Nevada Appellate Court Summaries (8-10-21)

By Joe Tommasino, Esq.

Supreme Court of Nevada

Administrative proceedings: (1) NRS 233B.130(2)(a) requires a petitioner to name “the agency and all parties of record to the administrative proceeding” as respondents in a petition for judicial review of an administrative proceeding; (2) NRS 233B.130(2)(a)’s requirements are “mandatory and jurisdictional”; and (3) here, the Supreme Court of Nevada overruled a prior case which held that a petitioner meets NRS 233B.130(2)(a)’s naming requirement whenever the party’s name appears in a document attached to the petition. In Washoe County v. Otto, 128 Nev. 424, 282 P.3d 719 (2012), the Court held that NRS 233B.130(2)(a)’s naming requirement is “mandatory and jurisdictional” and that strict compliance therewith is necessary. More recently, in Prevost v. State, Department of Administration, 134 Nev. 326, 418 P.3d 675 (2018), the Court concluded the petitioner’s failure to name one party of record in the caption of a petition for judicial review was not jurisdictionally fatal under NRS 233B.130(2)(a) because the petitioner named the missing respondent in the body of the petition, attached the administrative decision naming the missing respondent in the petition, and served the missing respondent with the petition. The Prevost decision forced lower courts to deviate from NRS 233B.130(2)(a)’s plain language and determine whether the facts of each case are more like Otto or Prevost, a problem foreshadowed by Prevost’s dissent. Because courts should not be making this kind of determination where the statute plainly requires petitioners to name all parties as respondents, the Court overruled Prevost. And because appellant Michael Whitfield failed to strictly comply with NRS 233B.130(2)(a), the Court affirmed the dismissal of his petition. Whitfield v. Nev. State Pers. Comm’n, 137 Nev. Adv. Op. No. 34, ___ P.3d ___ (July 29, 2021).

Arbitration: (1) NRS 38.222 provides limited authority to intervene in an arbitration only where the district court orders a provisional remedy; and (2) because the parties here did not seek, and the district court did not provide, a provisional remedy, NRS 38.222 did not grant the district court authority to intervene in the arbitration. The district court did not have inherent authority to intervene in this arbitration to remedy alleged litigation misconduct because that matter was squarely before the arbitrator. Direct Grading & Paving, L.L.C. v. Dist. Ct. (Century Cmtys. of Nev., L.L.C.), 137 Nev. Adv. Op. No. 31, ___ P.3d ___ (July 8, 2021).

Cities: (1) NRS 268.0035(1), Nevada’s modified version of Dillon’s Rule, limits an incorporated city’s powers to those expressly granted to it, those necessarily implied from an express grant of power, or those “necessary or proper to address matters of local concern”; (2) in this writ petition, the Supreme Court of Nevada considered whether NRS 268.0035’s limitations on a city’s powers apply to a city’s ability to bring a lawsuit and, if so, whether the City of Reno has the power to bring the underlying action against pharmaceutical companies; and (3) the Court held that NRS 268.0035’s limitations apply to a city’s ability to litigate, such that the city’s power to maintain a lawsuit must be derived from an express grant of power or fall within a “matter of local concern” as defined in NRS 268.003(1). The City pointed to no express authority granting it the power to maintain this action. Though the district court found that the action involved a “matter of local concern,” the district court did not properly apply the statutory definition and make sufficient findings. The Supreme Court thus directed the district court to determine whether the underlying action falls under the statutory definition of a “matter of local concern.” Endo Health Solutions, Inc. v. Dist. Ct. (City of Reno), 137 Nev. Adv. Op. No. 39, ___ P.3d ___ (July 29, 2021).

Construction defect: (1) Statutes of repose envision that defendants should be free from liability after a legislatively determined period of time; (2) here, a six-year period applies under NRS 11.202 (2015); and (3) that six-year period begins when the improvement to the real property is “substantially complete” which, in the context of the common law, means sufficiently complete so that the owner can occupy or utilize the improvement. Whether an improvement to property is substantially complete is a fact-intensive inquiry, turning on the specific circumstances of the improvement. Here, the appellant failed to offer anything beyond “gossamer threads of whimsy, speculation, and conjecture” to support its argument that it commenced this action within the applicable six-year period. Thus, “[I]ike a discharge in bankruptcy, [the] statute of repose can be said to provide a fresh start or freedom from liability” for the respondents in this case. Somersett Owners Ass’n v. Somersett Dev. Co., LTD., 137 Nev. Adv. Op. No. 35, ___ P.3d ___ (July 29, 2021).

