Court Opinion

ID: 9912970
Source: CourtListenerOpinion
Date Created: 2023-12-26 16:37:52.059676+00
Date Added: 2024-06-11T13:06:34.749856
License: Public Domain

135 Nev., Advance Opinion 1 01
                        IN THE COURT OF APPEALS OF THE STATE OF NEVADA

                   ROSE, LLC, A NEVADA LIMITED                        No. 71941-COA
                   LIABILITY COMPANY,
                   Appellant,                                              FILE
                   vs.
                   TREASURE ISLAND, LLC, A NEVADA                          JUN 06 2111!j
                   LIMITED LIABILITY COMPANY,                           ELIZABETH ft
                                                                     CLE
                                                                       r_yer ftPRE
                   Respondent.                                       :3?

                              Appeal from a judgment following a bench trial in a contract
                   action. Eighth Judicial District Court, Clark County; Elizabeth Goff
                   Gonzalez, Judge.
                              Affirmed.

                   Lewis Roca Rothgerber Christie LLP and Abraham G. Smith, Daniel F.
                   Polsenberg, and Joel D. Henriod, Las Vegas,
                   for Appellant.

                   Hutchison & Steffen, LLC, and Michael K. Wall and Mark Hutchison, Las
                   Vegas; Fennemore Craig, P.C., and Patrick J. Sheehan and Steven M. Silva,
                   Las Vegas,
                   for Respondent.

                   BEFORE GIBBONS, C.J., TAO and BULLA,' JJ.

                         'Subsequent to the oral argument held in this matter, the Honorable
                   Bonnie Bulla was appointed to the Nevada Court of Appeals. Judge Bulla
                   has listened to the audio recording of oral argument and considered all
                   arguments and briefs in participating in this matter.
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                                                    OPINION

                   By the Court, TAO, J.:
                               In this appeal arising from the alleged breach of a commercial
                   lease, we explore two legal questions not fully developed in Nevada law:
                   (1) when a written lease is otherwise silent, whether the allegedly
                   defaulting party is entitled to "strict" or merely "substantial" compliance
                   with the notice requirements set forth in the lease for declaring the party
                   in default, and (2) whether, under the circumstances of this case, a
                   subtenant becomes a necessary party under Rule 19 of the Nevada Rules of
                   Civil Procedure2 (NRCP) to an action for breach of contract between the
                   landlord and the prime tenant.
                               These questions arise from a lease between landlord Treasure
                   Island, LLC, and its prime tenant, Rose, LLC, for space inside of Treasure
                   Island's hotel/casino that was subleased to a third party, Serior Frog's (a
                   subsidiary of a Mexican company called Operadora Andersons, hereinafter
                   collectively referred to as Senor Frog's), and used to operate a restaurant.
                   Treasure Island alleged that Rose failed to make timely rent payments and
                   declared the lease in default, triggering the instant lawsuit. In addressing
                   the two questions before us, we note that a clear majority of states requires
                   landlords to strictly comply with any contractual notice provisions when
                   declaring a lease in default, but nonetheless we conclude that any failure to
                   do so is excused when the allegedly defaulting party receives actual notice

                         NRCP 19 was amended effective March 1, 2019, but the recent
                         2
                   changes do not affect any issue raised in this appeal. See In re Creating a
                   Comm. to Update & Revise the Nev. Rules of Civil Procedure, ADKT 0522
                   (Order Amending the Rules of Civil Procedure, the Rules of Appellate
                   Procedure, and the Nevada Electronic Filing and Conversion Rules,
                   December 31, 2018). We cite the text of the new rule herein.
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                   of the default despite any noncompliance. We also conclude that, under the
                   particular circumstances of this case, Senor Frog's was not a necessary
                   party to the litigation under NRCP 19.
                                   FACTUAL AND PROCEDURAL HISTORY
                               Treasure Island and Rose entered into a 10-year lease (with
                   options to renew for another 20 years) for space inside of Treasure Island's
                   Las Vegas Strip hotel/casino that was turned into a Senor Frog's bar and
                   restaurant. The lease provided for both monthly rent and quarterly
                   percentage rent and required that notices under the lease be sent to Susan
                   Markusch (an officer of Rose), with a copy to Senor Frog's. The lease
                   provided that, upon the giving of any notice of default, Rose would be given
                   10 days to cure any alleged breach of the lease.
                               The parties subsequently revised the lease a number of times
                   through mutual agreement. At issue here is the fifth revision to the lease,
                   which the parties negotiated primarily to reflect a change in the
                   relationship between Rose and Senor Frog's, converting what had been a
                   partnership between them into a sublease with Rose as the principal tenant
                   and Senor Frog's as the subtenant. The fifth amendment introduced a new
                   provision "for the benefit of Serior Frog's" as a subtenant, updated Rose's
                   "notice address," and added Senor Frog's and Sailor Frog's counsel to the
                   list of those required to receive copies of any notices given under the lease.
                   Although the amendment required notice to be given to Senor Frog's, by its
                   terms the text of the amendment did not grant Senor Frog's any right to
                   intervene to cure a default by Rose after receiving such notice.
                               Approximately one year later, Rose failed to make its quarterly
                   percentage rent payment on time. Treasure Island's in-house counsel sent
                   a notice regarding the missed payment to Rose's president, also cc'ing Rose's

