NV Supreme Court Summaries (1-31-14)
By Joe Tommasino
The NV Supreme Court Summaries are provided by attorney Joe Tommasino and published by the Clark County Bar Association (CCBA). All rights reserved. To request permissions to reprint, contact CCBA at (702) 387-6011.
Civil Judgments: Because NRS 17.130(2) does not authorize compound interest, the statute only allows for the award of simple interest on judgments. Simple interest is “[i]nterest paid on the principal only and not on accumulated interest.” Compound interest is “[i]nterest paid on both the principal and the previously accumulated interest.” When not provided for by an agreement, compound interest on a judgment is only permissible if authorized by statute. First, the Court focused on the last sentence in NRS 17.130(2): “The rate must be adjusted accordingly on each January 1 and July 1 thereafter until the judgment is satisfied.” The Court found that the phrase “adjusted accordingly” does not authorize compound interest. Second, the Court considered an argument relating to the phrase “per annum.” The Nevada Supreme Court conceded that the phrase “per annum” is often used to designate the application of simple interest. Nevertheless, the Court concluded that although the use of the term “per annum” in a statute about interest rates may be sufficient to dictate the use of simple interest, it is not a necessary term for requiring the use of simple interest. Therefore, “the failure to use this term in [NRS 17.130(2)] does not prohibit the application of the statute’s plain meaning which, in the absence of language authorizing compound interest, unambiguously authorizes the award of simple interest only.” Torres v. Goodyear Tire & Rubber Co., 130 Nev. Adv. Op. No. 3, ___ P.3d ___ (January 30, 2014).
Equitable Subrogation: Nevada recognizes the doctrine of equitable subrogation as formulated in section 7.6 of the Restatement (Third) of Property: Mortgages (1997). Equitable subrogation permits a person who pays off an encumbrance to assume the same priority position as the holder of the previous encumbrance, so long as the payor (1) reasonably expected to receive a security interest in the real estate with the priority of the mortgage being discharged, and (2) subrogation does not materially prejudice the holders of intervening interests in the real estate. Restatement (Third) of Prop.: Mortgages § 7.6(b)(4). “The payor is subrogated only to the extent that the funds disbursed are actually applied toward payment of the prior lien. There is no right of subrogation with respect to any excess funds.” Id. cmt. e. Applying these principles to this case, Countrywide had a strong equitable-subrogation position, but the district court did not decide equitable subrogation because it resolved the case on other, later-reversed grounds. The Nevada Supreme Court commented that the law-of-the-case doctrine “refers to a family of rules embodying the general concept that a court involved in later phases of a lawsuit should not re-open questions decided (i.e., established as law of the case) by that court or a higher one in earlier phases.” Normally, “for the law-of-the-case doctrine to apply, the appellate court must actually address and decide the issue explicitly or by necessary implication.” “Subjects an appellate court does not discuss, because the parties did not raise them, do not become the law of the case by default.” The Nevada Supreme Court held that the prior case of Zhang II did not decide equitable subrogation explicitly or by necessary implication, nor did Zhang II reject equitable subrogation by necessary implication. Thus, the Nevada Supreme Court vacated the district court’s judgment and remanded with instructions to decide Countrywide’s equitable-subrogation claim on the merits and to enter final judgment accordingly. Recontrust Co. v. Zhang, 130 Nev. Adv. Op. No. 1, ___ P.3d ___ (January 30, 2014).
Family Law: (1) The Uniform Interstate Family Support Act (UIFSA), as enacted in Nevada, allows for the enforcement of a foreign support order when the order is entered in a country that is a recognized “state” under NRS Chapter 130; (2) in addition to UIFSA, a foreign support order may be enforced under the doctrine of comity. Here, the Nevada Supreme Court considered whether a spousal and child support order entered by a family court in Costa Rica is enforceable in Nevada. UIFSA governs multiple jurisdiction involvement in child support issues, and its purpose is to ensure that only one child support order is effective at any given time. UIFSA has been codified in Nevada under NRS Chapter 130 and provides procedures for the enforcement and modification of a support order issued by another state. Under NRS 130.10179(2), the term “state” is defined to include a foreign country if one of the following three conditions is met:
(1) The country has been declared to be a foreign reciprocating country under federal law,
(2) The state’s attorney general has declared the country a “state” because it has reciprocal provisions ensuring the enforcement of support orders, or
(3) The country has enacted law or established procedures for enforcing support orders that are substantially similar to those under UIFSA.
