Nevada Appellate Court Summaries (12-5-23)

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

Anti-SLAPP statutes: Nevada’s anti-SLAPP statutes do not exclude any particular types of claims for relief from their scope because the focus is on the defendant’s activity, not the form of the plaintiffs’ claims for relief. Nevada’s anti-SLAPP statutes are intended to protect citizens’ First-Amendment rights to petition the government for redress of grievances and to free speech by limiting the chilling effect of civil actions that are based on the valid exercise of those rights in connection with an issue of public concern. The statutes allow defendants to file a special motion to dismiss to obtain an early and expeditious resolution of a meritless claim for relief that is based on protected activity. Nevada’s anti-SLAPP statutes provide immunity “from any civil action for claims based upon” a person’s protected good-faith communications. The statutory language directs courts to examine the substance of the defendant’s communications, not the title of the plaintiffs’ claims for relief. Panik v. TMM, Inc., 139 Nev. Adv. Op. No. 53, ___ P.3d ___ (November 30, 2023).

Arbitration: Under circumstances where a nonsignatory seeking to compel arbitration demonstrates both the right to enforce the contract and that compelling another nonsignatory to arbitration is warranted under standard principles of contract law or estoppel, compelling arbitration is appropriate. Generally, the contractual right to compel arbitration may not be invoked by one who is not a party to the agreement and does not otherwise possess the right to compel arbitration. However, nonsignatories of arbitration agreements may be bound by the agreement under ordinary contract and agency principles. In considering whether a nonsignatory can enforce an arbitration clause against another nonsignatory, Nevada’s substantive law must be utilized. Previously, the Supreme Court held that a nonsignatory may be obligated to arbitrate “if so dictated by the ordinary principles of contract and agency,” and that case listed five theories for binding a nonsignatory to an arbitration agreement:

(1) Incorporation by reference;

(2) Assumption;

(3) Agency;

(4) Veil-piercing/alter ego; and

(5) Estoppel.

Therefore, under established Nevada caselaw, a nonsignatory to an arbitration agreement can be obligated to arbitrate if one of these theories is satisfied. RUAG Ammotec GmbH v. Archon Firearms, 139 Nev. Adv. Op. No. 48, ___ P.3d ___ (November 16, 2023).

Civil procedure: (1) When a plaintiff fails to demonstrate good cause for failing to seek an extension of time to serve the summons and complaint within the 120-day period prescribed by NRCP 4(e), the district court may properly deny an untimely motion for an extension of time; (2) under NRCP 12, a motion to dismiss for insufficient service of process may be filed at any time before a responsive pleading is filed; and (3) absent the filing of a responsive pleading or entry of a default, a motion to dismiss for insufficient service of process is not untimely. A request for an extension of time to serve a summons and complaint must be made within the initial 120-day period for service. When a party fails to file a timely motion to extend time for service, that party must demonstrate good cause exists for the untimely request before the court will consider whether good cause exists for an extension. Only upon a showing of good cause for the delay in filing the motion to enlarge time should the court then engage in a complete analysis to determine whether good cause also supports the request for enlargement of time for service of process. Additionally, the plain language of NRCP 12 provides no time restraint on a defendant’s motion to dismiss for lack of service before a responsive pleading has been filed. NRCP 12(a)(1)(A)(i) requires that defendants serve an answer to a complaint “within 21 days after being served with the summons and complaint.” Prior to filing an answer, a defendant may assert certain defenses by motion. Those defenses include insufficient service of process. While no other time limit governs a motion filed under NRCP 12(b)(4), a defendant takes risks filing such a motion beyond the 21 days provided for answering the complaint–if the motion or an answer is not filed by 21 days after service, a plaintiff could obtain a default. Sabater v. Razmy, 139 Nev. Adv. Op. No. 50, ___ P.3d ___ (November 22, 2023).

