Nevada Appellate Court Summaries 10-29-20

By Joe Tommasino, Esq.

Supreme Court of Nevada

Construction contracts:  (1) In Lehrer McGovern Bovis, Inc. v. Bullock Insulation, Inc., the Supreme Court of Nevada concluded that pay if paid provisions in construction contracts, whereby a subcontractor gets paid only if the general contractor is paid by the project owner for that work, are generally unenforceable because they violate public policy; (2) at the same time, the Court recognized that, due to statutory amendments, such provisions could be enforceable in limited circumstances, subject to the restrictions laid out in NRS 624.624-.626 of Nevada’s Prompt Payment Act; (3) and, here, the Court clarified that pay if paid provisions are not per se void and unenforceable in Nevada, but such provisions require a case-by-case analysis and are unenforceable if they require subcontractors to waive or limit rights provided under NRS 624.624-.630, relieve general contractors of their obligations or liabilities under NRS 624.624-.630, or require subcontractors to waive their rights to damages, as further outlined under NRS 624.628(3).  Because provisions in the subcontract considered here condition payment on the general contractor receiving payment first and require the respondent subcontractor to forgo its right to prompt payment under NRS 624.624 when payment would otherwise be due, such provisions are void under NRS 624.628(3) and cannot be relied upon by appellant general contractor for its nonpayment to respondent for work performed.  Furthermore, because appellant’s evidence in support of its other conditions-precedent defenses is precluded and the plain language of NRS 108.239(12) permits a subcontractor to sue a contractor for unpaid lien amounts, the Court affirmed the district court’s grant of summary judgment and award of attorney fees and costs in favor of respondent. Apco Constr., Inc. v. Zitting Bros. Constr., Inc., 136 Nev. Adv. Op. No. 64, ___ P.3d ___ (October 8, 2020).  https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Construction defect:  (1) When the Legislature retroactively shortened the statute of repose for construction-defect lawsuits with the enactment of Assembly Bill 125 in 2015, it created a grace period for a claimant to “commence” an action even after the statute of repose had run; and (2) “commence” means that a claimant must have filed a lawsuit, not merely served notice of a construction defect pursuant to NRS 40.645, within the grace period to preserve his or her action.  Because appellant failed to file a lawsuit within the grace period and the statute of repose had run, her action was time barred.  At Footnote 4, the Supreme Court of Nevada noted that, in 2019, the Legislature expanded the statute of repose for construction-defect actions from 6 years to 10 years for all defects.  Byrne v. Sunridge Builders, Inc., 136 Nev. Adv. Op. No. 69, ___ P.3d ___ (October 29, 2020).  https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Criminal law:  Under NRS 201.230(1)(a), a mistaken belief as to the victim’s age is not a defense to the crime of lewdness with a child under the age of 16.  The only portion of NRS 201.230(1)(a) that requires the State to prove specific intent is the portion of the statute that follows the word “intent,”i.e., the element that provides “with the intent of arousing, appealing to, or gratifying the lust or passions or sexual desires of that person or of that child.”  The portion of the statute that requires the child be under the age of 16 is not preceded by the word “intent,” nor does the statute’s plain language otherwise require the State to prove that the defendant knew or should have known that the child was under the age of 16.  Therefore, NRS 201.230(1)(a) does not entitle a defendant to a mistake of fact defense as to the victim’s age.  Moore (Maurice) v. State, 136 Nev. Adv. Op. No. 71, ___ P.3d ___ (October 29, 2020).

https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Fair report privilege:  (1) The fair report privilege shields a defendant from liability for publication of defamatory content in the course of reporting on official actions, official proceedings, or meetings open to the public regarding issues of public concern so long as it is a fair and accurate summary thereof; (2) to hold that a law enforcement officer’s mere transcription of a complainant’s allegations, absent any additional official action or proceeding, warrants application of the fair report privilege would be inconsistent with the underlying policies behind the privilege and would unnecessarily impinge on Nevada’s defamation laws; and (3) therefore, a news article reporting on the contents of a citizen’s complaint to the police, which was neither investigated nor evaluated by the police, is not a report of an official action or proceeding for which the fair report privilege provides an absolute defense.  The fair report privilege is designed to promote citizen supervision and oversight of government action.  Here, the Las Vegas Metropolitan Police Department (LVMPD) did not take any action on the citizen’s complaint because the limitation period for alleged sexual assault expired.  Therefore, there was no government action for the citizenry to evaluate.  Accordingly, the Supreme Court of Nevada held that “a law enforcement officer’s mere transcription and filing of a complainant’s allegations does not constitute an official action for purposes of applying the fair report privilege.” 

Wynn v. The Associated Press, 136 Nev. Adv. Op. No. 70, ___ P.3d ___ (October 29, 2020).

