Court Opinion

ID: 2824337
Source: CourtListenerOpinion
Date Created: 2015-08-11 04:41:53.496286+00
Date Added: 2024-06-11T11:31:13.121373
License: Public Domain

131 Nev., Advance Opinion 53
                         IN THE SUPREME COURT OF THE STATE OF NEVADA

                  BARRY A. FORD, AN INDIVIDUAL;                          No. 65242
                  AND PATRICIA A. FORD, AN
                  INDIVIDUAL,
                  Appellants,
                  vs.
                                                                              FILED
                  BRANCH BANKING AND TRUST                                     JUL 2 3 2015
                  COMPANY, SUCCESSOR-IN-                                        glE K. LINDEMAN
                  INTEREST TO COLONIAL BANK BY                             aaRAWAUPttceME
                                                                               A            cal R
                  ACQUISITION OF ASSETS FROM THE
                  FDIC AS RECEIVER FOR COLONIAL
                  BANK, A NORTH CAROLINA
                  BANKING CORPORATION
                  ORGANIZED AND IN GOOD
                  STANDING UNDER THE LAWS OF
                  THE STATE OF NORTH CAROLINA,
                  Respondent.

                              Appeal from a district court order denying a motion for NRCP
                  60(b) relief in a breach of guaranty action. Eighth Judicial District Court,
                  Clark County; Jerry A. Wiese, Judge.
                              Affirmed.

                  Law Office of Timothy P. Thomas, LLC, and Timothy P. Thomas, Las
                  Vegas,
                  for Appellants.

                  Sylvester & Polednak, Ltd., and Ryan W. Daniels, Allyson R. Noto, and
                  Jeffrey R. Sylvester, Las Vegas,
                  for Respondent.

                  BEFORE PARRAGUIRRE, DOUGLAS and CHERRY, JJ.

SUPREME COURT
         OF
      NEVADA

(ID) 1947A    e                                                                       - 22299
                                                        OPINION
                       By the Court, PARRAGUIRRE, J.:
                                   NRCP 60(b)(5) allows the district court to set aside a judgment
                       when, in material part, "a prior judgment upon which it is based has been
                       reversed or otherwise vacated, or it is no longer equitable that an
                       injunction should have prospective application." Here, we are asked to
                       determine whether new or changed precedent from this court justifies
                       NRCP 60(b)(5) relief. We conclude that NRCP 60(b)(5) does not allow a
                       district court to set aside judgments solely based on new or changed
                       precedent. Additionally, we conclude that NRCP 60(b)(5) does not allow a
                       district court to set aside monetary judgments merely because new or
                       changed precedent makes enforcement inequitable. Accordingly, we
                       affirm the district court's order denying NRCP 60(b) relief.
                                                         FACTS
                                   In 2004, appellants Barry and Patricia Ford guaranteed two
                       commercial loans made by Colonial Bank The FDIC subsequently
                       acquired the loans when it was appointed as the receiver for Colonial
                       Bank. The FDIC, in turn, assigned the loans to respondent Branch
                       Banking and Trust Company (BB&T) in August 2009. The properties
                       securing the commercial loans were foreclosed August 29, 2011, and
                       BB&T brought a breach of guaranty action against the Fords in December
                       2011. After a partial summary judgment hearing, the district court
                       determined that the amount of damages was the only issue remaining for
                       trial.

                                   At trial, the parties disputed whether NRS 40.459(1)(c) (2013)
                       (current version codified at NRS 40.459(3)(c)), which reduces the amount

SUPREME Com.
        OF
     NEVADA
                                                             2
(0) 1947A    (407arn
                of some deficiency judgments, could limit the amount the Fords owed
                BB&T. The district court concluded that former NRS 40.459(1)(c) only
                applied prospectively. Further, it concluded the statute would have an
                impermissible retroactive effect if applied to loans, like this one, that were
                assigned before NRS 40.459(1)(c) took effect on June 10, 2011.       See 2011
                Nev. Stat., ch. 311, §§ 5(c), 7 at 1740, 1743, 1748. Therefore, NRS
                40.459(1)(c) could not apply to the Fords' loans, and they were liable for
                the full deficiency. The Fords never appealed the district court's final
                judgment.
                            More than one year after the district court entered its
                judgment, this court published Sandpointe Apartments v. Eighth Judicial
                District Court, 129 Nev., Adv. Op. 87, 313 P.3d 849 (2013). Sandpointe
                holds that "NRS 40.459(1)(c) only applies prospectively," and an
                application of the statute is prospective if there has been no foreclosure
                sale on the underlying loan as of June 10, 2011, the date the statute was
                enacted. Sandpointe, 129 Nev., Adv. Op. 87, 313 P.3d at 851. Whether or
                when a loan is assigned is not material. Id. Therefore, the district court
                erred in holding that NRS 40.459(1)(c) would be retroactive if applied to
                the Fords' loans because the foreclosure sale occurred August 29, 2011,
                more than two months after NRS 40.459(1)(c) took effect. Shortly after
                the Sandpointe opinion was published, the Fords asked the district court
                to set aside the judgment against them pursuant to NRCP 60(b)(5). The
                district court denied the Fords' motion, holding that NRCP 60(b)(5) was
                not an appropriate avenue for seeking relief based on new or changed
                precedent. The Fords now appeal that decision.

