No. 58869 

FILED 

BY 

DEPUTY, 

MAY 0 2 2013 

TRACIE K LINDEMAN 

CLEMOVUPREME,G04.1 f2T 

No. 59683 

SUPREME COURT 

OF 

NEVADA 

(0) 1947A I3 ) B 2. 

129 Nev., Advance Opinion 30 

IN THE SUPREME COURT OF THE STATE OF NEVADA 

MARSHALL SYLVER, AN 

INDIVIDUAL; MIND POWER, INC., A 

NEVADA CORPORATION; CASA DE 

MILLIONAIRE, LLC, A NEVADA 

LIMITED LIABILITY COMPANY; AND 

PROSPERITY CENTER, LLC, A 

NEVADA LIMITED LIABILITY 

COMPANY, 

Appellants, 

vs. 

REGENTS BANK, N.A., A NATIONAL 

ASSOCIATION, 

Respondent. 

MARSHALL SYLVER, AN 

INDIVIDUAL; MIND POWER, INC., A 

NEVADA CORPORATION; CASA DE 

MILLIONAIRE, LLC, A NEVADA 

LIMITED LIABILITY COMPANY; AND 

PROSPERITY CENTER, LLC, A 

NEVADA LIMITED LIABILITY 

COMPANY, 

Appellants, 

vs. 

REGENTS BANK, N.A., A NATIONAL 

ASSOCIATION, 

Respondent. 

Consolidated appeals from a district court order confirming an 

arbitration award and an amended judgment and order of sale. Eighth 

Judicial District Court, Clark County; Rob Bare, Judge. 

Affirmed. 

Kolesar & Leatham, Chtd., and Bart K. Larsen, Las Vegas, 

for Appellants. 
Sullivan Hill Lewin Rez & Engel and Christine A. Roberts, Las Vegas; 

Sullivan Hill Lewin Rez & Engel and James E. Drummond, San Diego, 

California, 

for Respondent. 

BEFORE HARDESTY, PARRAGUIRRE and CHERRY, JJ. 

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NEVADA 

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OPINION 

By the Court, PARRAGUIRRE, J.: 

In this appeal, we consider whether an arbitration award was 

obtained through undue means. In resolving this issue, we interpret the 

meaning of "undue means" under NRS 38.241 in line with the 

interpretation given by other state and federal courts, whereby the 

challenging party has the burden of proving that the arbitration award 

was secured through intentionally misleading conduct. Accordingly, we 

conclude that the district court correctly refused to vacate the arbitration 

award since the appellant did not satisfy his burden in showing by clear 

and convincing evidence that the respondent secured the award through 

intentionally misleading conduct. 

We also consider whether the arbitrator's refusal to void a 

loan in the underlying dispute constituted a manifest disregard of the law. 

Because the arbitrator did not consciously disregard the applicable legal 

standard, we conclude that there was no manifest disregard of the law. 

FACTS AND PROCEDURAL HISTORY 

In 2008, respondent Regents Bank, N.A., issued two loans to 

appellant Marshall Sylver. The first loan, intended as a bridge loan to 

purchase a residential property in Las Vegas, was partially secured by a 

deed of trust in another residential property located in Las Vegas. Sylver 

planned to sell the first property to pay off this loan. The second loan was 

a bridge loan to purchase a commercial building in Las Vegas. Sylver 

2 
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proposed to obtain commercial take-out financing for the second loan with 

Regents' assistance. With the exception of recordation of a deed of trust in 

Nevada, all transactions took place in California, where Regents is 

sitused. Throughout the process of obtaining the loans and seeking longterm financing with Regents, James Hibert was Sylver's point of contact. 

When financing failed to materialize, the parties twice 

adjusted the terms of the second loan's maturity date. Still, Sylver did not 

repay either loan. 

Regents filed a complaint in district court for breach of 

contract and judicial foreclosure. In his answer, Sylver alleged that 

Regents breached certain fiduciary duties; that Regents made false 

representations to Sylver regarding long-term financing; and that the first 

loan was void because Regents engaged in mortgage banking activity in 

Nevada without first seeking a certificate of exemption, as required by 

NRS 645E.910. The district court stayed the proceedings and compelled 

arbitration as provided in the loan documents. 