Civil procedure: Orders of dismissal are not “prospective” within the meaning of NRCP 60(b)(5). NRCP 60(b)(5) permits a district court to relieve a party from an order if “applying [the order] prospectively is no longer equitable.” The Supreme Court followed persuasive federal authority and clarified that orders of dismissal are not “prospective” under the rule. Therefore, NRCP 60(b)(5) was not an appropriate vehicle by which appellants could obtain relief. Additionally, the district court did not abuse its discretion in denying relief under NRCP 60(b)(6), given that appellants sought relief on a basis that was cognizable under NRCP 60(b)(1), which is mutually exclusive from NRCP 60(b)(6) relief. Willard v. Berry-Hinckley Indus., 139 Nev. Adv. Op. No. 52, ___ P.3d ___ (November 30, 2023). Noncompete covenants:(1) Appellant sought a preliminary injunction from the district court enforcing a noncompete covenant against respondents (three former employees), and the court ruled that the covenant was unenforceable due to procedural unconscionability; and (2) on appeal, the Supreme Court of Nevada concluded that “there was minimal procedural unconscionability” and that “the district court was otherwise obligated to determine whether the covenant’s remaining flaws could be cured by revision under NRS 613.195(6).” When considering whether a contract is unconscionable, courts generally require a showing of both procedural and substantive unconscionability. A contract clause is procedurally unconscionable when a party lacks a meaningful opportunity to agree to the clause terms either because of unequal bargaining power, as in an adhesion contract, or because the clause and its effects are not readily ascertainable upon a review of the contract. Substantive unconscionability concerns the contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy. Unconscionability is evaluated on a sliding scale; if one type of unconscionability is greater, the other may be lesser. Here, the district court invalidated the noncompete covenant, finding that it was a “fatal” error to place the covenant where it could be easily overlooked, which made it procedurally unconscionable and therefore unenforceable as a matter of law. The Supreme Court disagreed. Additionally, the district court did not analyze the covenant under NRS 613.195(1) and (6), which govern the enforceability of and court revision to noncompete covenants. The Supreme Court agreed with the district court that the noncompete covenant is overbroad in its geographic scope at minimum and, therefore, is substantively unconscionable as written. But if the noncompete covenant is modifiable so that it is no longer overbroad, the noncompete covenant would not be substantively unconscionable and would be enforceable. The Supreme Court concluded that “NRS 613.195(1) and (6), taken together, do not require a district court to always modify an overbroad noncompete covenant; however, the district court must modify an overbroad noncompete covenant when possible.” Tough Turtle Turf, LLC v. Scott, 139 Nev. Adv. Op. No. 47, ___ P.3d ___ (November 2, 2023)

Nevada Court of Appeals

Divorce: Because spouses are the materially interested parties in a divorce action, and divorce revokes every devise given by a settlor to their former spouse in a revocable inter vivos trust, the parties are not required to name such a revocable inter vivos trust as a necessary party in a divorce action where the spouses are co-settlors, co-trustees, and beneficiaries. NRCP 19 requires that all necessary parties be joined in an action, so long as the party’s joinder does not deprive the court of subject-matter jurisdiction. A necessary party includes a party without whom the court cannot accord complete relief and a party whose interest in the action is such that the party’s ability to protect its interests will be impeded if that party is not joined. In a divorce action, the spouses are the materially interested parties. Where the spouses are the co-settlors, co-trustees, and beneficiaries of a revocable inter vivos trust, the court’s distribution of the trust’s joint assets will not impede the trust’s interests because the necessary parties are already named in the litigation. Lopez v. Lopez, 139 Nev. Adv. Op. No. 54, ___ P.3d ___ (November 30, 2023).

Equitable liens: An equitable lien placed on property to satisfy a debt–while not vesting the lienholder with an interest in the property–permits the lienholder to enforce the value of the equitable lien against the debtor’s property even where that property has been subsequently transferred to a nondebtor spouse during divorce proceedings. Equitable remedies, such as equitable liens and constructive trusts, are available to a plaintiff when “legal remedies, such as statutory review, are not available or are inadequate.” Nevada recognizes both equitable liens and constructive trusts as remedies to restore property belonging to another. An equitable lien can be a proper remedy to reimburse a creditor whose money was stolen and used to purchase real property. While a lien is a security interest in property, it does not confer a title interest or ownership. The lienholder does not obtain the right to control or dispose of the property, and these rights remain with the property owner until foreclosure proceedings are undertaken. A constructive trust is also a remedy to restore stolen funds used to purchase property. However, a constructive trust is a remedial device “by which the holder of legal title to property is deemed to be a trustee of that property for the benefit of another who in good conscience is entitled to it.” Holland v. Anthony L. Barney, Ltd., 139 Nev. Adv. Op. No. 49, ___ P.3d ___ (November 22, 2023).

Nevada Transportation Authority (NTA):(1) In contested cases before the NTA, arguments not raised during the administrative proceedings are generally waived, and the NTA need not consider arguments raised for the first time at the general session; and (2) when a party to a contested case before the NTA stipulates to informally dispose of the case and waive the findings of fact and conclusions of law otherwise required by NRS 233B.125, that party is bound by the terms of the stipulation and may not subsequently challenge the legal or factual underpinnings of the NTA’s decision on judicial review. The NTA generally conducts its business at public hearings during open meetings of the NTA general session. However, in cases involving the imposition of civil penalties or fines, administrative proceedings may be conducted by a designated hearing officer. At the conclusion of such administrative proceedings, the hearing officer delivers the record of the hearing and a proposed decision to the Authority for consideration. The Authority reviews the hearing officer’s proposed decision and, at a meeting of the NTA general session, enters a final order affirming, modifying, or setting aside the decision. Generally, consistent with traditional waiver principles, a party in a contested case before the NTA must raise arguments at the administrative hearing in order to properly preserve those arguments for appellate review. The agency must have an opportunity to respond, and the hearing officer must also have an opportunity to fully consider the party’s claim. If an argument is presented for the first time at an NTA general session, the NTA is not obligated to consider it. Highroller Transp. v. Nev. Transp. Auth., 139 Nev. Adv. Op. No. 51, ___ P.3d ___ (November 30, 2023).


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 submitted for publication in the Communiqué (Jan. 2024), the official publication of the Clark County Bar Association. See https://clarkcountybar.org/about/member-benefits/communique-2024/communique-jan-2024/.

© 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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