Justia Nevada Supreme Court Opinion Summaries

The Supreme Court reversed the judgment of the district court granting summary judgment by substituting other remedies in place of an equitable lien placed by the bankruptcy court on real property located at 10512 Loma Portal Avenue, holding that, based on the preclusive effect of prior court orders, an equitable lien was the only available remedy to satisfy Respondent's interest concerning the property.At issue before the Supreme Court was the preclusive effect of the multiple court orders in this case and the equitable remedies available under those orders. The Supreme Court remanded the case for further proceedings, holding (1) an equitable lien placed on property to satisfy a debt permits the lien holder to enforce the value of the equitable lien against the debtor's property even where that property has been subsequently transferred to a nondebtor spouse during divorce proceedings; (2) the district court erred by substituting other remedies in place of the equitable lien; and (3) genuine issues of material fact remained as to the value of the equitable lien placed on the property, as well as the value of the property itself. View "Holland v. Barney" on Justia Law

The Supreme Court affirmed the judgment of the district court exercising jurisdiction over the underlying fraudulent conveyance action and avoiding all of Paul Morabito's transfers to Superpumper, Inc., Sam Morabito, Snowshoe Petroleum, Inc., and Edward Bayer, individually and as trustee of the Bayuk Trust (collectively, Superpumper) and awarding Paul Morabito's bankruptcy trustee (Trustee) the subject property or the value thereof, holding that the district court did not err.Paul and Consolidated Nevada Corporation entered into a settlement agreement with JH Inc., Jerry Herbst, and Berry-Hinckley Industries (collectively, the Herbsts) for $85 million and later defaulted on the agreement. After a bankruptcy court adjudicated Paul as a Chapter 7 debtor the Herbsts filed a fraudulent transfer action against Paul and Superpumper, the transferees of Paul's assets. The state district court avoided all of Morabito's transfers to Superpumper and awarded the Trustee the subject property or the value thereof. The Supreme Court affirmed, holding (1) the district court had subject matter jurisdiction over the fraudulent conveyance action; (2) Superpumper waived its in rem jurisdiction argument; and (3) the district court did not abuse its discretion in allowing attorney-client communications to be admitted into evidence at trial. View "Superpumper, Inc. v. Leonard" on Justia Law

In this homeowners' association (HOA) foreclosure case, the Supreme Court reversed the district court's grant of summary judgment to U.S. Bank, N.A. and remanded for entry of summary judgment for SFR Investments Pool 1, LLC, holding that the mere fact that a foreclosure sale was held in violation of a bankruptcy stay is not by itself evidence of unfairness.The homeowner filed for bankruptcy under Chapter 11, which imposed an automatic stay on actions against her real property. In violation of the stay, the HOA sold the property at a foreclosure sale. SFR, the purchaser, sought to quiet title. The bankruptcy court issued a limited order retroactively annulling the bankruptcy stay of the stay, which has the legal effect of validating the sale. The district court, however, set aside the sale and granted summary judgment for U.S. Bank finding that the HOA's foreclosure sale being conducted in violation of the bankruptcy stay was evidence of unfairness and that the sale price was inadequate. The Supreme Court reversed, holding that U.S. Bank failed to produce any evidence showing how the sale's violation of the automatic stay constituted unfairness and that SFR met its burden of showing that the HOA foreclosure sale complied with the procedures in Nev. Rev. Stat. Chapter 116. View "SFR Investments Pool 1 v. U.S. Bank, N.A." on Justia Law

Certain real property was sold in violation of an automatic stay from the homeowners’ bankruptcy proceedings. Because the property was situated in Nevada, and the bankruptcy proceedings commenced in Texas, the Supreme Court was presented with a purported conflict of laws issue. Appellant sought to quiet title in the district court. Respondent disputed the validity of the sale by filing a complaint in intervention. The district court granted summary judgment for Respondent, concluding that the United States Court of Appeals for the Ninth Circuit applied, Respondent had standing as a creditor enforce the automatic stay in the homeowners’ bankruptcy, and the foreclosure sale was void due to the violation of the automatic stay. On appeal, Appellant argued that the United States Court of Appeals for the Fifth Circuit law applied. The Supreme Court affirmed, holding that summary judgment was proper because, under both the Ninth and Fifth Circuits, a sale conducted during an automatic stay in bankruptcy proceedings is invalid. View "LN Management LLC Series 5105 Portraits Place v. Green Tree Loan Servicing LLC" on Justia Law

Appellant filed for Chapter 11 bankruptcy, which was later converted to a Chapter 7 bankruptcy. Prior to filing, Appellant was involved in two personal injury cases. As part of his bankruptcy proceedings, Appellant claimed two personal injury exemptions, one for the personal injury settlement stemming from a dog attack and another stemming from an automobile accident. The bankruptcy court certified to the Supreme Court the question of whether a debtor is entitled to more than one personal injury exemption under Nev. Rev. Stat. 21.090(1)(u) if the debtor has more than one personal injury accident. The Supreme Court held that section 21.090(1)(u) entitles a debtor to an exemption for each personal injury claim, on a per-claim basis. View "Kaplan v. Dutra" on Justia Law

