No. 56527 

FILED 

OCT 0 3 2013 

No. 57182 

129 Nev., Advance Opinion 6+ 

IN THE SUPREME COURT OF THE STATE OF NEVADA 

MCKNIGHT FAMILY, LLP, 

Appellant, 

vs. 

ADEPT MANAGEMENT SERVICES, 

INC.; NEVADA ASSOCIATION 

SERVICES, INC.; TORREY PINES 

HOMEOWNERS ASSOCIATION; AND 

DESIGN 3.2 LLC, 

Respondents. 

ADEPT MANAGEMENT SERVICES, 

INC., A NEVADA NONPROFIT 

CORPORATION; NEVADA 

ASSOCIATION SERVICES, INC.; AND 

TORREY PINES HOMEOWNERS 

ASSOCIATION, 

Appellants, 

vs. 

MCKNIGHT FAMILY, LLP, 

Respondent. 

Consolidated appeals from a district court order dismissing a 

complaint pursuant to NRS 38.310 and from a post-judgment order 

denying a motion for attorney fees and costs. Eighth Judicial District 

Court, Clark County; Stefany Miley, Judge. 

Affirmed in part, reversed in part, and remanded. 

James S. Kent, Ltd., and James S. Kent, Las Vegas, 

for McKnight Family, LLP. 

Gibbs, Giden, Locher, Turner, Senet & Wittbrodt LLP and Rich Haskin, 

Becky A. Pintar, and Airene Haze, Las Vegas, 

for Adept Management Services, Inc., Nevada Association Services, Inc., 

and Torrey Pines Homeowners Association. 

- 9v99 
Design 3.2 LLC, 

in Proper Person. 

BEFORE THE COURT EN BANC. 

OPINION 

By the Court, DOUGLAS, J.: 

After unsuccessful settlement negotiations regarding a dispute 

over unpaid property assessments, respondents/appellants Torrey Pines 

Homeowners Association, Adept Management, and Nevada Association 

Services (collectively, TP HOA) sold appellant/respondent McKnight 

Family, LLP's properties at a trustee sale. Design 3.2 purchased one of 

the properties. 

McKnight filed a complaint naming TP HOA and Design 3.2 

as defendants and a motion to set aside the sale based on improper notice. 

The district court entered a default judgment against Design 3.2 for failing 

to timely answer McKnight's complaint; however, the court later set aside 

the default. 

The district court denied McKnight's motion to set aside the 

sale, determining that TP HOA properly served McKnight. Further, the 

district court dismissed McKnight's complaint because the court 

determined that, pursuant to NRS 38.310, the claims should have been 

submitted to a form of alternative dispute resolution before being brought 

in district court. 

While the district court was correct in determining that most 

of McKnight's claims were subject to NRS 38.310, we conclude that the 

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district court erred to the extent that it dismissed McKnight's claim for 

quiet title because that claim was not subject to NRS 38.310. Accordingly, 

we reverse the dismissal of McKnight's quiet title claim. In light of this 

determination, we also reverse the district court's order denying the 

motion to set aside the trustee's sale. 

FACTS 

McKnight owned two properties in a housing community 

managed by TP HOA. TPHOA placed a lien on McKnight's properties 

under NRS 116.3116 after a dispute over allegedly unpaid assessments. 

In response, McKnight filed a complaint and an ex parte application for a 

temporary restraining order. McKnight alleged seven claims in its 

complaint, including one for injunctive relief. The district court granted 

the temporary restraining order and set a preliminary injunction hearing. 

However, the parties agreed to engage in settlement negotiations and 

signed a stipulation to halt all litigation and foreclosure proceedings for 30 

days. As a result, the preliminary injunction hearing was taken off the 

court's calendar. 