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                   in-house counsel via email. Treasure Island did not deliver separate notice
                   to either Susan Markusch or Senor Frog's. After Rose failed to cure the
                   default within the 10-day period set forth in the lease, Treasure Island's
                   counsel sent a notice-of-termination letter to Rose's president and to Senor
                   Frog's. In response to this letter, Senor Frog's attorney sent an email to
                   Treasure Island asserting that the termination letter
                               was sent to my client for notice. . . purposes only
                               under section 11 of the fifth amendment to the lease
                               agreement [and] my client, Senor Frog's, is not
                               affected by default by Rose LLC as to prime tenant.
                               As we further discussed, [Rose] is disputing the
                               default. You have confirmed with me that
                               [Treasure Island] does not plan on taking any
                               action until the dispute with [Rose] is resolved,
                               whether by court action or settlement between the
                               parties. None of this will impact adversely on my
                               client, which will be permitted to continue its
                               subtenancy.
                               Thereafter, Treasure Island sued Rose alleging breach of the
                   lease agreement and seeking declaratory relief. Rose counterclaimed,
                   alleging breach of contract and breach of the implied covenant of good faith
                   and fair dealing, and seeking a declaratory judgment. The district court
                   conducted a bench trial during which the president of Senor Frog's testified
                   as a witness and expressed no concern that Senor Frog's was not a
                   participant in the lawsuit. Ultimately, the district court entered judgment
                   in favor of Treasure Island, declaring that it properly terminated the lease.
                   Rose now appeals.
                                                    ANALYSIS
                               On appeal, Rose challenges the district court's judgment on two
                   grounds. First, it argues that the district court erred in declaring the lease
                   terminated because Treasure Island failed to give proper notice of the
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                   default. Second, it argues that the judgment is void because a necessary
                   party, namely Setior Frog's, was not joined in the action in violation of
                   NRCP 19.
                   Termination of the lease
                               The parties do not dispute that Rose missed the quarterly rent
                   payment in question. They also do not dispute that, after Treasure Island
                   sent notice of the missed rent payment to Rose, Rose failed to pay within 10
                   days. Nonetheless, Rose argues that Treasure Island failed to comply with
                   the notice requirements specifically agreed upon by the parties and recited
                   in the fifth amendment and, therefore, the notice of default was legally
                   ineffective, rendering the notice of termination ineffective. In response,
                   Treasure Island concedes that its notice failed to strictly comply with the
                   terms of the fifth amendment, but it argues that it substantially complied
                   with those terms and that, in any event, the district court found that Rose
                   received actual notice.
                               The Nevada Supreme Court has not yet addressed whether,
                   under Nevada law, a party declaring another party in contractual default
                   must comply strictly with the notice requirements set forth in the contract,
                   or whether it need only substantially comply with those requirements,
                   especially when the defaulting party has received actual notice. While
                   Nevada law is silent, a review of other jurisdictions reveals that a clear
                   majority of states that have addressed the question holds that a party
                   declaring default must strictly comply with any and all contractual notice
                   requirements. These courts reason that "equity abhors forfeitures of
                   valuable leasehold interests," Metro. Transp. Auth. v. Cosmopolitan
                   Aviation Corp., 471 N.Y.S.2d 872, 873 (App. Div. 1984), and forfeiture is a
                   result "so harsh[ that] the law requires that every prescribed requirement

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                   be met unless waived by agreement of the parties," Boyd v. Boone Mgmt.,
                   Inc., 676 S.W.2d 24, 26-27 (Mo. Ct. App. 1984). See Tiller v. YW Hous.
                   Partners, Ltd., 5 So. 3d 623, 629 (Ala. Civ. App. 2008); Berry v. Crawford,
                   373 S.W.2d 129, 131 (Ark. 1963); Boston LLC v. Juarez, 199 Cal, Rptr. 3d
                   452, 460 (Ct. App. 2016) (citing Cal. Civ. Code § 1442 (West 2007));
                   Entrepreneur, Ltd. v. Yasuna, 498 A.2d 1151, 1160 (D.C. 1985); Wood v.
                   Ensworth, 430 So. 2d 617, 618 (Fla. Dist. Ct. App. 1983); Preferred Real
                   Estate Equities, Inc. v. Hous. Sys., Inc., 548 S.E.2d 646, 648 (Ga. Ct. App.
                   2001); Tage II Corp. v. Ducas (U.S.) Realty Corp., 461 N.E.2d 1222, 1225
                   (Mass. App. Ct. 1984); ARE-100/8001801 Capitola, LLC v. Triangle Labs.,
                   Inc., 550 S.E.2d 31, 35 (N.C. Ct. App. 2001); Keller v. Bolding, 678 N.W.2d
                   578, 584 (N.D. 2004); Elizabethtown Lodge No. 596, Loyal Order of Moose v.
                   Ellis, 137 A.2d 286, 290 (Pa. 1958); Litchfield Co. of S.C., Inc. v. Kiriakides,
                   349 S.E.2d 344, 347 (S.C. Ct. App. 1986); Vinson Minerals, Ltd. ix XTO
                   Energy, Inc., 335 S.W.3d 344, 354 (Tex. App. 2010); Grow v. Marwick Den.,
                   Inc., 621 P.2d 1249, 1251 (Utah 1980); Vt. Small Bus. Den. Corp. v. Fifth
                   Son Corp., 67 A.3d 241, 245 (Vt. 2013); Tacoma Rescue Mission v. Stewart,
                   228 P.3d 1289, 1291 (Wash. Ct. App. 2010); see also Tatewosian v. McLellan,
                   80 A.2d 879, 880 (R.I. 1951) (cited in Turks Head Realty Tr. v. Shearson
                   Lehman Hutton, Inc., 736 F. Supp. 422, 428 (D.R.I. 1990) for the proposition
                   that notice provisions are literally construed); cf. In re Kapiolani Blvd.
                   Lands, Inc., 563 P.2d 390, 391 (Haw. 1977) (noting that covenants in a lease
                   upon "the breach of which a forfeiture is claimed. . . must be strictly
                   construed"); Davis v. Wickline, 135 S.E.2d 812, 814 (Va. 1964) ("[Al breach
                   of covenant [in a lease] to sustain forfeiture is construed strictly against
                   forfeiture.").

