Court Opinion

ID: 3187179
Source: CourtListenerOpinion
Date Created: 2016-03-21 14:29:22.763189+00
Date Added: 2024-06-11T14:46:54.185771
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF NEVADA

                    FLEETWOOD CORPORATION, A                               No. 66450
                    NEVADA CORPORATION,
                    Appellant,
                    vs.
                    THE DOROTHY TOWNE TRUST,
                                                                                 FILED
                    Resnondent.                                                   MAR 1 8 2016

                                            ORDER OF AFFIRMANCE
                                This is an appeal from a post-judgment order modifying the
                    judgment and denying a motion to enforce. Second Judicial District Court,
                    Washoe County; Patrick Flanagan, Judge.
                                Appellant Fleetwood Corporation challenges the district
                    court's interpretation of a lease term. The dispute between these parties
                    has a lengthy history. In 1991 the parties executed a geothermal lease
                    whereby respondent Dorothy Towne Trust leased "geothermal and surface
                    resources" to Fleetwood (master lease), referencing a sublease whereby
                    Fleetwood subleased the geothermal resources to a third party for the
                    purpose of generating electricity (sublease). In the course of their
                    disputes, the district court made certain findings pertinent to the scope of
                    those contested "surface resources."
                                The district court entered a May 19, 2011, order and found
                    that the master lease granted Fleetwood "surface resources" and "interests
                    to surface rights"; that the Trust retained all non-granted rights, including
                    all surface rights that were not "resources"; and that the income the Trust
                    received from the east-side parcels did not involve "surface resources."
                    The district court subsequently entered a November 18, 2011, judgment

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                and found that Fleetwood was entitled to the "surface resources" of the
                east-side parcels but not to offset its outstanding property-tax obligation
                for those parcels with income the Trust received from that property.
                             After the Trust refused to convey the income received from
                renting houses, billboards, and pasture located on the east-side parcels,
                Fleetwood filed a motion to enforce the judgment, and the district court
                denied the motion. In its post-judgment order, the district court
                distinguished "surface resources" from "surface right[s]," concluding that
                "surface resources" constituted vegetative organic resources and that
                Fleetwood was entitled to the income generated by "natural surface
                resources," including pasture-grazing fees, but excluding rental income
                from houses and billboards. Fleetwood appealed, and this court reversed
                and remanded.      Fleetwood Corp. v. Dorothy Towne Trust, Docket No.
                60866 (Order of Reversal and Remand, January 29, 2014). We noted that
                the district court's definition of "surface resources" as "vegetative organic
                resources" introduced a limitation that was not stated in the final
                judgment and concluded that the district court improperly altered rights
                granted to Fleetwood under the November judgment. Id. We also noted
                that, even though the district court's definition encompassed income from
                the pasture grazing, the court denied Fleetwood's motion as to this
                portion.   Id.   We directed the district court to reconcile its May and
                November decrees and to clarify the definition of "surface resources." Id.
                             On remand, the district court conducted a hearing and entered
                an order that found that "surface rights" and "surface resources" were not
                synonymous, that the parties intended to minimize the effect of
                geothermal power generation on other uses of the surface, that Fleetwood
                had the right to develop the geothermal resources that it subleased, and

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                 that the Trust had the right to retain income from non-geothermal uses of
                 the property. The district court provided the definition:
                             "Surface resources" are such limited surface rights
                             as are necessary to access the geothermal
                             resources located on the properties, and to allow
                             Fleetwood, or its sub-lessee, to conduct all
                             necessary operations or activities related to the
                             collection of geothermal resources.
                             Fleetwood first argues that the district court exceeded its
                 jurisdiction because no motion to amend had been filed and that the
                 district court improperly extinguished its rights in the judgment. We
                 review de novo whether the district court exceeded its jurisdiction.
                 Emerson v. Eighth Judicial Dist. Court, 127 Nev. 672, 677, 263 P.3d 224,
                 227 (2011). A district court has the inherent power to construe its
                 judgments to remove ambiguity, and this court will remand a matter to
                 relieve such ambiguity.    Grenz v. Grenz, 78 Nev. 394, 401, 374 P.2d 891,
                 895 (1962) (remanding to clarify divorce decree). The district court had
                 jurisdiction to construe its prior decrees on the parties' post-judgment
                 motions and this court's remand. The district court then entered its order
                 on the narrow issue of reconciling the discrepancies in the "surface
                 resources" between the May order and the November judgment and
                 provided a clarifying definition of "surface resources" to settle the dispute.
                 As discussed below, the district court's clarification is consistent with the
                 contract language, and thus the district court did not extinguish
                 Fleetwood's rights. We conclude that Fleetwood's contention lacks merit.
                             Second, Fleetwood argues that the district court improperly
                 interpreted the meaning of "surface resources." Fleetwood argues that the
                 district court's definition was contrary to provisions of the master lease
                 and improperly relied on language from the sublease. We review contract