The settlement negotiations were unsuccessful, and TP HOA 

sold the properties at a trustee's sale. In response, McKnight filed an 

amended complaint alleging seven claims: (1) preliminary/permanent 

injunction, (2) negligence, (3) breach of contract, (4) violation of NAC 

116.300, 1(5) violation of NAC 116.341, 2(6) violation of NRS 116.1113 and 

IThe Nevada Administrative Code has since been revised. This 

provision was recodified at NAC 116A.320. 

2Recodified at NAC 116A.345. 

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NRS 116.3103, and (7) slander of title/wrongful foreclosure/quiet title. All 

seven claims were alleged in the original complaint; the only difference in 

the amended complaint was McKnight's addition of Design 3.2, LLC, as a 

defendant because Design 3.2 purchased one of the properties at the 

trustee's sale. 

The district court entered a default judgment against Design 

3.2 for failing to timely answer McKnight's complaint but later set aside 

the judgment. The parties briefed and argued the default judgment issue 

at an evidentiary hearing. At the hearing, Design 3.2 argued that the 

district court should set aside the default judgment because McKnight did 

not properly serve it with the amended complaint. The district court 

determined it would set aside the default judgment due to the Nevada 

Supreme Court's "liberal" attitude regarding setting aside a default if the 

motion to set aside the default is brought within "the six-month time 

frame." The district court later issued an order granting Design 3.2's 

motion to set aside the default, but did not determine whether McKnight 

properly served Design 3.2. 

Additionally, McKnight requested that the district court set 

aside the trustee's sale due to improper notice. McKnight alleged that TP 

HOA did not send notice of the sale via certified or registered mail, as 

Nevada law requires. In response, TP HOA filed a notice of compliance 

with the district court, which included two notices of delinquent 

assessment, two notices of default and election to sell, and two notices of 

sale. Additionally, the document contained several receipts for certified 

mail and sworn affidavits stating that each notice was sent to McKnight 

via certified mail. In light of the evidence TP HOA presented, the district 

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court determined that TP HOA provided McKnight with proper notice of 

the sale and denied McKnight's motion to set aside the trustee's sale. 

Further, the district court dismissed McKnight's amended 

complaint because it determined the parties were required to participate 

in alternative dispute resolution under NRS 38.310 before McKnight could 

bring the claims in district court. 

After the district court dismissed McKnight's complaint, TP 

HOA moved for attorney fees. The district court denied the motion 

without prejudice, pending the resolution of this appea1. 3 

DISCUSSION 

The district court erred in dismissing McKnight's entire complaint 

The district court's decision to dismiss McKnight's complaint 

pursuant to NRS 38.310 involves an issue of statutory interpretation; 

thus, we review this issue de novo. See Hamm v. Arrowcreek Homeowners' 

Ass'n, 124 Nev. 290, 295, 183 P.3d 895, 899 (2008). 

NRS 38.310 states: 

1. No civil action based upon a claim 

relating to: 

(a) The interpretation, application or 

enforcement of any covenants, conditions or 

restrictions applicable to residential property. . . 

• • • • 

may be commenced in [state court] unless the 

action has been submitted to mediation or 

3Our decision to reverse and remand this matter for further 

proceedings renders the attorney fees issue moot. See Personhood Nev. v. 

Bristol, 126 Nev. , , 245 P.3d 572, 574 (2010). 
arbitration pursuant to the provisions of NRS 

38.300 to 38.360, inclusive. . . . 

Under NRS 38.300(3), a civil action includes "an action for money 

damages or equitable relief," but not "an action in equity for injunctive 

relief in which there is an immediate threat of irreparable harm, or an 

action relating to the title to residential property." 

McKnight argues that NRS 38.310(2) prohibits the district 

court from dismissing a complaint once it commences, irrespective of 

whether the complaint violates NRS 38.310(1). NRS 38.310(2) states that 

"[a] court shall dismiss any civil action which is commenced in violation of 

the provisions of [NRS 38.310(1)1." McKnight's argument is meritless 

because NRS 38.310(2)'s language does not determine when a court can 

dismiss a civil action; rather, it mandates the court to dismiss any civil 

action initiated in violation of NRS 38.310(1). Therefore, the district court 

had the authority to dismiss the complaint. The only remaining issue 

regarding the complaint is whether the district court erred in dismissing 

every claim. To make such a determination, we must analyze each claim 

under NRS 38.310. 