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                               A minority of states, on the other hand, concludes that mere
                   substantial compliance with contractual notice terms is sufficient.          See
                   Kimmel v. Cockrell, 317 N.E.2d 449, 451 (Ind. Ct. App. 1974) (finding notice
                   sufficient when it "substantially complie[d] with the terms of the lease");
                   First Nat'l Bank of Commerce v. DiRosa, 545 So. 2d 692, 694 (La. Ct. App.
                   1989); Equity Props. & Dev. Co. v. Entinger, No. 188302, 1996 WL
                   33347540, at *2 (Mich. Ct. App. Dec. 27, 1996) (citing Gordon v. Great Lakes
                   Bowling Corp., 171 N.W.2d 225 (Mich. Ct. App, 1969)); Hil-Roc Condo. Unit
                   Owners Ass'n v. HWC Realty, Inc., No. 87344, 2006 WL 2627553, at *3 (Ohio
                   Ct. App. Sep. 14, 2006) (citing McGowan v. DM Grp. IX, 455 N.E.2d 1052
                   (Ohio Ct. App. 1982)).
                               Although the majority approach seems the better one, we need
                   not decide which of these lines of cases to follow because an additional
                   wrinkle exists here: in this case, the district court specifically found that,
                   notwithstanding Treasure Island's failure to strictly comply with the
                   contractual notice requirements, Rose received actual notice anyway. A
                   number of states that require strict compliance with notice requirements
                   nonetheless recognize that, if a defaulting party received actual notice
                   anyway despite some failure of strict compliance, then the failure resulted
                   in no prejudice and therefore no breach to complain about.        See Jefferson
                   Garden Assocs. v. Greene, 520 A.2d 173, 183-84 (Conn. 1987); Thompson v.
                   Fairchild, 468 P.2d 316, 318-19 (Idaho 1970); Vole, Inc. v. Georgacopoulos,
                   538 N.E.2d 205, 210-11 (Ill App. Ct. 1989). These courts reason that
                   "[sltrict construction does not. . . require ritualistic compliance with [notice
                   requirements]." Greene, 520 A.2d at 183 Instead, the notice of termination
                   "must reflect the purpose that the notices were meant to serve." Id. Thus,
                   when actual notice is received and the defaulting party is fully aware of the

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                   problem, how the notice was sent becomes immaterial. See Thompson, 468
                   P.2d at 319 (noting that whether formal requirements regarding notice were
                   complied with is immaterial where it is clear that notice was in fact
                   received); Vole, 538 N.E.2d at 210 (noting that provisions requiring a
                   particular form of notice are only meant to ensure delivery). Whether the
                   legal standard is characterized as "strict" or "substantial" compliance, the
                   point is to ensure that the defaulting party actually receives the information
                   to which it is entitled, not to penalize the noticing party for minor technical
                   failures that caused no prejudice to any other party.
                               Because the district court found, as a factual matter, that Rose
                   received actual notice of the default, for our purposes it matters little that
                   Treasure Island failed to technically comply with the notice requirements
                   agreed upon in the fifth amendment. Rose knew what it was entitled to
                   know: that the quarterly rent payment had not been received in a timely
                   manner, and consequently the notice of default was valid notwithstanding
                   any failure of strict compliance. When the missing rent was not paid despite
                   the giving of actual notice, Treasure Island became entitled to terminate
                   the contract.
                   Whether Senor Frog's is a necessary party under NRCP 19
                               Quite apart from the notice issue, Rose argues that the
                   judgment cannot stand because Treasure Island and the district court failed
                   to join Setior Frog's as a necessary party under NRCP 19. Rose contends
                   that Serior Frog's was a necessary party because it was a third-party
                   beneficiary to the prime lease and also because Treasure Island sought a
                   declaratory judgment that the lease was terminated, which would have
                   affected Senor Frog's contractual rights under the sublease. Treasure
                   Island counters that Rose is precluded from asserting this argument

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                   because it failed to raise it below and Serior Frog's was not a necessary party
                   in any event because it was not a party or a third-party beneficiary to the
                   lease and any declaratory judgment would not affect any possible claim
                   Serior Frog's may possess.
                                Generally speaking, the absence of an allegedly necessary party
                   may be raised in one of two ways: it may be raised by the necessary party
                   itself, or it may be raised by someone other than the allegedly necessary
                   party (such as another party or the court). These two methods involve
                   different procedures and deadlines. If an allegedly necessary party believes
                   it has an interest in a pending action, it may seek to intervene in the action.
                   See NRCP 24. On the other hand, if another party already present in the
                   action desires to raise the issue on behalf of a missing party, it can do so by
                   filing either a motion to dismiss the action pursuant to NRCP 12(b)(6), a
                   motion for judgment on the pleadings pursuant to NRCP 12(h)(2) (which
                   can be filed before trial or during trial), or a motion seeking to join the
                   missing party under NRCP 19. Always, the substantive test for
                   determining whether the absent party is necessary is governed by NRCP
                   19.
                                Here, Serior Frog's never made any effort to intervene in this
                   action in order to protect its own interests. Quite to the contrary, upon
                   learning of the termination, counsel for Setior Frog's emailed Treasure
                   Island to state that Serior Frog's "is not affected by [the] default" and "[n] one
                   of this will impact [it] adversely," thereby effectively disclaiming any
                   interest in participating in the litigation. Therefore, the question raised in
                   this appeal is not whether Senor Frog's may now intervene (something that
                   it stated in writing that it did not want to do), but rather whether an
                   existing party (Rose) may now seek to have the judgment reversed due to

