning that a defendant may validly use claim preclusion as a defense by demonstrating that (1) there has been a valid, final judgment in a previous action; (2) the subsequent action is based on the same claims or any part of them that were or could have been brought in the first action; and (3) privity exists between the new defendant and the previous defendant or the defendant can demonstrate that he or she should have been included as a defendant in the earlier suit and the plaintiff cannot provide a good reason for failing to include the new defendant in the previous action.

Weddell and Stewart were former business partners who were engaged in multiple business ventures. Through time, several disputes arose between the partners regarding their business dealings. The partners agreed to informally settle their disputes by presenting them to a panel of three attorneys (attorneys). Because the attorneys had previous dealings with Weddell and Stewart, both Weddell and Stewart signed a Memorandum of Understanding in which they acknowledged the potential for conflicts of interest, waived those potential conflicts, recognized that the attorneys would be neutral in the dispute-resolution process, and agreed that the decision rendered by the attorneys would be binding, non-appealable and could be judicially enforced.

The Memorandum of Understanding did not specify the process by which the attorneys would go about rendering their decision, and the record did not clearly reflect the process that was actually taken. In any event, the attorneys issued a decision resolving the partners’ disputes that, for the most part, was favorable to Stewart. Stewart then filed a lawsuit against Weddell, seeking a declaratory judgment that the attorneys’ decision was valid and enforceable. Weddell filed an answer and counterclaim to Stewart’s complaint in which he asked the district court to enforce only the portion of the attorneys’ decision that was favorable to him. In support of his requested relief, Weddell questioned the attorneys’ neutrality in rendering their decision, specifically alleging that the attorneys had failed to answer certain questions that Weddell had wanted answered, that the attorneys had concealed pertinent facts from each other, and that the attorneys had concealed from Weddell their knowledge that Stewart had defrauded Weddell. Weddell, however, did not assert cross-claims against any of the attorneys. During the first day of a bench trial, appellant.

During the first day of a bench trial, Weddell informed the district court that he would enter a confession of judgment acknowledging that the attorneys’ decision was, indeed, valid and enforceable against him in its entirety. Weddell proceeded to confess judgment and stipulated to dismiss his counterclaim. Over two years later, however, Weddell instituted an action against the attorneys in which he asserted causes of action stemming from the attorneys’ conduct in the dispute-resolution process. The attorneys filed a motion to dismiss the complaint and requested attorney fees as sanctions, contending that, among other reasons, dismissal was warranted on claim preclusion principles and that Weddell had filed the complaint without reasonable grounds, warranting sanctions under NRS 18.010(2)(b). The district court granted the attorneys’ motion to dismiss, finding that the three factors for claim preclusion articulated by the Nevada Supreme Court in Five Star Capital Corp. v. Ruby, 124 Nev. 1048, 194 P.3d 709 (2008), had been satisfied. The district court also entered a subsequent order granting the request for attorney fees. Weddell appealed both orders.

Five Star modified the previous four-factor test for when claim preclusion could be asserted as a valid defense in favor of the following three-factor test, which was the test that the district court in this case employed: (1) the parties or their privies are the same, (2) the final judgment is valid, and (3) the subsequent action is based on the same claims or any part of them that were or could have been brought in the first case.

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Does federal law preempt Nevada’s law limiting deficiency judgments?

Posted on by Jeff Jaeger

Munoz v. Branch Banking (Nev. Supreme Ct. – Apr. 30, 2015)

In 2007, the Mr. and Mrs. Munoz borrowed money from Colonial Bank and granted Colonial Bank a security interest in their real property. In 2009, the FDIC placed Colonial into receivership and assigned the Munozes’ loan to Branch Banking and Trust Company, Inc. (BB&T).

In 2011, NRS 40.459(1)(c), which implements certain limitations on the amount of a deficiency judgment that can be recovered by an assignee creditor, became effective. In 2012, after the Munozes had defaulted on their loan, BB&T instituted an action for a judicial foreclosure of the secured property, which the Munozes did not oppose. The property was sold for less than the value of the outstanding loan at a sheriff’s sale in 2013. BB&T then filed a motion seeking a deficiency judgment against the Munozes for the remaining balance of the loan.

Reasoning that NRS 40.459(1)(c) did not apply retroactively to the Munozes’ loan, which was originated and assigned before the statute’s effective date, the district court awarded a deficiency judgment to BB&T for the full deficiency amount sought. In its order, the district court did not address whether NRS 40.459(1)(c)’s present application was preempted by federal law. The Munozes appealed.

The issue is whether NRS 40.459(1)(c)’s limitation on the amount of a deficiency judgment that a successor creditor can recover conflicts with the federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA)’s purpose of facilitating the transfer of the assets of failed banks to other institutions.

