Court Opinion

ID: 2763451
Source: CourtListenerOpinion
Date Created: 2014-12-22 16:06:27.907444+00
Date Added: 2024-06-11T11:27:15.367449
License: Public Domain

easements, if any of record on said premises." JV has since defaulted on
                   the May 10, 2006, promissory note.
                               SMR7 filed a complaint in district court, and later filed a
                   motion for partial summary judgment against JV on the issue of JV's
                   liability. The district court granted partial summary judgment, finding (1)
                   the offer and acceptance agreement merged with the grant, bargain, and
                   sale deed, and the deed became the sole memorial of the agreement, and
                   (2) the grant, bargain, and sale deed, while reserving "rights," did not
                   expressly restrain the covenant against encumbrances under NRS
                   111.170(1)(b). The district court later issued a second order granting
                   summary judgment on the issue of damages based on a formal payoff
                   demand from the beneficiary of the May 10, 2006, deed of trust. JV now
                   appeals from both district court orders.
                   Standard of review
                               "This court reviews a district court's grant of summary
                   judgment de novo . . . ."   Wood v. Safeway, Inc.,   121 Nev. 724, 729, 121
P.3d 1026, 1029 (2005). Summary judgment is appropriate when, after
                   viewing the evidence and any reasonable inferences drawn from the
                   evidence in the light most favorable to the nonmoving party, there is no
                   genuine issue of material fact and the moving party is entitled to
                   judgment as a matter of law. Id.
                               This appeal also requires this court to interpret NRS 111.170
                   as well as the contractual provisions. "Issues involving statutory and
                   contractual interpretation are legal issues subject to .. . de novo review."
                   Weddell v. H20, Inc., 128 Nev. „ 271 P.3d 743, 748 (2012). "When
                   interpreting a statute, this court must give its terms their plain meaning,
                   considering its provisions as a whole so as to read them in a way that
                   would not render words or phrases superfluous or make a provision
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                nugatory." S. Nev. Homebuilders Ass'n v. Clark Cnty.,      121 Nev. 446, 449,
                117 P.3d 171, 173 (2005) (internal quotations omitted).
                The district court correctly found that the offer and acceptance agreement
                merged into the deed.
                            Traditionally, a contract of sale will merge into the deed once
                the deed is executed and delivered.    Hanneman v. Downer, 110 Nev. 167,
                177, 871 P.2d 279, 285 (1994) (determining that "[t] he terms in the deed
                which follows the contract of sale become the sole memorial of the
                agreement') (citations omitted). However, the doctrine of merger may not
                apply if the parties did not intend for the contract of sale to merge into the
                deed.   Hanneman, 110 Nev. at 177, 871 P.2d at 285 (concluding that
                intention is a "question of fact to be determined by an examination of the
                instruments and from the facts and circumstances surrounding their
                execution') (citations omitted). The issue here is whether the parties
                intended for the offer and acceptance agreement to merge with the deed.
                            JV argues that the existence of detailed terms and provisions
                within its offer and acceptance agreement are evidence that the parties
                intended the offer and acceptance agreement to memorialize their deal
                and not the deed. Alternatively, JV contends that at a minimum, the
                district court granted summary judgment prematurely because intent is a
                question of fact. In contrast, SMR7 argues that JV failed to produce
                sufficient evidence to warrant application of an exception to the doctrine of
                merger or to survive summary judgment.
                            We agree with SMR7 that after examining the instruments
                and surrounding facts, there is no evidence the parties intended for the
                offer and acceptance agreement to control over the deed. For instance, the
                deed included some but not all of the provisions contained in the offer and
                acceptance agreement. This indicates that the parties elected to choose
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                which contractual provisions would be included within the deed and which
                would not. Further, after reviewing the other evidence presented by JV,
                we agree with the district court that no genuine issues of material fact
                regarding the doctrine of merger exist.
                            Therefore, the traditional rule applies, and we affirm the
                finding of the district court that the offer and acceptance agreement
                merged into the deed upon its execution and delivery.
                The district court correctly found that the deed failed to expressly restrain
                the covenant against encumbrances.
                            Unless restrained by the express terms contained in the deed,
                all real property conveyed by way of a grant, bargain, and sale deed
                includes two statutory covenants: the covenant against prior conveyances,
                and the covenant against encumbrances. NRS 111.170(1)(a)-(b). The
                issue here is whether the deed's language stating that the conveyance was
                subject to tleservations, restrictions, conditions, rights, rights of way and
                easements, if any of record" restrained the covenant against
                encumbrances.
                            JV argues that the district court erred when it found that the
                concepts of reservations, restrictions, or rights are not interchangeable
                with the concept of encumbrances. SMR7 argues that JVs interpretation
                confuses the statutory language used in NRS 111.170(1)(a)-the covenant
                against prior conveyances-with the statutory language used in NRS
                111.170(1)(b)-the covenant against encumbrances. SMR7 notes that NRS
                111.170(1)(a) 2 uses the term "right" in describing the covenant against