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                   Senor Frog's absence notwithstanding its lack of interest in being joined.
                   This question, in turn, has two components: whether the absence of Senor
                   Frog's can still be raised at this stage of the litigation and, if the answer to
                   that is yes, whether Sefior Frog's is a necessary party as defined by NRCP
                   19.
                         A. Whether Rose has waived its right to challenge the absence of Senor
                         Frog's
                               Treasure Island argues that Rose's challenge to the absence of
                   Setior Frog's has been waived because nobody ever raised it below, citing a
                   number of federal cases for the proposition that Rule 19 defects must first
                   be asserted in district court or they are waived on appeal.
                               NRCP 19 is virtually identical to its federal counterpart and
                   Nevada generally follows federal law when its procedural rules are similar.
                   See Exec. Mgmt., Ltd. v. Ticor Title Ins. Co.,   118 Nev. 46, 53, 38 P.3d 872,
                   876 (2002) (noting that where the NRCP parallel the Federal Rules of Civil
                   Procedure, rulings of federal courts interpreting and applying the federal
                   rules are persuasive authority for the appellate courts in applying the
                   Nevada rules). However, the Nevada Supreme Court does not follow federal
                   law when it comes to whether a challenge to the absence of a necessary
                   party under Rule 19 may be waived.
                                In most federal courts, a challenge by one of the current parties
                   asserting the absence of a necessary party is waived on appeal if not first
                   raised before the district court through either an immediate motion to
                   dismiss under FRCP 12(b)(7) filed at the pleading stage, or a subsequent
                   motion under FRCP 12(h)(2) filed before the end of trial.        See, e.g., State
                   Farm Mut. Auto. Ins. Co. v. Mid-Continent Cas. Co., 518 F.2d 292, 294 (10th
                   Cir. 1975); Capital Fire Ins. Co. of Cal. v. Langhorne, 146 F.2d 237, 242-43
                   (8th Cir. 1945); but see Marvin v. Pflueger, 280 P.3d 88, 98 (Haw. 2012)
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                   (noting that some federal courts question whether such a challenge can be
                   waived). This approach is designed to prevent any party from using Rule
                   19 as something of an "ambush" tactic when the party knows that an absent
                   party has not been joined but tactically chooses not to bring the matter to
                   the court's attention until after it loses and then raises it belatedly for the
                   first time on appeal in order to engineer a reversal on grounds it knew
                   existed all along but purposely hid. See Judwin Props., Inc. v. U.S. Fire Ins.
                   Co., 973 F.2d 432, 434 (5th Cir. 1992) (finding "no authority for the offensive
                   use of Rule 19 which would allow a plaintiff to negate an adverse ruling
                   because of its own failure to join all indispensable parties"); cf. Burka v.
                   Aetna Life Ins. Co., 87 F.3d 478, 483 (D.C. Cir. 1996) (concluding that an
                   appellant's conscious, tactical decision not to join a party at the beginning
                   of the action militated against finding that the party was indispensable);
                   Arnold v. BLaST Intermediate Unit 17, 843 F.2d 122, 125 n.6 (3d Cir. 1988)
                   (applying the principle of laches to bar a Rule 19 argument where
                   "[respondent] itself failed to join fa necessary party] despite ample
                   opportunity"). However, this approach achieves this goal at the cost of
                   accepting the risk of occasional piecemeal litigation separately initiated by
                   the absent party.
                               Here, Treasure Island notes that Rose failed to challenge the
                   absence of Setior Frog's below. Unlike federal courts, however, the Nevada
                   Supreme Court has held that under NRCP 19 such challenges are not
                   waivable and may be raised for the first time on appeal. See Blaine Equip.
                   Co. v. State, Purchasing Div., 122 Nev. 860, 864-66, 138 P.3d 820, 822-23
                   (2006); Univ. of Nev. v. Tarkanian, 95 Nev. 389, 395-96, 594 P.2d 1159, 1163
                   (1979); Robinson v. Kind, 23 Nev. 330, 338, 47 P. 1, 3-4 (1896).

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                                The Nevada Supreme Court thus appears to prioritize slightly
                   different policy interests than does the federal judiciary: avoiding the
                   possibility of piecemeal litigation by permitting courts to attempt to join all
                   necessary parties with any potential claim no matter when the question is
                   raised. See Tarkanian, 95 Nev. at 397, 594 P.2d at 1164 ("A major objective
                   of [NRCP 19(a)] is to have a final and complete determination of the
                   controversy, not to determine issues piecemeal. . . .") (second alteration in
                   original) (internal quotation marks omitted). However, it achieves this goal
                   at the cost of potentially permitting parties to use Rule 19 as a tactical
                   maneuver to engineer reversals by strategically waiting to see what the
                   trial verdict is before asserting the issue for the first time on appeal.   See
                   id. at 396, 594 P.2d at 1163-64 (noting that a party should have been joined
                   in the action because its ability to protect its interests would be impaired
                   and further litigation of the controversy was likely absent joinder); Young
                   Inv. Co. v. Reno Club, Inc., 66 Nev. 216, 222, 208 P.2d 297, 300 (1949)
                   (noting that the purpose of joining necessary parties "is to have a final and
                   complete determination of a controversy, not to determine issues piecemeal
                   but to avoid a multiplicity of suits").
                                Treasure Island asserts that, here, the risk of piecemeal
                   litigation is nonexistent and the possibility of waste is high because Sefior
                   Frog's has expressed no interest in participating in the litigation despite
                   having been involved in certain parts of it. Thus, it argues that all of the
                   conditions for a waiver of Rule 19 are present and nothing useful will be
                   achieved through a reversal other than to relitigate the trial, adding a new
                   party that, as a practical matter, has no desire to be involved.

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                               That may be so; there is evidence in the record suggesting that
                   Treasure Island may be correct about Senor Frog's lack of interest, as the
                   company's president testified during the trial as a witness, yet expressed no
                   interest in intervening and displayed no distress that his company had been
                   omitted from the action. More, after learning that the lease had been
                   terminated, counsel for Senor Frog's expressly notified Treasure Island by
                   email that it "is not affected by [Rose's] default" and "[alone of this will
                   impact adversely" Senor Frog's, which comes vanishingly close to an express
                   written disclaimer of any interest that Senor Frog's might otherwise have
                   possessed in the litigation. But even with that evidence, Nevada's
                   interpretation of NRCP 19 prohibits a conclusion that Rose has legally
                   waived its right to challenge the absence of Senor Frog's.
                               The next question is whether Senor Frog's is a necessary party
                   under NRCP 19.
                         B. Whether Setior Frog's is a necessary party under NRCP 19
                               Under NRCP 19, a party is necessary if:
                                     (A) in that person's absence, the court cannot
                               accord complete relief among existing parties; or
                                     (B) that person claims an interest relating to
                               the subject of the action and is so situated that
                               disposing of the action in the person's absence may
                                            as a practical matter impair or
                               impede the person's ability to protect the interest;
                               Or
                                           (ii) leave an existing party subject to a
                               substantial risk of incurring double, multiple, or
                               otherwise inconsistent obligations because of the
                               interest.