Both Sylver and Regents designated witnesses who would 

testify at the arbitration hearing. One witness, James Hibert, was 

designated by both parties. Prior to arbitration, Regents informed the 

arbitrator and Sylver that Hibert was unwilling to go to Las Vegas to 

testify at the arbitration hearing. Regents had recently terminated Hibert 

and could contact Hibert only through his attorney. Because Hibert's 

counsel informed Regents that Hibert was unwilling to attend the 

arbitration hearing in Las Vegas, Regents took Hibert's deposition and 

used it instead of his live testimony at the hearing. Sylver cross-examined 

Hibert for two hours during the deposition. 

On the second day of the arbitration hearing, Sylver testified 

that he had a phone conversation with Hibert that morning, wherein 

3 
Hibert stated that he had never been asked to testify in Las Vegas but 

would be willing to do so. Nevertheless, Sylver did not ask for a 

continuance, and the arbitrator ultimately rejected Sylver's arguments 

and ruled in Regents' favor. 

Regents filed a motion to confirm the arbitration award with 

the district court. Prior to the hearing on Regents' motion, Sylver filed a 

declaration by Hibert that, contrary to his earlier deposition testimony, 

supported allegations that Regents made false representations and failed 

to help secure long-term financing, despite Sylver's diligence throughout 

the process. In opposition to the motion, Sylver argued that Regents 

employed undue means in procuring the award by misrepresenting that 

Hibert was unavailable, and that the arbitrator had manifestly 

disregarded the law in refusing to void one of the loans. The district court 

confirmed the arbitration award and later entered an amended judgment 

and order of sale. Sylver appealed from both orders. 

DISCUSSION 

On appeal, Sylver revives the contentions he made before the 

district court. Specifically, he argues that (1) Regents employed undue 

means in procuring the award, and (2) the arbitrator manifestly 

disregarded the law in refusing to void one of the loans. 

Standard of review 

We review a district court's confirmation of an arbitration 

award de novo. Thomas v. City of North Las Vegas, 122 Nev. 82, 97, 127 

P.3d 1057, 1067 (2006). In so doing, we consider that "[s]trong public 

policy favors arbitration because arbitration generally avoids the higher 

costs and longer time periods associated with traditional litigation." D.R. 

Horton, Inc. v. Green, 120 Nev. 549, 553, 96 P.3d 1159, 1162 (2004). We 

apply a clear and convincing evidence standard when parties seek to 

4 
vacate an arbitration award. Health Plan of Nevada v. Rainbow Med., 120 

Nev. 689, 695, 100 P.3d 172, 178 (2004). 

NRS 38.241 allows a court to vacate an arbitration award 

procured by fraud, corruption, or undue means. A court may also vacate 

an arbitration award under the common law ground that the arbitrator 

"manifestly disregarded the law." Clark Cnty. Educ. Ass'n v. Clark Cnty. 

Sch. Dist., 122 Nev. 337, 341, 131 P.3d 5, 8 (2006). Sylver challenges the 

arbitration award on both grounds. 

The arbitration award was not procured by undue means 

Sylver argues that the arbitration award was obtained by 

undue means as a result of Regents' misrepresentation regarding Hibert's 

availability to testify at the arbitration hearing. Because we have never 

addressed the definition of "undue means" under NRS 38.241, we begin by 

reviewing and ultimately adopting the definition used by numerous state 

and federal circuit courts. Applying this definition to the circumstances 

raised here, we conclude that Sylver has not satisfied his burden for 

vacating the arbitration award. 

Definition of "undue means" 

NRS Chapter 38 embodies Nevada's adoption of the Revised 

Uniform Arbitration Act. Hearing on S.B. 336 Before the Assembly 

Judiciary Comm., 71st Leg. (Nev., April 24, 2001). NRS 38.241(1)(a) 

provides: 

Upon motion to the court by a party to an arbitral 

proceeding, the court shall vacate an award made 

in the arbitral proceeding if. . . [t]he award was 

procured by corruption, fraud or other undue 

means. 

