Court Opinion

ID: 1032466
Source: CourtListenerOpinion
Date Created: 2013-07-09 18:40:12.511559+00
Date Added: 2024-06-11T15:38:40.142442
License: Public Domain

ORDER OF REVERSAL AND REMAND
                                   These are appeals and a cross-appeal from a final judgment in
                    an action involving the sale of water rights and post-judgment orders
                    awarding attorney fees and costs and denying NRCP 60(b) relief. First
                    Judicial District Court, Carson City; James E. Wilson, Judge", and Robert
                    E. Rose, Senior Judge.
                                   Respondents Jack White and Retireman LLC bought water
                    rights from appellant Tim Eugene Bertagnolli. White needed the water
                    rights for a planned residential housing development and Retireman
                    needed water rights for a retail tire shop. Both White and Retireman
                    allegedly relied on the advice of appellant Western Engineering &
                    Surveying Services, who affirmed that Bertagnolli's water rights could be
                    used for these purposes. However, when respondents tried to use their
                    water rights, the State Engineer refused to approve the transfers based on
                    language in Bertagnolli's original water permit indicating that his water
                    rights were only temporary. White and Retireman filed a complaint
                    against Bertagnolli and Western alleging numerous claims for relief.
                    Bertagnolli sought indemnification from Western and vice versa. Four
                    days into trial, Western settled with both respondents and the court
                    approved the settlement. Bertagnolli made his first motion for mistrial at
                    that time, which was denied. The jury subsequently found against
                    Bertagnolli.
                                   This appeal involves a challenge to the district court's
                    interlocutory decision granting an oral motion accepting a good faith

                          'Judge Wilson presided over the hearing at which Bertagnolli
                    alleges the errors occurred.

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settlement proposal and a subsequent refusal by the district court to grant
a motion for a mistrial. We review both challenges for an abuse of
discretion. Doctors Co. v. Vincent, 120 Nev. 644, 652, 98 P.3d 681, 686-87
(2004); Romo v. Keplinger, 115 Nev. 94, 96, 978 P.2d 964, 966 (1999).
            In analyzing whether a settlement was made in good faith, a
district court should consider all relevant facts available to it, which
includes evaluating the settlement amount, the financial condition of the
settling defendants, and the "relative liability permutations of the
particular contribution or indemnity action known to it, including the
strengths and weaknesses of the contribution or indemnity claims."
Doctors Co., 120 Nev. at 652, 98 P.3d at 686-87; see also Velsicol Chemical
Corp. v. Davidson, 107 Nev. 356, 360, 811 P.2d 561, 563 (1991); In re
MGM Grand Hotel Fire Litig., 570 F. Supp. 913, 927 (D. Nev. 1983).
Having reviewed the parties' briefs, oral arguments, and the appellate
record, we conclude that the district court abused its discretion in
approving the settlement because it failed to consider the full
ramifications of the indemnification and the financial positions of the
parties. Specifically, in deciding that the Western settlement was in good
faith, the district court's order notes only that it considered "the apparent
value of the settlement, Western's insurance limits, and the lack of acts
which would injure Bertagnolli." This portion of the district court's order
was wholly insufficient, as it failed to provide analysis concerning the
financial condition of the settling parties and indemnification, both
significant factors under the circumstances. The district court further
abused its discretion because, at the time the motion was made, the
financial terms of the settlement were not concrete. While not required by
statute, a settlement of this magnitude should have been set forth in a

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                    written order detailing the district court's rationale for approving the
                    settlement terms—a few pages of oral record is unsatisfactory. As a result
                    of this abuse of discretion, the settlement cannot pass muster.
                                  Even if the settlement had been made in good faith, the
                    district court also abused its discretion by refusing to grant Bertagnolli's
                    first motion for mistrial because the timing of the settlement severely
                    prejudiced Bertagnolli's ability to appropriately defend the action. The
                    record reveals that but for Western's lack of due diligence in inspecting
                    Bertagnolli's original permit, White and Retireman would not have
                    purchased the water rights. If Western had knowledge of the Bertagnolli's
                    temporary water rights, Western should have advised against the
                    purchase. Thus, Western was an active participant and quite possibly
                    primarily responsible for the wrongs that caused the sale of temporary
                    water rights. See Doctors, 120 Nev. at 653, 98 P.3d at 687-88 ("`The right
                    of indemnity rests upon a difference between the primary [active] and the
                    secondary [passive] liability of two persons, each of whom is made
                    responsible by the law to an injured party.") With Western out of the
                    picture, liability was completely shifted to Bertagnolli and his trial
                    strategy had to change midway through trial. Therefore, we are not
                    convinced that Bertagnolli received a fair trial. A new trial, or even a
                    newly seated jury, would have alleviated any prejudice caused by the
                    settlement.
                                  We also note that the district court did not provide the jury
                    with a special verdict form to assess the comparative fault of the
                    codefendants. "The general verdict rule does not apply in a case that
                    involves special findings that assign specific damages on specific theories
                    of recovery." Skender v. Brunsonbuilt Constr. & Dev. Co., 122 Nev. 1430,

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                1438, 148 P.3d 710, 716 (2006). A special verdict form should be used
                where there exists more than one theory of liability or defense. Id. Here,
                because Bertagnolli argued indemnification and comparative fault from
                the outset, a special verdict form is proper. Accordingly, we
                            ORDER the judgment of the district court REVERSED AND
                REMAND this matter to the district court for further proceedings
                consistent with this order. 2

                                                       (                        , J
                                                    Hardesty

                                                    Parraguirre

                cc: James E. Wilson, District Court Judge
                      Robert E. Rose, Senior Judge
                      William E. Nork, Settlement Judge
                      J.M. Clouser & Associates, Ltd.
                      Holland & Hart LLP/Reno
                      Lemons, Grundy & Eisenberg
                      Sullivan Law Offices
                      Carson City Clerk

                      2 Becausewe are reversing and remanding for further proceedings,
                we need not address Bertagnolli's additional claims of error.
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