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                   NRCP 19(a)(1). To feasibly join a party, that party must be subject to
                   service of process and joinder must not deprive the district court of subject
                   matter jurisdiction. Id. A party is considered indispensable "only when
                   joinder of that party is not feasible." Blaine, 122 Nev. at 864 n.6, 138 P.3d
                   at 822 n.6.
                                 Whether a party is necessary does not depend upon broad labels
                   or general classifications, but rather comprises a highly fact-specific
                   inquiry. Rule 19 "calls for courts to make pragmatic, practical judgments
                   that are heavily influenced by the facts of each case." Bacardi Int? Ltd. v.
                   V. Suarez & Co., 719 F.3d 1, 9 (1st Cir. 2013) (citing 7 Charles Alan Wright
                   et al., Federal Practice & Procedure § 1604 (3d ed. 2001)). "There is no
                   precise formula for determining whether a particular nonparty must be
                   joined under Rule 19(a)." Knutzen v. Eben Ezer Lutheran Hous. Ctr., 815
                   F.2d 1343, 1356 (10th Cir. 1987) (quoting 7 Charles Alan Wright et al.,
                   Federal Practice & Procedure § 1604 (2d ed. 1986)).
                                 Although Rule 19 "provides for joinder of necessary parties, it
                   does not [itself] create a cause of action against them." Davenport v. Intl
                   Bhd. of Teamsters, AFL-CIO, 166 F.3d 356, 366 (D.C. Cir. 1999). Before a
                   party may be joined under Rule 19, it "must have [its own cause of action
                   against another party on a cause of action against it."    Vieux Carre Prop.
                   Owners, Residents & Assocs., Inc. v. Brown, 875 F.2d 453, 457 (5th Cir.
                   1989).
                                 Thus, in applying NRCP 19, we must first determine whether
                   Senor Frog's has a legally valid claim against someone already in the
                   litigation and/or whether someone already in the litigation has a legally
                   valid claim against it. The answer to that question depends partly upon
                   what legal relationship Serior Frog's bears to the other parties. Treasure

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                   Island argues that Serior Frog's is nothing more than a mere subtenant. If
                   Treasure Island is correct and Serior Frog's is only that, then the only claim
                   it could possess would be against Rose. But Rose argues that Serior Frog's
                   is not merely a subtenant but also a third-party beneficiary to the principal
                   lease, and it therefore possesses claims against both Treasure Island and
                   Rose.
                           C. Whether Senor Frog's is merely a subtenant or is also a third-party
                           beneficiary to the principal lease
                                Rose argues that Serior Frog's is not merely a subtenant, but
                   rather something more: a third-party beneficiary to the lease between
                   Treasure Island and Rose. A subtenant normally possesses a claim only
                   against the prime tenant but not against the landlord, because subtenants
                   generally have no rights vis-à-vis a prime lessor merely by virtue of the
                   sublease because there exists no direct relationship of privity between the
                   subtenant and the landlord. See, e.g., Hornwood v. Smith's Food King No.
                   1, 107 Nev. 80, 85, 807 P.2d 208, 212 (1991) (noting that landlords have no
                   privity of contract or estate with subtenants and thus must rely upon prime
                   tenants to maintain subleases). In contrast, a third-party beneficiary of a
                   lease has privity with the landlord and therefore would possess a claim not
                   only against the prime tenant but also against the landlord arising from the
                   principal contract. See Mercury Gas. Co. v. Maloney, 6 Cal. Rptr. 3d. 647,
                   649 (Ct. App. 2003) ("[A] third party beneficiary's rights under [a] contract
                   are not based on the existence of an actual contractual relationship between
                   the [promisor and the third party beneficiary] but on the law's recognition
                   that the acts of the contracting parties . . . established privity between the
                   promisor and the third party beneficiary. . . ." (emphasis omitted)); see also
                   Wells v. Bank of Nev., 90 Nev. 192, 197, 522 P.2d 1014, 1017 (1974) ("Absent
                   evidence of a third party beneficiary status, an assignment of contract
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                   rights or a delegation of contract duties, [individuals have no] rights, duties
                   or obligations under [an] agreement."). Because a third-party beneficiary's
                   right to enforce a contractual promise depends upon the continued validity
                   of the contract itself, see Principal Mut. Life Ins. Co. v. Vars, Pave, McCord
                   & Freedman, 77 Cal. Rptr. 2d 479, 489 (Ct. App. 1998), the beneficiary may
                   be a necessary party to an action threatening rescission of the contract. See
                   Jordan v. Paul Fin., LLC, 644 F. Supp. 2d 1156, 1172 (N.D. Cal. 2009) ("All
                   parties to a contract and others having a substantial interest in it should be
                   joined in an action to rescind or set aside the contract." (internal quotation
                   marks omitted)).
                               A person or entity is a third-party beneficiary to a contract, even
                   without signing it, when (1) there "clearly appear [s] a promissory intent to
                   benefit the third party" and (2) "the third party's reliance thereon [wals
                   foreseeable." Lipshie v. Tracy Inv. Co., 93 Nev. 370, 379, 566 P.2d 819, 824-
                   25 (1977); cf. Restatement (Second) of Contracts § 302 (Am. Law Inst 1979)
                   (stating that third-party beneficiary status exists where (1) the recognition
                   of the beneficiary's right to performance is "appropriate to effectuate the
                   intention of the parties [to a contact]," and (2) either the performance "will
                   satisfy an obligation of the promisee to pay money to the beneficiary" or "the
                   circumstances indicate that the promisee intends to give the beneficiary the
                   benefit of the promised performance"). Whether a party is an intended
                   third-party beneficiary "depends on the parties' intent, gleaned from
                   reading the contract as a whole in light of the circumstances under which it
                   was entered." Canfora v. Coast Hotels & Casinos, Inc., 121 Nev. 771, 779,
                   121 P.3d 599, 605 (2005) (internal quotation marks omitted).