https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Federal Foreclosure Bar: (1) The Federal Foreclosure Bar, 12 U.S.C. § 4617(j)(3), preempts NRS 116.3116 and prevents a homeowners’ association (HOA) foreclosure sale from extinguishing a first deed of trust that secures a loan owned by the Federal Housing Finance Agency (FHFA) or by a federal entity under the FHFA’s conservatorship; (2) the instant case raised the question of “what statute of limitations, if any, applies to an action brought to enforce the Federal Foreclosure Bar;” and (3) the answer is governed by the federal law that enacted the Federal Foreclosure Bar—the Housing and Economic Recovery Act (HERA).  The HERA statute of limitations looks to whether the claim in the action sounds in contract or tort. Although the claims in the underlying action do not fit either category, the Supreme Court of Nevada concluded that they are best described as sounding in contract for purposes of the HERA statute of limitations.  HERA provides for a six-year statute of limitations for claims sounding in contract.  Because the loan servicer commenced the action here within six years of the foreclosure sale, the date the parties agree triggered the running of the statute of limitations, the Court reversed the district court’s summary judgment order.  Because the Court also concluded that the loan servicer sufficiently demonstrated that a regulated entity under the FHFA’s conservatorship owned the subject loan, the Court remanded for the district court to enter judgment in favor of the loan servicer.  JPMorgan Chase Bank, Nat’l Ass’n v. SFR Inv.’s Pool 1, LLC, 136 Nev. Adv. Op. No. 68, ___ P.3d ___ (October 29, 2020).  https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Gaming:  (1) Nevada Gaming Commission Regulation (NGCR) 12.060(2)(c) provides, in relevant part, that a licensee must “[p]romptly redeem its own chips and tokens from its patrons;” (2)  NGCR 12.060(4) complements that general rule by providing in relevant part that “[a] licensee shall not redeem its chips or tokens if presented by a person who the licensee knows or reasonably should know is not a patron of its gaming establishment;” and (3) under these rules, a “patron” is simply “a customer.”  The Nevada Gaming Control Board had argued that a “patron” should be defined as “a customer of a gaming establishment that obtained the chips ‘through a game, tournament, contest, drawing, promotion or similar activity,’” i.e., winning the chips.  However, the Supreme Court of Nevada disagreed with that argument because interpreting “patron” simply as “a customer” does not produce an absurd result.  Here, the customer at issue was a regular, rated player at the Hard Rock Hotel and Casino (Hard Rock) who wagered hundreds of thousands of dollars.  Thus, the customer was clearly a “patron.”  Because no identifiable statute, regulation, or other law entitled Hard Rock to refuse redemption simply because its records could not confirm that the customer won any $5,000 chips, the Board should have instructed Hard Rock to redeem the customer’s chips.  Young v. Nev. Gaming Control Bd., 136 Nev. Adv. Op. No. 66, ___ P.3d ___ (October 8, 2020).  https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Record sealing:  A criminal record sealing petition is a civil proceeding separate from the original criminal prosecution, and a district attorney’s office is not a party to that record sealing proceeding; thus, if a district attorney’s office chooses not to participate in a proceeding, the district court lacks the authority to compel it to do so.  NRS 179.2405 through NRS 179.301, and most specifically NRS 179.245, provide a process by which people convicted of certain crimes may petition the district court to seal their criminal records.  NRS 179.245(3) instructs the district court upon the filing of such a petition to notify, among other entities, the district attorney’s office that prosecuted the petitioner.  NRS 179.245(3) further provides that upon notification of the petition, the district attorney’s office “may testify and present evidence at any hearing on the petition.”  In 2017, the Nevada Legislature amended NRS 179.245 to clarify that district courts are not required to hold a hearing on every petition to seal criminal records.  In so doing, the Legislature enacted a new subsection 4 permitting a district court to resolve the petition without a hearing if the district attorney’s office stipulates to sealing the records, but requiring the district court to hold a hearing if the district attorney’s office does not stipulate to sealing the records.  Here, the Supreme Court of Nevada agreed with the Washoe County District Attorney that NRS 179.245(3) and (4) permit the Washoe County District Attorney to participate in a record sealing petition, but do not require it to do so, and that the district court otherwise lacks authority to compel the Washoe County District Attorney to participate.  Washoe Cty. D.A.’s Off. v. The Second Jud. Dist. Ct. C/W 80008/80009, 136 Nev. Adv. Op. No. 67, ___ P.3d ___ (October 8, 2020).  https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Worker’s compensation:  Here, compensation for the retiree’s permanent partial disability rating must be based on the wages he earned before retiring.  In DeMaranville v. Employers Insurance Co. of Nevada, 135 Nev. 259, 448 P.3d 526 (2019), the Supreme Court of Nevada addressed the calculation of a retired workers’ compensation claimant’s death benefits when the retiree died from a compensable occupational disease. Therein, the Court held that the retiree was entitled to death benefits based on the wages earned immediately before retirement.  In doing so, the Court distinguished the death benefits at issue in that case from temporary total disability benefits, which the Court has held are not available to a retiree when an occupational disease manifests after retirement.  See Howard v. City of Las Vegas, 121 Nev. 691, 695, 120 P.3d 410, 412 (2005) (concluding that a workers’ compensation claimant is not entitled to total temporary disability benefits for an occupational disease manifesting after retirement).  Here, the retiree was seeking neither death benefits nor total temporary disability benefits; instead, he was seeking permanent partial disability benefits. The retiree argued that the reasoning in DeMaranville controls and that he is entitled to a benefits award, while appellant Clark County contended that the reasoning in Howard controls, negating any benefits award.  The Supreme Court of Nevada concluded that DeMaranville’s analysis of compensation for death benefits is directly applicable here because the regulation governing the calculation of compensation for both benefit types is the same.  Furthermore, neither death benefits nor permanent partial disability benefits are statutorily limited based on the amount of work missed, and both are meant to compensate an employee who suffers death or permanent disability resulting from their employment.  Both of these points distinguish permanent partial disability benefits from the total temporary disability benefits discussed in Howard.  Accordingly, the Supreme Court of Nevada affirmed the district court’s denial of Clark County’s petition for judicial review, as the appeals officer correctly found that the retiree was entitled to permanent partial disability benefits based on the wages he was earning at the time he retired.  Clark Cty. v. Bean, 136 Nev. Adv. Op. No. 65, ___ P.3d ___ (October 8, 2020).  https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Resources

About the author: Joe Tommasino has served as Staff Attorney for the Las Vegas Justice Court since 1996.  Joe is the President of the Nevada Association for Court Career Advancement (NACCA).

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