Written by Joe Tommasino, Esq.
Supreme Court of Nevada
Adoption: Grandparents do not have standing to move to set aside an adoption involving a grandchild solely on the basis of familial relationship. Finality plays an elevated role in adoption proceedings because adoptions provide stability to children and adoptive families. Accordingly, only parties to the proceeding, entities in privity with those parties, or nonparties whose rights are directly affected by the court order have standing to seek NRCP 60(b) relief from an adoption decree. A prospective interest such as that created by a pending petition for guardianship does not confer standing. In re: Petition of Katherine Anne P., 140 Nev. Adv. Op. No. 37, ___ P.3d ___ (June 6, 2024).
Community redevelopment agencies: (1) The Labor Commissioner correctly concluded that she had jurisdiction to decide whether prevailing-wage provisions apply under NRS 279.500; (2) the plain language of NRS 279.500 did not require the application of the prevailing-wage provisions to the underlying agreement between a redevelopment agency (RDA) and the developer; and (3) it was error to conclude that the RDA created a financial incentive to the developer worth more than $100,000 and to assess an administrative penalty. Under Nevada’s Community Redevelopment Law, if a redevelopment agency transfers property to a developer for less than its fair market value or provides financial incentives to a developer worth more than $100,000, then the agency’s agreement with the developer must include a clause requiring payment of prevailing wages. In this case, the Labor Commissioner considered a transaction where a redevelopment agency transferred property to the developer of an apartment project in exchange for the developer agreeing to a deed restriction obligating it to maintain free public parking on the property for the next 50 years. The parties structured the transaction this way because, while the developer preferred a cash-for-property exchange, the agency could not afford to lose public parking in the downtown redevelopment area. Appraisers valued the property and the 50-year public parking obligation as an equivalent exchange, and the Labor Commissioner made no finding that the agency transferred the property for less than its fair market value. Although NRS 279.500(2)(a) did not apply, the Labor Commissioner nonetheless determined that, because the redevelopment agency received “future compensation” as opposed to cash for the property, it provided the developer a “financial incentive” worth more than $100,000, so NRS 279.500(2)(c) applied. On this basis, the Labor Commissioner assessed a penalty against the redevelopment agency for not requiring the developer to pay prevailing wages on the project. On appeal, the Supreme Court of Nevada concluded that the Labor Commissioner’s decision did not square with the plain language of NRS 279.500(2). The statute does not reference “future compensation,” much less equate its receipt with a redevelopment agency giving a developer “financial incentives [worth] more than $100,000.” Without a finding that the present value of the parking obligation was less than the fair market value of the property, or evidence of a financial incentive worth more than $100,000, the penalty against the redevelopment agency cannot stand. The Redevelopment Agency of the City of Sparks v. Nev. Labor Comm’r, 140 Nev. Adv. Op. No. 44, ___ P.3d ___ (June 27, 2024).
Corporations: (1) Officers and directors of a parent company can be individually liable where those officers and directors have knowledge of proposed action by a wholly owned subsidiary that is adverse to the parent company and intentionally implement or knowingly permit the adverse action; and (2) that liability is not dependent upon piercing the corporate veil and is not limited to wholly owned subsidiaries directly beneath the parent company. Officers and directors of a parent company who allow a wholly owned subsidiary to take action adverse to the parent can be held liable without use of the alter ego doctrine. Such liability is imposed because directors and officers have a fiduciary duty to act in the best interests of the parent company and its stockholders and thus cannot intentionally cause, or knowingly fail to stop, adverse actions by a wholly owned subsidiary company. Moreover, shareholders may file derivative suits against officers and directors of a parent company based on wrongful actions that occurred at a wholly owned subsidiary of a wholly owned subsidiary without asserting alter ego. Fiduciaries at a parent company have a duty not to intentionally implement, or knowingly permit, a wholly owned subsidiary to effect a transaction that is unfair to the parent company on whose board they serve, regardless of the presence of intermediate subsidiaries between the parent and the subsidiary where the challenged action is alleged to have taken place. Capital Advisors, LLC v. Cai C/W 85378, 140 Nev. Adv. Op. No. 34, ___ P.3d ___ (May 23, 2024).
