THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING

THE IMPLIED COVENANT  OF GOOD FAITH AND FAIR DEALING

The Nevada Supreme Court has recognized the implied covenant of good faith and fair dealing that attaches to contracts.  This covenant is explained in the 1991 decision in Hilton Hotels Corporation v. Butch Lewis Productions, Inc. 107 Nev. 226, 808 P.2d 919 (1991).  In its decision, the Court held:  “When one party performs a contract in a manner that is unfaithful to the purposes of the contract and the justified expectations of the other party are thus denied, damages may be awarded against the party who does not act in good faith.  Whether the controlling party’s actions fall outside the reasonable expectations of the dependent party is determined by the various factors and general circumstances.” (citations omitted)

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Quiet Title Actions in Nevada

QUIET TITLE

Many property owners find themselves in need of an attorney to handle a real estate quiet title action.  Quiet title is often needed at the time of selling or refinancing property.  It is at this time that as a result of a title search, old trust deeds, mortgages,  liens, easements, ownership issues,  etc. can be discovered that need to be removed from title through a court action.   Without quieting title, clean title insurance may not be available.     Hayes and Welsh is experienced in real estate quiet title actions.    We can also work with owners and their title companies to address title issues that can sometimes be resolved without filing a lawsuit.

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We are often asked if costs and attorney fees can be recovered as part an action to collect.  Costs and attorney fees recovery are governed by NRS 18.005-18.180.  Costs can include filing fees, court reporter fees, service of process fees, expert fees, etc.    NRS 18.020 allows the recovery of court costs to the prevailing party in litigation.  This is applicable where the award is a result of default (the defendant failing to respond) or in a contested action where the matter is eventually decided by a verdict.  NRS 18.110 describes the process to be awarded costs.  The process begins with the prevailing party filing with the court clerk a Verified Memorandum of Costs, or simply a Memorandum of Costs.  The non-prevailing party can object to the requested costs by filing a timely objection.  The Court will ultimately “settle the costs”.  Judges are generally inclined to add an award of costs to a judgment assuming the costs are reasonable, comply with statute and the  statutory steps for recovery are followed.

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Senate Bill 1 provides for pre-eviction mediation

The Nevada Legislature met in special session July and August to consider legislation related to the Covid-19 pandemic.  Senate Bill 1 was introduced, passed by both houses and signed by the Governor.  Anticipating a wave of evictions in September, the Legislature will require mediation as a condition to eviction.  SB 1 amends current state law as follows:

“If the Supreme Court or a district court or  justice court
establishes by rule an expedited program of alternative dispute
resolution concerning the eviction of a tenant of any dwelling unit, apartment, mobile home, recreational vehicle or part of a low-
rent housing program operated by a public housing authority, any such eviction
proceedings pursuant to this chapter may be
stayed for not more than 30 days to facilitate the program of
alternative dispute resolution.”
Tenants and Landlords should understand and utilize in good faith this mediation
process when it is fully implemented.  Effective mediation allows landlords to maintain a
tenant and avoid expenses related to releasing the property.  Tenants who attempt to
resolve back rent  payment issues through mediation can avaid the hardships associated
with eviction.  Like any medition, both parties must be willing to compromise.  An
experienced and trained
mediator can help both sides reach a resolution.
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Courthouse to be named for Justice Hardesty

The new Nevada Supreme Court and Court of Appeals Courthouse in Las Vegas at 4th and Clark will be named for Justice Hardesty.  Justice Hardesty has served many years on the Court and has been active in working to improve Court operations.

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Attorney Larson Welsh a Superlawyer

Hayes and Welsh attorney Larson Welsh has been voted as a Superlawyer.  Larson was selected as a 2020 Rising Star in the area of representing creditors.  Congratulations Larson!