Tower Homes, LLC retained William Heaton and his law firm (collectively, Heaton) for legal guidance in developing a residential common ownership project. The project eventually failed, and Tower Homes entered Chapter 11 bankruptcy protection. The plan of reorganization and confirmation order stated that the trustee and bankruptcy estate retained all legal claims. The trustee subsequently entered into a stipulation with a group of creditors (collectively, the Creditors) permitting the Creditors to pursue any legal malpractice claims in the Tower Homes’ name. The bankruptcy court then entered an order authorizing the trustee to permit the Creditors to pursue Tower Homes’ legal malpractice claim in Tower Homes’ name. The Creditors subsequently filed a legal malpractice lawsuit against Heaton, naming Tower Homes as plaintiff. The district court granted summary judgment in favor of Heaton, concluding that the stipulation and order constituted an impermissible assignment of a legal malpractice claim to the Creditors. The Supreme Court affirmed, holding (1) the stipulation and order constituted an assignment, which is prohibited under Nevada law; and (2) the Creditors may bring a debtor’s legal malpractice claim pursuant to 11 U.S.C. 1123(b)(3)(B) when certain conditions are met, but those conditions were not met in this case. View "Tower Homes, LLC v. Heaton" on Justia Law

Debtor filed a voluntary Chapter 7 bankruptcy petition. On his claimed exemption schedule, Debtor asserted that, pursuant to Nev. Rev. Stat. 21.090(1)(bb), his entire interest in two corporations’ stock was exempt from the bankruptcy estate. The bankruptcy court certified a question to the Supreme Court, asking whether section 21.090(1)(bb) allows a debtor to exempt his entire interest in a closely held corporation or whether the exemption is limited to the debtor’s noneconomic interest in the corporation. The Supreme Court answered that section 21.090(1)(bb)’s language exempting stock of a corporation described in subsection 2 of Nev. Rev. Stat. 78.746 “except as set forth in that section” means that a debtor can exempt stock in the corporations described in Nev. Rev. Stat. 78.746(2), but his economic interest in that stock can still be subject to the charging order remedy in section 78.746(1). View "Becker v. Becker" on Justia Law

Appellants filed a promissory note that was secured by a deed of trust on their property. At the time that Appellants defaulted, Respondent was the holder of the note and Mortgage Electronic Registration Systems, Inc. (MERS) was the beneficiary of the deed of trust securing the note. After Appellants filed for bankruptcy, MERS assigned its interest in the deed of trust to Respondent. Before the assignment was recorded, Respondent filed a proof of claim in Appellants’ bankruptcy claiming that it was a secured creditor. Respondent then filed a motion for relief from the automatic bankruptcy stay so that it could foreclose on Appellants’ property. Appellants argued that Respondent was not a secured creditor because it did not have a unified note and deed of trust when the bankruptcy petition was filed. The United States Bankruptcy Court certified two questions of law to the Supreme Court concerning the legal effect on a foreclosure when the promissory note and deed of trust are split at the time of foreclosure. The Supreme Court concluded (1) when the promissory note is held by a principal and the beneficiary under the deed of trust is the principal’s agent at the time of foreclosure, reunification of the note and the deed of trust is not required to foreclose; and (2) as a matter of law, the recording of an assignment of a deed of trust is a ministerial act. View "In re Montierth" on Justia Law

The Kawaharas loaned the Allisons $400,000. The Allisons executed a note to the Kawaharas in that amount secured by a deed of trust on a Reno property. The note was delivered in 2009 but was not recorded until 2011. When the Allisons’ car dealership became delinquent in taxes, the State Department of Taxation recorded certificates of tax lien against the Allisons. The lien was created and recorded in 2010. The Allisons filed for bankruptcy in 2011. The U.S. Bankruptcy Court for the District of Nevada approved the sale of the Reno property. The bankruptcy court certified two questions to the Nevada Supreme Court concerning the priority of the competing liens on the Reno property. The Supreme Court concluded (1) a recorded tax lien cannot be recognized as a mortgage lien, and therefore, the Department cannot claim to have recorded a mortgage lien when it filed a tax lien certificate; (2) the deed of trust had priority over a tax lien levied under Nev. Rev. Stat. 360.473; and (3) the Department’s tax lien is considered a judgment lien under section 360.473(2), and Nevada recording statutes do not protect judgment creditors against prior unrecorded conveyances. View "State, Dep't of Taxation v. Kawahara" on Justia Law

William Plise, a judgment debtor, did not attend his scheduled debtor’s examinations in the district court. Eliot Alper, the judgment creditor, sought an order to show cause why Plise should not be held in contempt of court. Before the hearing on that motion, Plise filed a bankruptcy petition. Alper participated in the bankruptcy proceeding and obtained an order from the bankruptcy court granting relief from the automatic stay and allowing the district court to conduct a hearing and enter an order with regard to Plise’s alleged criminal contempt. The district court found Plise guilty of contempt of court and sentenced him to twenty-one days incarceration. The court, however, conditionally allowed Plise to avoid criminal contempt punishment. Alper filed this petition seeking a writ of prohibition arguing that the district court exceeded the scope of the bankruptcy court’s order granting relief from the automatic stay when it allowed him to avoid incarceration by participating in a debtor’s examination. The Supreme Court granted the writ of prohibition, concluding that the district court’s order exceeded the scope of the bankruptcy court’s lift stay order because a contempt order that permits a judgment debtor to purge incarceration is civil, rather than criminal, in nature. View "Alper v. Eighth Judicial Dist. Court" on Justia Law