Criminal procedure: Counsel may not waive a petitioner’s right to be present at an evidentiary hearing on a postconviction habeas petition where the record does not indicate that the petitioner personally waived the right to be present. A postconviction habeas petitioner has a statutory right to be present at an evidentiary hearing on the merits of the petition. Once the district court decides to hold an evidentiary hearing on a petitioner’s claims, the district court is “required by statute to grant the writ, to order [the petitioner] to be produced for the hearing, and to permit [the petitioner] an opportunity to deny, controvert, or present evidence to demonstrate that [the petitioner’s] imprisonment was unlawful.” The State suggested that relief was not warranted here because postconviction counsel did not intend to call appellant to testify. However, appellant was not able to communicate with counsel regarding the testimony presented, assist counsel in cross-examining witnesses, or inform counsel of his account of material events, which appellant represents would contradict the accounts of his previous attorneys. Further, postconviction counsel acknowledged that he had not intended to question pretrial and trial counsel and that it was appellant who had subpoenaed them. This reinforces the importance of appellant’s presence and indicates that his perspective may have illuminated elements of prior counsels’ representation that postconviction counsel did not appreciate.While counsel represented that he did not intend on calling appellant as a witness, that does not speak to what appellant may have desired to do. Because appellant was not present, it is unknown whether appellant, at the time of the hearing, may have intended to testify or would have desired to testify after evaluating the testimony of the State’s witnesses and consulting with counsel. While the Supreme Court of Nevada had not previously addressed whether postconviction counsel may waive a petitioner’s statutory right to be present at a postconviction habeas evidentiary hearing, the Court agreed that only the petitioner, not counsel, may waive the right. For a waiver to be effective, it must be clear in the record that the petitioner personally waived the right to be present at the hearing. Where counsel purports to waive a petitioner’s right to be present in the petitioner’s absence and the record does not show that the petitioner had personally waived the right, the waiver may be effective if the petitioner subsequently acquiesces. District courts must “exercise due care to ensure that an inmate is allowed to attend an evidentiary hearing held on a timely postconviction habeas petition, unless the court has ascertained from the inmate a clear intention to waive that right.” Harris (Barry) v. Warden, 140 Nev. Adv. Op. No. 35, ___ P.3d ___ (May 30, 2024).
Equity expropriation claims: Most equity expropriation claims are “exclusively derivative” claims rather than direct claims. A derivative claim is one brought by a shareholder on behalf of the corporation to recover for harm done to the corporation. Alternatively, shareholders have standing to bring suit for direct injuries they have suffered that are separate from any injury the corporation may have suffered. Nevada has adopted the “direct harm test” to determine whether an action is direct or derivative. This test asks “(1) who suffered the alleged harm (the corporation or the suing stockholders, individually); and (2) who would receive the benefit of any recovery or other remedy (the corporation or the stockholders, individually)?” Equity expropriation claims involve a controlling shareholder or director’s expropriation of value from the company, causing other shareholders’ equity to be diluted. In Brookfield Asset Management v. Rosson, 261 A.3d 1251 (Del. 2021), the Delaware Supreme Court concluded that “when a corporation exchanges equity for assets of a stockholder who is already a controlling stockholder for allegedly inadequate consideration, the dilution/overpayment claim is exclusively derivative.” However, these claims may become direct if the transaction results “in a shift in control from a diversified group of public equity holders to a controlling interest,” a circumstance where Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173, 182 (Del. 1986) “already provides for a direct claim.” In re: Parametric Sound Corp. Shareholders’ Litig. C/W 84971, 85358, 140 Nev. Adv. Op. No. 36, ___ P.3d ___ (June 6, 2024).