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                 interpretation de novo.   May v. Anderson, 121 Nev. 668, 672, 119 P.3d
                 1254, 1257 (2005). Where a contract is clear and unambiguous, the court
                 enforces the contract as written.     Kaldi v. Farmers Ins. Exch., 117 Nev.
                 273, 278-79, 21 P.3d 16, 20 (2001).
                             The master lease provides that the Trust conveyed to
                 Fleetwood its rights in geothermal and surface resources and that the
                 rights conferred were coextensive with those granted under the sublease.
                 The sublease provided the third party with certain geothermal rights and
                 the right to use the surface as necessary or convenient for geothermal
                 electricity production, which was to be exercised so as to minimize the
                 effect on the lessor's potential use of the surface. Pursuant to the master
                 lease reservation clause, the Trust reserved all of the other rights of the
                 sublease lessor except the right to receive funds, such that the only rights
                 not reserved were the rights expressly granted under the sublease to the
                 sublessee: namely, geothermal rights and the right to develop the surface
                 to facilitate generating geothermal electricity. Thus, as the district court
                 concluded, the sublease's terms are expressly referenced in and thus
                 relevant to the master lease's interpretation, and, as provided therein,
                 Fleetwood's surface rights are limited to developing the surface as
                 necessary or convenient for generating geothermal electricity.
                             Third, Fleetwood argues that the Trust should be estopped
                 from arguing that surface resources constitutes merely surface rights
                 necessary to develop geothermal energy because its prior counsel
                 previously argued for a broader definition. Judicial estoppel applies when
                 (1) the same party takes two positions (2) in judicial proceedings and (3)
                 successfully asserted the first position, (4) the two positions are totally
                 inconsistent, and (5) the first position was not taken by ignorance, fraud,

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                or mistake. Marcuse v. Del Webb Cmtys., Inc., 123 Nev. 278, 287, 163 P.3d
                462, 468-69 (2007). Fleetwood cites testimony by the Trust's former
                counsel uttered as a witness during the 2011 trial when asked about his
                understanding of the meaning of "surface resources." The Trust, however,
                took the same position in that trial's closing arguments regarding
                Fleetwood's limited surface rights that it takes here, as it has in
                subsequent filings and argument. Accordingly, the Trust has not taken
                two different positions, and estoppel does not apply. Fleetwood's
                argument that the Trust should be estopped from denying that the east-
                side parcels are part of the leased premises lacks merit, as the Trust never
                argued that the east-side parcels were not part of the leased premises but
                rather that Fleetwood's rights on the parcels were limited. We conclude
                that Fleetwood's estoppel argument fails. Accordingly, we
                              ORDER the judgment of the district court AFFIRMED.'

                                                                   ,   J.
                                         Hardesty

                Saitta
                             II                                                        J.

                cc:      Hon. Patrick Flanagan, District Judge
                         Carol Webster Millie, Settlement Judge
                         McDonald Carano Wilson LLP/Reno
                         McDonald Carano Wilson LLP/Las Vegas
                         Parsons Behle & Latimer/Reno
                         Washoe District Court Clerk

                      'We have considered Fleetwood's other arguments, including the
                spa-related finding and the Trust's purported waiver, and conclude that
                they lack merit.

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