Court Opinion

ID: 6328525
Source: CourtListenerOpinion
Date Created: 2022-03-31 10:06:31.195297+00
Date Added: 2024-06-11T09:21:36.770373
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF NEVADA

 THOMAS L. CORNWELL, A NEVADA                            No. 82106
 RESIDENT,
 Appellant,
 vs.                                                        FILED
 NEIL E. SCHULTZ, A NEVADA
 RESIDENT, A/K/A THE NEIL E.                                 MAR 3 O 2022
 SCHULTZ TRUST DATED JANUARY                                ELIZABETH A. BROWN
                                                         CLERK CIF SUPREME COURT
 29, 2016,                                               By
                                                              5  NI
                                                               DEPUTY CL.ERK
 Res • ondent.

                         ORDER OF AFFIRMANCE

            This is an appeal from a district court order, pursuant to a
bench trial, granting quiet title. First Judicial District Court, Carson City;
James E. Wilson, Judge.
            Respondent Neil E. Schultz acquired a promissory note from
the nonparty promisee, George Soetje, in 2018. The promissory note,
executed in 2003, was secured by a deed of trust to a parcel of land at 2355
Columbia Way, Carson City ("the property"). Appellant Thomas L.
Cornwell had acquired title to the property in 2017 via a quitclaim deed
granted to him by nonparty Karen Lynn Clarke, the promisor to the 2003
promissory note. Cornwell lives in a mobile home classified as personal
property, to which he does not retain title, that sits on the property. Schultz
initiated a nonjudicial foreclosure of the property following his acquisition
and recordation of the assignment of the deed of trust. The Neil E. Schultz
Trust, of which Schultz is a trustee, purchased the property at the trustee's
sale. Schultz filed this quiet title action after Cornwell refused to leave the
property. After a bench trial, the district court concluded that Schultz
acquired superior title to the property pursuant to a valid nonjudicial
foreclosure because the promissory note, secured by the deed of trust to the
property, was in default. This appeal followed.
The district court did not abuse its discretion in admitting hearsay
testimony, and substantial evidence otherwise supports the district court's
findings of fact and conclusions of law
             Cornwell argues that Schultz relied exclusively on inadmissible
hearsay evidence to prove the default of the promissory note: (1) a sworn
declaration by Soetje that Clarke failed to make any payments on the note
since June 2010;1 (2) testimony by Schultz that Soetje told him that the last
payment made on the note occurred in 2010; (3) Cornwell's testimony, which
Schultz characterizes as corroborative of his own testimony, that Soetje told
Cornwell "that no payments had been made on the [promissory] note since
May 2010," but that Cornwell "ignored these statements," instead believing
that Clarke "was making at least some paymente; and (4) a handwritten
note from Soetje to a title company in which Soetje listed the principal
balance, interest, and fees outstanding on the promissory note at the time
Schultz acquired it. Cornwell contends that because Schultz failed to offer
admissible evidence, the "district court improperly relied on" these pieces of
inadmissible hearsay to conclude that Schultz acquired superior title, and
Schultz failed to prove his quiet-title claim without these pieces of
evidence.2 We disagree.

      1We  do not consider whether the declaration was inadmissible
hearsay because the district court never admitted it into evidence.