Evidence: The rule of completeness under NRS 47.120(1) is a rule of admission, not of exclusion. “When any part of a writing or recorded statement is introduced by a party, the party may be required at that time to introduce any other part of it which is relevant to the part introduced, and any party may introduce any other relevant parts.” The rule functions as a mechanism for an adverse party to introduce additional statements to complete portions of a written or recorded statement. Thus, a party’s failure to move for admission of additional statements under NRS 47.120(1) will not render the initial statements inadmissible. Since the State’s exhibits were otherwise admissible, the district court did not err in admitting them. Separately, the Supreme Court of Nevada emphasized that the prosecution has “a right to comment upon the testimony and to ask the jury to draw inferences from the evidence, and has the right to state fully [its] views as to what the evidence shows.” The prosecution may “argue inferences from the evidence and offer conclusions on contested issues.” Here, the prosecution did not commit misconduct in its closing argument by arguing that gaps in text messages indicated that the minor victim and the defendant had met in person. Finally, the Court concluded that the district court did not err in failing to instruct the jury regarding the edited nature of the State’s exhibits. Rodriguez (Isaac) v. State, 140 Nev. Adv. Op. No. 47, ___ P.3d ___ (July 3, 2024).
Fictive kin: (1) A fictive kin is a person who has a significant emotional and positive relationship with a child; (2) the legislature’s inclusion of fictive kin as an alternative placement to relatives recognizes the significant role certain unrelated people can play in a child’s life and indicates an intent for children to be placed, when possible, into a home uniquely interested in a child’s well-being; and (3) no preference for placement with extended biological family over fictive kin exists in Nevada. Nevada law describes the procedure required to place a child in need of protection outside the home. Historically, the child-welfare statutes provided preference for relative placement only; however, the statutory placement preference now includes fictive kin. When consistent with a child’s best interest, placement preference should be given to an adult with a preexisting relationship with the child. Here, the district court ordered the placement of a child based on blood relations alone. The Supreme Court of Nevada clarified that the term “fictive kin” requires an evaluation of the relationship from the perspective of the child and the adult and makes clear that blood relatives do not enjoy a legal placement preference over fictive kin. Placement decisions must be based on a child’s best interest, and a child must be meaningfully represented in all stages of a placement proceeding. In re: Matter of J.B., 140 Nev. Adv. Op. No. 39, ___ P.3d ___ (June 13, 2024).
Foreclosure: (1) This appeal involves a dispute between the first deed of trust holder and the purchaser of a property at a homeowners’ association (HOA) lien foreclosure sale; (2) the issue presented implicates the parameters of 9352 Cranesbill Trust v. Wells Fargo Bank, N.A., 136 Nev. 76, 76, 459 P.3d 227, 228 (2020), which provided for allocation of a defaulting homeowner’s partial payments to an HOA superpriority lien; (3) under Cranesbill, a court must look at any allocation by the homeowner at the time of payment, application of the payment by the HOA prior to any dispute about allocation, and the equities involved; (4) in the instant case, the Supreme Court of Nevada made clear that absent express direction of the homeowner to the contrary, the HOA may not apply a payment in a way that jeopardizes the first deed of trust holder’s interest and deprives the homeowner of the security on the homeowner’s mortgage; and (5) principles of justice and equity presume a superpriority lien is satisfied first, unless the court has a compelling reason to conclude otherwise. Courts applying Cranesbill must look first for direction of the homeowner allocating payment at the time payment was made. Then, if the homeowner fails to provide direction, a court must determine if the HOA allocated the payment prior to the dispute over the allocation. The HOA may not, without express direction from the homeowner, allocate the payment so as to forfeit the first deed of trust holder’s interest and deprive the homeowner of the security in the home. If allocation by neither the homeowner nor the HOA resolves the question, the court considers principles of justice and equity, which presume that the superpriority lien is paid first, unless the court has a compelling reason to conclude otherwise. Here, under Cranesbill, the homeowner’s partial payments to the HOA satisfied the HOA’s superpriority lien, so the foreclosure did not extinguish Deutsche Bank’s first deed of trust. Deutsche Bank Tr. Co. Americas v. SFR Invs. Pool 1, LLC, 140 Nev. Adv. Op. No. 43, ___ P.3d ___ (June 27, 2024).
