Nevada Mediator and Arbitrator

Employees and Trade Secrets in Nevada

Even without a non-disclosure agreement, confidential information obtained by an employee during employment by reason of his or her position cannot be used or disclosed to the detriment of the employer.  “An employee is obligated not to reveal employer’s confidential information during employment and after termination of employment.”[1]  Nevada codified the Uniform Trade Secret Act (“UTSA” or “NUTSA”) at NRS 600A et. seq.  There is a split of authority whether confidential information is protected if it is not covered by NUTSA.  These materials will treat all protected confidential commercial information as being contained in NUTSA and all others to be unprotected information.

At termination of employment, an employee who misuses confidential information (customer lists, formulas, etc.), is precluded from using the information and is required to return the materials to the employer.[2]   An employer, therefore, at common law, has some protection against disclosure of confidential information even without a valid non-disclosure agreement.  “However, an employee can use to his or her own advantage all the skills and knowledge commonly used in the trade that the employee acquired during the employee’s tenure of employment.”[3]

For information regarding the prosecution of a former employee who steals trade secrets, see http://nevadalaw.info/misappropriation-trade-secrets-nevada/ and http://nevadalaw.info/elements-for-a-claim-of-misappropriation-of-trade-secrets-in-nevada/.

[1] 27 Am.Jur.2d Employment Relationship § 224.

[2] 27 Am.Jur.2d Employment Relationship § 226 (citing NCH Corp. v. Broyles, 749 F.2d 247 (5th Cir. 1985); Advanced Magnification Instruments, Ltd. v. Minutemen Optical Corp., 522 N.Y.S.2d 287, 135 A.D.2d 889 (3d Dept. 1987); Gonzales v. Zamora, 791 S.W.2d 258 (Tex. App. Corpus Christi 1990)).

[3] Id. (citing Service Center of Chicago, Inc. v. Minogue, 180 Ill.App.3d 447, 535 N.E.2d 1132 (1989)).

How Does Information Become a Protected Trade Secret?

Confidential business information automatically becomes protected in the law once the statutory definition in NRS 600A.030 is met.  There is no requirement that the parties expressly identify the information as a “trade secret”.   Should a dispute arise as to the use of the information, determining whether the information used is protected is a matter of applying the statutory definition as a question of fact.[1]

Courts may consider such factors as: (1) the extent to which the information is ascertainable from sources outside the business and the ease with which it can be obtained; (2) whether the information was confidential or secret or was treated as such by the business; and (3) the employee’s knowledge of the confidential information and whether the same was known by competitors.[2]  The business is presumed to make reasonable efforts to maintain the secrecy of information that is marked “Confidential” or “Private” in a reasonably noticeable manner.[3]  This presumption may only be overcome by clear and convincing evidence that the owner did not take reasonable efforts to maintain the secrecy of the information.[4]

[1] Frantz.

[2] Id., 116 Nev. at 467, 999 P.2d at 358-59.

[3] NRS 600A.032.

[4] Id.

Motion for a New Trial Under Rule 59

Federal Rule of Civil Procedure 59 governs motions for a new trial, as well as motions to alter or amend a judgment in certain cases where summary judgment has been granted.[1]  Although not granted except with a showing of “highly unusual circumstances,”[2] the Ninth Circuit has listed grounds for amending or altering a judgment pursuant to Rule 59(e): (1) to correct manifest errors of law or fact upon which the judgment rests; (2) to present newly discovered or previously unavailable evidence; (3) to prevent manifest injustice; and (4) if the amendment is justified by an intervening change in controlling law.[3]  A district court, however, “has considerable discretion when considering a motion to amend a judgment under Rule 59(e).”[4]

[1] Fed.R.Civ.P. 59; see School Dist. No. 1J v. AC&S, Inc., 5 F.3d 1255, 1262 (9th Cir.1993), cert. denied, 512 U.S. 1236 (1994) (as cited by Olin Corp. v. Cont’l Cas. Co., 2:10-CV-00623-GMN, 2013 WL 6837799 (D. Nev. Dec. 23, 2013)).

