Opinion ID: 2595805
Heading Depth: 1
Heading Rank: 8

Heading: Ratification and laches

Text: Two additional points bear discussion. First, citing Navrides v. Zurich Insurance Company, 5 Cal.3d 698, 97 Cal.Rptr. 309, 488 P.2d 637, 640, (1971), Valley Hospital urges us to find the Garners ratified the fraud by attempting to negotiate for a settlement involving new funds of an equal amount after the fraud came to light, effectively doubling Valley Hospital's outlay but concluding their claims for the $160,000 Davidson disappeared with. While a client can ratify a lawyer's unauthorized act, see Restatement (Third) of the Law Governing Lawyers § 26(3), the district court found the facts did not support ratification here. Unlike the defrauded client in Navrides, who sued to enforce the unauthorized settlement, Navrides, 97 Cal.Rptr. 309, 488 P.2d at 640, the Garners consistently protested it as fraudulent. The district court's finding of no ratification was not clearly erroneous. Second, and of greater concern, the Garners learned of Davidson's misconduct from the State Bar of Nevada within weeks of the court entering the stipulation and order of dismissal, yet they waited almost 18 months before filing their NRCP 60(b) motion. During this time, they cooperated with the federal government in its criminal prosecution of Davidson and with the State Bar in its disbarment proceeding against him, and submitted a claim to the Nevada State Bar's Client Security Fund, for which they received $6,834.56. Federal authority holds that [t]here is no time limit on setting aside a judgment on th[e basis of fraud on the court], nor can laches bar consideration of the matter. 11 Wright, Miller & Kane supra, § 2870 (footnotes omitted). Other authority suggests due diligence is required, at least in discovering the underlying facts. Restatement (Second) of Judgments, § 70(2)(a) (1982). See also Matter of Harrison Living Trust, 121 Nev. 217, 112 P.3d 1058 (2005) (applying equitable estoppel and due diligence principles to bar a motion to vacate a motion to set aside a void judgment under NRCP 60(b)(4)); Manville v. Manville, 79 Nev. 487, 387 P.2d 661 (1963) (declining to address laches but holding that an independent suit to vacate a divorce decree was barred by the statute of limitations where the plaintiff waited more than six years to sue her ex-husband, alleging fraud upon the court in presenting the plaintiffs identical twin sister to testify in the underlying divorce). Our Nevada cases have held that a party who seeks relief from a judgment based on fraud upon the court is not subject to NRCP 60(b)'s six-month limitation period and that there is no time limitation. Price v. Dunn, 106 Nev. 100, 104, 787 P.2d 785, 787 (1990) (allowing motion even though 19 months had passed between entry of judgment and application to vacate); see Murphy, 103 Nev. at 185-86, 734 P.2d at 739 (allowing application [n]early a year after judgment was entered); Savage v. Salzmann, 88 Nev. 193, 495 P.2d 367 (1972) (remanding order dismissing independent action to vacate judgment filed 16 months after judgment was entered). This case does not require us to decide how far concern for the integrity of the court in a case involving fraud on the court will take a party who delays seeking relief. Davidson did not settle this case until discovery was well underway, and the record on appeal shows that, despite the district court's affording the parties the opportunity to brief, argue, and present live evidence on the Garners' NRCP 60(b) motion, Valley Hospital made no argument or showing that specific testimony or evidence had been lost or that it did not learn of Davidson's fraud at or about the same time the Garners did. While Valley Hospital did argue that the Garners were subject to the six-month limitation applicable to NRCP 60(b)(3) motions, it did not assert laches or establish prejudice. Indeed, among the arguments it tendered to the district court was that until Davidson's criminal proceedings ran their course, it was premature for the court to proceed with the Garners' NRCP 60(b) motion, because restitution might be ordered at Davidson's sentencing. Under these circumstances, the district court did not err in failing to deny the Garners relief based on the 18 months that elapsed between entry of the judgment and the NRCP 60(b) motion. Accordingly, we affirm the order of the district court. We concur: HARDESTY, C.J., and PARRAGUIRRE, DOUGLAS, CHERRY, SAITTA, and GIBBONS, JJ.