Nevada Appellate Court Summaries 3-2-20

By Joe Tommasino, Esq.

Supreme Court of Nevada:

Anti-SLAPP statute: (1) The appellant met her burden of showing that this action was “based upon a good-faith communication in furtherance of the right to petition or the right to free speech in direct connection with an issue of public concern,” thus satisfying prong one of the anti-SLAPP analysis in NRS 41.660; and (2) because the comments were directly connected with an issue of public concern, and because the appellant submitted an affidavit that, in the absence of conflicting evidence, satisfies the requirement of showing that the comments were true or made without knowledge of any falsehood, the district court erred in finding that she failed to satisfy prong one so as to shift the burden to respondent to demonstrate that the claims should be allowed to proceed.  Third-party comments posted to appellant Carolyn Stark’s public Facebook page criticize respondent Carl Lackey for his handling of bears in his official capacity as a Nevada Department of Wildlife biologist. Lackey sued based on these comments, and Stark filed a special motion to dismiss under Nevada’s anti-SLAPP (strategic-lawsuit-against-public-participation) statutes. The district court denied the motion, concluding that not all the comments were related to a matter of public interest or were shown to be true or made without knowledge of any falsehood, such that they constituted good-faith communications entitled to anti-SLAPP protections. On appeal, the Supreme Court recognized that a SLAPP suit is a meritless lawsuit that a party initiates primarily to chill the exercise of free-speech rights. Nevada’s anti-SLAPP statutes provide defendants with a procedural mechanism whereby they may file a special motion to dismiss the meritless lawsuit before incurring significant litigation costs. The anti-SLAPP statutes posit a two-prong analysis to determine the viability of a special motion to dismiss:

(1) The district court must “[d]etermine whether the moving party has established, by a preponderance of the evidence, that the claim is based upon a good faith communication in furtherance of the right to petition or the right to free speech in direct connection with an issue of public concern”; and

(2) If the district court finds the defendant has met this burden, the court must then “determine whether the plaintiff has demonstrated with prima facie evidence a probability of prevailing on the claim.”

The showing required to satisfy prong one has two components. The first is that the comments at issue fall into one of the categories of protected communications in NRS 41.637. The category at issue here is “[c]ommunication made in direct connection with an issue of public interest in a place open to the public or in a public forum.” The second is that the communication “is truthful or is made without knowledge of its falsehood.” The Supreme Court noted that the first prong of the anti-SLAPP analysis does not require that the subject comments actually be made by the defendant, and instead focuses only on whether the comments constituted protected communication made in good faith. The issue of whether the defendant may be liable for the communication only becomes a consideration in the second prong of the analysis, when the burden shifts to the plaintiff to demonstrate “a probability of prevailing on the claim.” Here, because the district court never reached the second prong, the Supreme Court did not address Stark’s immunity argument but instructed the district court to consider it on remand. Stark v. Lackey, 136 Nev. Adv. Op. No. 4, ___ P.3d ___ (February 27, 2020).  https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Corporations: NRS 78.138(7) applies to all claims of individual liability against directors and officers, precluding the imposition of liability for grossly negligent breaches of fiduciary duties. NRS 78.138(3) (2017) provides that “[a] director or officer is not individually liable for damages as a result of an act or failure to act in his or her capacity as a director or officer except under circumstances described in subsection 7.” NRS 78.138(7) requires a two-step analysis to impose individual liability on a director or officer. First, the presumptions of the business-judgment rule in NRS 78.138 must be rebutted. The business-judgment rule states that “directors and officers, in deciding upon matters of business, are presumed to act in good faith, on an informed basis and with a view to the interests of the corporation.” Second, the “director’s or officer’s act or failure to act” must constitute “a breach of his or her fiduciary duties,” and that breach must involve “intentional misconduct, fraud or a knowing violation of law.” NRS 78.138 provides for the sole circumstance under which a director or officer may be held individually liable for damages stemming from the director’s or officer’s conduct in an official capacity. The Court disavowed Shoen v. SAC Holding Corp., 122 Nev. 621, 137 P.3d 1171 (2006) to the extent it implied a bifurcated approach to duty-of-care and duty-of-loyalty claims, and the Court gave effect to the plain meaning of NRS 78.138. Allegations of gross negligence do not state a breach of the fiduciary duty of care involving a “knowing violation of law.” A claimant must establish that the director or officer had knowledge that the alleged conduct was wrongful to show a “knowing violation of law” or “intentional misconduct” under NRS 78.138(7)(b). Chur v. Eighth Jud. Dist. Ct., 136 Nev. Adv. Op. No. 7, ___ P.3d ___ (February 27, 2020). https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Foreclosures: (1) In SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 130 Nev. 742, 334 P.3d 408 (2014), the Supreme Court of Nevada held that NRS 116.3116(2) provides a homeowners’ association (HOA) with a superpriority lien that, when properly foreclosed upon, extinguishes a first deed of trust; (2) the Court subsequently held in Bank of America, N.A. v. SFR Investments Pool 1, LLC, 134 Nev. 604, 427 P.3d 113 (2018), that a deed-of-trust beneficiary can preserve its deed of trust by tendering the superpriority portion of the HOA’s lien before the foreclosure sale is held; (3) here, the Court concluded that an offer to pay the superpriority amount in the future, once that amount is determined, does not constitute a tender sufficient to preserve the first deed of trust; and (4) the Court further concluded that formal tender is excused when evidence shows that the party entitled to payment had a known policy of rejecting such payments. Because the evidence at trial established that it was Nevada Association Services (NAS)’s business policy to have its receptionist reject any check for less than the full lien amount, and because the evidence further established that the respondent bank had knowledge of this business practice, substantial evidence supports the district court’s finding that even if the respondent bank had tendered a check for the superpriority amount, it would have been rejected. Thus, the respondent bank was excused from making a formal tender, and the district court properly determined that the bank preserved its interest in the property such that the appellant purchased the property subject to the bank’s first deed of trust. 7510 Perla Del Mar Ave Tr. v. Bank of Am., 136 Nev. Adv. Op. No. 6, ___ P.3d ___ (February 27, 2020). https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Public records: (1) The Las Vegas Metropolitan Police Department (LVMPD) did not waive its assertion of confidentiality by failing to timely respond to records requests from the Republican Attorneys General Association (RAGA); and (2) the district court did not err in denying the request for bodycam footage because all portions of the footage contain juvenile-justice information. The NPRA articulates several remedies for noncompliance. After an unreasonable delay or denial by a governmental entity, a requester may apply to the district court and seek an order granting record access. The prevailing requester may also recover costs and reasonable attorney’s fees. The statute does not mention waiver as a remedy, and the Supreme Court declined to read it into the statute. To the extent that RAGA contended that waiver is an appropriate remedy in equity, the Court disagreed. Waiving LVMPD’s assertion of confidentiality would lead to an absurd penalty resulting in public disclosure of Nevadans’ private information solely because of LVMPD’s failure to timely respond. The Court also recognized that bodycam footage is subject to numerous provisions listed in NRS 239.010(1) that guarantee confidentiality, such as NRS 62H.025 which protects juvenile-justice information. Without the Legislature’s express direction otherwise, the Court was unwilling to subject Nevadans to possibly having their statutorily-protected information disclosed because it was captured on a police officer’s bodycam. Additionally, the Court rejected RAGA’s argument that LVMPD could have redacted the footage to remove any confidential juvenile-justice information. Under a different set of facts, a governmental entity may be able to separate confidential periods of bodycam footage from substantial nonconfidential periods or blur the occasional juvenile’s face to redact or edit out confidential material. But that is not the case here. Accordingly, the district court did not abuse its discretion in denying RAGA’s mandamus petition regarding the bodycam footage. At Footnote 1, the Court emphasized that because this action was filed before October 1, 2019, the Court applied the version of the NPRA in effect at the time the instant action was initiated, not the 2019 amendments. Republican Att’ys Gen. Ass’n v. LVMPD, 136 Nev. Adv. Op. No. 3, ___ P.3d ___ (February 20, 2020). https://nvcourts.gov/Supreme/Decisions/Advance_Opinions/