Guardianship: Here, the district court manifestly abused its discretion when it failed to consider an NRS 159A.053 temporary guardianship despite the proposed guardians’ showing of good cause. Temporary court-ordered guardianships allow minors to obtain emergency care or protection pending a formal decision on a petition for general guardianship. In Nevada, such temporary guardianships may take either of two forms. NRS 159A.052 provides for temporary guardianships of minors who need immediate medical attention, and NRS 159A.053 provides for temporary guardianships of minors for other good cause. Although the district court here concluded that temporary guardianship over petitioner was not warranted under NRS 159A.052 because no medical emergency existed, the court failed to consider whether temporary guardianship was warranted under NRS 159A.053. Thus, the district court manifestly abused its discretion. B.S. v. Dist. Ct. (Simek), 140 Nev. Adv. Op. No. 46, ___ P.3d ___ (June 27, 2024).
Inventory searches: (1) When a warrantless inventory search does not comply with department policies and procedures, it may be constitutional if it is reasonable under the totality of the circumstances; (2) an investigatory motive does not necessarily invalidate an inventory search so long as the search that occurred is the same as the inventory-based search that would have happened even absent any investigatory or other intent or motivation; and (3) a court deciding a suppression motion must determine the search’s reasonableness under the totality of the circumstances by evaluating:
(a) the extent to which law enforcement departed from standardized procedure,
(b) whether the scope of the search was as expected in light of the underlying justifications for inventory searches, and
(c) whether the inventory produced served the purposes of an inventory search.
Here, a law-enforcement deputy pulled over appellant because the car appellant was driving had no operating license-plate light. The deputy arrested appellant on an active warrant. During the subsequent warrantless search of the vehicle, the deputy made statements indicating the deputy hoped to locate incriminating evidence. While searching, the deputy found a handgun. Appellant was charged with ex-felon in possession of a firearm and moved to suppress the evidence on the basis that the search was not a true inventory search, but rather a ruse to conduct an investigatory search. The Supreme Court of Nevada affirmed. The investigatory motive here does not invalidate the inventory search because the search that occurred was the same as the search that would have occurred absent the impure motivation.Because the deputy properly stopped appellant for the nonfunctioning license-plate light and arrested appellant on the outstanding warrant, the deputy was required under police policy to tow the car appellant was driving. Therefore, the search that uncovered the gun would have occurred pursuant to the inventory-search policy even absent the deputy’s investigatory motives. The inventory search here passes constitutional muster because it was reasonable under the totality of the circumstances. Gilbert (Jesse) v. State, 140 Nev. Adv. Op. No. 33, ___ P.3d ___ (May 9, 2024).
Jurors: A district court does not abuse its discretion in denying a motion for a mistrial, construed as a motion to strike a venire for cause, based on a prospective juror’s comments during voir dire unless the comments are so prejudicial that they could not be cured by an admonition. Here, because the district court found that the prospective juror’s statement was equivocal and vague, any prejudice was neutralized by the curative admonition given by the district court. Mariscal-Ochoa (Manuel) v. State, 140 Nev. Adv. Op. No. 42, ___ P.3d ___ (June 27, 2024).
Name changes: The name-change statutes permit incarcerated felons to change their names, regardless of the offense for which they were convicted, as long as good reason exists for the change. A reviewing court must consider an applicant’s criminal record, in addition to any other relevant evidence, to determine whether “good reason exists” for the name change. The Supreme Court of Nevada declined to define “good reason,” “as that is a decision best left, in the first instance, to the discretion of the district courts based on the facts and circumstances present in a given case.” The Court also noted that “the name-change statutes require that an applicant’s criminal history follows them to their new identity.” In re: Application for Change of Name (Lowry), 140 Nev. Adv. Op. No. 38, ___ P.3d ___ (June 6, 2024).