[2] Carroll v. Nakatini, 342 F.3d 934, 945 (9th Cir. 2003); see also Herbst v. Cook, 260 F.3d 1039, 1044 (9th Cir. 2001) (quoting McDowell v. Calderon, 197 F.3d 1253, 1255 (9th Cir. 1999) (en banc)). (“a Rule 59(e) motion should not be granted absent “highly unusual circumstances, unless the district court is presented with newly discovered evidence, committed clear error, or if there is an intervening change in the controlling law.”)

[3]  Olin, 2013 WL 6837799 (citing Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011)).

[4] Turner v. Burlington N. Santa Fe R. Co., 338 F.3d 1058, 1063 (9th Cir. 2003) (citations omitted).

Relief From Final Judgment Under Rule 60

Rule 60 of the Federal Rules of Civil Procedure provides a standard by which the Court might reconsider its Order.  This rule, governing relief from a judgment or order, provides in part:

(b) Grounds for Relief from a Final Judgment, Order, or Proceeding. On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);

(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;

(4) the judgment is void;

(5) the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or

(6) any other reason that justifies relief.[1]

The Ninth Circuit has distilled the grounds for reconsideration into three primary categories: (1) newly discovered evidence; (2) the need to correct clear error or prevent manifest injustice; and (3) an intervening change in controlling law.[2]  This Nevada District Court has recognized the same factors, while articulating a four-part test: “(1) the motion is necessary to correct manifest errors of law or fact upon which the judgment is based; (2) the moving party presents newly discovered or previously unavailable evidence; (3) the motion is necessary to prevent manifest injustice; or (4) there is an intervening change in controlling law.”[3]

[1] Fed.R.Civ.P. 60(b).

[2] School Dist. No. 1J v. AC&S, Inc., 5 F.3d at 1263 (as cited by Centeno v. Mortgage Elec. Registration Sys., Inc., 2:11-CV-02105-GMN, 2013 WL 2558262 (D. Nev. June 8, 2013), appeal dismissed (Nov. 7, 2013)).

[3] Turner v. High Desert State Prison, 2:13-CV-01752-GMN, 2014 WL 321070 (D. Nev. Jan. 29, 2014) (citing Turner v. Burlington Northern Santa Fe R. Co., 338 F.3d 1058 (9th Cir. 2003).

 

Join ARM Founder Abbas Kazerounian, Esq, as he discusses the unique characteristics of business mediation with ARM Neutrals Jay Young, Esq, and Kristine Kuzemka, Esq.

 

Can I File a Motion to Reconsider in Federal Court?

Although not mentioned in the Federal Rules of Civil Procedure, motions for reconsideration may be considered pursuant to Rules 59(e) and 60(b).[1]  In order to succeed on a motion to reconsider, a party must set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision.[2]  A motion for reconsideration is not, however, a mechanism for rearguing issues presented in the original filings, or for “advancing theories of the case that could have been presented earlier.” [3]  Thus, Rule 59(e) and 60(b) and are not “intended to give an unhappy litigant one additional chance to sway the judge.”[4]

[1] Hansen v. Liberty Mut. Fire Ins. Co., 2:11-CV-01519-GMN, 2013 WL 2322146 (D. Nev. May 28, 2013).

[2] Turner v. High Desert State Prison, 2:13-CV-01752-GMN, 2014 WL 321070 (D. Nev. Jan. 29, 2014) (citing Kern–Tulare Water Dist. v. City of Bakersfield, 634 F.Supp. 656, 665 (E.D. Cal. 1986), aff’d in part and rev’d in part on other grounds 828 F.2d 514 (9th Cir.1987)); see Frasure v. U.S., 256 F.Supp.2d 1180, 1183 (D. Nev. 2003) (citing All Haw. Tours Corp. v. Polynesian Cultural Ctr., 116 F.R.D. 645, 648–49 (D. Haw. 1987), rev’d on other grounds, 855 F.2d 860 (1988)).

[3] Hansen v. Liberty Mut. Fire Ins. Co., 2:11-CV-01519-GMN, 2013 WL 2322146 (D. Nev. May 28, 2013) (citing Backlund v. Barnhart, 778 F.2d 1386, 1388 (9th Cir.1985) and quoting Resolution Trust Corp. v. Holmes, 846 F.Supp. 1310, 1316 (S.D.Tex.1994) (footnotes omitted)).

[4] Id. (quoting Durkin v. Taylor, 444 F.Supp. 879, 889 (E.D.Va.1977)).

