Court Opinion

ID: 3005965
Source: CourtListenerOpinion
Date Created: 2015-09-30 15:08:37.316769+00
Date Added: 2024-06-11T11:46:02.355292
License: Public Domain

687B.260. This declaratory relief action was separate from the action
                  regarding Mitchell's prior confession of judgment, was assigned to a
                  different department, and named many defendants including Mitchell.
                  Mitchell failed to appear in the declaratory relief action, and the district
                  court entered a default judgment against Mitchell. The district court
                  denied Mitchell's subsequent motions to set the judgment aside. Mitchell
                  now appeals, challenging the denial of those motions.
                  Thefl district court properly exercised its discretion by denying Mitchell's
                  motion to set aside the judgment pursuant to NRCP 60(c)
                              The district court properly exercised its discretion by denying
                  Mitchell's NRCP 60(c) motion to set aside the judgment for lack of
                  personal service. We review a district court's order denying a motion to
                  set aside a default judgment for an abuse of discretion. Price v. Dunn, 106
                  Nev. 100, 103, 787 P.2d 785, 787 (1990), overruled on other grounds by
                  NC-DSH, Inc. v. Garner, 125 Nev. 647, 651 n.3, 218 P.3d 853, 857 n.3
                  (2009). In doing so, we will not disturb factual findings that are supported
                  by substantial evidence.   Ogawa v. Ogawa, 125 Nev. 660, 668, 221 P.3d
                  699, 704 (2009).
                              NRCP 60(c) provides:
                              When a default judgment shall have been taken
                              against any party who was not personally served
                              with summons and complaint. . . and who has not
                              entered a general appearance in the action, the
                              court, after notice to the adverse party, upon
                              motion made within 6 months after the date of
                              service of written notice of entry of such judgment,
                              may vacate such judgment. . . .
                  Therefore, an NRCP 60(c) movant must demonstrate that (1) the motion
                  was filed within six months after service of notice of entry of the default
                  judgment, and (2) the movant was not personally served with a summons

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                    and complaint. See Basf Corp., Inmont Div. v. Jafbros, Inc., 105 Nev. 142,
                    144, 771 P.2d 161, 162 (1989); see also Epstein v. Epstein, 113 Nev. 1401,
                    1405, 950 P.2d 771, 773 (1997) (overruling cases that required an NRCP
                    60(c) movant to also show that it had a meritorious defense). Once a
                    movant makes this showing, "the burden shifts to the opposing party to
                    show circumstances which would make granting the motion inequitable."
                    Basf, 105 Nev. at 144, 771 P.2d at 162.
                                The district court properly concluded—and Powercom and
                    Reynolds do not dispute—that Mitchell made the requisite showing to
                    shift the burden to Powercom and Reynolds according to Basf. See id. We
                    therefore review the district court's conclusion that Powercom and
                    Reynolds met their burden to show granting Mitchell's motion would have
                    been inequitable under a theory of laches. We hold that the district court
                    did not abuse its discretion.
                                "Laches is more than mere delay in seeking to enforce one's
                    rights, it is delay that works a disadvantage to another."    Home Savings
                    Ass'n v. Bigelow, 105 Nev. 494, 496, 779 P.2d 85, 86 (1989). "The condition
                    of the party asserting laches must become so changed that he cannot be
                    restored to his former state." Id.
                                Powercom and Reynolds first attempted to serve Mitchell
                    through Ms. Gottschalk, Mitchell's attorney at the time. Ms. Gottschalk
                    initially promised to ask Mitchell whether she could accept service, but
                    later indicated she no longer represented Mitchell. This suggests Mitchell
                    was aware of the action and terminated the representation to avoid
                    service. Powercom and Reynolds next attempted to serve Mitchell at the
                    address of its registered agent, but the person at the front desk turned the
                    process server away, indicating Mitchell had not been there for several