Professional negligence: (1) A professional-negligence claim requires a supporting affidavit from a medical expert under NRS 41A.071; and (2) the common-knowledge exception enunciated in Estate of Curtis v. South Las Vegas Medical Investors, LLC, 136 Nev. 350, 466 P.3d 1263 (2020) no longer applies. The Legislature has constructed a strict scheme for professional negligence actions in Nevada, and that scheme includes a definition of professional negligence and exceptions to the affidavit requirement that are intentionally narrow. To distinguish professional from ordinary negligence, the relevant question is whether the claim pertains to an action that occurred within the course of a professional relationship. If it does not, it is for ordinary negligence. If it does, it sounds in professional negligence and requires an affidavit under NRS 41A.071, unless it falls under the statutory exceptions in NRS 41A.100. The sole question for distinguishing professional and ordinary negligence relates to the nature of the conduct in the claim; specifically, whether it arises from services rendered in the course of a professional relationship. The complexity of a claim that involves a provider of health care rendering services cannot be used to transform a professional-negligence claim into an ordinary-negligence claim. Also, only the circumstances of res ipsa loquitur enumerated in NRS 41A.100 are exceptions to the affidavit requirement. Therefore, the Supreme Court of Nevada overruled the common-knowledge exception created in Curtis. The Court also reiterated that an affidavit satisfies NRS 41A.071 even when it is filed after the complaint, if it was incorporated by reference in the complaint and executed before the complaint was filed. Limprasert v. PAM Specialty Hosp. of Las Vegas LLC, 140 Nev. Adv. Op. No. 45, ___ P.3d ___ (June 27, 2024).
Tolling: (1) NRS 41A.097(5) allows a plaintiff to sue healthcare providers on behalf of a child for brain damage or a birth defect as late as the child’s 10th birthday; (2) here, a pair of gubernatorial emergency directives issued during the COVID-19 pandemic tolled the applicable limitations period in NRS 41A.097(5) for 122 days; and (3) therefore, the complaint was timely. The complaint was filed 72 days after the child’s 10th birthday. Directive 009 “tolled” limitations periods for “any legal action,” a clear order that limitations periods for “any” pending legal action stop running. Directive 026 then recommenced the tolled limitations periods beginning August 1, 2020. Thus, the Directives’ plain, unambiguous language tolled the applicable limitations period for 122 days. Dignity Health v. Dist. Ct. (Gohari), 140 Nev. Adv. Op. No. 40, ___ P.3d ___ (June 20, 2024).
Nevada Court of Appeals
Public trials: (1) Before a court may exclude members of the public from a criminal trial, it must satisfy the test articulated by the Supreme Court of the United States in Waller v. Georgia, 467 U.S. 39, 46 (1984) and adopted by the Supreme Court of Nevada in Feazell v. State, 111 Nev. 1446, 1449, 906 P.2d 727, 729 (1995); and (2) here, the trial court violated the defendant’s right to a public trial by excluding the defendant’s family from the courtroom during the complaining witness’s testimony based on her nonspecific “concern” about their presence. The following test must be met before a court can completely exclude the public from criminal-trial proceedings:
(1) The trial court must find that “the party seeking to close the hearing [has advanced] an overriding interest that is likely to be prejudiced;”
(2) The closure must be “no broader than necessary to protect [the overriding] interest;”
(3) The trial court must consider “reasonable alternatives to closing the proceeding;” and
(4) The trial court “must make findings adequate to support the closure.”
When a court only partially closes the proceedings, the court must find a “substantial reason” to justify the closure, instead of an “overriding interest.” Palmer (Christopher) v. State, 140 Nev. Adv. Op. No. 41, ___ P.3d ___ (June 27, 2024).
Resources
- “Advance Opinions” are viewable at this link: http://nvcourts.gov/Supreme/Decisions/Advance_Opinions/
- A list of “Forthcoming Opinions” is available at this link every Wednesday: http://nvcourts.gov/Supreme/Decisions/Forthcoming_Opinions/
- “Supreme Court Unpublished Orders” are viewable at this link: http://nvcourts.gov/Supreme/Decisions/Unpublished_Orders/
- “Court of Appeals Unpublished Orders” are viewable at this link: http://nvcourts.gov/Supreme/Decisions/Court_of_Appeals/Unpublished_Orders/
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
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This article was originally submitted for publication in the Communiqué (Aug. 2024), the official publication of the Clark County Bar Association. See https://clarkcountybar.org/about/member-benefits/communique-2024/communique-aug-2024/
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