The Munozes argued that NRS 40.459(1)(c) was not preempted by a conflict with federal law because it did not impair the Federal Deposit Insurance Corporation (FDIC)’s ability to act as the receiver for a failed bank or to transfer a failed bank’s assets. BB&T argued that the application of NRS 40.459(1)(c) to loans acquired from the FDIC was preempted by FIRREA because NRS 40.459(1)(c) interfered with the FDIC’s ability to assume and dispose of a failed bank’s assets.

Congress enacted FIRREA to enable the federal government to respond swiftly and effectively to the declining financial condition of the nation’s banks and savings institutions. Under FIRREA, when the FDIC is appointed receiver of a failed financial institution, it immediately becomes the receiver of all of that institution’s assets, including promissory notes that are in default. To assist the FDIC in carrying out this duty, federal law provides special status to the FDIC’s assignees so as to maintain the value of the assets they receive from the FDIC. The Nevada Supreme Court explained that if a state statute limits the market for assets transferred by the FDIC, it conflicts with FIRREA because it would have a deleterious effect on the FDIC’s ability to protect the assets of failed banks. Thus, state laws that limit the private market for assets of failed banks held by the FDIC conflict with FIRREA and are preempted.

The Court reasoned that since the statute limits a successor creditor’s recovery to no more than it paid for a loan, NRS 40.459(1)(c) prevents a creditor from realizing a profit on its purchase of a debt from an assignor creditor. This statute makes it less likely that a rational creditor would purchase such a loan. Therefore, NRS 40.459(1)(c)’s application to failed banks’ assets held by the FDIC would limit the private market for such assets by making it more difficult for the FDIC to dispose of these assets. Thus, the application of NRS 40.459(1)(c) to assets transferred by the FDIC would frustrate the purpose of FIRREA and directly conflict with this federal statutory scheme. Therefore, the Court held that NRS 40.459(1)(c) is preempted by FIRREA as to assets transferred by the FDIC.

Although the district court found that NRS 40.459(1)(c) did not apply to BB&T’s application for a deficiency judgment for a different reason, the Court noted that it reached the correct result in concluding that NRS 40.459(1)(c) did not shield the Munozes from deficiency judgment liability. The Court affirmed the district court’s order on the grounds that conflict preemption prevents NRS 40.459(1)(c)’s application in this case.

Judges sue Sheriff over electronic warrants

Posted on by Jeff Jaeger

Veil v. Bennett (Nev. Supreme Ct. – Apr. 30, 2015)

Veil became Sheriff of Lyon County, Nevada in 2007. At that time, Sheriff’s Office employees entered information from all arrest warrants delivered to the Sheriff’s Office into various electronic databases. In 2009, Sheriff Veil began trying to shift part of this task to the justice courts of Lyon County. Sheriff Veil proposed that Sheriff’s Office employees continue to enter information into the databases from arrest warrants issued by the justice courts based on Sheriff’s Office investigations. Sheriff Veil further proposed, however, that the justice courts enter information into the databases from all other justice court-issued arrest warrants, such as warrants arising from defendants’ failure to appear.

The Justice of the Peace of Walker River Township agreed to this arrangement. Bennett and Vecchiarelli, Justices of the Peace of Canal Township and Dayton Township, respectively, did not. At some point, the Sheriff’s Office ceased entering information into the databases from arrest warrants issued by the justice courts that were not based on Sheriff’s Office investigations.

Acting in their official capacities as Justices of the Peace, Bennett and Vecchiarelli petitioned the district court for a writ of mandamus to compel Sheriff Veil to enter information from all arrest warrants delivered to the Sheriff’s Office into the databases. The district court granted the petition, explaining that NRS 248.100 imposed on Sheriff Veil a duty to execute warrants, and that in the modern age, this duty included entering warrant information into electronic databases. Sheriff Veil appealed.

The issue is whether NRS 248.100(1)(c), which requires sheriffs to execute warrants, also imposes upon sheriffs the duty to enter warrant information into electronic databases.

According to NRS 248.100(1)(c), “[t]he sheriff shall … execute the process, writs or warrants of courts of justice. .. when delivered to the sheriff for that purpose.” NRS Chapter 248 does not define “execute,” but Black’s Law Dictionary defines the word as “[t]o perform or complete.” In light of the plain meaning of “execute” as that term relates to arrest warrants, the Nevada Supreme Court concluded that NRS 248.100(1)(c) unambiguously requires sheriffs to arrest defendants named in arrest warrants, but imposes no duty to enter warrant information into electronic databases.

The Court noted that Sheriff Veil must act diligently in the performance of his official duties, including his duty to execute arrest warrants by arresting defendants. The Court reasoned that it is within Sheriff Veil’s discretion, however, to determine how best to execute arrest warrants under NRS 248.100(1)(c), and the district court improperly attempted to control the exercise of that discretion.

Thus, the Court determined that while entering warrant information into electronic databases may further the objectives of both law enforcement and the justice system, NRS 248.100(1)(c) neither contemplates nor assigns this task. Therefore, it is the role of the Legislature, not the court, to determine which entity is best suited to this task. Accordingly, the Court concluded that the district court abused its discretion by ordering Sheriff Veil to enter warrant information into electronic databases, and reversed the district court order granting the petition for a writ of mandamus.