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The language of NRS 38.241 closely mirrors the language of 9 

U.S.C. § 10(a)(1), which also addresses the standard for vacating an 

arbitration award. 

5 
Numerous federal and state courts have addressed the 

meaning of "undue means" as used in this context.' These jurisdictions, in 

interpreting "undue means," begin with the principle of statutory 

construction that "a word should be known by the company it keeps." 

National Cas. Co., 430 F.3d at 499. Accordingly, "[t]he best reading of the 

term 'undue means' under the maxim noscitur a sociis is that it describes 

underhanded or conniving ways of procuring an award that are similar to 

corruption or fraud, but do not precisely constitute either." Id.; see also 

PaineWebber Group, 187 F.3d at 991 ("The term 'undue means' must be 

read in conjunction with the words 'fraud' and 'corruption' that precede it 

in the statute."); Amer. Postal Workers Union, 52 F.3d at 362 ("[U]ndue 

means must be limited to an action by a party that is equivalent in gravity 

to corruption or fraud, such as a physical threat to an arbitrator or other 

improper influence."). Thus, "undue means' has generally been 

interpreted to mean something like fraud or corruption." Three S 

Delaware, 492 F.3d at 529; see also PaineWebber Group, 187 F.3d at 991 

(citing Amer. Postal Workers Union, 52 F.3d at 362, and noting that courts 

have "uniformly construed the term undue means as requiring proof of 

intentional misconduct"). 

Typically, to prove that an award was procured by 

undue means, the party seeking vacatur "must 

show that the fraud [or corruption] was (1) not 

1See, e.g., MCI Constructors, LLC v. City of Greensboro, 610 F.3d 849 

(4th Cir. 2010); Three S Delaware v. Data Quick Information Systems, 492 

F.3d 520 (4th Cir. 2007); National Gas. Co. v. First State Ins. Group, 430 

F.3d 492 (1st Cir. 2005); PaineWebber Group v. Zinsmeyer Trusts 

Partnership, 187 F.3d 988 (8th Cir. 1999); Amer. Postal Workers Union v. 

U.S. Postal Service, 52 F.3d 359 (D.C. Cir. 1995); A.G. Edwards & Sons, 

Inc. v. McCollough, 967 F.2d 1401 (9th Cir. 1992); Spiska Engineering v. 

SPM Thermo-Shield, 678 N.W.2d 804 (S.D. 2004). 

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discoverable upon the exercise of due diligence 

prior to the arbitration, (2) materially related to 

an issue in the arbitration, and (3) established by 

clear and convincing evidence." 

MCI Constructors, 610 F.3d 858 (alteration in original) (quoting A.G. 

Edwards & Sons, 967 F.2d at 1404). MCI Constructors requires the party 

seeking to vacate the award to prove a causal connection between the 

undue means and the resulting arbitration award. Id. 

Sylver has not established by clear and convincing evidence that the 

award was procured by undue means 

Adopting the above interpretation of "undue means," we 

conclude that Sylver has not met his burden for vacating the arbitration 

award. 

First, the conduct alleged by Sylver does not rise to the level of 

intentional bad faith behavior equivalent in gravity to corruption or fraud. 

See PaineWebber Group, 187 F.3d at 991; Amer. Postal Workers Union, 52 

F.3d at 362. While Sylver claims that Regents was incorrect in its 

representation that Hibert was unavailable, Sylver does not proffer any 

specific evidence that Regents' conduct was intentional, stating only that 

"[w]hether intentional or inadvertent, Regents' misrepresentations clearly 

impaired [a]ppellants' ability to present relevant evidence before the 

arbitrator." 2 

Second, Hibert's availability to testify was discoverable 

through due diligence. See MCI Constructors, 610 F.3d at 858. Sylver 

2Sylver seems to insinuate that since Regents paid for Hibert to 

have independent legal representation, there was collusion between 

Regents and Hibert's attorney, despite Hibert's own willingness to testify. 