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                               Here, the fifth amendment expressly states that the new notice
                   provisions were "for the benefit" of Senor Frog's. Rose focuses principally
                   upon this language, arguing that it evidences the clear intention that Senor
                   Frog's be a third-party beneficiary. But viewed as a whole, a fair reading of
                   the lease indicates that it was not the intention of Treasure Island and Rose
                   to treat Senor Frog's as both a subtenant under one contract (the sublease)
                   and also simultaneously a third-party beneficiary with independent rights
                   under another contract (the prime lease).
                               As a threshold matter, it's far from clear that Rose can properly
                   defend its own default by asserting that the nondefaulting party failed to
                   give notice to a supposed third-party beneficiary other than Rose; that
                   argument belongs to the third-party beneficiary, not to Rose. That aside,
                   although the fifth amendment provides for notice to Senor Frog's, it does
                   not provide Senor Frog's with any right, in response to such notice, to cure
                   a default triggered by any other party. Accordingly, the failure to give
                   notice by itself would give Senor Frog's no independent cause of action
                   against either Treasure Island or Rose that would meet the requirements
                   of NRCP 19. Cf Vision Aviation, LLC v. Airport Auth. for Airport Dist. No.
                   1 of Calcasieu Par., 33 So. 3d 423, 426-28 (La. Ct. App. 2010) (holding that
                   a mortgagee of leased property was a third-party beneficiary of the lease—
                   and therefore a necessary party to an action threatening its termination—
                   because it provided the mortgagee a right to cure the lessee's default).
                   Without such a right to cure, a serious question exists as to whether the
                   notice provision is in any way material to the lease as a whole.
                               Structurally, the relationship encapsulated by the lease was a
                   commercial transaction in which everybody hoped to make money, and in
                   order to do so Senor Frog's had to hold up its end of the bargain and operate

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                   a profitable restaurant and pay rent regularly and on time. If it failed to do
                   so, then under the terms of the sublease Rose could evict it and find a
                   higher-paying subtenant instead. The overarching design of the agreement
                   hardly evinces an intention that if Senor Frog's was evicted from the
                   premises for breaching the sublease, it would somehow still retain rights
                   under the prime lease between Treasure Island and Rose even after Rose
                   found another subtenant to take its place. Indeed, the very fact that Rose
                   could unilaterally evict Serior Frog's from the premises for nonperformance
                   without the agreement or knowledge of Treasure Island demonstrates that
                   the primary lease was not intended to exist just for the benefit of Senor
                   Frog's. To the contrary, neither Treasure Island nor Rose signed the
                   primary lease only to benefit Senor Frog's for its own sake regardless of how
                   its restaurant performed or whether or not Senor Frog's complied with the
                   sublease. The situation at hand does not meet the legal definition of a third-
                   party beneficiary, and Senor Frog's is therefore a mere subtenant and not a
                   third-party beneficiary of the primary lease.
                         D. Whether Setior Frog's, as a subtenant, was a necessary party
                               As a subtenant, Senor Frog's has a relationship of privity with
                   Rose but not with Treasure Island. The next question is whether that is
                   enough to make Senor Frog's a necessary party.
                               NRCP 19 asks whether complete relief can be accorded to all
                   current parties without the absent party and/or whether the absent party
                   "claims an interest" in the action. How we analyze these two inquiries
                   depends upon how the question of necessity came before us. Had the
                   question of Senor Frog's absence been raised by Serior Frog's itself through
                   an attempt to intervene in the action, we would start by analyzing the scope
                   of the interest it claims to have in the action. See NRCP 24(a)(2). Had

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                   Senor Frog's sought intervention, an argument could perhaps be made that
                   it is indeed a necessary party to an action between the landlord and the
                   prime tenant because "when a prime lease falls, so does the sublease."      In
                   re 48th St. Steakhouse, Inc., 835 F.2d 427, 430 (2d Cir. 1987) (internal
                   quotation marks omitted); see Syufy Enters., L.P. v. City of Oakland,      128
                   Cal. Rptr. 2d. 808, 818 (Ct. App. 2002) ("rejection of a. . . master lease
                   effectively terminates an attached sublease as well, thus extinguishing the
                   subtenant's right to possession of the premises"). On the other hand,
                   however, because a sublease cannot exist without a prime lease, Rose's
                   interest in defending the prime lease means that in many cases it likely
                   could adequately defend Serior Frog's interest in the sublease.     CI NRCP
                   24(a)(2) (providing that intervention of right is unavailable where "existing
                   parties adequately represent [the would-be intervener's] interest").
                               But when the question of an absent party's necessity is raised
                   by a party other than the missing one, that inquiry becomes less critical.
                   This is especially so when, as here, the absent party knows about the action
                   but has made no effort to intervene, because its lack of interest suggests
                   that in truth it may not really fear impairment of its rights. See Northrop
                   Corp. v. McDonnell Douglas Corp., 705 F.2d 1030, 1043-44 (9th Cir. 1983)
                   (declining to order joinder of an entity that knew of the action yet "never
                   asserted a formal interest in either the subject matter of ti[e] action or the
                   action itself' and instead opted to "observe [I a neutral and disinterested
                   posture"). Moreover, as a practical matter, when an absent party chooses
                   not to intervene, its absence frequently deprives courts of the very
                   information most essential to determining whether the party does or does
                   not possess a valid interest in the litigation. "It is the absent party that
                   must claim an interest," and another party's attempt to assert a nonparty's