 

When is a Settlement Agreement Enforceable in Nevada?

“Under Nevada law, ‘a settlement agreement[’s] construction and enforcement are governed by principles of contract law.’”[1]  “The essential elements of a valid contract include offer, acceptance, and bargained for consideration.”[2]  The creation of a contract requires that two parties mutually assent to the same bargain at the same time-an assent which is usually in the form of an offeree’s acceptance of a definite and certain offer by the offeror.[3]

“The ‘ultimate goal is to effectuate the contracting parties’ intent.’”[4] “Although an analysis of a settlement’s terms starts with the language of the agreement, ‘when that intent is not clearly expressed in the contractual language, [courts] may also consider the circumstances surrounding the agreement.’”[5]  For a contract to be enforceable, basic contract principles require an offer and acceptance, meeting of the minds, and consideration.[6]

It is well settled that an offeror may revoke an offer at any time prior to acceptance, thereby terminating the offeree’s power to accept.[7] This rule applies even when the offeror has agreed to keep the offer open for a certain period.  Moreover, “the power to create a contract by acceptance of an offer terminates at the time specified in the offer, or, if no time is specified, at the end of a reasonable time.”[8]

A settlement agreement is enforceable where the parties have agreed on the agreement’s material terms – even if the exact language of the agreement is not finalized until later.[9]  Thus, a party cannot back out on a deal by refusing to sign a finalized agreement, when the parties have already had a “meeting of the minds” as to the agreement’s material terms. Id.

The Nevada Supreme Court has also consistently enforced settlement agreements according to their plain language.[10] To that extent, “a compromise agreement is a contract whereby the parties, in an effort to resolve their differences over a claim, agree to an amicable settlement based upon mutual concessions.”[11]

The Supreme Court of Nevada has rejected a party’s attempt to retract a settlement agreement once made.[12]  In May, the court held that a party’s refusal to execute a settlement after previously agreeing to the settlement’s essential terms does not render the settlement invalid. Id. All parties had agreed to a settlement, which provided for the payment of $300,000.00 in exchange for a general release of all claims and a covenant not to sue. Id. Although two of the Plaintiffs had authorized their attorney to negotiate the agreement, they later refused to execute the documents memorializing the agreement. Id. at 668, 119 P.3d at1257. In rejecting the Plaintiffs’ arguments, the court held that the Plaintiff had already agreed on the settlement’s material terms because their attorney had accepted the offer of settlement which contained a release of all claims. Id. at 668,119 P.3d at 1258-9.

In deciding whether a settlement agreement has been reached, the court may consider the surrounding circumstances to determine the intention of the parties.[13] If the intent of the parties is not clear from the contract itself the court may look to the surrounding circumstances to effectuate the intent of the parties.[14] “Absent a fundamental defect in the agreement itself the terms are binding on the parties.”[15]

Binding Settlement Agreement Was Reached Where Counsel Had Apparent Authority To Act On Client’s Behalf.

Where counsel has apparent or ostensible authority to act on his behalf the law is clear that a party is bound by the acts of his or her attorney within the scope of the latter’s authority . . . where the relation of attorney and client exists . . . and any limitations on the authority of the attorney may not be asserted by the client against one who had no knowledge of the limitation.[16]

Additionally, a client can cloak his attorney with apparent authority to settle a case where the client “knowingly permits [her] attorney to exercise such authority.”[17] Moreover, as a general rule, a presumption exists that an attorney has the authority to compromise and settle an action.[18]

The Nevada Rules of Professional Conduct agree:

A lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation.[19]

Nevada law specifically acknowledges the power of parties’ attorneys to resolve litigation through a Settlement Agreement. EDCR 7.50 states:

No agreement or stipulation between the parties or their attorneys will be effective unless the same shall, by consent, be entered in the minutes in the form of an order, or unless the same is in writing subscribed by the party against whom the same shall be alleged, or by the party’s attorney.

The local rules of the United States District Court as well as the Eighth Judicial District Court all recognize that attorneys have the power to resolve litigation of their clients. Local Rule 7-1 provides:

Stipulations relating to proceedings before the Court, except stipulations made in open Court that are noted in the Clerk’s minutes or Court reporters notes, shall be in writing, signed by the parties or counsel for the parties to be bound, and served on all the parties.