However, Sylver points to no evidence of such collusion. We therefore do 

not address this contention. See NRAP 28(a)(9)(A). 

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relied on Regents' representation that Hibert was unavailable to testify, 

despite Sylver listing Hibert as a witness and deposing him for two hours. 

On the second day of the arbitration hearing, Sylver discovered Hibert was 

willing and available to testify, yet Sylver did not seek a continuance of 

the arbitration. 

Third, Sylver has not shown any causal connection between 

the arbitration award and the alleged misconduct. See id. Sylver had the 

opportunity to cross-examine Hibert prior to the arbitration, and Sylver 

himself admitted in district court that it was only after the arbitration 

that Hibert's potential testimony became so critical to Sylver's case. 

Accordingly, the district court correctly refused to vacate the 

arbitration award based on undue means. 

The arbitrator's refusal to void the loan was not a manifest disregard of 

the law 

Sylver argues that the district court erred in confirming the 

arbitration award, asserting that the arbitrator manifestly disregarded 

the law by enforcing the loan despite Regents' violation of NRS 645E.910, 

which requires a national bank to seek a certificate of exemption before 

engaging in mortgage banking activity in Nevada. 3 

"[J]udicial inquiry under the manifest-disregard-of-the-law 

standard is extremely limited.' A party seeking to vacate an arbitration 

3The arbitrator also found that Regents did not violate NRS 

645E.900, which makes soliciting or conducting business as a mortgage 

banker without a proper license or certificate of exemption unlawful. On 

appeal, Sylver does not present any legal authority or factual basis for 

challenging the arbitrator's decision besides a cursory statement alleging 

that Regents clearly violated NRS 645E.900. Accordingly, we need not 

address the arbitrator's decision regarding NRS 645E.900. NRAP 

28(a)(9)(A). 

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award based, on manifest disregard of the law may not merely object to the 

results of the arbitration.' Clark Cnty. Educ. Ass'n, 122 Nev. at 342, 131 

P.3d at 8 (quoting Bohlmann v. Printz, 120 Nev. 543, 547, 96 P.3d 1155, 

1158 (2004), disapproved on other grounds by Bass-Davis v. Davis, 122 

Nev. 442, 452 n.32, 134 P.3d 103, 109 n.32 (2006)). In analyzing whether 

an arbitrator manifestly disregarded the law, "the issue is not whether 

the arbitrator correctly interpreted the law, but whether the arbitrator, 

knowing the law and recognizing that the law required a particular result, 

simply disregarded the law." Id. (quoting Bohlmann, 120 Nev. at 547, 96 

P.3d at 1158); see also Health Plan of Nevada, 120 Nev. at 699, 100 P.3d at 

179 (stating that manifest disregard of the law requires a "conscious 

disregard of applicable law"). 

NRS 645E.200 requires corporations to receive licenses from 

the State of Nevada prior to engaging in mortgage banking activity in 

Nevada. NRS 645E.150 exempts national banks (such as Regents) from 

the licensing requirement, but NRS 645E.160 requires any such foreign 

corporations to obtain a certificate of exemption prior to engaging in 

certain mortgage banking activity in Nevada, and NRS 645E.910 makes it 

unlawful for a foreign bank to engage in such banking activity if it fails to 

obtain the certificate of exemption. 4 

Because Regents is a national bank, the arbitrator determined 

that Regents violated NRS 645E.910 by recording a deed of trust in 

Nevada without a certificate of exemption. However, because no civil 

remedy existed at the time for violations of NRS 645E.910, the arbitrator 

4NRS 80.015(3)(d) limits the application of NRS 645E.910 to 

noncommercial property. Thus, only the enforcement of the first loan, 

secured by the deed of trust in the Las Vegas residential property, is at 

issue. 

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concluded that "the unintentional violation of Chapter 645E by Regents 

had no materiality to the issues between the parties in the within action." 5 

On appeal, Sylver argues that even though no statutory civil 

remedy applies, Nevada courts have long refused to enforce contracts that 

are illegal or contravene public policy. Sylver refers to other jurisdictions 

that have found loans void and unenforceable following a lender's failure 

to comply with licensing requirements. See, e.g., Klipping v. McCauley, 

354 P.2d 167, 169 (Colo. 1960); Solomon v. Gilmore, 731 A.2d 280, 289 

(Conn. 1999). 