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In Rodriguez v. Fiesta Palms, LLC, Case No. 72098, 134 Nev. Adv. Op. 78 (Oct. 4, 2018), the Nevada Supreme Court upheld a district court order denying a motion to set aside the judgment under NRCP 60(b). After repeated warnings to the pro se plaintiff by the court that he needed to respond to motions filed by the defendant, the district court judge granted the defendant’s motion to dismiss. Id. At *2. Plaintiff waited five months and three weeks to file a motion to set aside the dismissal under NRCP 60(b). Id. At *3. The Nevada Supreme Court found that the district court had considered the factors set forth in Yochum v. Davis, 98 Nev. 484, 486, 653 P.2d 1215, 1216 (1982), and concluded that they favored denial of Plaintiff’s motion. Id. at *3. Even though the motion was filed less than 6 months after the dismissal order, the district court found that the plaintiff did not act promptly, exhibited a pattern of repeated continuances, and was apprised of the procedural requirements. Id. at *4 – 6. The Nevada Supreme Court afforded “wide discretion” to the district court and concluded that no abuse of discretion took place. Id. at *6.

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In Soro v. The Eighth Judicial District Court, 133 Nev., Adv. Op. 107, Case No. 72086 (Dec. 28, 2017), the Nevada Supreme Court addressed the application of the anti-deficiency statutes of other states in Nevada deficiency actions. Soro involved a deficiency action for commercial real property located in Nevada; however, the promissory note specified that Utah law governed the agreement and loan documents. Nevada’s anti-deficiency statute allows a deficiency action to be filed within six months of the foreclosure sale, but Utah’s anti-deficiency statute requires that suit be filed within three months of the foreclosure sale. The lawsuit was filed in Nevada six months after the foreclosure sale, and the debtor filed a motion to dismiss as a result. Although the parties agreed that Utah law governed the deficiency action, the Utah Supreme Court had already determined that the Utah anti-deficiency statute did not apply extraterritorially. Therefore, the Nevada anti-deficiency statute applied rather than the Utah anti-deficiency statute, and the motion to dismiss was properly denied by the district court. Soro affirmed and clarified the Nevada Supreme Court’s prior decision in Key Bank of Alaska v. Donnels, 106 Nev. 49, 787 P.2d 382 (1990), holding that before an anti-deficiency statute can be applied extraterritorially, the Court must determine whether the statute was intended to be applied extraterritorially.

Megan K. Mayry McHenry, Esq.

Attorney

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NRCP 68 Offers of Judgment and Claim Preclusion

On October 5, 2017, in Mendenhall v. Tassinari, Case No. 68053, the Nevada Supreme Court answered the question of whether claim preclusion bars a party from subsequently filing claims based on fraud discovered during the ten-day irrevocable period for an offer of judgment. The Court held that claim preclusion would apply if the three-part test for claim preclusion set forth in Five Star Capital Corp. v. Ruby, 124 Nev. 1048, 1054, 194 P.3d 709, 713 (2008) is met: (1) the parties or their privies are the same; (2) the final judgment is valid; and, (3) the subsequent action is based on the same claims or any part of them were or could have been brought in the first case. The Court in Mendenhall found that claim preclusion did apply based on the three-part test and the fact that the offer of judgment was timely accepted. The Court held that the proper avenue for relief in such a situation is through the filing of a NRCP 60(b) motion for relief from a final judgment or order, as alluded to in Nava v. Second Judicial District Court, 118 Nev. 396, 46 P.3d 60 (2002). Unfortunately, the appellant/defendant failed to file a NRCP 60(b) motion after the offer of judgment was accepted. The Court noted that claim preclusion may not apply if the offer of judgment does not “evince an intent by the parties to prevent a broad set of claims from being raised in a second action.” Unfortunately for appellants/defendants, the Court found that the broad wording of the offer of judgment evinced an intent for the offer to apply broadly to “any related or potential claims” that could have been asserted “between and among” the parties.

Megan K. Mayry McHenry, Esq.

Attorney

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The Nevada Supreme Court, in an expedited review, determined that the press does have a right to obtain autopsy reports of victims of the October 1 Las Vegas shooting. The Court held:

“While we are deeply sympathetic to the decedent’s family’s privacy concerns, the First Amendment does not permit a court to enjoin the press from reporting on a redacted autopsy report already in the public domain,”

Click Here to read the full Review Journal Article

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