The purpose of language employed in Local Rule 7-1 and EDCR 7.50 is to provide the Court with an “efficient method for determining genuine settlements and enforcing them.” Resnick v. Valente, 97 Nev. 615,637 P2d.1205 (1981).

The law is clear that counsel has the authority to bind a party. See, e.g. Dixon v. Thatcher 103 Nev. 414, 417, 742, P.2d 1029, 1031 (1987) (stating that apparent authority is “that authority which a principal permits his agent] to exercise or represent himself as possessing under such circumstances as to estop the principal from denying its existence”); Great Am. Ins. v. General Builders, 113 Nev. 346, 352, 934, P.2d 257, 26I (1997) (noting that “[a] party claiming apparent authority of an agent as a basis for contract formation must show subjective belief and that the subjective belief was objectively reasonable”); RPC 1.2 (a) (providing that “[a] lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation”); Samland v. J. White Transp. Co., Inc., 675 S.W. 2d 92,96 (Mo. Ct. App. 1984) (noting that “the compromise of a pending suit by an attorney having apparent authority, will be binding upon his client, unless it be so unfair as to put the other party upon inquiry as to the authority, or imply fraud”); Arizona Title Ins. & Trust Co. v. Pace, 445, P.2d 47I,473-74 (Ariz. Ct. App. 1968) (stating that a client is bound by the acts of her attorney if she places the attorney in the position for third parties to reasonably assume that the attorney is acting within his authority).

The Lack of a Typewritten Document Does Not Invalidate a Settlement Agreement.

The failure to complete formal settlement papers does not indicate that a settlement agreement was not in fact reached. See May, 121 Nev. 668, 119 P.3d 1254; see also Sadighi v. Daghighfekr, 66 F. Supp.2d 752,763 (D.S.C. 1999) (citing U.S. v. Centex-Simpson Constr. Co., 34 F.Supp.2d 397,400 (N.D. W.Va. 1999)). Indeed, the agreement need not even be in writing. Nolte v. Southern Cal. Home Bldg. Co., 28 Cal.App .2d 532, 535, 82 P.2d 946 (1938).  One Court has explained:

It may be conceded that where the minds of the parties have met respecting the terms and conditions of the more formal writing that is to be executed by them, and the agreed terms of the contract thereafter to be executed are certain in all respects definitely understood and agreed upon in advance, either orally or by informal writing, there is in such a case an obligatory contract dating from the making of the earlier agreement.[20]

Moreover, a settlement agreement is not invalid because details are not worked out when those details are not essential to the proposal and do not change its terms or purpose.[21]

“[A]n intent to memorialize a contract in a subsequent writing will not prevent a reviewing court from finding an enforceable contract so long as the parties intended to be bound by the earlier documents.”[22]

Therefore, a Settlement Agreement is not invalidated because it is oral.

[1] Doud v. Yellow Cab of Reno, Inc., No. 3:13-CV-00664-WGC, 2015 WL 4874701, at *4 (D. Nev. Aug. 14, 2015) (citing May v. Anderson, 121 Nev. 668, 119 P.3d 1254, 1257 (2005)).

[2] D’Angelo v. Gardner, 819 P.2d 206 (Nev.1991).

[3] In re Mapes Enterprises, Inc., 15 B.R. 192, 194–95 (Bankr. D. Nev. 1981) (citing Restatement (Second) of Contracts § 1, (1979).

[4] Id.; (citing In re Amerco Derivative Litig., 252 P.3d 681, 693 (Nev.2011)).

[5] Id.

[6] Id. (citing May v. Anderson, 121 Nev. 668, 672, 119 P.3d 1254, 1257 (2005)).

[7] Id. (citing Restatement (Second) of Contracts §§ 36, 42 (Am.Law.Ins.1981); see also Comment (a) to § 42; 1 Williston on Contracts § 5:8 (4th ed.)).

[8] Morrison v. Rayen Investments, Inc., 97 Nev. 58, 60, 624 P.2d 11, 12 (1981) (quoting Restatement of the Law of Contracts, § 40(1)).

[9] See May v. Anderson, 121 Nev. 668, 119 P.3d 1254, 1257 (2005).

