NSC Summaries

Advance Opinion Summary (8-28-14)

By Joe Tommasino

These 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.

Attorney-client privilege

A corporation’s current management is the sole holder of its attorney-client privilege and, thus, Nevada law does not allow for a judicially created “class-of-persons” exception to attorney-client privilege. NRS 49.095 unambiguously guarantees a client the right “to prevent any other person from disclosing” privileged communications. NRS 49.045 defines the term “client” to include corporations. The Nevada Supreme Court explained that allowing a former fiduciary of a corporation to access and use privileged information after he or she becomes adverse to the corporation solely based on his or her former fiduciary role is entirely inconsistent with the purpose of the attorney-client privilege, and such a situation would have a perverse chilling effect on candid communications between corporate managers and counsel. The court’s reasoning precludes a finding that there is a class of persons outside the corporation’s current officers and directors who are entitled to access the client’s confidential or privileged information over the client’s objection for use in litigation. Las Vegas Sands v. Eighth Jud. Dist. Ct., 130 Nev. Adv. Op. No. 69 (Aug. 7, 2014).

Attorneys

An out-of-state attorney’s motion to associate under SCR 42 should generally be granted as a matter of course, and the district court should typically limit its analysis to the requirements for admission set forth in that rule. In the instant case, the Nevada Supreme Court held that the possibility of delay did not provide a valid basis for the district court to deny the association request, as petitioners repeatedly stated that they did not wish to delay trial and the district court itself can control whether delay occurs through its resolution of any requests to continue the trial. Further, any reliance by the district court on petitioners’ purported failure to prove that out-of-state counsel was more capable of handling their case was improper, as SCR 42 contains no such requirement in its language. The denial of the motion to associate was therefore an arbitrary and capricious exercise of discretion. Imperial Credit v. Eighth Jud. Dist. Ct., 130 Nev. Adv. Op. No. 59 (Aug. 7, 2014).

Attorneys

The two-year statute of limitations in NRS 11.207, as revised in 1997, is tolled against a cause of action for attorney malpractice pending the outcome of the underlying lawsuit in which the malpractice allegedly occurred. After 1997, the amended statute retained the discovery-rule language to which the litigation malpractice tolling rule has been applied in Nevada case law. And Nevada case law, while not explicitly addressing whether the tolling rule survived the statutory amendments, has continued to implicitly recognize the rule as good law under the amended statute. Here, the court maintained the rule because it permits the final resolution of the damages incurred during the litigation, including any changes on the appeal, thereby preventing judicial resources from being spent on a claim for damages that may be reduced or cured during litigation. Brady Vorwerck v. New Albertson’s, 130 Nev. Adv. Op. No. 68 (Aug. 7, 2014).

Civil appeals

An appeal must be taken from an appealable order when first entered. Superfluous or duplicative orders and judgments—those filed after an appealable order has been entered that do nothing more than repeat the contents of that order—are not appealable and, generally, should not be rendered. The appealability of an order or judgment depends on “what the order or judgment actually does, not what it is called.” Thus, a post-judgment order awarding attorney fees and costs is appealable, even though not termed a “judgment” or incorporated into the final judgment. When district courts, after entering an appealable order, go on to enter a judgment on the same issue, the judgment is superfluous and unnecessary. Campos-Garcia v. Johnson, 130 Nev. Adv. Op. No. 64 (Aug. 7, 2014).

Construction defects

NRS Chapter 40 does not require a subcontractor to give prelitigation notice before filing a fourth-party complaint against a supplier. Before claimant homeowners may assert construction defect claims in the district court, they must provide the contractor written notice of the alleged defect, followed by an opportunity to repair. While NRS Chapter 40 compels the contractor to forward any notices of defect to the subcontractors and suppliers or forgo suit against those subcontractors and suppliers, the chapter does not require either the claimant homeowners or the subcontractors to give prelitigation notice to another subcontractor or supplier. Barrett v. Eighth Jud. Dist. Ct., 130 Nev. Adv. Op. No. 65 (Aug. 7, 2014).

Discovery

The mere presence of a foreign international privacy statute does not preclude Nevada district courts from ordering litigants to comply with Nevada discovery rules. Rather, the existence of such a statute becomes relevant to the district court’s sanctions analysis in the event that its discovery order is disobeyed. Nevada Rules of Civil Procedure 26(b)(1) authorizes parties to discover any nonprivileged evidence that is relevant to any claims or defenses at issue. Conversely, many foreign nations have created nondisclosure laws that prohibit international entities from producing various types of documents in litigation. Such a privacy statute does not, by itself, excuse a party from complying with a discovery order. The Nevada Supreme Court advised the district court to evaluate specific factors in determining what sanctions, if any, are appropriate for violation of a discovery order. Las Vegas Sands v. Eighth Jud. Dist. Ct., 130 Nev. Adv. Op. No. 61 (Aug. 7, 2014).

Donative transfers

A donor may obtain relief from an erroneous gift if he or she proves by clear and convincing evidence that the donor’s intent was mistaken and not in accord with the donative transfer. A unilateral mistake occurs when one party makes a mistake as to a basic assumption of a contract, that party does not bear the risk of mistake, and the other party has reason to know of the mistake or caused it. Most jurisdictions follow the modern Restatement approach, which allows a donor to obtain relief from a donative transfer based on unilateral mistake through reformation or rescission. In re Irrevocable Trust Agreement of 1979, 130 Nev. Adv. Op. No. 63 (Aug. 7, 2014).

