Nevada Appellate Court Summaries 12-4-20

By Joe Tommasino, Esq.

Supreme Court of Nevada

Contractors: “Subdivision site” is commonly used in the planning-and-zoning context to mean the general location of a subdivision; consequently, that term as used in NRS 624.220(2) is not unconstitutionally vague. NRS 624.220(2) requires respondent Nevada State Contractors Board to impose a monetary license limit on the amount a contractor can bid on a project. The limit is calculated with respect to “one or more construction contracts on a single construction site or subdivision site for a single client.” Here, the Board lodged a complaint against appellant Silverwing alleging that Silverwing had improperly entered into contracts with contractors that exceeded the contractors’ license limits in conjunction with several of Silverwing’s condominium-development projects. A hearing officer determined that “subdivision site” in NRS 624.220(2) refers to the general location of a subdivision, rather than a particular location within a subdivision, such that the multiple contracts that Silverwing entered into with each contractor for work within the condominium development project should be added together to determine whether the contractor’s license limits had been exceeded. The hearing officer sustained the Board’s complaint and fined Silverwing. Silverwing petitioned for judicial review, which the district court denied. Silverwing appealed, arguing that “subdivision site” in NRS 624.220(2) is unconstitutionally vague. The Supreme Court of Nevada disagreed. “Subdivision site” has a common meaning in statutes, regulations, and ordinances relating to planning and zoning. That common meaning is consistent with the Board’s construction of NRS 624.220(2), i.e., “subdivision site” means the general physical location of a subdivision. Consequently, the statute provides a person of ordinary intelligence fair notice that it is impermissible to exceed a contractor’s license limit in a particular subdivision, and it provides an adequate standard to preclude discriminatory enforcement. Silverwing Dev. v. Nev. State Contractors Bd., 136 Nev. Adv. Op. No. 74, ___ P.3d ___ (December 3, 2020). https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

 

Record sealing: Misdemeanor open-or-gross lewdness is not an offense for which the records cannot be sealed. If a convicted person meets all the statutory requirements under NRS 179.245, then he or she is entitled to a rebuttable presumption in favor of sealing criminal records. However, NRS 179.245(6)(a) and (b), respectively, specifically preclude individuals convicted of “[a] crime against a child” or “[a] sexual offense” from filing a petition to seal criminal records “relating to [such] a conviction.” The defendant here was convicted of the crime of gross-misdemeanor open-or-gross lewdness. This offense is not expressly listed as a “[c]rime against a child” under NRS 179D.0357. Had the Legislature intended to preclude the sealing of criminal records relating to a gross-misdemeanor open-or-gross-lewdness conviction, it would have expressly done so by including it in this list of convictions that a defendant may not petition to seal. With the Legislature having defined a “crime against a child” for purposes of this statute, a court may not independently evaluate the facts to make its own decision about whether the conviction relates to a “crime against a child,” but instead must look to the crimes identified in the statute as being precluded from record sealing. Here, because the defendant’s offense is not included in the list of offenses ineligible for record sealing under NRS 179.245(6)(a), the Supreme Court of Nevada held that the district court abused its discretion by finding that the defendant did not meet the statutory requirements for sealing and was not entitled to a rebuttable presumption that his records should be sealed pursuant to NRS 179.2445(1). The presumption in favor of sealing criminal records applies and was not rebutted here. In re: Petition of Aragon, 136 Nev. Adv. Op. No. 75, ___ P.3d ___ (December 3, 2020). https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

 

Spoliation: Without willfulness, bad faith, or an intent to harm, case-terminating sanctions for pre-litigation spoliation of evidence are unwarranted. Spoliation occurs when a party fails to preserve evidence it knows or reasonably should know is relevant to actual or anticipated litigation. Nevada courts have relied on NRCP 37(b) as the source of authority to sanction a party for spoliation of evidence. Because NRCP 37(b) only authorizes sanctions against a party who disobeys a court order, the rule does not literally apply to most pre-litigation spoliation, where no court order to preserve or produce evidence is in place. Separate and apart from the Rules of Civil Procedure, courts have inherent authority to manage the judicial process so as to achieve the fair, orderly, and expeditious disposition of cases, which empowers them to impose sanctions for pre-litigation spoliation of physical evidence. A district court has discretion in choosing spoliation sanctions. However, fundamental notions of fairness and due process require that the sanctions be just and relate to the specific conduct at issue. The dismissal of a case, based upon the destruction or loss of evidence, should be used only in extreme situations; if less drastic sanctions are available, they should be utilized. Because case-terminating sanctions are so harsh, a heightened standard of review applies to orders imposing them. Factors a district court should consider before imposing case-terminating sanctions include the following:

(1) The degree of willfulness of the offending party;

(2) The extent to which the non-offending party would be prejudiced by a lesser sanction;

(3) The severity of the sanction of dismissal relative to the severity of the discovery abuse;

(4) Whether any evidence has been irreparably lost;

(5) The feasibility and fairness of alternative, less severe sanctions, such as an order deeming  facts relating to improperly withheld or destroyed evidence to be admitted by the offending party;

(6) The policy favoring adjudication on the merits;

(7) Whether sanctions unfairly operate to penalize a party for the misconduct of his or her attorney; and

(8) The need to deter both the parties and future litigants from similar abuses.