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                years. In combination, this evidence supports the district court's finding
                that Mitchell knew of the declaratory relief action but delayed asserting
                its right to appear. See Ogawa, 125 Nev. at 668, 221 P.3d at 704.
                            Substantial evidence also supports the district court's finding
                that this delay severely prejudiced Powercom and Reynolds. Powercom
                and Reynolds filed the declaratory action for the express purpose of
                determining what they could and could not do with the insurance
                proceeds. By failing to appear in a timely manner, Mitchell prevented the
                district court from adjudicating the merits of Mitchell's claim to the
                insurance proceeds. As a result, and pursuant to the default judgment,
                Powercom and Reynolds did not reserve any of the insurance proceeds for
                Mitchell. Where, as here, other creditors who appeared in the action
                claimed portions of the insurance proceeds, we cannot conclude the district
                court abused its discretion by finding substantial prejudice would result
                from forcing Powercom and Reynolds to return the insurance proceeds to
                satisfy Mitchell's claim.   See Home Savings Ass'n,   105 Nev. at 496, 779
                P.2d at 86. Nor are we persuaded that disbursing the insurance proceeds
                to Reynolds changes this result. Indeed, Reynolds was a party to the
                declaratory relief action in order to have both Powercom's and her own
                rights to the insurance proceeds adjudicated.
                            We therefore conclude the district court did not abuse its
                discretion by finding that vacating the default judgment would be
                inequitable, and we affirm the district court's denial of Mitchell's NRCP
                60(c) motion to set aside the default judgment.
                 The district court properly denied Mitchell's motion to set aside the
                judgment as void for lack of personal jurisdiction
                            Mitchell further argues the district court abused its discretion
                by denying Mitchell's NRCP 60(b) motion to set aside the judgment as void
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                    for lack of personal jurisdiction. We disagree. When a defendant "by
                    concealment seeks to avoid the service of summons," a district court may
                    allow service of process by publication. NRCP 4(e)(1)(i). As discussed
                    above, substantial evidence supports the district court's finding that
                    Mitchell knew of the action. Moreover, the same evidence suggests
                    Mitchell concealed itself to avoid service. Accordingly, substantial
                    evidence supports the district court's conclusion that service by
                    publication was proper and that it had personal jurisdiction over Mitchell,
                    see id., and the district court therefore did not abuse its discretion by
                    denying Mitchell's NRCP 60(b) motion even if Mitchell did not waive this
                    argument. See Saavedra-Sandoval v. Wal-Mart Stores, Inc., 126 Nev. 592,
                    599, 245 P.3d 1198, 1202 (2010) ("This court will affirm a district court's
                    order if the district court reached the correct result, even if for the wrong
                    re ason."). 2

                           Because Powercom and Reynolds clearly sought an interpretation of
                           2
                    NRS 687B.260, not Mitchell's judgment, we reject Mitchell's argument
                    that declaratory relief was unavailable. See NRS 30.040(1) (stating a
                    party may seek an interpretation of a statute in a declaratory relief
                    action). We also summarily reject Mitchell's claim that a corporation
                    cannot claim an exemption for life insurance proceeds because
                    "exemptions are to be liberally construed in favor of the debtor," In re Fox,
                    129 Nev., Adv. Op. 39, 302 P.3d 1137, 1140 (2013) (internal quotation
                    marks omitted), and beneficiaries are not expressly limited to natural
                    persons. See NRS 687B.260(1); see also NRS 0.039.

                          Finally, the declaratory relief action did not indirectly challenge the
                    legal basis for Mitchell's prior judgment, and thus was not an improper
                    collateral attack. See Sheriff, Clark Cnty. v. Hatch, 100 Nev. 664, 666, 691
                    P.2d 449, 450 (1984) (defining collateral attack). Similarly, because the
                    declaratory relief action involved many parties unrelated to Mitchell's
                    judgment, the district court did not err by exercising subject matter
                    jurisdiction over the action. See Pub. Serv. Comm'n of Nev. v. Eighth
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                                 For these reasons, we
                                 ORDER the judgment of the district court AFFIRMED.

                                                         T cwt. 01----c2C J.
                                                         Parraguirre

                                                                                       J.
                                                         Douglas

                      cc: Hon. Mark R. Denton, District Judge
                           Robert F. Saint-Aubin, Settlement Judge
                           Wilson, Elser, Moskowitz, Edelman & Dicker, LLP/Las Vegas
                           Aldrich Law Firm, Ltd.
                           Eighth District Court Clerk

                      ...continued
                      Judicial Dist. Court, 107 Nev. 680, 684, 818 P.2d 396, 399 (1991) (stating
                      that a court will not entertain a declaratory judgment action if there is
                      another action pending that involves the same parties and the same
                      issues).

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