[10] See Egert v. State Farm Mutual Insurance Co., 91 Nev. 240,

533 P.2d 1365 (1975) (holding that the Plaintiffs’ negotiated settlement with her own insurance

company released the insurance company from liability and barred Plaintiffs Complaint); see

also Chwialkowski v. Sachs, 108 Nev. 404, 834 P.2d 405 (1992).

[11] Johnson v. Utile, 86 Nev. 593, 596, 472 P.2d 335,337 (1970).

[12] May, 121 Nev. at 668, 119 P.3d at 1254.

[13] Mohr Park Manner. Inc. v. Mohr, 83 Nev. 107,424 P.2d 101 (1967).

[14] NGA#2 LLC v. Rains, 113 Nev. 1151, 946 P.2d 163 (1997).

[15] A.J. Industries. Inc. v. VerHalen, 75 Cal.App.3d 75l, 759,142 Cal.Rptr. 383 (1977).

[16] 7 AmJur.2d Attorneys at Law § 147 (2007).

[17] 7A C.J.S. Attorney & Client § 208 (2007).

[18] 7A C.J.S. Attorney & Client § 208 (2007).

[19] NRPC Rule 1.2(a).

[20] Fly v. Cline, 49 Cal. App. 414, 425,193 Pac. 615 (1920).

[21] See Assoc.Fin. Serv. Co. of Hawaii, Inc. v. Mijo, 950 P.2d 1219, 1232 (Haw. 1998).

[22] Sadighi, 66 F.Supp.2d at 763 (citing Rennick v. O.P.T.I.O.N. Care. Inc., 77 F.3d 309, 313 (9thCir. 1996)); see also Domin8uez Estates Co. v. Los Angeles Turf Club. Inc., 259 P.2d 962 (Cal.Ct. App. 1953) (concluding that an oral settlement agreement was not invalid by the fact that a written agreement embodying the terms of the oral agreement was contemplated but was not signed by the defendant and a third-party).

Use of Perjured Testimony in Nevada Courts

It is well established that use of perjured testimony in any legal proceeding is fundamentally unfair. For example, a criminal conviction based on perjured testimony violates due process and must be set aside if there is any “reasonable likelihood” that the false testimony could have affected the judgment of the jury. See generally, Jimenez v. State, 112 Nev. 610, 918 P.2d 687 (1996) and Riley v. State, 93 Nev. 461, 567 P.2d 475 (1977). Similarly, a district judge in a civil case has the discretion to grant an injured party a new trial if a verdict is based on false testimony. See Antevski v. Vlokswagenwerk Aktiengesellschaft, 4 F.3d 537, 541 (7th Cir. 1993); see also Ahem v. Scholz, 85 F.3d 774 (1st Cir. 1996) (verdict may be set aside and new trial ordered when verdict is against clear weight of evidence, or based upon evidence which is false, or will result in clear miscarriage of justice). Although in Nevada a court may not weigh the sufficiency of the evidence as grounds for a new trial, a court may grant a new trial when there is plain error in the record, or if there is a showing of manifest Injustice. Frances v. Plaza Pac. Equities, 109 Nev. 91, 847 P.2d 722 (1993) (citing Price v. Sinnott, 85 Nev. 600, 460 P.2d 837 (1969)).

Barbara Ann Hollier Trust v. Shack, 2014 WL 10537341 *42-43 (Nev. 2014).

 

In Televideo Systems, Inc. v. Heidenthal, 826 F.2d 915 (9th Cir. 1987), a defendant gave certain deposition testimony, but he recanted his testimony on the first day of trial. The trial court sanctioned him by striking his answer. The Ninth Circuit affirmed, holding that the defendant’s “elaborate scheme involving perjury clearly qualifies as a willful deceit of the court.” Id. at 917. The court observed that the defendant’s recantation of his testimony was not motivated by a desire to repent and set the record straight; instead, he was motivated by a scheme to prevail at trial. Id. The defendant’s strategy was “orchestrated to reap a tactical advantage,” and therefore, permitting him to proceed to trial would have played into his hands and greatly disadvantaged the opposing parties who had planned their strategy and developed their case. Id.

Firefly Partners, LLC v. Reimann, 2016 WL 1276535 *17 (Nev. 2016).