The Court found that none of these definitions were satisfied with respect to Costa Rica, so the Costa Rican support order was not enforceable under UIFSA. The Court then turned to the issue of whether the support order might still be enforceable by a Nevada court under the doctrine of comity. This doctrine is a principle of courtesy by which “the courts of one jurisdiction may give effect to the laws and judicial decisions of another jurisdiction out of deference and respect.” The Court noted that it had not previously considered the circumstances under which a foreign spousal and child support order will be enforceable in Nevada under the doctrine of comity. The Court thus considered the approach taken by the Restatement (Third) of Foreign Relations Law of the United States, which discusses reasons why a foreign judgment or order should not be enforced under comity. Section 482(1) provides: “[a] court in the United States may not recognize a judgment of the court of a foreign state” if “the judgment was rendered under a judicial system that does not provide impartial tribunals or procedures compatible with due process of law,” or if “the court that rendered the judgment did not have jurisdiction over the defendant.” Restatement (Third) of Foreign Relations Law of the United States § 482(1) (1987). Section 482(2) further provides that a court “need not recognize” a foreign judgment if:
(a) The court that rendered the judgment did not have jurisdiction of the subject matter of the action;
(b) The defendant did not receive notice of the proceedings in sufficient time to enable him to defend;
(c) The judgment was obtained by fraud;
(d) The cause of action on which the judgment was based, or the judgment itself, is repugnant to the public policy of the United States or of the State where recognition is sought;
(e) The judgment conflicts with another final judgment that is entitled to recognition; or
(f) The proceeding in the foreign court was contrary to an agreement between the parties to submit the controversy on which the judgment is based to another forum.
Id. Sec. 482(2).
The Ninth Circuit Court of Appeals has adopted the Restatement (Third) approach to enforcing foreign judgments, stating that it “provide[s] sound guidance for assessing legal judgments of other nations.” Several state courts have also adopted Section 482 of the Restatement (Third) to analyze whether foreign orders should be recognized under the doctrine of comity. The Nevada Supreme Court found the reasoning of Section 482 of the Restatement (Third) and these courts to be consistent with Nevada’s jurisprudence under the Full Faith and Credit Clause, as Nevada courts will refuse to recognize a judgment or order of a sister state if there is “a showing of fraud, lack of due process, or lack of jurisdiction in the rendering state.” The Nevada Supreme Court therefore adopted Section 482 of the Restatement (Third) of Foreign Relations Law of the United States to analyze whether a foreign support award for spousal and child support should be recognized by Nevada courts under the doctrine of comity. After reviewing the facts of the instant case, the Court declined to recognize and enforce the Costa Rican spousal-support order under the doctrine of comity “where a spouse purposefully failed to provide to the foreign court the premarital agreement that governed the parties’ agreement regarding spousal support.” However, the failure to disclose the premarital agreement would not necessarily prevent the district court from enforcing the child-support order because the agreement contained no provision concerning child support. The Nevada Supreme Court was unable to determine whether comity should be granted or denied to the child-support award. Thus, the Court remanded that issue to the district court to make appropriate findings of fact and conclusions of law under the Restatement (Third) approach, and to determine whether the child-support portion of the Costa Rican support order should be enforced as a matter of comity. Gonzales-Alpizar v. Griffith, 130 Nev. Adv. Op. No. 2, ___ P.3d ___ (January 30, 2014).
Details for each opinion can now be found on the “Advance Opinions” page published by the Nevada Supreme Court at http://supreme.nvcourts.gov/Supreme/Decisions/Advance_Opinions/
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).