Corporations: (1) A board’s resolution is the expression of its intent to bind the corporation to a specific course of conduct, when the directors are acting as agents of the corporation, and the resolution is not defined by any particular formal requirements or magic words; and (2) for a shareholder to exercise dissenters’ rights when the “market-out exception” applies, the resolution must expressly provide otherwise than that there is no right to dissent. These consolidated appeals concern whether shareholders had a right to dissent from a corporate merger and seek fair value for their shares. When a corporation executes a merger, shareholders that object may dissent and obtain payment of fair value for their shares. There is generally no right to dissent, however, when the shares are publicly traded securities. This limitation is known as the market-out exception. This exception is itself subject to several exceptions, including where the board of directors resolution approving the merger expressly provides otherwise. What constitutes a board of directors’ “resolution” and when a resolution approving a plan of merger provides dissenters’ rights were issues of first impression that the Supreme Court of Nevada clarified in this case. Here, appellants owned shares of respondent’s stock and sought to exercise dissenters’ rights when respondent commenced a corporate merger offering per-share compensation that appellants found inadequate. The shareholders had a right to dissent because the board’s resolution stated that it unconditionally approved the merger agreement and the merger agreement provided that there was a right to dissent that could be validly exercised and a class of shareholders that could exercise it. The board’s resolution thus provided appellants with the right to obtain an appraisal of the fair value of their shares. Pope Invs., LLC v. China Yida Holding, Co. C/W 80709, 137 Nev. Adv. Op. No. 33, ___ P.3d ___ (July 8, 2021).

Criminal procedure: (1) NRS 173.035(2) safeguards against the erroneous dismissal of criminal charges by a justice of the peace following a preliminary hearing, and the statute allows the State to seek and obtain leave from the district court to proceed against the accused by information filed in district court, upon a showing that the justice court committed egregious error in dismissing the charges; (2) to obtain such leave, the district attorney must file a motion in district court “upon affidavit of any person who has knowledge of the commission of an offense, and who is a competent witness to testify in the case, setting forth the offense and the name of the person . . . charged with the commission thereof”; and (3) a preliminary-hearing transcript can satisfy NRS 173.035(2)’s affidavit requirement. NRS 53.045 allows a court to consider, in lieu of an affidavit, certain unsworn written declarations. To qualify as an alternative to an affidavit, such a declaration must recite that its statements are true and correct and be signed by the declarant under penalty of perjury. A declaration that complies with NRS 53.045 can satisfy a separate statute’s affidavit requirement even though the declaration is not sworn as an affidavit, by definition, would be. Here, the preliminary-hearing transcript was certified and it accurately reported the witnesses’ testimony. Moreover, the witnesses who testified did so under oath. Thus, the preliminary-hearing transcript is at least as accurate as a declaration or affidavit would be. Bolden (Jason) v. State, 137 Nev. Adv. Op. No. 28, ___ P.3d ___ (July 8, 2021).

Criminal procedure: (1) Under NRS 176.09187(1), a party may move for a new trial at any time where DNA test results are “favorable” to the moving party; and (2) new DNA test results are “favorable” where they would make a different result reasonably probable upon retrial. To warrant a new trial, the favorable DNA evidence must do more than merely support the defendant’s position or possibly alter the outcome of trial. The new DNA evidence must be material to a key part of the prosecution or defense, or so significant to the trial overall, such that had it been introduced at trial, a different result would have been reasonably probable. The weight of the new DNA evidence will ultimately depend on the facts and circumstances of each individual case, including the sufficiency of the evidence adduced at trial. For example, newly discovered DNA evidence cannot be considered favorable where it does not undermine the jury’s verdict and is cumulative. State v. Seka (John), 137 Nev. Adv. Op. No. 30, ___ P.3d ___ (July 8, 2021).