Respondents also offer no legal authority to counter the authority cited by Appellants holding that a party is entitled to a new trial when the opposition has presented perjured testimony. See Antevski v. Vlokswagenwerk Aktiengesellschaft, 4 F.3d 537 (7th Cir. 1993) and NRCP 60(b).

Barbara Ann Hollier Trust v. Shack, 2014 WL 10537342 *39 (Nev. 2014).

“Rapoport’s in-court perjury, and perjury in his affidavits could land him in prison for one to four years. NRS 199.120.”  Klein v. Rapoport, 2007 WL 9355268 *43 (Nev. 2007).

“It is uniformly held that the giving of false testimony is not civilly actionable. Radue v. Dill, 74 Wis.2d 239, 246 N.W.2d 507 (1976); Platts, Inc. v. Platts, 73 Wash.2d 434, 438 P.2d 867 (1968); Ginsburg v. Halpern, 383 Pa. 178, 118 A.2d 201 (1955); Kantor v. Kessler, 132 N.J.L. 336, 40 A.2d 607 (1945).”  Eikelberger v. Tolotti, 96 Nev. 525, 531, 611 P.2d 1086, 1090 (1980).

 

Nevada Jury Instruction 2.07 reads:

The credibility or “believability” of a witness should be determined by his or her manner upon the stand, his or her relationship to the parties, his or her fears, motives, interests or feelings, his or her opportunity to have observed the matter to which he or she testified, the reasonableness of his or her statements and the strength or weakness of his or her recollections.

 

If you believe that a witness has lied about any material fact in the case, you may disregard the entire testimony of that witness or any portion of this testimony which is not proved by other evidence.

Obtaining a Subpoena in Aid of Foreign Litigation

The Doctrine of Forum Non Conveniens in Nevada

The term “forum non conveniens” is Latin for “an inconvenient forum”.[1]  Under the circumstances discussed below, a court may grant a motion to dismiss a complaint that is filed in a court that is inconvenient to a defendant.

In Buckholt v. District Court,[2] the Petitioners sued a Nevada corporation, seeking damages for injuries allegedly resulting from a single vehicle accident occurring near Cheyenne, Wyoming in 1976. The Nevada Supreme Court held the doctrine of forum non conveniens is inapposite where the defendant is a Nevada corporation and does business here.

The Buckholt court suggests that although the location of a defendant corporation in this state is significant, and should weigh heavily against the granting of such a motion, the doctrine of forum non conveniens is not limited to a single factor.  The doctrine involves a balancing approach using several other factors, including public and private interests, access to sources of proof, and the availability of a view of the premises, if necessary.  If an adequate alternative forum does exist, the Court must then weigh public and private interest factors to determine whether dismissal is warranted.[3]

Relevant public interest factors include the local interest in the case, the district court’s familiarity with applicable law, the burdens on local courts and jurors, court congestion, and the costs of resolving a dispute unrelated to the plaintiffs chosen forum.[4]

Private interest factors favor dismissal for forum non conveniens.  Relevant private interest factors may include the location of a defendant corporation, access to proof, the availability of compulsory process for unwilling witnesses, the cost of obtaining testimony from willing witnesses, and the enforceability of a judgment.[5]  The court should also consider whether failure to apply the doctrine would subject the defendant to harassment, oppression, vexatiousness, or inconvenience.[6]

[1] The Law.com Dictionary.

[2] 94 Nev. 631, 584 P.2d 672 (1978).

[3] Id.

[4]Lueck, 236 F.3d at 1147 (citing Piper Aircraft, 454 U.S. at 259-61).

[5] Lueck, 236 F.3d at 1145; see also Eaton, 96 Nev. at 774, 616 P.2d at 401; Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S. Ct. 839, 91 L. Ed. 1055 (1947).

[6] See Swisco, Inc. v. District Court, 79 Nev. 414, 385 P.2d 772 (1963).

Independent Contractors, Read How You Can Apply for the Pandemic Unemployment Assistance Program

By: Robert L. Rosenthal, Esq.  Guest Blogger

Have you heard about the  new COVID-19 law for Nevadans that provides benefits similar to unemployment to independent contractors?  It’s referred to as the Pandemic Unemployment Assistance program (“PUA”), and provides up to 39 weeks of benefits.  Payments are set to commence within the next week or so.  Keep in mind that independent contractors remain ineligible for traditional unemployment benefits because they’re not employees.  Below is an overview of the new PUA law.

