Court Opinion

ID: 6316016
Source: CourtListenerOpinion
Date Created: 2022-02-21 08:07:20.600172+00
Date Added: 2024-06-11T09:01:41.859100
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF NEVADA

                 THE STATE OF NEVADA                     No. 82701
                 COMMISSIONER OF INSURANCE,
                 BARBARA D. RICHARDSON, IN HER
                 OFFICIAL CAPACITY AS RECEIVER
                 FOR SPIRIT COMMERCIAL AUTO
                 RISK RETENTION GROUP, INC.,
                 Petitioner,
                                                          FILED
                 VS.                                       FEB 1 8 2022
                 THE EIGHTH JUDICIAL DISTRICT                AaEm    BROWN
                 COURT OF THE STATE OF NEVADA,         CjAPP,SpRkEME COURT

                 IN AND FOR THE COUNTY OF              BY c-I
                                                            DEPN
                                                               U111
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                                                                  C4.EltK
                 CLARK; AND THE HONORABLE
                 MARK R. DENTON, DISTRICT JUDGE,
                 Respondents,
                 and
                 THOMAS MULLIGAN, AN
                 INDIVIDUAL; CTC TRANSPORTATION
                 INSURANCE SERVICES OF
                 MISSOURI, LLC, A MISSOURI
                 LIMITED LIABILITY COMPANY; CTC
                 TRANSPORTATION INSURANCE
                 SERVICES LLC, A CALIFORNIA
                 LIMITED LIABILITY COMPANY; CTC
                 TRANSPORTATION INSURANCE
                 SERVICES OF HAWAII LLC, A HAWAII
                 LIMITED LIABILITY COMPANY;
                 CRITERION CLAIMS SOLUTIONS OF
                 OMAHA, INC., A NEBRASKA
                 CORPORATION; PAVEL
                 KAPELNIKOV, AN INDIVIDUAL;
                 CHELSEA FINANCIAL GROUP, INC.,
                 A CALIFORNIA CORPORATION;
                 CHELSEA FINANCIAL GROUP, INC.,
                 A MISSOURI CORPORATION;
                 CHELSEA FINANCIAL GROUP, INC.,
                 A NEW JERSEY CORPORATION, D/B/A
                 CHELSEA PREMIUM FINANCE
                 CORPORATION; FOURGOREAN
SUPREME COURT    CAPTIAL, LLC, A NEW JERSEY
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1011947A 4.11D
                                                                     91)
                KAPA MANAGEMENT CONSULTING,
                INC., A NEW JERSEY CORPORATION;
                KAPA VENTURES, INC., A NEW
                JERSEY CORPORATION; GLOBAL
                FORWARDING ENTERPRISES
                LIMITED LIABILITY COMPANY, A
                NEW JERSEY LIMITED LIABILITY
                COMPANY; NEW TECH CAPITAL,
                LLC, A DELAWARE LIMITED
                LIABILITY COMPANY; LEXICON
                INSURANCE MANAGEMENT LLC, A
                NORTH CAROLINA LIMITED
                LIABILITY COMPANY; ICAP
                MANAGEMENT SOLUTIONS, LLC, A
                VERMONT LIMITED LIABILITY
                COMPANY; SIX ELEVEN LLC, A
                MISSOURI LIMITED LIABILITY
                COMPANY; 10-4 PREFERRED RISK
                M.ANAGERS INC., A MISSOURI
                CORPORATION; IRONJAB LLC, A
                NEW JERSEY LIMITED LIABILITY
                COMPANY; YANINA G. KAPELNIKOV,
                AN INDIVIDUAL; IGOR KAPELNIKOV,
                AN INDIVIDUAL; QUOTE MY RIG
                LLC, A NEW JERSEY LIMITED
                LIABILITY COMPANY; MATIIIEW
                SIMON, AN INDIVIDUAL; DANIEL
                GEORGE, AN INDIVIDUAL; JOHN
                MALONEY, AN INDWIDUAL; JAMES
                MARX, AN INDIVIDUAL; CARLOS
                TORRES, AN INDIVIDUAL; VIRGINIA
                TORRES, AN INDWIDUAL; SCOTT
                MCCRAE, AN INDIVIDUAL; BRENDA
                GUFFEY, AN INDIVIDUAL; AND 195
                GLUTEN FREE LLC, A NEW JERSEY
                LIMITED LIABILITY COMPANY,
                Real Parties in Interest.