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                   interest "falls outside the language of the rule." Peregrine Myanmar Ltd. v.
                   Segal, 89 F.3d 41, 49 (2d Cir. 1996) (internal quotation marks omitted).
                   Accordingly, when the question of necessity is raised by another party
                   already present in the action rather than by the missing party itself, Rule
                   19 focuses principally upon whether complete relief can be accorded among
                   the parties already present.
                               "Completeness is determined on the basis of those persons who
                   are already parties, and not as between a party and the absent person
                   whose joinder is sought." Humphries v. Eighth Judicial Dist. Court, 129
                   Nev. 788, 796, 312 P.3d 484, 490 (2013) (quoting Angst v. Royal Maccabees
                   Life Ins. Co., 77 F.3d 701, 705 (3d Cir. 1996)). "[T]he court must decide if
                   complete relief is possible among those already parties to the suit. This
                   analysis is independent of the question whether relief is available to the
                   absent party."   Id. (alteration in original) (emphasis omitted) (quoting
                   Makah Indian Tribe v. Verity, 910 F.2d 555, 558 (9th Cir. 1990)).
                               To answer this inquiry, we look to the nature of "the pleadings
                   as they appear at the time of the proposed joinder." Associated Dry Goods
                   Corp. v. Towers Fin. Corp., 920 F.2d 1121, 1124 (2d Cir. 1990) (quoting 7
                   Charles Alan Wright et al., Federal Practice & Procedure § 1604 (2d ed.
                   1986)). Moreover, completeness is measured by the claims and defenses
                   already asserted in the litigation rather than hypothetical claims or
                   defenses that other parties could have raised but did not; under Rule 19,
                   parties "are not required to anticipate [the opposing party's claims] and join
                   all parties that may be necessary for the [opposing party]'s benefit."
                   Halpern v. Rosenbloom, 459 F. Supp. 1346, 1354 (S.D.N.Y. 1978). In
                   contract disputes, "[c]ontroversies arising under an agreement properly are
                   to be determined and settled by parties to the agreement or their assigns,

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                   that is, by those who have legal rights or duties thereunder." Wells, 90 Nev.
                   at 197, 522 P.2d at 1017.
                               In this case, Treasure Island could, and did, obtain complete
                   relief despite the absence of Senor Frog's. Treasure Island sought
                   termination of the prime lease based upon Rose's default, relief that the
                   district court granted. Conversely, Rose sought a declaration nullifying the
                   termination of the lease, relief that the district court denied. The presence
                   or absence of Serior Frog's in the litigation through its own sublease played
                   no role in the district court's decision regarding whether Rose defaulted in
                   its obligations under the prime lease. Senor Frog's appears legally
                   irrelevant to any claim that Treasure Island and Rose asserted against each
                   other, and Serior Frog's said as much in its own email indicating that it "is
                   not affected" by Rose's default.
                               Unlike Treasure Island, Rose has a relationship of privity with
                   Senor Frog's. But it is Rose, not Senor Frog's, who is accused of breaching
                   the lease, and it is Treasure Island, not Senor Frog's, who is accused of
                   wrongfully terminating the lease. As far as we know, Serior Frog's has done
                   nothing wrong that would create a claim against it by anyone. Rose
                   therefore appears to have no claim it could assert against Senor Frog's. If
                   evicted, Senor Frog's may have a claim against Rose, but Rose does not
                   argue that it possesses any claim against Senor Frog's; Rose's only claims
                   are against Treasure Island.
                               Consequently, complete relief can be accorded to both Treasure
                   Island and Rose without needing to join Senor Frog's. Nothing about the
                   disposition of the action in favor of Treasure Island impairs the ability of
                   Senor Frog's to seek relief against Rose or leaves either Treasure Island or

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                   Rose subject to double, multiple, or otherwise inconsistent obligations.
                   Senor Frog's is therefore not a necessary party under NRCP 19.
                               It's possible that Rose may be the target of separate litigation
                   brought by Serior Frog's under the sublease. But even if that is true, that
                   would not subject Rose to any judgment inconsistent with the relief granted
                   through this litigation. If Rose defaulted on its prime lease (as the district
                   court concluded), then it likely also breached its obligations toward Senor
                   Frog's under the sublease. Those are two independent breaches of two
                   different contracts, and neither is inconsistent with the other. Adjudicating
                   Rose liable for both breaches would result in multiple judgments against
                   Rose, but not judgments that are in any way inconsistent with each other.
                               Moreover, even if some inconsistency could arise, that is Rose's
                   own fault. In this appeal, it is Rose who seeks to overturn the judgment by
                   arguing the absence of Senor Frog's. But the only likely claim that could
                   involve Senor Frog's in any way would be a claim by Serior Frog's against
                   Rose for breach of the sublease. Thus, the only party in this action that
                   could suffer from multiple actions from the failure to join Serior Frog's is
                   Rose, a problem that Rose itself could have easily rectified by simply joining
                   Senor Frog's. Rose was the only party that had any incentive to do so,
                   because it was the only party that could have been the target of any claim
                   by Serior Frog's.
                               Yet Rose never mentioned this potential problem until raising
                   it for the first time in this appeal. Rose effectively seeks to overturn a
                   judgment based upon the absence of a party that only it had any reason to
                   join. This raises the possibility that, in reality, Rose may not be all that
                   concerned about any threat of piecemeal litigation from Senor Frog's for, if
                   it was, one would think that it would have done everything it could to