Introduction/Background:

In response to COVID-19, the Nevada Division of Employment, Training and Rehabilitation (“DETR”) just implemented and launched a new filing system for Nevada residents who have been affected by the pandemic to receive benefits. This is completely separate from filing; for traditional unemployment insurance benefits. Please read the important information on this page before filing a PUA claim on the designated platform.

What is Pandemic Unemployment Assistance (PUA)?

PUA is a new temporary federal program that is part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The PUA program is available retroactive to February 2, 2020 through December 26, 2020 and provides up to 39 weeks of benefits to eligible individuals. PUA is separate from unemployment insurance and provides coverage only to individuals who are not eligible for regular unemployment insurance.

Who is Eligible for PUA?

PUA is available to Nevada workers who are unemployed, partially unemployed, unable to work or unavailable for work due to the COVID-19 pandemic and who are not eligible for unemployment insurance benefits. This includes many different groups of people:

  • Self-employed;
  • 1099 contract workers;
  • Gig workers;
  • Employees whose wages are not reported for unemployment insurance;
  • Employees who have not earned enough wages or worked enough hours for regular unemployment benefits; and
  • Individuals who were going to start work but could not due to COVID-19 pandemic.

What does it mean to be affected by COVID-19?

To be eligible for PUA, the individual’s ability or availability to work must be affected by COVID-19. There are several different ways this could happen:

  • The person has been diagnosed with or are experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  • A member of the household has been diagnosed with COVID-19;
  • The person is providing care for a family member or a member of the household who has been diagnosed with COVID-19;
  • The person’s child or other persons in the household for whom the person is the primary caregiver is unable to attend school or another facility that is closed due to the COVID-19 pandemic, and directly prevents the person from working;
  • The person is unable to reach his/her place of employment because of a quarantine or stay-at-home order due to the COVID-19 pandemic;
  • The person is unable to reach his/her place of employment because he/she has been advised by a health care provider to self-isolate or quarantine because he/she is positive for or may have had exposure to someone who has or is suspected of having COVID-19;
  • The person was scheduled to start a new job and does not have an existing job or are unable to reach the job as a direct result of the COVID-19 pandemic;
  • The person had to quit his/her job due to being diagnosed with COVID-19 and being unable to perform his/her work duties;
  • The person’s place of employment is closed as a direct result of the COVID-19 pandemic; or
  • The person is self-employed or an independent contractor and a slowdown in business due to COVID-19 has forced him/her to suspend operations.

Who is not eligible for PUA?

Eligibility for PUA requires that an individual be unemployed, partially unemployed, or unable or unavailable to work in Nevada due to COVID-19, and that the person not be eligible for any other unemployment insurance benefits. For example, an applicant is not eligible for PUA if:

  • He/she is eligible for a regular UI claim, PEUC or SEB;
  • He/she is I able to work remotely without reduced pay;
  • He/she is receiving paid sick leave or other leave benefits;
  • He/she is unemployed, but not due to COVID-19; or
  • He/she was not working in Nevada at the time he/she became unemployed due to COVID-19 and do not have a bona fide job offer to work in Nevada that the person was unable to start due to COVID-19.

How to Apply for PUA

Those who wish to apply should visit Nevada’s Department of Employment, Training & Rehabilitation (“DETR”) website and fill out the required form, which can be found at:

https://detr.nv.gov/Page/Pandemic_Unemployment_Assistance

DETR anticipates tens of thousands or even hundreds of thousands of applications being submitted and will take between 7-14 days to arrive. Payments for PUA weekly claims are scheduled to begin by the end of May.