                                     ORDER DENYING PETITION
                           This original petition for a writ of mandamus challenges several
SUPREME COURT   orders in a contract and tort action. The district court placed Spirit
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101 I VOA e
Commercial Auto Risk Retention Group, Inc., into an involuntary
receivership and appointed petitioner Commissioner of Insurance, Barbara
Richardson as receiver. Richardson then sued the real parties in interest
(RPIs) to recover money allegedly owed to Spirit. In her petition,
Richardson challenges district court orders compelling arbitration and
dismissing the claims as to RPIs CTC Transportation Insurance Services of
Missouri, LLC; CTC Transportation Services, LLC; CTC Transportation
Services of Hawaii, LLC (collectively, CTC); and Criterion Claims Solutions
of Omaha, Inc. (Criterion). Richardson also challenges the district court
orders granting the remaining RPIs motions for a stay of the proceedings
pending arbitration.
            "[W]here there is not a plain, speedy and adequate remedy in
the ordinary course of law," a writ of mandamus may issue "to compel the
performance of an ace that the law requires. NRS 34.160; NRS 34.170.
Thus, "the right to appeal [a final judgment] is generally an adequate legal
remedy that precludes writ relief." Pan v. Eighth Judicial Dist. Court, 120
Nev. 222, 224, 88 P.3d 840, 841 (2004). Additionally, petitioner must have
a legal right to a particular action by the district court. Walker v. Second
Judicial Dist. Court, 136 Nev., Adv. Op. 80, 476 P.3d 1194, 1196 (2020).
And, "where a district court [is] entrusted with discretion on an
issue, . . . we can issue traditional mandamus only where the lower court
has manifestly abused that discretion or acted arbitrarily or capriciously."
Id. Ultimately, however, "because a writ of mandamus is an extraordinary
remedy, the decision to entertain a petition for the writ lies within [this
court's] discretion." Gonzalez v. Eighth Judicial Dist. Court, 129 Nev. 215,
217, 298 P.3d 448, 449-50 (2013).
            Richardson has not carried her "burden of demonstrating that
extraordinary relief is warranted." Pan, 120 Nev. at 228, 88 P.3d at 844.

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Regarding the arbitration and dismissal orders, Richardson may appeal
from the arbitrator's decision and, to the extent she wishes to challenge the
agreements at issue based on fraud or illegality, she can raise these
arguments with the arbitrator.    See Rent-A-Ctr., W, Inc. v. Jackson, 561
U.S. 63, 70-71 (2010) (holding that under the Federal Arbitration Act, a
challenge to an arbitration provision is for the courts to decide, while a
challenge to an entire contract which includes an arbitration provision is an
issue for the arbitrator). Additionally, Richardson argues that her petition
raises an important issue warranting writ relief because the district court
ordered arbitration despite her argument that the McCarran Ferguson Act,
15 U.S. C. § 1012(b) (providing that "[n]o Act of Congress shall be construed
to invalidate, impair, or supersede any law enacted by any State for the
purpose of regulating the business of insurance, . . . unless such Act
specifically relates to the business of insurance) and NRS Chapter 696B
(addressing conservation, rehabilitation, and liquidation of delinquent
insurers) reverse-preempt the Federal Arbitration Act, 9 U.S.C. § 2; see U.S.
Horne Corp. v. Michael Ballesteros Tr., 134 Nev. 180, 189, 415 P.3d 32, 40
(2018) (explaining that the FAA preempts state laws and legal doctrines
that are "applied in a fashion that disfavors arbitration"). However,
Richardson fails to demonstrate that the arbitration of Spirit's claims
against RPIs for torts and contract breaches would impede a specific state

      'Richardson cites to Janvey v. Alguire, 847 F.3d 231, 246 (5th Cir.
2017) for the proposition that "arbitration agreements may be rejected when
they are instruments of a criminal enterprise?' However, Janvey is
distinguishable in that the receiver in Janvey was appointed to assist in
unwinding a criminal scheme in which several prominent figureheads had
already pleaded guilty and were incarcerated. Id. at 237. The district court
has not found such a criminal scheme here. Therefore, we are not
persuaded by this argument.

