Court Opinion

ID: 8213380
Source: CourtListenerOpinion
Date Created: 2022-10-12 10:07:42.23561+00
Date Added: 2024-06-11T16:42:22.494427
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF NEVADA

                J. MCDONALD CO., INC., A TEXAS                           No. 83569
                CORPORATION, FOR ITSELF AND
                DERIVATIVELY ON BEHALF OF
                TROPICAL & LOSEE, LLC,
                Appellant,                                              F1L
                vs.
                                                                         op 1 1        UL
                TROPICAL & LOSEE, LLC, A NEVADA
                LIMITED LIABILITY COMPANY;                         CL
                                                                        ELIZALI   A. B7i CIWU
                                                                            OF A PREME
                DAVID E. CROWE, AN INDIVIDUAL;
                                                                          DEP      CLERK
                AND FLETCHER MAJORS, AN
                INDIVIDUAL,
                Res • ondents.

                                        ORDER OF AFFIRMANCE
                             This is an appeal from a district court judgment in a business
                dispute. Eighth Judicial District Court, Clark County; Mark R. Denton,
                Judge.'
                             Respondents David E. Crowe and Fletcher Majors formed
                respondent Tropical & Losee, LLC (T&L) along with nonparty John
                McDonald (on behalf of his company, nonparty J. McDonald Co., Inc., a
                Nevada corporation (JMC Nevada)) in 1996. Nonparty J.W. Wood later
                replaced McDonald as president of JMC Nevada and McDonald no longer
                sat on T&L's governing board. JMC Nevada's corporate charter lapsed, and
                Wood unsuccessfully attempted to convert JMC Nevada to a Texas
                corporation. Because the conversion failed, Wood instead created appellant
                J. McDonald Co., Inc. (JMC Texas), a Texas corporation unrelated to JMC
                Nevada. The underlying dispute arose two months later when T&L denied

                     1Pursuant  to NRAP 34(f)(1), we have determined that oral argument
                is not warranted in this appeal.
SUPREME COURT
          OF
       NEVADA

10)   1947A
                Wood's request to access T&L's records, expressing concern with releasing
                the requested records because JMC Nevada was in "permanent revoke"
                status with the Nevada Secretary of State at that time. In response, JMC
                Texas filed the underlying action alleging various breach-of-contract and
                derivative claims against respondents and seeking an accounting of T&L's
                member distributions.
                             JMC Texas argues that the district court erred by entering
                judgment for respondents based on inaccurate findings that JMC Nevada
                was not a member when T&L denied it access to T&L's records and that
                Crowe and Majors did not breach any duties as alleged in JMC Texas'
                complaint. Notwithstanding the brevity of the record on appeal,2 because it
                is undisputed that JMC Texas is not now, and never has been, a member of
                T&L, we agree with the district court that JMC Texas lacks standing to
                bring derivative claims on T&L's behalf.      See NRS 86.485 (requiring a
                plaintiff bringing a derivative action to be a member); Cotter ex rel. Reading
                     Inc. v. Kane, 136 Nev. 559, 564, 473 P.3d 451, 456 (2020) (examining
                the language of a statute to determine if a plaintiff has standing to sue).
                Further, because JMC Nevada, and not JMC Texas was a party to T&L's
                operating agreement, JMC Texas could not challenge T&L's accounting and
                distributions; therefore, the district court properly found in respondents'
                favor on appellant's breach-of-contract claims. See High Noon at Arlington

                      2JMC   Texas' appendix included neither trial transcripts nor trial
                exhibits, impairing this court's ability to meaningfully review the district
                court's factual findings. See Cuzze v. Univ. & Crnty. Coll. Sys. of Nev., 123
                Nev. 598, 603, 172 P.3d 131, 135 (2007) ("[T]his court has made it clear that
                appellants are responsible for making an adequate appellate record."); see
                also Sargeant v. Henderson Taxi, 133 Nev. 196, 197, 394 P.3d 1215, 1218
                (2017) (explaining that meaningful review is impaired when essential
                records are omitted from the record on appeal).
SUPREME COURT
        OF
     NEVADA
                                                      2
(0) I947A
                Ranch Horneowners Ass'n v. Eighth Judicial Dist. Court, 133 Nev. 500, 507,
                402 P.3d 639, 646 (2017) NA] party has standing to assert only its own
                rights and cannot raise the claims of a third party not before the court.").
                Thus, JMC Texas lacked standing to bring its claims and the district court
                did not err by entering judgment for respondents.3 See Arguello v. Sunset
                Station, Inc., 127 Nev. 365, 368, 252 P.3d 206, 208 (2011) (explaining that
                this court reviews standing de novo). Based upon the foregoing, we
                             ORDER the judgment of the district court AFFIRMED.4

                                        -1c2kotka.gleke""rb
                                        Parraguirre

                                                                                     , Sr.J.
                Herndon                                   Gi

                cc:   Hon. Mark R. Denton, District Judge
                      Stephen E. Haberfeld, Settlement Judge
                      Cleveland Terrazas PLLC
                      Thomas & Associates/Los Angeles
                      King Scow Koch Durham LLC
                      Sklar Williams LLP
                      Eighth District Court Clerk

                      3Given   our conclusion, we need not reach JMC Texas' remaining
                arguments.

                      4The   Honorable Mark Gibbons, Senior Justice, participated in the
                decision of this matter under a general order of assignment.
SUPREME COURT
        OF
     NEVADA

                                                      3
(0) I947A