Eminent domain

In this case, the Nevada Supreme Court’s prior dispositional order properly concluded that prejudgment interest should be calculated from the date of taking, which in this case is the first date of compensable injury. Separately, the court concluded that the landowners’ claims are not barred by the applicable statute of limitations because a 15-year statute of limitations applies in “takings” actions. The court found that “[a]lthough separate from inverse condemnation claims, we see no reason to apply a different limitations period to precondemnation claims, which are often brought together with an inverse condemnation claim.” City of N. Las Vegas v. 5th & Centennial, 130 Nev. Adv. Op. No. 66 (Aug. 7, 2014).

Foreclosure mediation

A loan assignment made in violation of a Pooling and Servicing Agreement (PSA) is not void, but merely voidable and may be ratified or rejected at the option of the parties to the PSA. The Nevada Supreme Court examined the legal effect of a loan assignment from a homeowner’s original lender to a subsequent purchaser when that assignment violates the terms of the original lender and subsequent purchaser’s PSA. In particular, the court considered whether a loan assignment that is executed after the PSA’s “closing date” renders the assignment void and ineffective to transfer ownership of the homeowner’s loan. The court concluded that the assignment is voidable at the option of the parties to the PSA. Moreover, the homeowner, who is neither a party to the PSA nor an intended third-party beneficiary, lacks standing to challenge the validity of the loan assignment. Wood v. Germann, 130 Nev. Adv. Op. No. 58 (Aug. 7, 2014).

Habeas corpus

The case of Martinez v. Ryan, 132 S. Ct. 1309 (2012), does not alter the Nevada Supreme Court’s prior decisions that a petitioner has no constitutional right to post-conviction counsel and that post-conviction counsel’s performance does not constitute good cause to excuse the procedural bars under NRS 34.726(1) or NRS 34.810 unless the appointment of that counsel was mandated by statute. The filing of successive (and most likely untimely) petitions for post-conviction relief would overload the court system, significantly increase costs, and undermine the finality of the judgment of conviction, precisely what the Nevada State Legislature was attempting to avoid in creating the single post-conviction remedy in NRS Chapter 34. Because the Martinez ruling does not fit within Nevada’s statutory post-conviction framework, the Nevada Supreme Court declined to extend it to state post-conviction proceedings. Brown v. McDaniel, 130 Nev. Adv. Op. No. 60 (Aug. 7, 2014).

Liens

Under NRS 108.222, a materialman has a lien upon a property and any improvements thereon for which he supplied materials in the amount of the unpaid balance due for those materials. A materialman does not need to prove that the materials that he supplied were actually used or incorporated into the property or improvements. Separately, the court indicated that a mechanic’s lien is directed at a specific property, requiring the district court to determine the total appropriate charge attributable to that property before ordering its sale. Moreover, because a surety bond replaces a property as security for the lien, the property cannot be sold where a surety bond was posted; instead, the lien judgment should be satisfied from the surety bond. Simmons Self-Storage v. Rib Roof, Inc., 130 Nev. Adv. Op. No. 57 (Aug. 7, 2014).

Liens

(1) In Nevada, a mechanic’s lien takes priority over other encumbrances on a property that are recorded after construction of a work of improvement visibly commences, and (2) contract dates and permit issuance dates are irrelevant to the visible-commencement-of-construction test, but they may assist the trier of fact in determining the scope of the work of improvement. A mechanic’s lien claimant may properly claim lien priority under NRS 108.225 when the work or material forming the basis of the lien’s priority was placed or performed on the site “months before the building permit was issued or the general contractor hired, as long as there was, in fact, visible commencement of construction as defined by NRS 108.22112 and as long as all of the work or material placed or performed on the site in the prior months was a part of the same work of improvement under NRS 108.22188 as the later work giving rise to the mechanic’s lien. Also, a trier of fact is not precluded from finding that grading property for a work of improvement constitutes visible commencement of construction. Byrd Underground, L.L.C. v. Angaur, L.L.C., 130 Nev. Adv. Op. No. 62 (Aug. 7, 2014).

Litigation privilege

(1) The common-law litigation privilege immunizes from civil-liability communicative acts occurring in the course of judicial proceedings, even if those acts would otherwise be tortious, and (2) Nevada law recognizes an exception to the litigation privilege for legal malpractice and professional negligence actions. The court concluded that “it is unsound policy to allow an attorney to assert a privilege designed to ensure unimpeded advocacy for a client as a shield against the client’s claim that the attorney provided inadequate legal representation.” Therefore, an attorney generally cannot assert the litigation privilege as a defense to legal malpractice and professional negligence claims. Greenberg Traurig v. Frias Holding Co., 130 Nev. Adv. Op. No. 67(Aug. 7, 2014).

Restitution

A district court has jurisdiction to impose restitution to the state for the cost of child care in a child-abuse case in which a family court has already imposed an obligation on the defendant for the costs of supporting the child; however, the district court must offset the restitution amount by the amount of the support obligation imposed by the family court. This case involved “an overlap between the family court’s authority to impose a support obligation and a district court’s authority to impose restitution as part of a criminal sentence.” Such overlap does not undermine the jurisdiction of either the family court or the sentencing court, as long as the district court offsets the restitution amount by the amount of the support obligation. Major v. State, 130 Nev. Adv. Op. No. 70 (Aug. 28, 2014).

Details for each opinion can now be found on the “Advance Opinions” page published by the Supreme Court of Nevada 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).