Cumulative error: (1) A criminal defendant has a fundamental right to a fair trial secured by the United States and Nevada Constitutions; and (2) because cumulative error in this case violated the defendant’s due-process right to a fair trial, the Supreme Court of Nevada reversed the judgment of conviction and remanded for a new trial. The Supreme Court categorized three types of misconduct here. First, the Court addressed judicial misconduct. The district court’s comment that “we know that the Defendant has been arrested by the police department” and “that the police department didn’t go out and select somebody at random to prosecute” undermined the defendant’s presumption of innocence because it improperly underscored the facts of his arrest and prosecution. Second, the Court addressed jury misconduct of two jurors using Google to define the term “common sense.” A juror who proffered an extraneous dictionary definition should be questioned as to what definition was applied so that the district court can ascertain whether “the jury might have been misled” by the definition. In assessing whether the definition applied by jurors was prejudicial, the relevant inquiry remains “whether the average, hypothetical juror would be influenced by the juror misconduct,” and whether “there is a reasonable probability that [the information] affected the verdict.” Because the term “common sense” was emphasized at trial, the jury’s use of Google to ascertain its meaning could have prejudiced the defendant, so the jury’s misconduct contributed to cumulative error. Finally, the Court addressed prosecutorial misconduct. A prosecutor is prohibited from directly commenting on the defendant’s decision not to testify. To determine whether an indirect reference violates the Fifth Amendment, a court must examine “whether the language used was manifestly intended to be or was of such a character that the jury would naturally and necessarily take it to be comment on the defendant’s failure to testify.” According to the Court, remarking that “[t]here’s two people that know what happened,” with one of those people being a defendant who has invoked the right not to testify, is an impermissible indirect reference because it is “of such a character that the jury would naturally and necessarily take it to be comment on the defendant’s failure to testify.” Thus, this indirect reference to the defendant’s failure to testify violated the Fifth Amendment and Nevada Constitution and also constituted prosecutorial misconduct.Where the government’s case is weak, a defendant is more likely to be prejudiced by the effect of cumulative errors. Here, the issue of guilt was close because—with no physical evidence to prove the crimes—the verdict centered on whether the jury believed specific testimony. The judicial, juror, and prosecutorial misconduct was substantial because it undermined the defendant’s credibility and defense, and the defendant was convicted of grave crimes. Thus, the cumulative effect of the errors denied the defendant’s due-process right to a fair trial. Gunera-Pastrana (Gustavo) v. State, 137 Nev. Adv. Op. No. 29, ___ P.3d ___ (July 8, 2021).

Genetic-marker analysis: Here, the district court erred in concluding that evidence obtained from genetic-marker analysis would have been inadmissible under Nevada’s rape-shield statute. The district court apparently concluded that there was no reasonable possibility that the appellant would not have been prosecuted or convicted because any evidence from a genetic-marker analysis that indicated another male’s DNA was present in the rape kit would be inadmissible under Nevada’s rape-shield statute. NRS 50.090 provides that in a prosecution for sexual assault, “the accused may not present evidence of any previous sexual conduct” of the victim in order to challenge the victim’s credibility as a witness “unless the prosecutor has presented evidence or the victim has testified concerning such conduct, or the absence of such conduct.” (Emphasis added.) In cases where NRS 50.090 is arguably applicable, the defendant must be given an opportunity upon motion to demonstrate that due process requires the admission of evidence concerning the victim’s past sexual conduct because such evidence’s probative value substantially outweighs its prejudicial effect. However, the district court mistakenly assumed that the CODIS match to another man’s DNA was evidence of “previous sexual conduct” such that the evidence would be inadmissible at a trial. Here, there is no evidence to support the conclusion that the match is evidence of sexual conduct preceding the assault. Importantly, even if the CODIS match evidence could have been considered as falling within the scope of NRS 50.090’s definition of “previous sexual conduct,” such that it might arguably be inadmissible at trial, the appellant would have been entitled to an opportunity, upon his request, to raise the issue of whether his constitutional rights would be violated by not admitting the evidence and require the court to consider whether the probative value of the evidence substantially outweighs its prejudicial effect. Thus, the appellant was wrongly denied the opportunity to litigate the admissibility of potentially critical evidence. James, Sr. (Tyrone) v. State (C/W 80907), 137 Nev. Adv. Op. No. 38, ___ P.3d ___ (July 29, 2021).

Insurance: NRS 687B.147, which requires disclosures to be made in a certain manner when an exclusion appears in a “policy of motor vehicle insurance,” does not apply to umbrella policies. While an insurer’s complete failure to disclose a policy exclusion might make the exclusion unenforceable, the Supreme Court of Nevada held that an insured who alleges that an exclusion was not disclosed must make that allegation in an affidavit rather than rely solely on the arguments of counsel. The Court also held that the district court did not abuse its discretion by denying a continuance where the insured did not clearly explain how further discovery would change the outcome. Sciarratta v. Foremost Ins. Co. Grand Rapids Mich., 137 Nev. Adv. Op. No. 32, ___ P.3d ___ (July 8, 2021).

Minimum wage: (1) Employee status for purposes of the Minimum Wage Amendment to the Nevada Constitution (MWA) is determined only by the “economic-realities” test, but employee status for purposes of statutory waiting-time penalties for late-paid wages may be affected by the presumption set forth in NRS 608.0155; and (2) a contractual recitation that a worker is not an employee is not conclusive under either test. Different laws may have different scopes of coverage, so the same worker may be an “independent contractor” under one law and an “employee” under another. Notably, employee status for the purposes of either the MWA or NRS Chapter 608 is notaffected by the Nevada Transportation Authority’s (NTA) approval of a taxi lease under NRS 706.473. Myers v. Reno Cab Co., Inc. C/W 80449, 137 Nev. Adv. Op. No. 36, ___ P.3d ___ (July 29, 2021).