An action is exempt from the NRS 38.310 requirements if the 

action relates to an individual's right to possess and use his or her 

property. In Hamm, this court determined that a lien on a property does 

not present an immediate danger of irreparable harm nor is it related to 

an individual's title to property for NRS 38.310 purposes because a lien 

exists separate from the property, and the right to use and dispose of the 

property remains with the owner until the lien is enforced at foreclosure 

proceedings. 124 Nev. at 298-99, 183 P.3d at 901-02. Contrarily, this 

court determined that a threat of foreclosure constitutes a danger of 

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irreparable harm because land is unique. Id. at 297, 183 P.2d at 901. 

With these principles in mind, we now analyze the claims McKnight 

alleged in its amended complaint. 

Injunctive relief claim 

The injunctive relief claim was properly dismissed because 

McKnight did not face an immediate threat of irreparable harm. The 

amended complaint superseded all claims for relief alleged in the original 

complaint. See Las Vegas Network, Inc. v. B. Shawcross & Assocs., 80 

Nev. 405, 407, 395 P.2d 520, 521 (1964). McKnight filed its amended 

complaint after TP HOA sold the properties at the trustee sale; thus, 

McKnight no longer faced the foreclosure threat. Without some 

immediate threat of a future irreparable harm, the injunctive relief claim 

is subject to NRS 38.310. Therefore, the district court properly dismissed 

it. See Hamm, 124 Nev. at 297-98, 183 P.3d at 901. 

Negligence, breach of contract, NAG, and NRS claims 

The negligence, breach of contract, NAC, and NRS claims are 

civil actions as defined in NRS 38.300. Therefore, the district court 

properly dismissed these claims. The negligence claim does not affect the 

title to the properties, rather it concerns payments McKnight made to TP 

HOA. The breach of contract claim is related to obligations and duties set 

forth in the CC&Rs, and the alleged NAC and NRS violations required the 

district court to interpret regulations and statutes that contained 

conditions and restrictions applicable to residential property. Thus, these 

claims fell under NRS 38.310's purview. Additionally, McKnight sought 

money damages for its NRS claims, so those claims are civil actions as 

defined in NRS 38.300(3). 

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Slander of title 

Slander of title involves false and malicious communications 

that disparage a person's title in land and cause special damages. Higgins 

v. Higgins, 103 Nev. 443, 445, 744 P.2d 530, 531 (1987). Slander of title is 

an NRS 38.300(3) civil action because it exists separate from the title to 

land. Similar to the lien in Hamm, slander of title may cloud an 

individual's title, perhaps resulting in a lower sale price. See Hamm, 124 

Nev. at 298-99, 183 P.3d at 901-02. However, slander of title does not 

infringe upon an individual's right to use or dispose of his or her property. 

Thus, the district court correctly dismissed this claim because the claim is 

subject to NRS 38.310 and must be submitted to alternative dispute 

resolution prior to being brought in district court. 

Wrongful foreclosure 

Wrongful foreclosure is a civil action subject to NRS 38.310's 

requirements because deciding a wrongful foreclosure claim against a 

homeowners' association involves interpreting covenants, conditions, or 

restrictions applicable to residential property. See Long v. Towne, 98 Nev. 

