Nevada Appellate Court Summaries (11-2-21)

Check out these summaries of recent opinions of the Supreme Court of Nevada and the Nevada Court of Appeals, as compiled by Joe Tommasino, Esq.

Supreme Court of Nevada

Divorce: (1) NRS 125.020(2) provides in part that “no court has jurisdiction to grant a divorce unless either the plaintiff or defendant has been resident of the State for a period of not less than 6 weeks preceding the commencement of the action”; (2) although residence and domicile are distinct concepts elsewhere in the law, the Supreme Court of Nevada has long considered residence “synonymous with domicile” for purposes of divorce jurisdiction; and (3) in this opinion, the Court revisited that rule and concluded that divorce jurisdiction only requires mere residence. The Supreme Court of Nevada recognized that residence and domicile are distinct concepts not only elsewhere in the law but also in NRS 125.020 itself. NRS 125.020(2) plainly and separately addresses “domicile[ ]” in its first clause and “residen[ce]” in its second clause. Given such a construction, the Court could not interpret residence and domicile to be synonymous in NRS 125.020. Additionally, the Legislature has supplied an applicable definition of residence in NRS 10.155. Under that definition, residence under NRS 125.020 plainly requires only “physical[] presen[ce]” –not an extra-textual intent to remain. Here, the district court found that the parties had been physically present in Nevada for at least six weeks before the divorce complaint was filed. Under a plain-meaning interpretation of “reside[nce],” that finding satisfies NRS 125.020(1)(e), which provides that a plaintiff may obtain divorce in “the district court of any county [. . .] [i]f plaintiff resided 6 weeks in the State before suit was brought.” It also satisfies NRS 125.020(2), which likewise requires residence “for a period of not less than 6 weeks preceding the commencement of the action.” With that finding, and the new plain-meaning interpretation of “residen[ce],” the district court did not lack subject-matter jurisdiction under NRS 125.020. Senjab v. Alhulaibi (Child Custody), 137 Nev. Adv. Op. No. 64, ___ P.3d ___ (October 21, 2021).

Insurance: (1) The burden of proving the applicability of an exception to an exclusion for coverage in an insurance policy falls on the insured; and (2) the insured may rely on any extrinsic evidence that was available to the insurer at the time the insured tendered the defense to the insurer. Courts in many jurisdictions have concluded that the insured bears the burden of proving an exception to an exclusion of coverage.The Supreme Court of Nevada classified this position as the majority rule. Many courts that adopted the majority rule have reasoned that because the insured generally bears the initial burden of establishing a possibility of coverage, and the exception grants coverage where there otherwise would be none, the insured therefore bears the burden. Nevada law provides that an insurance policy should be read according to general contract principles. Furthermore, Nevada law requires that the insured establish coverage under an insurance policy, whether claiming a duty to indemnify or a duty to defend. The majority rule, which places the burden on the insured to, in essence, re-establish coverage where it would not otherwise exist, accords with these principles. Therefore, the Supreme Court of Nevada adopted the majority rule regarding burdens of proof for exceptions to an exclusion and concluded that the burden is on the insured, not the insurer, to prove the potential that an exception to an exclusion applies when determining whether the insurer owes a duty to defend. Separately, the Court stated that an insurer “bears a duty to defend its insured whenever it ascertains facts which give rise to the potential of liability under the policy.” Thus, under Nevada law, an insured may present such extrinsic facts to the insurer, and rely upon them, in order to argue that the insurer owes a duty to defend as within an exception to an exclusion. However, Nevada law is silent as to what particular extrinsic facts an insured may use to fulfill its burden. Since the duty to defend must be determined at the outset of litigation based upon the complaint and any other facts available to the insurer, the Court held that the insured may use extrinsic facts that were available to the insurer at the time it tendered its defense to prove there was a potential for coverage under the policy and, therefore, a duty to defend. However, at footnote 9, the Court clarified that an insurer is not allowed to introduce extrinsic evidence at the duty-to-defend stage. Zurich Am. Ins. Co. v. Ironshore Specialty Ins. (NRAP 5), 137 Nev. Adv. Op. No. 66, ___ P.3d ___ (October 28, 2021).

Legislature: (1) Assembly Bill (A.B.) 458 (2019), which eliminates future increases in the amount of tax credits available to businesses that donate to certain scholarship organizations, did not meet the supermajority voting requirement but was passed during the 80th session of the Nevada Legislature in 2019; (2) A.B. 458 does not increase public revenue but instead redirects funds from a specific appropriation to the State General Fund; and (3) therefore, the bill was not subject to the supermajority requirement. Under the supermajority voting provision set forth in Article 4, Section 18(2) of the Nevada Constitution, at least two-thirds of the members’ votes in each house of the Nevada Legislature are required to pass any bill “which creates, generates, or increases any public revenue in any form, including but not limited to taxes, fees, assessments and rates, or changes in the computation bases for taxes, fees, assessments and rates.” Accordingly, a bill that is subject to the supermajority provision and fails to obtain the necessary two-thirds majority vote from each house cannot be constitutionally enacted. Assembly Bill (A.B.) 458 did not meet the supermajority voting requirement but nevertheless became law. Appellants, parents of scholarship recipients, a scholarship organization, and businesses who benefited from the tax credit, challenged the legislation as unconstitutional. On appeal, the Court found that appellants had standing. The Court also found that A.B. 458 redirects funds from a specific appropriation to the State General Fund rather than “creat[ing], generat[ing], or increas[ing]” public revenue as contemplated by the supermajority provision. Thus, Article 4, Section 18(2) of the Nevada Constitution does not apply to A.B. 458, and the bill is constitutional. Morency v. State, Dep’t of Education, 137 Nev. Adv. Op. No. 63, ___ P.3d ___ (October 7, 2021).