Postconviction petitions: (1) NRS 34.810(1)(a) requires a district court to dismiss a postconviction habeas corpus petition if “[t]he petitioner’s conviction was upon a plea of guilty or guilty but mentally ill and the petition is not based upon an allegation that the plea was involuntarily or unknowingly entered or that the plea was entered without effective assistance of counsel”; but (2) NRS 34.810(1)(a) does not bar a claim that a petitioner received ineffective assistance of counsel at sentencing. Core claims prohibited by NRS 34.810(1)(a) are “independent claims relating to the deprivation of constitutional rights that occurred prior to the entry of the guilty plea” that do not allege that the guilty plea was entered involuntarily or unknowingly or without the effective assistance of counsel. Those claims are “waived” by the guilty plea. But where a petitioner argues that he or she received ineffective assistance of counsel at sentencing, he or she could not have raised that claim before entering his or her plea. It would violate the spirit of Nevada’s habeas statute and the public policy of this state to prohibit him or her from ever raising that claim in state court. Gonzales (Melvin) v. State, 137 Nev. Adv. Op. No. 40, ___ P.3d ___ (July 29, 2021).

Unjust enrichment: (1) Here, the existence of a bond pursuant to NRS 108.2415 precluded a contractor’s ability to maintain a claim for unjust enrichment against the property owner where the subject of the underlying dispute was governed by an express, written contract; and (2) the Supreme Court of Nevada adopted the Restatement’s test for determining when a contractor may maintain an unjust-enrichment claim against a defendant property owner even though the contractor’s contract was with the lessee, not the property owner. This opinion makes clear that “[i]f a surety bond executed by a lessee provides sufficient funds to cover damages incurred by a plaintiff, the plaintiff may not seek a separate unjust enrichment claim from a defendant property owner.” Further, the Supreme Court adopted the Restatement’s test for determining when a contractor may maintain an unjust enrichment claim against a defendant property owner for services the contractor rendered to a third person. Restatement (Third) of Restitution and Unjust Enrichment § 25 (Am. Law Inst. 2011). The Restatement describes that restitution is available after a claimant has rendered a contractual performance to a third person, the claimant has not received the promised compensation, and the uncompensated performance confers a benefit onto the defendant. Restatement (Third) of Restitution and Unjust Enrichment 25(1) (Am. Law Inst. 2011). The rule requires three conditions for unjust enrichment under such circumstances:

            (1) “[l]iability in restitution may not subject the defendant to a forced exchange”;

            (2) “[a]bsent liability in restitution, the claimant will not be compensated for the performance in question, and the defendant will retain the benefit of the claimant’s performance free of any liability to pay for it”; and

            (3) “[l]iability in restitution will not subject the defendant to an obligation from which it was understood by the parties that the defendant would be free.”

Id. § 25(2)(a)-(c). It is a “fundamental requirement of unjust enrichment in these circumstances . . . that [the defendant] must stand to obtain a valuable benefit at [the plaintiff’s] expense without paying anyone for it.” Id. § 25 cmt. b (emphasis added). Korte Constr. Co. v. State, Bd. of Regents, 137 Nev. Adv. Op. No. 37, ___ P.3d ___ (July 29, 2021).

Nevada Court of Appeals:

Medical malpractice: Because the plaintiffs had all necessary medical records and were therefore on inquiry notice of the claim more than a year before filing the complaint, and because the health care provider’s alleged concealment did not hinder the plaintiffs’ ability to procure an expert affidavit, the one-year statute of limitations expired and extraordinary writ relief is appropriate. Pursuant to NRS 41A.097(2), a medical-malpractice action against a health care provider must be filed within one year of the injury’s discovery or three years of the date of injury, whichever occurs first. NRS 41A.097(3) permits tolling of both limitations periods “for any period during which the provider of health care has concealed any act, error or omission upon which the action is based and which is known or through the use of reasonable diligence should have been known to the provider of health care.” The Supreme Court of Nevada has interpreted the statute to warrant tolling where the health care provider’s intentional concealment “would have hindered a reasonably diligent plaintiff from procuring an expert affidavit’ as required under NRS 41A.071.” Here, the irrefutable facts establish that the one-year statute of limitations expired in August 2017, making the November 2017 complaint untimely. Kushnir, M.D. v. Dist. Ct. (Estate of Gaetano), 137 Nev. Adv. Op. No. 41, ___ P.3d ___ (August 5, 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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