Nevada Appellate Court Summaries (11-1-23)

Check out the summaries of opinions from the Nevada Appellate Courts written by Joe Tommasino, Esq.

Written by Joe Tommasino, Esq.

Supreme Court of Nevada

Title insurance: (1) The applicability of at-issue endorsements in the title-insurance policy depends on the interpretation of NRS 116.3116, which is unambiguous; (2) under that statute, an HOA’s lien for assessment obligations arises when the assessment obligation becomes due; (3) moreover, NRS 116.3116 determines the superpriority of the HOA’s assessment lien over the first security interest by reference to the assessment obligation and when it becomes due; (4) applying this understanding of NRS 116.3116 to the allegations in the complaint, the assessment lien that extinguished Deutsche Bank’s deed of trust arose roughly seven years after the date of policy; and (5) because the California Land Title Association (CLTA) 115.2 endorsement insures losses resulting from the priority of assessment liens in existence at the date of the policy, this post-policy lien does not fall within the endorsement’s scope. The Supreme Court of Nevada has previously recognized that NRS 116.3116 designates a portion of an HOA’s lien for assessment obligations as senior to a first deed of trust, and if this “superpriority piece” is foreclosed upon, it “extinguish[es] the first deed of trust.” At issue in this appeal is whether, following such a foreclosure, the first deed of trust holder may recover for its loss of interest in the property by making a claim on its title-insurance policy. The underlying dispute arose when an insurer denied coverage as to such a claim, prompting the first-deed-of-trust holder to file a complaint for breach of contract and related claims. The district court dismissed the complaint, determining that there was no coverage and that each of the claims failed as a matter of law. On appeal, the Supreme Court concluded that, without NRS 116.3116, which created a statutory lien comprised of a superpriority piece, as well as the ability to enforce that piece and extinguish a first security interest, the enforcement of the HOA’s assessment lien would not extinguish a first security interest. Therefore, the injury alleged arose not by the existence of an HOA’s CC&R or a violation of a CC&R, but by the existence of NRS 116.3116. Because only the statute creates the HOA’s superpriority assessment lien and drives the ensuing extinguishment of a first security interest, the CLTA 100 endorsement does not provide coverage for Deutsche Bank’s losses. Nor can it be said that a future violation on the land of a CC&R caused the loss under CLTA 100(2)(a), when only the statute allows for the HOA to extinguish a first deed of trust by enforcement of its superpriority assessment lien. Accordingly, operation of NRS 116.3116 precludes coverage under the title-insurance policy endorsements CLTA 115.2 and CLTA 100. Separately, the Court pointed out that, in 1991, the Nevada Legislature adopted the Uniform Common Interest Ownership Act (UCIOA), codified in NRS Chapter 116, to govern common-interest communities like HOAs. At footnote seven, the Court emphasized that “[o]ur Legislature has not amended NRS 116.3116(1) despite the UCIOA commenters’ recommendation to do so nearly 30 years ago,” and “[i]t is not our role to make changes to statutes the Legislature has not elected to make, and we are aware of no authority for the proposition that we should interpret a uniform act based on comments written after the pertinent statute was adopted in Nevada.” Deutsche Bank Nat’l Tr. v. Fid. Nat’l, 139 Nev. Adv. Op. No. 45, _ P.3d _ (October 12, 2023).

Nevada Court of Appeals

Criminal procedure: (1) The plain language of NRS 179.225(2) requires the district court to inquire, prior to sentencing, into the defendant’s ability to pay extradition restitution in light of any existing obligations for child support, victim restitution, or administrative assessments; and (2) the district court’s statutory duty is satisfied by asking the defendant whether they have any such obligations that would be impacted by the imposition of extradition restitution and by determining whether the defendant is able to pay such obligations or, alternatively, if extradition restitution would prevent the defendant from satisfying those obligations. In contrast, the plain language of NRS 176.139(7) does not require the district court, sua sponte, to conduct a similar investigative inquiry before requiring a defendant to pay for the cost of a psychosexual evaluation. Rather, it is incumbent upon the defendant to object to the psychosexual evaluation cost based on their inability to pay, and the defendant bears the burden to substantiate that inability to pay before the court can reduce or waive the psychosexual evaluation cost. However, once a defendant has done so, the court must make findings on the record as to the extent of the defendant’s ability to pay and must impose the cost of the psychosexual evaluation only to that extent. When determining the defendant’s ability to pay, the court may consider evidence such as whether the defendant was represented by appointed counsel, a financial affidavit that establishes indigency, the presentence investigation report, the defendant’s current or prospective custody status, or other evidence of their financial inability to pay the psychosexual evaluation cost. At footnote ten, the Court of Appeals emphasized that a district court “shall” impose the $25 administrative assessment mandated by NRS 176.062(1), and the statute does not include any waiver provisions. Bolden v. State, 139 Nev. Adv. Op. No. 46, _ P.3d _ (October 19, 2023).

Proposed orders: Practitioners and courts must exercise diligence when submitting and adopting proposed orders; practitioners should ensure that proposed orders are factually accurate and legally adequate, and courts should exercise due diligence and judgment when reviewing litigant-drafted orders prior to adoption. In the Eighth Judicial District Court’s Family Division, the court rules expressly contemplate that parties may submit proposed orders for consideration and adoption by the court. Moreover, the Supreme Court of Nevada has recognized that a district court may properly adopt a party’s proposed order, provided that the opposing party is apprised of the order and given an opportunity to respond. Further, after entry of the decree in this case, both parties had an opportunity, under NRCP 52(b), to request amendments to the decree. The availability of this procedure offers an additional level of protection to litigants in the event that they believe the district court’s findings and conclusions are improper. Admittedly, some cases have strongly discouraged the practice of adopting litigant-drafted orders verbatim, but the practice is not in itself an independent basis for reversal. Even when the trial judge adopts proposed findings verbatim, the findings are those of the court and may be reversed only if clearly erroneous. Moreover, asking litigants to submit proposed orders is a customary practice that is often necessary for the timely administration of justice. Although a district court’s verbatim adoption of a litigant’s entire proposed order is not recommended as sound judicial practice, the Court of Appeals did not conclude that doing so is, inherently, an abuse of discretion. Rather, the Court of Appeals will analyze the content and substance of the proposed order that was adopted by the district court and decide whether any particular findings of fact and conclusions of law were unsupported by substantial evidence or legally erroneous. Eivazi v. Eivazi, 139 Nev. Adv. Op. No. 44, _ P.3d _ (October 5, 2023). https://nvcourts.gov/supreme/decisions/advance_opinions


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).

About the article

This article was originally published in the Communiqué (Dec. 2023), the official publication of the Clark County Bar Association. See https://clarkcountybar.org/about/member-benefits/communique-2023/communique-december-2023/

© 2023 Clark County Bar Association (CCBA). All rights reserved. No reproduction of any portion of this issue is allowed without written permission from the publisher. Editorial policy available upon request.

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