Public records: In this case involving the Nevada Public Records Act (NPRA) and other statutes addressing public access to information concerning deaths of children, the Supreme Court considered whether the Las Vegas Review-Journal is entitled to receive unredacted juvenile autopsy records, and the Court held the following:

(1) Because NRS 432B.407(6) limits access to public information, NRS 432B.407(6)’s confidentiality provision must be interpreted narrowly, and it applies strictly to the Child Death Review (CDR) team as a whole and may not be invoked by individual agencies within a CDR team to limit access to information the agency holds outside its role on the team;

(2) Juvenile autopsy reports may include sensitive, private information; such  information may be redacted as privileged; and the district court erred when it  ordered the production of unredacted reports;

(3) The Court rejected the Coroner’s Office’s argument that NRS 239.012 immunizes a governmental entity from an award of attorney fees when the entity, in response to a records request, withholds records in good faith; and

(4) A governmental entity does not waive a legal basis for withholding records by  failing to cite the legal authority in its initial five-day response to a records request, if it provides some legal basis in its first response.

NRS 432B.407 is included among several hundred statutory exceptions to the NPRA that declare certain public records to be confidential or otherwise exempt from disclosure. NRS Chapter 432B generally addresses the protection of children from abuse and neglect, and NRS 432B.403-.4095 establish provisions relating to CDR teams which are formed to “[r]eview the records of selected cases of deaths of children under 18 years of age.” NRS 432B.407(6) provides that “information acquired by, and the records of, a [CDR team] … are confidential.” By its plain language, NRS 432B.407(6) makes confidential only the records or information “acquired by” the “team.” Thus, “the Coroner’s Office may not rely on NRS 432B.407(6) to withhold juvenile autopsy reports or claim that such reports are categorically exempt from disclosure by virtue of a confidentiality designation applicable only to the CDR team.” At Footnote 1, the Court emphasized that this opinion focuses on the version of the NPRA in effect at the time the instant actions were initiated. Clark Cty. Coroner v. L.V. Review-Journal, 136 Nev. Adv. Op. No. 5, ___ P.3d ___ (February 27, 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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