                      2 NRS 111.170(1)(a) reads "[t]hat previous to the time of the
                execution of the conveyance the grantor has not conveyed the same real
                                                              continued on next page. . .

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                prior conveyances, while NRS 111.170(1)(b) 3 makes no mention of "right"
                in describing the covenant against encumbrances. NRS 111.170(1)(a)-(b).
                SMR7 contends that the two terms are not interchangeable, as evidenced
                by the Legislature's use of different words in the two subsections of NRS
                111.170(1), and that JV's proposed interpretation would render NRS
                111.170(1)(b) superfluous.
                              We agree with SMR7 that the language in the deed fails to
                expressly restrain the covenant against encumbrances. NRS 111.170(1)
                allows for the covenant against prior conveyances and the covenant
                against encumbrances to be restrained "by express terms" NRS
                111.170(1). To restrain either of these covenants, the language used in the
                deed must comport with NRS 111.170. Under a plain language reading,
                the inclusion of the word "rights" within a grant, bargain, and sale deed
                disclaimer only restrains the covenant against prior conveyances.
                Restraining the covenant against encumbrances requires use of the word
                "encumbrance." For instance, if the deed in this case included
                encumbrances within its list of items the conveyance was subject to, then
                NRS 111.170(1) would have been properly complied with. However, this is
                not the case. Thus, we agree with the district court's finding that the deed
                did not restrain the covenant against encumbrances.

                  . continued

                property, or any right, title, or interest therein, to any person other than
                the grantee." (emphasis added).

                      3 NRS  111.170(b) reads "rdhat the real property is, at the time of the
                execution of the conveyance, free from encumbrances, done, made or
                suffered by the grantor, or any person claiming under the grantor."

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                               Therefore, we affirm the district court's order of partial
                   summary judgment as to JV's liability.
                   The district court correctly calculated and awarded damages.
                               JV does not challenge the accuracy of the amount of the
                   damages award of $699,815.00.
                               Rather, JV argues that the damages award itself was
                   erroneous because the parties expressly agreed pursuant to the offer and
                   acceptance agreement that SMR7 would obtain title insurance and that
                   the title company would be liable for any alleged loss associated with the
                   transaction in question. JV contends that to allow SMR7 to recover from
                   JV is tantamount to re-writing the parties' agreement, which is not
                   permitted. SMR7 argues that JV's reliance on the terms of the offer and
                   acceptance agreement is irrelevant because it merged with the deed.
                   Alternatively, SMR7 asserts that even if this court looks to the language of
                   the agreement, there is no language that limits damages against JV.
                   Further, SMR7 contends that the mere fact that title insurance was
                   obtained has no effect on whether JV is liable for damages.
                               We agree with SMR7 that JV's argument lacks merit because,
                   as discussed above, the offer and acceptance agreement merged with the
                   deed, and thus its terms do not control. However, even if the terms of the
                   agreement are considered, the damages award against JV is still proper.
                   The fact that the parties agreement provided for title insurance does not
                   prevent SMR7 from recovering damages for the breach of the deed.         See
                   Lagrange Const., Inc. u. Kent Corp., 88 Nev. 271, 275, 496 P.2d 766, 768
                   (1972) (stating that damages must place the non-breaching party in as
                   good a position as it would have been had there been no breach).

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                    Therefore, we affirm the summary judgment order of the district court as
                    to damages. Accordingly we 4
                                 ORDER the judgment of the district court AFFIRMED.

                                                                                 ,   J.
                                                     Hardesty

                                                                    I            ,   J.

                                                                                     J.

                    cc: Hon. Joanna Kishner, District Judge
                         Paul H. Schofield, Settlement Judge
                         Bogatz Law Group
                         Kolesar & Leatham, Chtd.
                         Eighth District Court Clerk

                          4 We have considered the parties' remaining arguments and conclude
                    that they are without merit.

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