SUPREME COURT
        OF
     NEVADA
                                                      3
(0) 1947A
                                               DISCUSSION
                             On appeal, the Fords argue they can invoke NRCP 60(b)(5) to
                 set aside the judgment against them because (1) Sandpointe reversed "a
                 prior judgment upon which" the judgment against them was based, and (2)
                 "it is no longer equitable" to enforce the judgment against them in light of
                 this court's Sandpointe opinion. NRCP 60(b)(5).
                             Generally, we review a trial court's decision "to grant or deny
                 a motion to set aside a judgment under NRCP 60(b)" for an abuse of
                 discretion. Cook v. Cook, 112 Nev. 179, 181-82, 912 P.2d 264, 265 (1996).
                 However, we review de novo the district court's interpretation of the
                 Nevada Rules of Civil Procedure,     See Moseley v. Eighth Judicial Dist.
                 Court, 124 Nev. 654, 662, 188 P.3d 1136, 1142 (2008); see also Webb ex rel.
                 Webb v. Clark Cnty. Sch. Dist., 125 Nev. 611, 618, 218 P.3d 1239, 1244
                 (2009). The district court denied the Fords' NRCP 60(b)(5) motion based
                 on its interpretation of that rule, holding NRCP 60(b)(5) does not permit
                 district courts to set aside judgments based on new or changed precedent.
                 Therefore, de novo review is appropriate here.    See Moseley, 124 Nev. at
                 662, 188 P.3d at 1142; Webb, 125 Nev. at 618, 218 P.3d at 1244.
                             The material portions of NRCP 60(b)(5) allow the district court
                 to set aside a judgment when 11] a prior judgment upon which [the
                 challenged judgment] is based has been reversed or otherwise vacated, or
                 [2] it is no longer equitable that an injunction should have prospective
                 application." "Rule 60(b) of the Nevada Rules of Civil Procedure is
                 modeled on Rule 60(b) of the Federal Rules of Civil Procedure, as written
                 before the [FRCP's] amendment in 2007." Bonnell v. Lawrence, 128 Nev.,
                 Adv, Op. 37, 282 P.3d 712, 714 (2012). "Federal cases interpreting the
                 Federal Rules of Civil Procedure 'are strong persuasive authority, because

SUPREME COURT
        OF
     NEVADA
                                                      4
(7) 1947A    e
                   the Nevada Rules of Civil Procedure are based in large part upon their
                   federal counterparts." Exec. Mgmt., Ltd. v. Ticor Title Ins. Co.,   118 Nev.
46, 53, 38 P.3d 872, 876 (2002) (quoting Las Vegas Novelty, Inc. v.
                   Fernandez, 106 Nev. 113, 119, 787 P.2d 772, 776 (1990)).
                               The Fords contend that        Sandpointe    reversed a "prior
                   judgment" that formed the basis of the judgment against them, meaning
                   they may be entitled to relief under NRCP 60(b)(5). We reject the Fords'
                   interpretation.
                               The "prior judgment" language in NRCP 60(b)(5) is identical to
                   the pre-2007 version of its federal counterpart and substantively the same
                   as the current federal rule. 1 Compare NRCP 60(b)(5) (the court may set
                   aside a judgment when "a prior judgment upon which it is based has been
                   reversed or otherwise vacated"), with FRCP 60(b)(5) (2006) (same), and
                   FRCP 60(b)(5) (2014) (the court may set aside a judgment when "it is
                   based on an earlier judgment that has been reversed or vacated"). The
                   "prior judgment" portion of FRCP 60(b)(5) "does not apply merely because
                   a case relied on as precedent by the court in rendering the present
                   judgment has since been reversed." 11 Charles Alan Wright, Arthur R.
                   Miller & Mary Kay Kane, Federal Practice and Procedure § 2863 (3d ed.
                   2012). Rather, "[t]his ground is limited to cases in which the present
                   judgment is based on the prior judgment in the sense of claim or issue
                   preclusion." Id.; accord Tomlin v. McDaniel, 865 F.2d 209, 210-11 (9th

                         'In 2007, the federal rules were amended to make stylistic changes
                   only; the changes were not intended to modify the substance of the rules.
                   FRCP 60 advisory committee's note (2007 amendments).