      2 We  decline to review Cornwell's claims of error in the admission of
Schultz's testimony and Soetje's handwritten note because he failed to
object to these pieces of evidence below. See Canfield v. Gill, 101 Nev. 170,
171 n.1, 697 P.2d 476, 477 n.1 (1985) (declining to review admission of
evidence because "[t]he failure to object to this evidence constitute[d] a
waivee). Cornwell's lack of legal representation and "alleged ignorance of
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                                      2
                                We defer to the district court's findings of fact so long as
                    substantial evidence supports them. Sowers v. Forest Hills Subdivision,
                    129 Nev. 99, 105, 294 P.3d 427, 432 (2013). We define "substantial evidence
                    as that which 'a reasonable mind might accept as adequate to support a
                    conclusion.'" Bacher v. Office of State Ener of Nev., 122 Nev. 1110, 1121,
                    146 P.3d 793, 800 (2006) (quoting State Enip't Sec. Dep't v. Hilton Hotels
                    Corp., 102 Nev. 606, 608, 729 P.2d 497, 498 (1986)). Additionally, we review
                    a district court's decision to admit evidence for an abuse of discretion.
                    Hansen v. Universal Health Servs. of Nev., Inc., 115 Nev. 24, 27, 974 P.2d
                    1158, 1160 (1999). "An abuse of discretion occurs if the district court's
                    decision is arbitrary or capricious or if it exceeds the bounds of law or
                    reason." Skender v. Brunsonbuilt Constr. & Dev. Co., 122 Nev. 1430, 1435,
                    148 P.3d 710, 714 (2006).
                                Even if Cornwell's testimony constituted inadmissible hearsay,
                    and the district court improperly admitted it, the error did not affect the
                    outcome because Schultz's trustee's deed provided evidence for a reasonable
                    mind to accept as sufficient to support the finding of fact that a default
                    occurred.3 Indeed, the district court's findings of fact do not even reference

                    the law does not "protect him from the consequences of failing to comply
                    with" evidentiary rules and appellate procedure. See Rodriguez v. Fiesta
                    Palms, L.L.C., 134 Nev. 654, 659, 428 P.3d 255, 259 (2018), modified on
                    other grounds, Willard v. Berry-Hinckley Indus., 136 Nev. 467, 471 n.6, 469
                    P.3d 176, 180 n.6 (2020).

                          3 Even  if his hearsay testimony factored into the district court's
                    decision, Cornwell never objected to Schultz's examination of him, instead
                    offering a narrative unprompted by any particular question. And arguably,
                    the statement was offered to show its effect on Cornwell, a nonhearsay
                    reason, to admit the testimony, see, e.g., Grosjean v. Imperial Palace, Inc.,
                    125 Nev. 349, 362-63, 212 P.3d 1068, 1078 (2009) (explaining that a
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                      the challenged portion of Cornwell's testimony. Instead, the district court
                      referred repeatedly to the recitals contained in the trustee's deed, which
                      stated, in relevant part, that a missed payment in June 2010, and continued
                      missed payments thereafter, formed the basis to declare the note in default.
                      Cornwell did not and does not challenge the authenticity of the deed, the
                      admission of the deed into evidence, or the district court's reliance on the
                      deed. See Back Streets, Inc. v. Campbell, 95 Nev. 651, 653, 601 P.2d 54, 55
                      (1979) (concluding that the "right to object to the evidence" on appeal was
                      "waive& for failure to object to the evidence at its admission). Accordingly,
                      we conclude that substantial evidence supported the district court's factual
                      and legal conclusions on the status of the note, regardless of whether
                      Cornwell's testimony constituted inadmissible hearsay.1
                      The district court did not shift the burden of proof to Cornwell to prove
                      superior title
                                  Cornwell contends that the district court's consideration of
                      Cornwell's failure to provide admissible documentation to support his list
                      of purported payments made towards the promissory note to conclude
                      Schultz held superior title "improperly shift[ed] the burden of proof to"
                      Cornwell. We disagree.

                      statement offered for a purpose other than its truth, such as "to show its
                      effect on" the listener, makes the statement nonhearsay), such that the
                      district court's decision to not strike it sua sponte falls within its wide
                      discretion.