Victim rights: (1) The definitions of “victim” under Marsy’s Law and NRS 176.015(5)(d) are harmonious, if not identical; (2) although “victim” under Marsy’s Law may include individuals that NRS 176.015 does not, and vice versa, neither definition includes anyone and everyone impacted by a crime, as the district court found here; (3) when presented with an objection to impact statement(s) during sentencing, a district court must first determine if an individual falls under either the constitutional definition or the statutory definition of “victim”; and (4) if the statement is from a nonvictim, a district court may consider it only if the court first determines that the statement is relevant and reliable. Article 1, Section 8A of the Nevada Constitution, also known as Marsy’s Law, and NRS 176.015 both afford a victim the right to be heard at sentencing. The provisions differ, however, in their definitions of “victim.” Marsy’s Law defines “victim” as “any person directly and proximately harmed by the commission of a criminal offense under any law of this State.” Nev. Const. art. 1, § 8A(7) (emphasis added). NRS 176.015(5)(d)(1)-(3) defines “victim” in part as any person or relative of any person “against whom a crime has been committed” or “who has been injured or killed as a direct result of the commission of a crime.”

The constitutional and statutory definitions of “victim” are similar. In particular, they both recognize that a victim is the person (or persons) who is legally injured or harmed as a direct result of the defendant’s criminal conduct—i.e., the person who was the target or object of the offense, or one who was directly and proximately harmed as a result of the criminal act—as well as certain close family members. Neither definition for “victim,” however, includes anyone and everyone who was affected by the crime. Under either definition, a “victim” must still be injured or directly and proximately harmed. Here, once an objection had been lodged, the district court was required to determine, on the record, how each author of impact statements was “directly and proximately harmed.” In the future, upon objection, district courts must determine on the record whether each individual is a “victim” as defined in Marsy’s Law or NRS 176.015(5)(d), and why. This is not to say that only letters written by victims may be considered at sentencing. NRS 176.015(6) specifically states that “[t]his section does not restrict the authority of the court to consider any reliable and relevant evidence at the time of sentencing.” (Emphasis added.) Therefore, that the district court considered letters from nonvictims was not, in and of itself, reversible error. However, based on the record presented, it is clear that the district court treated the objected-to nonvictim impact letters the same as victim impact letters and did not determine whether they were relevant and reliable. Thus, the Supreme Court of Nevada was “required to vacate the sentence and remand this case, despite the inevitable pain and distress this will cause the surviving family members to again participate in a sentencing hearing, because it is not clear that the district court would have imposed the same sentence absent these errors.” Aparicio (Henry) v. State, 137 Nev. Adv. Op. No. 62, ___ P.3d ___ (October 7, 2021).

Court of Appeals

Equitable offset: (1) A party cannot make a claim for attorney fees and costs—and thus the district court cannot offset—against settlement funds from a third party that have not been reduced to a judgment; and (2) for an equitable offset to apply, there must be competing judgments between the parties that are mutually owed and mutually demandable. An equitable offset is a means by which a debtor may satisfy in whole or in part a judgment or claim held against him out of a judgment or claim which he has subsequently acquired against his judgment creditor. However, equitable offsets are only applicable where a debtor obtains a subsequent judgment against one of his or her creditors. Here, although Luxor Hotel & Casino had a collectable judgment against Vivia Harrison, she did not have a collectable judgment against Luxor. Thus, there were no mutually owed judgments to offset. Separately, the Court of Appeals addressed an award of attorney’s fees. When deciding whether to award attorney fees under NRCP 68, the district court must weigh these four factors:

(1) whether the plaintiff’s claim was brought in good faith;

(2) whether the defendant’s offer of judgment was reasonable and in good faith in both its timing and amount;

(3) whether the plaintiff’s decision to reject the offer and proceed to trial was grossly unreasonable or in bad faith; and

(4) whether the fees sought by the offeror are reasonable and justified in amount.[LIST (1-4) ENDS]

Although it is preferable, express factual findings on each factor are not necessaryfor a court to properly exercise its discretion; rather, “the district court need only demonstrate that it considered the required factors, and the award must be supported by substantial evidence.” While all of the above factors must be considered, not one is outcome determinative, “and thus, each should be given appropriate consideration.” Here, the lower court properly applied the above factors in awarding attorney’s fees. Harrison v. Ramparts, Inc., 137 Nev. Adv. Op. No. 65, ___ P.3d ___ (October 28, 2021).


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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