SUPREME COURT
      OF
    NEVADA
                                                        5
(0) I94Th cigado
                     Cir. 1989), overruled on other grounds by Gonzalez v. Crosby, 545 U.S. 524
                     (2005); Comfort v. Lynn Sch. Comm., 560 F.3d 22, 27 (1st Cir. 2009).
                                 We find the federal analysis of FRCP 60(b)(5) persuasive and
                     conclude NRCP 60(b)(5)'s "prior judgment" language does not reach new or
                     changed precedent. The Fords' matter and Sandpointe do not involve the
                     same parties or loans such that concerns about claim or issue preclusion
                     arise. See Weddell v. Sharp, 131 Nev., Adv. Op. 28, P.3d (2015)
                     (clarifying the elements of claim preclusion); Five Star Capital Corp. v.
                     Ruby, 124 Nev. 1048, 1054, 194 P.3d 709, 713 (2008) (setting forth the
                     basic elements for claim and issue preclusion); see also Sandpointe, 129
                     Nev., Adv. Op. 87, 313 P.3d 849. Therefore, Sandpointe is merely new
                     precedent, and NRCP 60(b)(5)'s "prior judgment" language does not apply
                     here.
                                 The Fords also argue they are entitled to relief under NRCP
                     60(b)(5) because, after Sandpointe, it is no longer equitable to enforce the
                     judgment against them. We also reject this interpretation of NRCP
                     60(b)(5).
                                 NRCP 60(b)(5) allows a district court to set aside a judgment
                     when "it is no longer equitable that an injunction should have prospective
                     application." (Emphasis added.) The pre-2007 version of FRCP 60(b)(5)
                     allows a district court to set aside a judgment when "it is no longer
                     equitable that   the judgment     should have prospective application."
                     (Emphasis added.) 2 Nevada's Advisory Committee expressly noted that it

                            The current version of FRCP 60(b)(5) allows a judgment to be set
                             2
                     aside when "applying [the judgment] prospectively is no longer equitable."
                                                                    continued on next page . . .

SUPREME COURT
        OF
     NEVADA
                                                          6
(0) 1947A    4)eq9
                 was modifying the federal rule such that the Nevada rule would only
                 consider the prospective application of injunctions, not judgments
                 generally.' NRCP 60 advisory committee's note. Therefore, NRCP
                 60(b)(5)'s drafters evidenced a clear intent to set aside only injunctions
                 where continued enforcement would be inequitable. See Moseley, 124 Nev.
                 at 662 n.20, 188 P.3d at 1142 n.20 (stating this court may interpret the
                 NRCP like a statute and subject to de novo review). The judgment against
                 the Fords is purely monetary, and BB&T neither sought nor obtained an
                 injunction. Therefore, the judgment against the Fords cannot be set aside
                 under NRCP 60(b)(5), even if enforcement might be inequitable.
                               Thus we conclude that new or changed precedent does not
                 constitute reversal of a "prior judgment" under NRCP 60(b)(5).
                 Additionally, NRCP 60(b)(5) relief is not available for monetary judgments
                 simply because enforcement of the judgment might be inequitable in light

                 . . . continued

                 The change here was meant to be purely stylistic, not substantive. FRCP
                 60 advisory committee's note (2007 amendments).

                       3 The Advisory Committee's Note states, "Mlle federal rule is revised
                 as follows . . . [fin part (4), the words 'an injunction' are substituted for 'the
                 judgment." NRCP 60 advisory committee's note. The reference to "part
                 (4)" is clearly a typographical error. Part (4) of both the FRCP 60(b) and
                 NRCP 60(b) simply state "the judgment is void." Therefore, "part (4)" was
                 not modified at all. However, as discussed above, part (5) of NRCP 60(b)
                 substitutes the words "the judgment" from the federal rules with the
                 words "an injunction." As such, Nevada's Advisory Committee clearly
                 intended to reference part (5) in its note, but mistakenly wrote part (4).

SUPREME COURT
        OF
     NEVADA
                                                         7
(0) 1947A    e
                of new or changed precedent. Accordingly, we affirm the district court's
                order denying the Fords' NRCP 60(b)(5) motion.

                We concur:

                    44
                Douglas   ,

                                              J.
                Cherry

SUPREME COURT
         OF
      NEVADA
                                                   8
(0) 1.947A