                            1 Because substantial evidence supports the district court's factual
                      finding regarding the default, and by consequence, the conclusion that the
                      default permitted Schultz to foreclose on the property, we do not address
                      Cornwell's challenge to the district court's alternative conclusion that the
                      due-on-sale clause permitted Schultz to conduct the foreclosure sale.
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            We review de novo the district court's application of the legal
principles of burdens of production and persuasion.        Gunderson v. D.R.
Horton, Inc., 130 Nev. 67, 82, 319 P.3d 606, 616 (2014). We conclude that
the district court did not shift the burden to Cornwell to prove the quiet-
title claim, see W. Sunset 2050 Tr. v. Nationstar Mortg.,            134 Nev.
352, 354, 420 P.3d 1032, 1034-35 (2018) (noting that the plaintiff bears the
burden to prove "good title (internal quotation marks omitted) (quoting
Breliant v. Preferred Equities Corp., 112 Nev. 663, 669, 918 P.2d 314, 318
(1996))), because the court merely permitted Cornwell to come forward with
rebuttal evidence to show that payments were made, cf. Weaver v. State
Dep't of Motor Vehicles, 121 Nev. 494, 501, 117 P.3d 193, 198 (2005)
(concluding that the decision to allow a party to present evidence to rebut
the administrative law judge's conclusion "did not shift the burden of
proof'). Contrary to Cornwell's argument, the district court referenced
Cornwell's general failure to provide any documentation or proof to
substantiate his testimony that Clarke made the payments, despite that he
did not make the payments and that he did not know whether Clarke
missed payments. As discussed above, substantial evidence supports the
fact of default. Without any rebuttal evidence from Cornwell, that evidence
supported the foreclosure. Thus, the district court did not improperly shift
the burden to Cornwell to prove that he held superior title.5

        W e decline to address Cornwell's final argument that equity requires
he receive protections provided to homeowners in proceedings for
nonjudicial foreclosures to correct for the perceived "inequitable"
circumstances of this quiet-title action. Not only does Cornwell raise the
argument for the first time on appeal, see Old Aztec Mine, Inc. v. Brown, 97
Nev. 49, 52, 623 P.2d 981, 983 (1981) (explaining that "[a] point not urged
in the trial court, unless it goes to the jurisdiction of that court, is deemed
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                                      5
                                   Accordingly, we
                                   ORDER the judgment of the district court AFFIRMED.

                                                                Li, 8,4,0                 J.
                                                          Silver

                                                                                          J.
                                                          Cadish

                       to have been waived and will not be considered on appeal"), but also he fails
                       to cogently argue the claim, see Edwards v. Emperor's Garden Rest., 122
                       Nev. 317, 330 n.38, 130 P.3d 1280, 1288 n.38 (2006) (declining to address
                       arguments where party failed "to cogently argue" them). His reliance on
                       our statement that equity jurisdiction "consider[s] the entirety of the
                       circumstances that bear upon the equities," Shadow Wood Homeowners
                       Ass'n v. N.Y. Ginty. I3ancorp, Inc., 132 Nev. 49, 63, 366 P.3d 1105, 11.14.
                       (2016), divorces the principle of equity from the various rules and doctrines
                       that comprise it, see generally 27A Am. Jur. 2d Equity § 2 (2021) (explaining
                       that the concept of equity does not permit courts to fashion relief "without
                       regard to precedents and established principlee). Cornwell identifies no
                       applicable equitable doctrine to warrant voiding the foreclosure sale and
                       applying the protections applicable to foreclosure of homes to the
                       foreclosure of a parcel of land. The court's equitable powers do not exist to
                       vindicate a party's perception of subjective unfairness in the legal outcome.

                             Because we do not address Cornwell's equity argument, we do not
                       need to reach Schultz's argument that the limitations periods in subsections
                       (5) and (6) of NRS 107.080 bar Cornwell's challenge to the foreclosure sale.
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                  cc:   Ron. James E. Wilson, District Judge
                        Garman Turner Gordon
                        John Bartlett, Attorney at Law
                        Carson City Clerk
                        Legal Aid Center of Southern Nevada, Barbara E. Buckley, Executive
                        Director
                        Anne R. Traurn, Coordinator, Appellate Litigation Section, I ro Bono
                        Committee, State Bar of Nevada

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