11, 14, 639 P.2d 528, 530 (1982) (finding no impropriety where "the lien 

foreclosure sale was conducted under authority of the CC&Rs and in 

compliance with NRS 107.080"). A wrongful foreclosure claim challenges 

the authority behind the foreclosure, not the foreclosure act itself. See 

Collins v. Union Fed. Say. & Loan, 99 Nev. 284, 304, 662 P.2d 610, 623 

(1983). To determine whether an individual violated any conditions or 

failed to perform any duties required under an association's CC&Rs, a 

court must interpret the CC&Rs to determine their applicability and 

enforceability regarding the individual. This type of interpretation falls 

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under NRS 38.310. Therefore, the court acted properly in dismissing the 

wrongful foreclosure action. 

Quiet title claim 

Unlike McKnight's other causes of action, the quiet title claim 

is exempt from NRS 38.310. A quiet title claim requires the court to 

determine who holds superior title to a land parcel. See NRS 40.010. 

Such a claim directly relates to an individual's right to possess and use his 

or her property. Therefore, it is not a civil action as defined in NRS 

38.300(3) and, accordingly, is exempt from NRS 38.310. Thus, the district 

court erred in dismissing the quiet title claim, and we reverse the 

dismissal of this claim. 

Motion to set aside the sale of the properties 

In light of our decision regarding McKnight's quiet title claim, 

we also reverse the district court's order denying McKnight's motion to set 

aside the sale of the properties. While we disagree with McKnight's 

assertion that the district court erred in its findings of fact in its order 

denying the motion to set aside the trustee's sale, we nevertheless reverse 

the district court's order denying the motion, because depending on the 

quiet title claim's outcome, the question of whether the sale should be set 

aside is still open. On remand, the district court should reconsider the 

motion to set aside once it resolves the quiet title claim. 

Default judgment 

A court's decision regarding a motion to set aside a default 

judgment will not be disturbed absent an abuse of discretion. Minton v. 

Roliff, 86 Nev. 478, 481, 471 P.2d 209, 210 (1970). A trial court may abuse 

its discretion when it acts "in clear disregard of the guiding legal 

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principles." Bergmann v. Boyce, 109 Nev. 670, 674, 856 P.2d 560, 563 

(1993). 

In Moseley v. Eighth Judicial District Court, this court 

determined that it could not resolve a writ petition in its entirety because 

the district court failed to find whether a party—in seeking relief from a 

motion to dismiss—established excusable neglect. 124 Nev. 654, 668, 188 

P.3d 1136, 1146 (2008). The factual issue of excusable neglect was critical 

to whether the party was entitled to relief from the dismissal; thus, 

without the issue resolved, this court could not properly review the 

petition. See id. 

We cannot determine whether the district court abused its 

discretion in setting aside the default judgment against Design 3.2 

because the court did not make the necessary findings of fact. The motion 

to set aside the default judgment was based on the alleged fact that 

McKnight failed to serve Design 3.2. However, McKnight maintains it 

properly served Design 3.2, and McKnight supports its assertion with the 

process server's affidavit. Under NRCP 60(c), a district court may set 

aside a default judgment if a defendant is "not personally served with 

summons and complaint." Thus, similar to the factual issue of excusable 

neglect in Moseley, the issue of whether McKnight served Design 3.2 is 

critical to whether Design 3.2 is entitled to relief from the default 

judgment. Further, this court cannot "resolve disputed questions of fact." 

Round Hill Gen. Improvement Dist. v. Newman, 97 Nev. 601, 604, 637 

P.2d 534, 536 (1981) (internal citations omitted). Consequently, we vacate 

the district court's order granting Design 3.2's motion and remand the 

issue to the district court to determine whether McKnight properly served 

Design 3.2. 

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CONCLUSION 

We affirm the district court's dismissal of all of McKnight's 

claims other than the quiet title claim. We reverse the district court's 

decisions to dismiss McKnight's quiet title claim, and to deny McKnight's 

motion to set aside the foreclosure sale, we vacate the district court's order 

to grant Design 3.2's motion to set aside the default judgment, and we 

remand this matter to the district court for further proceedings consistent 

with this opinion. 

We concur: 

Saitta 

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