                                      4
                   law regulating the business of insurance. See Union Labor Life Ins. Co. v.
                   Pireno, 458 U.S. 119, 129 (1982) (holding that the hallmark of a regulation
                   affecting "the business of insurance is that the regulation affects the
                   relationsfiip between insured and insurer). And several courts have
                   rejected Richardson's position. E.g., Millirnan, Inc. v. Roof, 353 F. Supp. 3d
                   588, 603 (E.D. Ky. 2018) (concluding that "[s]imply because the business is
                   an insurance company and has become insolvent is not relevant to the
                   regulation of the business of insurance"); Ommen v. Milliman, Inc., 941
                   N.W.2d 310, 320 (Iowa 2020) (holding under similar facts that "arbitration
                   only alters the forum in which the [receiver] may pursue" common law
                   claims); see also Suter v. Munich Reinsurance Co., 223 F.3d 150, 161 (3d Cir.
                   2000) (holding that enforcing an arbitration clause against a receiver would
                   not impair the regulation of the business of insurance under a liquidation
                   act, even assuming the liquidation act regulated the business of insurance,
                                c
                   because the 'proceeding [was] a suit instituted by the Liquidator.. . . to
                   enforce contract rights for an insolvent insuree). Lastly, Richardson argues
                   that the arbitration orders impact her ability to fulfill her obligations as
                   receiver and that the receivership order did not authorize her to initiate
                   arbitration. However, she fails to demonstrate how her concerns are unique
                   to the arbitration agreements at issue here, and the receivership order
                   explicitly stated that the "enumeration of powers shall not be construed as
                   a limitation upon the [r]eceiver." We therefore decline to grant writ relief
                   regarding the dismissals.
                               Regarding the orders granting the remaining RPIs request for
                   a stay pending arbitration, we similarly conclude that Richardson has failed
                   to meet her burden. In its discretion, the district court granted a stay
                   because the claims against the remaining RPIs were inextricably
                   intertwined with and depended upon the claims against CTC and Criterion,
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(01 1947A    04W
and that a stay would increase judicial economy and simplify the issues.
See NRS 38.221(6)-(7) (providing that a court "on just terms shall stay any
judicial proceeding that involves a claim alleged to be the subject of
arbitration"); see also Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936)
(holding that "the power to stay proceedings is incidental to the power
inherent in every court to control the disposition of the causes on its docket
with economy of time and effort for itself, for counsel, and for litigants" and
that "[h]ow this can best be done calls for the exercise of judgment, which
must weigh competing interests and maintain an even balance"); Leyva v.
Certified Grocers of Cal., Ltd., 593 F.2d 857, 863-64 (9th Cir. 1979)
(concluding that "[a] trial court may, with propriety, find it is efficient for
its own docket and the fairest course for the parties to enter a stay of an
action before it, pending resolution of independent proceedings which bear
upon the case," and that "R]his rule applies whether the separate
proceedings are judicial, administrative, or arbitral in character, and does
not require that the issues in such proceedings are necessarily controlling
of the action before the coure). The district court further noted that, absent
a stay, the parties could expend unnecessary resources on duplicative
litigation, and that duplicative litigation could lead to inconsistent results.
Richardson also recognized the interconnectedness of the claims, arguing in
opposition to CTC's and Criterion's respective motions to compel that
"[n]early every fraudulent and unlawful act the [petitioner] has identified
was transacted by or with the knowledge of CTC," and that "Criterion along
with the CTC Defendants were a part of a web of interrelated companies."
Based on the foregoing, we conclude that the district court's decision is
neither clearly erroneous under NRS 38.221, nor a manifest abuse of its
discretion.   See Walker, 476 P.3d at 1196 (explaining the analysis for
mandamus relief where the district court is entrusted with discretion);

                                       6
                    Archon Corp. v. Eighth Judicial Dist. Court, 133 Nev. 816, 819-20, 407 P.3d
                    702, 706 (2017) (holding that writ relief may be warranted if the record
                    reflects legal error or an abuse of discretion by the district court). For the
                    foregoing reasons, we
                                   ORDER the petition DENIED.2

                          iAet.t vez.4,tn     ,j
                    Hardesty

                    cc:    Hon. Mark R. Denton, District Judge
                           Greenberg Traurig, LLP/Las Vegas
                           Peterson Baker, PLLC
                           Jolley Urga Woodbury Holthus
                           Bailey Kennedy
                           Saltzman Mugan Dushoff
                           Howard & Howard Attorneys PLLC
                           Alverson Taylor & Sanders
                           Wilson, Elser, Moskowitz, Edelman & Dicker, LLP/Las Vegas
                           Gordon & Rees Scully Mansukhani LLP/Las Vegas
                           Tyson & Mendes LLP
                           Eighth District Court Clerk

                            2TheHonorable Mark Gibbons, Senior Justice, participated in the
SUPREME COURT       decision of this matter under a general order of assignment.
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