Does Nevada allow deficiency judgments when a nonjudicial foreclosure sale is conducted pursuant to the laws of another state?

Posted on by Jeff Jaeger

Branch Banking v. Windhaven & Tollway, LLC (Nev. Supreme Ct. – Apr. 30, 2015)

NRS 40.455(1) permits a creditor or deed-of-trust beneficiary who is unable to fully recover its investment through foreclosure to bring an action for a deficiency judgment after the foreclosure sale or the trustee’s sale held pursuant to NRS 107.080, respectively.

The issue is whether NRS 40.455(1) precludes a deficiency judgment when the beneficiary nonjudicially forecloses upon property located in another state and the foreclosure is conducted pursuant to that state’s laws instead of NRS 107.080.

In 2007, Windhaven & Tollway, LLC, borrowed nearly $17 million from Branch Banking and Trust Company’s predecessor-in-interest. The loan was secured by various assets, including real property located in Texas. The parties agreed that Nevada law would govern the note and that the courts in Clark County, Nevada, and Collin County, Texas, would have jurisdiction over future disputes. The remaining guarantors (collectively referred to as the Guarantors) entered into a guaranty agreement to pay any debt remaining if Windhaven defaulted.

Windhaven defaulted on the loan, and Branch Banking sent it and the Guarantors a demand letter requesting repayment. Four months later, Branch Banking mailed Windhaven and the Guarantors a notice of trustee’s sale, stating that it would foreclose on the Texas property if payment was not received. Windhaven and the Guarantors failed to remit payment and the property was sold at a nonjudicial foreclosure sale under Texas law for $14,080,000. At that time, the total indebtedness remaining on the loan was $16,675,218.61. Branch Banking then sought a deficiency judgment against Windhaven and the Guarantors under Nevada law, asserting claims for breach of guaranty and breach of the implied covenant of good faith and fair dealing.

Following discovery, Branch Banking moved for summary judgment, but before the district court could rule on the motion, Windhaven and the Guarantors also moved for summary judgment, on the ground that Branch Banking’s deficiency action was precluded by NRS 40.455(1) because that statute requires all nonjudicial trustee’s sales to be conducted pursuant to NRS 107.080. The district court granted summary judgment in favor of Windhaven and the Guarantors, finding that Branch Banking’s nonjudicial foreclosure in Texas did not comply with the terms of NRS 107.080 because Branch Banking did not record a notice of breach and election to sell or provide notice in accordance with NRS 107.080. The district court also concluded that Branch Banking could have sought a deficiency judgment in Texas or conducted the Texas trustee’s sale in a manner that complied with NRS 107.080. Further, the district court ruled that because NRS 40.455(1) prohibited Branch Banking from seeking a deficiency award against Windhaven, Branch Banking could not seek a deficiency judgment against the Guarantors. Branch Banking appealed.

The parties disputed whether NRS 40.455(1)’s phrase “trustee’s sale held pursuant to NRS 107.080” permits a deficiency judgment in Nevada when a nonjudicial foreclosure takes place in another state and the beneficiary of the deed of trust does not comply with the requirements of NRS 107.080. Windhaven argued that the clause requires that a trustee’s sale comply with Nevada law before the beneficiary of the deed of trust may seek a deficiency judgment. Branch Banking argued that the clause is merely illustrative, that the statutory scheme does not support Windhaven’s interpretation, and that to interpret the statute to require out-of-state nonjudicial foreclosures to comply with NRS 107.080 would lead to absurd results.

The Nevada Supreme Court explained that NRS 40.455 governs applications for deficiency judgments by “the judgment creditor or the beneficiary of the deed of trust,” made within six months ”after the date of the foreclosure sale or the trustee’s sale held pursuant to NRS 107.080, respectively.” Because “foreclosure sale” is specifically tied to “judgment creditor,” the foreclosure sale described in the statute is a judicial foreclosure.

However, the Court did not agree that the statute limits deficiency judgments to judicial foreclosures and trustee’s sales held in accordance with NRS 107.080. NRS 40.455(1) has no such limiting language. While it clearly governs deficiencies arising from judicial foreclosures and those trustee’s sales that are held pursuant to NRS 107.080, it does not indicate that it precludes deficiency judgments arising from nonjudicial foreclosure sales held in another state.

Furthermore, common law allows a lienholder to seek a deficiency judgment against the person(s) liable on the lien, and the Court declined to interpret NRS 40.455 in such a way that would interfere with this common-law right, when the statute does not expressly limit deficiency suits arising from nonjudicial foreclosures conducted pursuant to the laws of another state.

Because NRS 40.455 does not prohibit deficiency judgment actions from being brought in Nevada when the nonjudicial foreclosure in another state did not comply with NRS 107.080, the Court concluded that the district court erred in precluding Branch Banking from pursuing a deficiency judgment against Windhaven and the Guarantors.