Sylver appears to suggest that loans made in violation of 

licensing requirements are necessarily unenforceable. While we have 

previously addressed whether a contract is unenforceable on public policy 

grounds, we have never addressed whether failure to comply with a 

licensing requirement necessarily renders a contract unenforceable. We 

decline to do so now, as the operative standard of review in this case "does 

not entail plenary judicial review. . . . The governing law alleged to have 

been ignored must be well-defined, explicit, and clearly applicable." 

Graber v. Comstock Bank, 111 Nev. 1421, 1428, 905 P.2d 1112, 1116 

(1995). Accordingly, the issue before us on appeal is limited to whether 

the arbitrator manifestly disregarded existing Nevada law, not whether 

the common law in Nevada should be extended to conform to other states' 

holdings. 

5Under NRS 645E.950, conducting the business of a mortgage 

banker without a license or certificate of exemption is potentially a 

misdemeanor. However, prior to 2009, no civil remedies existed for 

violations of NRS 645E.910, and the current civil remedies were not given 

retroactive effect. See 2009 Nev. Stat., ch. 200, §§ 20-21, at 747-48 

(enacting NRS 645E.920 and NRS 645E.930, respectively); 2009 Nev. 

Stat., ch. 474, § 84.7, at 2693 (amending NRS 645E.920). 

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Under existing Nevada law, a contract is unenforceable on 

public policy grounds where the policy against enforcement of a contract 

clearly outweighs the interest in its enforcement. Picardi v. Eighth 

Judicial Dist. Court, 127 Nev. „ 251 P.3d 723, 727 (2011) (citing 

Restatement (Second) of Contracts § 178(1) (1981)). In applying this 

balancing approach, we take account of "the seriousness of any misconduct 

involved and the extent to which it was deliberate, and. . . the directness 

of the connection between that misconduct and the term." Restatement 

(Second) of Contracts § 178(3)(c)-(d) (1981). 

On review, we begin by noting that the purpose behind NRS 

645E.910 was to avoid predatory lending by out-of-state mortgage bankers 

and brokers. Hearing on A.B. 490 Before the Assembly Commerce and 

Labor Comm., 72d Leg. (Nev., April 4, 2003). Here, the record indicates 

that Sylver solicited Regents' business, offering the Nevada property as 

security. Regents did not engage in any other mortgage banking activity 

in Nevada, and the property secured a loan that Sylver freely entered into 

and later defaulted upon. The arbitrator found that Regents' violation of 

the licensing statute was unintentional. Sylver does not assert that 

Regents' failure to obtain a license or exemption to record the deed of trust 

is in any way related to his failure to repay the loan. We conclude that the 

public policy of the licensing requirement does not clearly outweigh the 

interest in enforcing the loan. 

Accordingly, Sylver has not overcome the very high hurdle for 

showing that the arbitrator, "knowing the law and recognizing that the 

law required a particular result, simply disregarded the law." Clark Cnty. 

Educ. Ass'n, 122 Nev. at 342, 131 P.3d at 8 (quoting Bohlmann, 120 Nev. 

at 547, 96 P.3d at 1158). 

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Hardesty 

CIVoirt 

Cherry 

CONCLUSION 

NRS 38.241 provides for vacatur of arbitration awards 

procured by corruption, fraud, or undue means. We conclude that to 

vacate an arbitration award on a theory of "undue means" requires the 

challenging party to prove by clear and convincing evidence that the 

award was procured through intentionally misleading conduct. The 

appellant has not satisfied his burden. We further conclude that the 

arbitrator's refusal to void one of the loans was not a manifest disregard of 

the law. 

For the reasons stated above, we affirm the district court's 

order confirming the arbitration award and judgment thereon. 

Pai-raguirre 

We concur: 

I LA fre-R-4:t\ 

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