Essentially, these factors relate to the willfulness or culpability of the offending party, the prejudice to the non-offending party caused by the loss or destruction of evidence, and the feasibility and fairness of alternative, less severe sanctions. The first factor—“the degree of willfulness of the offending party”—tasks the district court with assessing the culpability or fault of the party against whom spoliation sanctions are sought. In a prior case, the Supreme Court addressed the two principal forms of jury instructions available to remedy spoliation: (1) a permissive adverse inference instruction advising the jury that it could (but need not) draw a negative inference from the missing evidence; and (2) a rebuttable presumption instruction advising what evidence willfully suppressed would be adverse if produced, as provided in NRS 47.250(3). The negligent failure to preserve relevant evidence supports only a permissive adverse inference instruction. For the stronger rebuttable presumption instruction to be given, “willful suppression or destruction” of evidence must exist, and this “requires more than simple destruction of evidence and instead requires that evidence be destroyed with the intent to harm another party.” Here, the district court’s approach allowed case-terminating sanctions for negligent spoliation of evidence despite the fact that mere negligent spoliation does not support a rebuttable presumption instruction under NRS 47.250(3). This conflicts with the core principle that case-terminating sanctions are a last resort, appropriate only when no lesser sanction will do. The second and fourth factors—“the extent to which the non-offending party would be prejudiced by a lesser sanction” and “whether any evidence has been irreparably lost”—require the district court to assess the prejudice to the non-offending party caused by the loss or destruction of evidence. Prejudice, in this context, depends on the extent and materiality of the evidence lost or destroyed. If the spoliating party willfully destroyed evidence—i.e., destroyed evidence with the intent to harm the opposing party’s case—a rebuttable presumption arises that the evidence was materially adverse to that party. Absent willfulness, the burden lies with the party seeking the imposition of sanctions to prove actual prejudice by showing that the evidence was material to the party’s case and that its loss inflicted irreparable harm. Here, the district court erred. Given that a party acted negligently—not willfully—when it discarded replaced parts, the opposing party bore the burden of proving that the loss of this evidence materially prejudiced its case in a way lesser sanctions could not cure. Yet, the district court credited a claim of incurable prejudice without adequately evaluating alternative measures. The fifth factor—“the feasibility and fairness of alternative, less severe sanctions, such as an order deeming facts relating to improperly withheld or destroyed evidence to be admitted by the offending party”—requires the district court to consider lesser sanctions before imposing case-terminating sanctions for spoliation of evidence. In determining whether the district court properly considered lesser sanctions, the Supreme Court examined “whether the district court explicitly discussed the feasibility of less drastic sanctions and explained why such alternate sanctions would be inappropriate.” Courts have adopted a variety of measures, short of case-terminating sanctions, to redress spoliation of evidence. These measures include “attorney’s fees and costs [associated with curative discovery], monetary sanctions for the cost of reconstructing destroyed evidence, . . . issue-related sanctions, the exclusion of testimony from the spoliator’s witnesses regarding the destroyed material, [and] jury instructions on the spoliation inference.” For non-willful destruction of evidence, these and other measures, including the permissive adverse inference instruction authorized for negligent spoliation of evidence, must be considered. MDB Trucking, LLC v. Versa Products Co., Inc. C/W 75319/75321/76395/76396/76397, 136 Nev. Adv. Op. No. 72, ___ P.3d ___ (November 5, 2020). https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Trusts: (1) A creditor may bring a claim against a settlor of a trust so long as the settlor’s interest in the trust is not solely discretionary and there is not a spendthrift provision precluding payment of the claim; and (2) where a trust provides broad discretion to its trustees, the trustees may approve a creditor’s claim against the trust. Here, the creditor’s claim was proper and the trustees were within their broad discretion in approving the claim. The Supreme Court of Nevada rejected appellants’ argument that a creditor’s claim had to be filed against the settlor while she was alive. The provisions of NRS 164.025 specifically provide for claims against a settlor to be filed after the death of a settlor. The Court also rejected appellants’ argument that the applicable procedure to file a creditor’s claim was not followed. Upon the death of a settlor, a trustee of a nontestamentary trust may notify known or readily ascertainable creditors that the settlor has died. A creditor who has a claim against the trust estate must file a claim within 90 days after the first notice, and NRS 164.025(3) reiterates that a person having a claim against a settlor must file a claim with the trustee within 90 days of notice. Here, the written notice was proper. In re: Christian Family Trust, 136 Nev. Adv. Op. No. 73, ___ P.3d ___ (December 3, 2020). https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

 

Whistleblowers: (1) NRS 281.641(5) provides that the Nevada Department of Administration’s Personnel Commission may adopt procedural rules for whistleblower appeal hearings; (2) NAC 281.305(1)(a), which the Commission promulgated under NRS 281.641(5), provides that a state officer or employee claiming whistleblower protection “must” file a whistleblower appeal within 10 workdays of the alleged reprisal or retaliation; and (3) NAC 281.305(1)(a) is a jurisdictional rule that exceeds the Commission’s authority and is thus invalid. A rule providing a time limit for filing an administrative appeal is not procedural but jurisdictional. Because a jurisdictional rule is beyond the procedural rulemaking authority that NRS 281.641(5) confers, NAC 281.305(1)(a) is invalid. State, Dep’t of Transp. v. Bronder, 136 Nev. Adv. Op. No. 76, ___ P.3d ___ (December 3, 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).

%d bloggers like this: