Case Title: Emerson v. Eighth Judicial Dist. Court

Citation: 127 Nev. Adv. Op. No. 61

Docket Number: 

State: nevada

Court: Nevada Supreme Court

Date: 2011-10-06T00:00:00Z

Document:
427 Nev., Advance Opinion &|
IN THE SUPREME COURT OF THE STATE OF NEVADA

PHILLIP EMERSON, | No, 65238
Petitioner,

THE EIGHTH JUDICIAL DISTRICT

COURT OF THE STATE OF NEVADA, |

IN AND FOR THE COUNTY OF |

CLARK, AND THE HONORABLE F l L E D
DOUGLAS HERNDON, DISTRICT

 

JUDGE, OCT 06 2011

Respondents, | AISA,
sper i Ser

GREGORY J. LIOCE AND FARMERS Sen

INSURANCE EXCHANGE,
Real Parties in Interest.

 

Original petition for a writ of mandamus or prohibition
challenging a district court order imposing sanctions on petitioner.

Petition denied.
Lemons, Grundy & Bisenberg and Robert Eisenberg, Reno; Emerson &

‘Manke, PLLC, and Phillip R. Emerson, Henderson,
for Petitioner.

 

Coleman Law Associates and Edward S. Coleman, Las Vegas,
for Real Party in Interest Gregory J. Lioce.

BEFORE SAITTA, C.J., HARDESTY and PARRAGUIRRE, JJ.
OPINION

By the Court, HARDESTY, J.
In this petition for extraordinary writ relief, we consider
whether the district court can impose sanctions after it enters an order

1-30u7s,

 
om

dismissing a case with prejudice pursuant to a stipulation of the parties
under NRCP 41(a)(1)(i). In resolving this issue, we initially address
whether the district court has jurisdiction to impose sanctions after a
stipulated dismissal. We conclude that the district court retains
jurisdiction after a case is dismissed to consider

 

nctions for attorney

misconduct that occurred prior to the dismissal. Next, we addr

 

whether the district court may impose as a sanction attorney fees and
costs incurred in the original trial when a new trial is ordered. We
conclude that the district court did not abuse its discretion by imposing as

a sanction attorney fees and cost

 

incurred in the original trial. We,
therefore, deny writ relief,
FACTS

‘This matter arose out of a multivehicle traffic accident, which
led to a dispute over who was at fault for the incident. See Lioce v. Cohen,
124 Nev. 1, 9, 174 P.3d 970, 975-76 (2008). The plaintiff, Gregory Lioce,
sued three defendants, Dana Cohen: her spouse, Morry Cohen; and John
Wilson. Id, at 9, 174 P.3d 975. At trial, Wilson's attorney, petitioner

  

Phillip Emerson, made a series of statements to the jury that this court
later deemed improper.! Id, at 9-10, 20, 174 P.3d at 975-76, 982, The jury
eventually found for the defendants. Id. at 10, 174 P.3d at 976. Asa
result of Emerson's comments, Lioce moved for a directed verdict or a new
trial, but the district court denied both motions. Id, Lioce challenged the
denial of both motions before this court, and we ultimately concluded that
Emerson's comments were improper and amounted to impermissible jury
nullification because they reflected his “personal opinion about the

1Emerson's improper statements are more fully discussed in Lioce v.
Cohen, 124 Nev. 1, 9-10, 20, 174 P.3d 970, 975-76, 982 (2008).

 

 
justness of (the plaintiff's] cause[].” Id. at 21-22, 174 P.8d at 983-84
(citing RPC 8.4(e)). We then vacated the order denying a new trial and
remanded the Lioce matter to the distriet court with instructions.

‘On remand, the district court determined that a new trial as
to defendants Dana and Morry Cohen was not warranted. However, the
district court found that Lioce was entitled to a new trial against
defendant Wilson because “the verdict in favor of Wilson would have been
different but for the misconduct of [Emerson].”

After the district court granted Lioce's motion for a new trial
as to Wilson, Lioce filed a motion for sanctions based on Emerson's
misconduct. In the motion, he did not request a specified amount of
attorney fees or costs; instead, he contended that the district court should
award attorney fees and costs as sanctions “to make up for the immense
amounts of additional expense Emerson has caused.”

At a hearing on the motion on July 22, 2009, the district court
orally indicated its intent to grant sanctions in the amount of fees and
costs “only as to the first trial.” On August 19, 2009, the parties filed a
stipulation and order dismissing the matter with prejudice, and the
district court entered its order regarding the same on August 24, 2009.
‘The parties did not address the pending motion for sanctions in their
stipulation. On September 11, 2009, the district court entered an order
granting Lioce’s motion and imposing $19,330 in sanctions on Emerson,
personally. The district court selected this amount based on a declaration

submitted by Lioce’s counsel, which indicated various costs and attorney

fees incurred during the original trial, including the time counsel spent in
trial and the cost of an expert witness who testified.

 

 
Emerson then filed a motion for reconsideration, arguing that
the district court improperly imposed sanctions against him. However, he
did not raise the issue of whether the district court retained jurisdiction to
consider the motion for sanctions after the case had been dismissed
pursuant to the parties’ stipulation. The district court denied the motion
for reconsideration, after which Emerson petitioned this court for writ
relief, requesting that we issue a writ directing the district court to vacate
its order imposing sanctions.
DISCUSSION

“A writ of prohibition ‘serves to stop a district court from
carrying on its judicial functions when it is acting outside its jurisdiction.”
‘Stephens Media v. Dist, Ct,, 125 Nev. _, __, 221 P.3d 1240, 1246 (2009)
(quoting Sonia F. v, Dist. Ct,, 125 Nev. 495, 498, 215 P.3d 706, 707 (2009);
see_also NRS 34.320. “A writ of mandamus is available to compel the
performance of an act that the law requires as a duty resulting from an
office, trust, or station or to control an arbitrary or capricious exercise of
discretion.” Williams v. Dist, Ct,, 127 Nev. __, _, _ P.8d__, __ (Adv.
Op. No. 45, July 28, 2011) (quoting International Game Tech. v, Dist. Ct.,
124 Nev. 193, 197, 179 P.3d 556, 658 (2007); see also NRS 34.160. A writ

‘petitioner has a plain, speedy, and adequate remedy

 

will not issue if the

in the ordinary course of law,” Williams, 127 Nev. at __, __ P.3d at __
(quoting Mineral County v. State, Dep't of Conserv,, 117 Nev. 235, 243, 20

P.3d 800, 805 (2001); see also NRS 34.170; NRS 34.330, and “[mJandamus
will not lie to control discretionary action, unless discretion is manifestly
abused or is exercised arbitrarily or capriciously,” Round Hill Gen. Imp.
Dist.v. Newman, 97 Nev. 601, 603-04, 637 P.2d 534, 536 (1981) (internal
citation omitted),

 
8 Be

 

Because Emerson was not a party to the litigation below, he
cannot appeal, and therefore he has no other remedy available at law.
Additionally, Emerson raises an issue of first impression: whether the
district court retains jurisdiction to consider sanctions following the
voluntary dismissal of a case. Accordingly, we exercise our discretion to
consider this writ petition.

In his writ petition, Emerson argues that the district court
was without jurisdiction to impose sanctions once it dismissed the

underlying matter pursuant to the parties’ stipulation. Whether the

 

district court had ongoing jurisdiction to impose sanctions is a question of
law this court reviews de novo. See American Sterling Bank v. Johnny
Mamt. LY, 126 Nev. _, __, 245 P.3d 635, 538 (2010). Although

Emerson failed to raise this argument in the district court, this failure is

 

not fatal to his writ petition because the parties can raise subject matter
jurisdiction at any time. Landreth v, Malik, 127 Nev. _, __, 251 P.3d
163, 166 (2011).

We have previously held that jurisdiction over matters related
to the merits of a case terminates upon dismissal. Jeep Corp. v. District
Court, 98 Nev. 440, 443-44, 652 P.2d 1183, 1186 (1982); SEPP. L.P. v, Dist,
Ct, 123 Nev. 608, 612, 173 P.3d 715, 718 (2007). In Jeep Corp., the
district court sua sponte entered a judgment on the merits after the
parties stipulated to dismiss the case without prejudice? and filed a notice
to that effect. 98 Nev. at 442, 652 P.2d at 1185. We held that the district

*Pursuant to NRCP 41(a)(1), dismissal by stipulation is without
prejudice unless the notice of dismissal indicates otherwise. In Jeep Corp.
v. District Court, 98 Nev. 440, 652 P.2d 1183 (1982), the parties did not
indicate that they were dismissing the matter with prejudice.

 
court lacked jurisdiction to consider any action on the merits of the case
because the dismissal “terminated [the action] and the court is without
further jurisdiction in the matter.” Id. at 444, 652 P.2d at 1186.
Similarly, in SEPP. L.P., the parties stipulated to dismiss the dispute

 

between them, and we concluded that the “district court lost jurisdiction
over the judgment once the order for dismissal with prejudice was entered
and lacked jurisdiction to conduct any further proceedings with respect to
the matters resolved in the judgment unless it was first properly set aside
or vacated,” 123 Nev. at 612, 173 P.3d at 718. Jeep Corp. and SEPP. L.P.

 

thus leave open the question of whether the district court retains
jurisdiction to consider collateral matters such as sanctions for attorney

misconduct when, as here, the partie: the case with

 

tipulated to dism

 

prejudice.

‘The United States Supreme Court has held that a lower court
may impose sanctions under Federal Rule of Civil Procedure 11 after a
plaintiff files a voluntary notice of dismissal. Cooter & Gell v, Hartmarx
Corp,, 496 U.S. 384, 395 (1990). ‘The Court noted several other collateral

 

 

sues over which federal courts exercise ongoing jurisdiction, including

 

“costs after an action is dismissed for want of jurisdiction,” attorney fees,
and criminal contempt charges. Id, at 395-96. Similarly, this court has
held that the district court retains jurisdiction to award attorney fees in
the underlying matter after an appeal is filed. Kantor v, Kantor, 116 Nev.
886, 894.95, 8 P.3d 825, 830 (2000) (holding that, although a timely notice
of appeal divests the district court of jurisdiction and vests jurisdiction in
this court, the district court had jurisdiction to award attorney fees while

an appeal of the underlying divorce decree was pending because the

“collateral matter did not affect the merits of [the appellant's} appeal’).

 

 
Other jurisdictions have similarly held that the district court retains
jurisdiction to consider sanctions following a voluntary dismissal, or after
‘an appeal has been filed. See Toumajian v. Frailey, 135 F.3d 648, 657 (9th
Cir. 1998) (holding that “despite a lack of subject matter jurisdiction, a
district court may properly award sanctions under Fed.R.Civ.P. 11”
because “an award of sanctions involves the determination of a collateral

 

jue and not an adjudication of the merits of a ‘case or controversy”);
Schering Corp. v, Vitarine Pharmaceuticals, Inc., 889 F.2d 490, 496 (3d
Cir. 1989) (holding that “the district court had jurisdiction to entertain
and decide the Rule 11 motion after defendants suffered a voluntary
dismissal under Rule 41(a)(1)()"); Thomas v, Capital Sec, Services, Inc.,
812 F.2d 984, 987 (6th Cir. 1987) (holding that even though an appeal is
pending, “the district court retains jurisdiction to entertain and resolve a
motion requesting attorney’s fees or sanctions’)

Allowing the district court to retain jurisdiction to impose
sanctions is consistent with other jurisdictions’ rationale for sanctioning

attorney misconduct. The purpose of these sanctions is to “command

 

obedience to the judiciary and to deter and punish those who abuse the
judicial process.” Red Carpet Studios Div, of Source Advan, v, Sater, 465
F.3d 642, 645 (6th Cir. 2006). Like FRCP 11 violations, and similarly,
NRCP 11 violations, attorney misconduct and any resulting sanctions are
wholly separate and distinct from adjudicating the merits of an underlying
claim because they are affronts on the judicial process unrelated to the
substantive merits of a proceeding. See Sater, 465 F.3d at 645. As such,
the violation for which the sanction is imposed begins and ends at the time

of the act, irrespective of any agreement to settle and dismiss the matter.
Cooter & Gell, 496 U.S. at 395. We also recognize that collateral matters

 

 
have no preclusive or res judicata effect on the underlying claims because

they do not affect the parties’ ability to adjudicate the merits of the case.
k

 

see also Kantor, 116 Nev. at 895, 8 P.3d at 830 (istrict courts retain
jurisdiction to adjudicate matters that do not affect the merits of the
appeal)

In Red Carpet Studios Division of Source Advantage v, Sater,
the parties settled a case after the district court granted a motion for
sanctions but before it calculated the final amount. 465 F.8d at 645
Gnterpreting FRCP 41(a)(1)(A)(i)). ‘The Sixth Cireuit Court of Appeals
held that, even though the parties voluntarily dismissed the e

 

e pursuant
to a stipulation, this fact did not affect the district court's ability to impose
sanctions. Id, at 644-45, We agree and conclude that a district court
retains jurisdiction over collateral matters when a case is dismissed under
either NRCP 41(a)(1)() or (i). Additionally, this court treats dismissals
pursuant to NRCP 41(a)(1)(i) or (ii) coextensively. See Jeep Corp., 98 Nev.
at 444, 652 P.2d at 1186 ("The only difforence between subsection (i) and

 

 

subsection (ii) of the rule is that the former is a unilateral

 

ismissal by
plaintiff before issues are joined and the latter is a stipulated dismissal
which may be filed at any timo,” and “[iJn both instances, the action is
terminated and the court is without further [subject matter] jurisdiction in
the matter.”). Thus, the means of dismissal does not affect whether the
district court has jurisdiction to impose sanctions.

Accordingly, we now hold that the district court retains
jurisdiction to consider collateral matters, including sanctions for attorney

misconduct, after the parties stipulate to dismiss a case with prejudice.

We now address whether the district court properly awarded attorney fees

 

 
and costs incurred in the initial trial as a sanction for Emerson's
misconduct, when a new trial was ordered as a result of that misconduct,
‘The district court did not abuse its discretion in awarding most of the costs
‘misconduct

“This court reviews a district court's award of attorney fees
and costs, as a sanction, for an abuse of discretion.” Berkson v, LePome,
126 Nev. __, _, 245 P.3d 560, 568 (2010).

Emerson challenges the imposition of sanctions on three
grounds: (1) the Lioce opinion set forth new standards for misconduct, so
imposing those standards on Emerson violated his due process rights
because he did not have proper notice of what constituted misconduct; (2)
NRS 7.085 allows the district court to impose additional costs resulting
from a grant of a new trial, but not the costs incurred during the prior
trial; and (3) the amount of sanctions imposed here was grossly
disproportionate to the misconduct. Emerson's first argument is without
merit because Lioce did not set forth new standards for misconduct;
rather, it clarified the standards by which district courts must evaluate
misconduct when considering new trial motions. Emerson's second
argument is also without merit because neither party raised this issue, or
any other issue relating to NRS 7.085, in the district court? See In re
AMERCO Derivative Litigation, 127 Nev. _, __n.6, 252 P.3d 681, 697

8We further note that the district court did not cite NRS 7.085 as its
basis for imposing sanctions. ‘That statute grants district courts authority
to award sanctions for “additional” costs incurred in “all appropriate
situations to punish for and deter frivolous or vexatious claims and
defenses..." NRS 7.085(2). It is not necessary to address whether the
strict court's sanction of Emerson for misconduct during the trial fits
within frivolous claims or defenses punished under the statute.

 

   

9

 

 
i
t

ome

1n.6 (2011) (explaining that “we decline to address an issue raised for the
first time on appeal"). Accordingly, we only address Emerson's third
argument.

While the district court did not provide a statutory basis for its
imposition of sanctions against Emerson, we note that district courts have
broad discretion to impose sanctions for professional misconduct at trial.
See Young v, Johnny Ribeiro Building, 106 Nev. 88, 92, 787 P.2d 777, 779
(1990); see also Lioce, 124 Nev. at 26, 174 P.3d at 986 (explaining that
“sanctions for professional misconduct at trial in civil cases are best
considered in the first instance by the district court. Therefore, the

district court may, on a party's motion or sua sponte, impose sanctions for

 

professional misconduct at trial ..."). ‘This broad discretion permits the

 

district court to issue sanctions for any “litigation abuses not specifically
proscribed by statute.” Young, 106 Nev. at 92, 787 P.2d at 779. Therefore,
we conclude that the district court had inherent power to impose sanctions
for Emerson's misconduct.

‘Other jurisdictions have similarly concluded that a district court
has inherent power to impose sanctions. See, e.g., Couch v. Private
Diagnostic Clinic, 554 S.B.2d 356, 362-64 (N.C. Ct. App. 2001) (explaining
that while the trial court did not have express statutory authority to
impose attorney fees as sanctions for an attorney's improper closing
statement, the trial court had the inherent authority to do so); Persichini
v, Beaumont Hosp., 607 N.W. 2d 100, 109 (Mich. Ct. App. 1999) (“{A trial]
court's inherent power to sanction misconduct and to control the
movement of cases on its docket includes the power to award attorney fees
as sanctions when the egregious misconduct of a party or an attorney
causes a mistrial.”). We further note that the United States Supreme
Court has determined that a federal district court has the inherent power
to impose attorney fees as sanctions. Chambers v. NASCO, Inc,, 501 U.S.
82, 45-46, 62 (1991); see Couch, 554 S.E.2d at 363 (applying Chambers to
state trial courts).

 

 

 
Having concluded that the district court had inherent power to
impose sanctions against Emerson, we next consider whether, as Emerson
argues, the sanctions were grossly disproportionate to Emerson's
misconduct. We conclude that the district court did not abuse its
discretion when it awarded sanctions in the amount of fees and costs
incurred by Lioce in the original trial.

Despite the district court's broad discretion to impose
sanctions, “[a] district court may only impose sanctions that are
reasonably proportionate to the litigant’s misconduct.” Heinle v. Heinle,
777 N.W.2d 590, 602 (N.D. 2010). “Proportionate sanctions are those
which are ‘roughly proportionate to sanctions imposed in similar
situations or for analogous levels of culpability.” In_re Disciplinary
Proceeding Against Hicks, 214 P.3d 897, 905 (Wash. 2009) (quoting In re
Disciplinary Proceeding Against Dynan, 98 P.3d 444, 454-56 (Wash. 2004)
(further internal quotations omitted). ‘However, the fact that no other
court has imposed like sanctions for such behavior does not mandate a
conclusion that the trial court has abused its discretion in ordering such
+." Couch v, Private Diagnostic Clinic, 554 S.E.2d 366, 364
(N.C. Ct. App. 2001). Moreover, “[s]uch comparisons will seldom be
determinative, given the infinite variety of misconduct and of aggravating
Matter of Disciplinary Pro, Against Noble, 667
P.2d 608, 612 (Wash. 1983).

In this case, to support his argument that the fees the district

sanctions

 

 

and mitigating factor

court imposed were excessive, Emerson cited other cases where this court
awarded only nominal sanctions for an attorney's trial misconduct. See
Randolph v. State, 117 Nev. 970, 982, 36 P.3d 424, 432 (2001) (this court

 

 
found that a prosecutor's restatement of the reasonable doubt standard
was sanctionable); Greene v. State, 113 Nev. 157, 170, 981 P.2d 54, 62
(1997) (this court imposed a $250 sanction on the prosecutor for improper
comments during the opening statement), overruled on other grounds by
Byford _v. State, 116 Nev. 215, 235-36, 994 P.2d 700, 713-14 (2000);
Williams v, State, 103 Nev. 106, 112 n.6, 784 P.2d 700, 704 n.6 (1987);
McGuire v. State, 100 Ney. 153, 159-60, 677 P.2d 1060, 1064-65 (1984)
(this court ordered sanctions in the amount of $500 because of the
prosecutor's misconduct).

We conclude that the cases upon which Emerson relied do not
support the conclusion that the sanctions were grossly disproportionate to
the misconduct. The cases are distinguishable because they are criminal
cases and this court imposed sanctions instead of the district court. More
importantly, none of the cases involved misconduct that warranted the
granting of a new trial.

In contrast to the cases upon which Emerson relied, the
district court in this case granted Lioce’s motion for sanctions because it
determined that a new trial against defendant Wilson was appropriate
because of Emerson's misconduct during the first trial. While the district
court's order expressed the court’s intention to award attorney fees and
costs incurred by Wilson in preparing for and attending the first trial, the
ultimate amount awarded was limited to attorney fees and costs incurred
during the trial. Specifically, the district court awarded $19,330 based on

a declaration submitted by Lioce’s counsel for the time counsel spent
during trial and the cost of an expert witness who testified. Accordingly,

 

 
 

because Emerson’s misconduct caused a new trial to be granted, and the
district court limited the sanctions to the fees and costs that Lioce

incurred in the original trial, we conclude that the sanctions are not

 

disproportionate to the misconduct. Therefore, we conclude that the
district court did not abuse its discretion by exercising its inherent power
to impose such sanctions. See Young, 106 Nev. at 92, 787 P.2d at 779
(‘Even if we would not have imposed such sanctions in the first instance,

we will not substitute our judgment for that of the district court.”),

Accordingly, we deny Emerson's writ petition.

13.