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                   protect itself from the outset from every claim it feared might be filed. 3 Cf.
                   Northrop Corp., 705 F.2d at 1044.
                               The ultimate goal of NRCP 19 is to promote efficiency and
                   conserve judicial resources by reducing duplicative and piecemeal litigation
                   and avoiding potentially inconsistent outcomes.         See Univ. of Nev. v.
                   Tarkanian, 95 Nev. 389, 397, 594 P.2d 1159, 1164 (1979). That goal is
                   poorly served if a party is allowed to make a tactical decision to refrain from
                   timely bringing a known defect in the trial to the court's attention that it
                   then uses on appeal to try to force the court to conduct the same trial twice.
                   Quite to the contrary, allowing a party to procure reversal based upon the

                         3 Rose's inaction appears especially telling when it was intimately
                   familiar with Sefior Frog's personnel, business operations, and how to
                   contact them, because the two businesses started off as partners under the
                   original lease and only later (by the time of the fifth amendment) converted
                   their relationship into the more distant status of subtenancy. Under these
                   circumstances, waiting to raise this issue until so late in the day conveys
                   the impression that Rose is trying to benefit from its own trial decision and
                   thereby obtain reversal based upon something resembling invited error.

                                     The doctrine of "invited error" embodies the
                               principle that a party will not be heard to complain
                               on appeal of errors which he himself induced or
                               provoked the court or the opposite party to commit
                               It has been held that for the doctrine of invited
                               error to apply it is sufficient that the party who on
                               appeal complains of the error has contributed to it.
                               In most cases application of the doctrine has been
                               based on affirmative conduct inducing the action
                               complained of, but occasionally a failure to act has
                               been referred to.
                   Pearson v. Pearson, 110 Nev. 293, 297, 871 P.2d 343, 345 (1994) (quoting 5
                   Am. Jur. 2d Appeal and Error § 713 (1962)).

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                   absence of an entity that only it had any reason to join would set the
                   dangerous precedent of permitting litigants to reduce trials to mere practice
                   runs by manufacturing a "win-win" situation under which it either prevails
                   at trial or has an easy Plan B for appeal if it loses. That can hardly have
                   been the intention of the framers of NRCP 19.
                                In this case, both Treasure Island and Rose can procure
                   complete relief in their claims against each other without joining Senor
                   Frog's. But even if Rose suffered some detriment from not having Senor
                   Frog's in the litigation, it bears responsibility for the situation. Whatever
                   Rose's subjective intent might have been in failing to join Senor Frog's
                   (whether it resulted from mere oversight or a tactical plan), its inaction
                   created the very problem that it now argues compromised the verdict below.
                   And even to the extent Senor Frog's suffered any prejudice arising from the
                   termination of the agreement, its lack of interest in participating in this
                   lawsuit indicates that it was willing to live with whatever prejudice it may
                   have suffered. Consequently, Senor Frog's is not a necessary party and Rose
                   is not entitled to relief 4

                         4 In their briefing and during oral argument, the parties did not
                   explicitly address NRS 30.130, which identifies who must be joined in an
                   action seeking only declaratory relief Under that statute, Iwthen
                   declaratory relief is sought, all persons shall be made parties who have or
                   claim any interest which would be affected by the declaration, and no
                   declaration shall prejudice the rights of persons not parties to the
                   proceeding." When a relevant party is not so joined, the district court should
                   allow the plaintiff to amend his or her complaint to join the party or it
                   should "effectuate[ ] the amendment sua sponte." Crowley v. Duffrin, 109
                   Nev. 597, 603, 855 P.2d 536, 540 (1993). In Crowley, the supreme court
                   remanded the case for the district court to join parties required to be joined
                   under NRS 30.130 and then enter a declaratory judgment. Id. at 606, 855

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                                                  CONCLUSION
                               For the foregoing reasons, we conclude that Rose suffered no
                   prejudice as it received actual notice of the default, and we conclude that,
                   under the circumstances of this case, Senor Frog's was not a necessary party

                   P.2d at 542. In this case, however, we do not think it necessary to remand
                   for the district court to join Senor Frog's in that manner for the following
                   reasons. As an initial matter, the Uniform Declaratory Judgments Act "is
                   directed only to those who enjoy a legal interest in the agreement under
                   scrutiny." Wells v. Bank of Nev., 90 Nev. 192, 197-98, 522 P.2d 1014, 1017-
                   18 (1974) (emphasis added). Here, because Senor Frog's was not a party or
                   third-party beneficiary to the agreement between Treasure Island and
                   Rose, it had no legal interest in that agreement. See Wells, 90 Nev. at 197,
                   522 P.2d at 1017 (concluding that because the appellants were not parties,
                   third-party beneficiaries, assignees, or delegees with respect to the
                   underlying agreement, they had no rights, duties, or obligations under it,
                   and therefore, could not challenge it via a declaratory-judgment action). As
                   a subtenant, its only interest derived from Rose's interest. See Gasser v. Jet
                   Craft Ltd., 87 Nev. 376, 382, 487 P.2d 346, 350 (1971) (noting that a
                   "sublease" is generally defined as a lease "executed by the lessee of an estate
                   to a third person, conveying the same estate for a shorter term than that for
                   which the lessee holds it" (internal quotation marks omitted)); see also In re
                   J.T. Moran Fin. Corp., 124 B.R. 924, 925 (Bankr. S.D.N.Y. 1991) ("The
                   creation of a sublease depends upon the continuing viability of a prime
                   lease, so that the rejection of the prime lease also results in the rejection of
                   the sublease."). Thus, Serior Frog's was not a party that needed to be joined
                   under NRS 30.130. Accordingly, when Rose's interest was validly
                   extinguished (because it is a party to this case), so too was the subordinate
                   sublease, regardless of Serior Frog's absence.

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                   under NRCP 19 whose absence from the litigation compels reversal, and we
                   therefore affirm 5

                                                      Tao
                                                            iT  tre's

                   We concur:

                   Gibbons

                        S      ares="greag,
                                                 J.
                   Bulla

                         We have carefully considered all of Rose's other arguments on appeal
                           5
                   and conclude that they are without merit.
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