Applicants must provide documents that show total income for the entire year such as tax documents are preferable, as these will allow a quicker review of total earnings. Acceptable documentation you can provide may include but is not limited to:

  • W-2 or 1099 forms
  • Tax returns
  • Pay stubs
  • Bank receipts
  • Ledger
  • Invoices
  • Billing statements

For more information how you and your business can navigate through this process, contact Robert Rosenthal, Esq. at 702.667.4809

Moving to Dismiss Under the First-to-File Rule

The first-to-file rule is a doctrine of comity providing that “where substantially identical actions are proceeding in different courts, the court of the later-filed action should defer to the jurisdiction of the court of the first-filed action by either dismissing, staying, or transferring the later filed suit.”[1]  The two actions need not be identical—only substantially similar.[2]  The first-to-file rule is “not a rigid or inflexible rule to be mechanically applied,” but is a matter of sound judicial administration and its application is left to the discretion of the trial court.[3]  The purpose of the rule is to promote efficiency and to avoid duplicative litigation, and, thus, it should not be lightly disregarded.[4]

A doctrine of comity “is a principle of courtesy by which the courts of one jurisdiction may give effect to the laws and judicial decisions of another jurisdiction out of deference and respect.”[5]  Comity is appropriately invoked according to the sound discretion of the trial court,[6] and may even be raised sua sponte.[7]

When applying the first-to-file rule, courts look to three threshold factors: “(1) the chronology of the two actions; (2) the similarity of the parties, and (3) the similarity of the issues.”[8]  “[T]he first-to-file rule does not require strict identity of the parties, but rather substantial similarity.”[9] Likewise, the sameness requirement does not mandate that the two actions be identical; it is satisfied if they are sufficiently similar.[10]

 

[1] SAES Getters S.P.A. v. Aeronex, Inc., 219 F.Supp.2d 1081, 1089 (S.D. Cal. 2002).

[2] Inherent.com v. Martindale–Hubbell, 420 F.Supp.2d 1093, 1097 (N.D. Cal. 2006).

[3] Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94–95 (9th Cir. 1982) (explaining that declining jurisdiction based on the first-to-file rule is discretionary, not mandatory, with the trial court).

[4] Alltrade, Inc. v. Uniweld Prod., Inc., 946 F.2d 622, 625 (9th Cir. 1991).

[5] Gonzales–Alpizar v. Griffith, 130 Nev. Adv. Op. 2, 317 P.3d 820, 826 (2014) (internal quotation omitted).

[6] Mianecki v. Second Judicial Dist. Court, 99 Nev. 93, 97–98, 658 P.2d 422, 424–25 (1983).

[7] See Stone v. City & County of San Francisco, 968 F.2d 850, 855 (9th Cir. 1992).

[8] Global Experience Specialists, Inc. v. Cunniffe, 2:14–cv–00421–JCM–NJK, 2014 WL 3748931, at *4 (D. Nev. July 30, 2014) (quoting Nesbit v. Fornaro, 2011 WL 1869917, at *2 (D. Nev. Mar. 31, 2011)).

[9] Id. (quoting Nesbit, 2011 WL 1869917, at *3).

[10] Id.

By Jonathan Fountain, Esq.

Jonathan’s excellent article discusses the dangers of unilaterally declaring that a party will not appear at a deposition because counsel cannot agree to a mutually convenient date and time to hold the deposition.

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This article was originally published in the May 2020 Nevada Lawyer, an official publication of the Nevada State Bar.

The Rule 30(b)(6) Deposition in Nevada

     The law recognizes a legal fiction—that a corporation or other legal entity is a separate “person” who acts independent of the owners of the entity.[1]  Because the entity is a separate person, the law also allows a deposition of the entity under Rule 30(b)(6), which reads:

(b) Notice of the Deposition; Other Formal Requirements.

(6) Notice or Subpoena Directed to an Organization. In its notice or subpoena, a party may name as the deponent a public or private corporation, a partnership, an association, a governmental agency, or other entity and must describe with reasonable particularity the matters for examination. The named organization must then designate one or more officers, directors, or managing agents, or designate other persons who consent to testify on its behalf; and it may set out the matters on which each person designated will testify. A subpoena must advise a nonparty organization of its duty to make this designation. The persons designated must testify about information known or reasonably available to the organization. This paragraph (6) does not preclude a deposition by any other procedure allowed by these rules.

Some practitioners inaccurately refer to a Rule 30(b)(6) entity deposition as a deposition of the “PMK” or “Person Most Knowledgeable”.

It is All About the Spokesperson . . . .

The law under Rule 30 does not require the entity to provide the person with the “most” knowledge on any particular topic.  It only requires the entity to provide a spokesperson whose testimony on a designated topic will bind the company.  The company could present its janitor to testify if it educates the janitor on the topics and “represents the knowledge of the corporation, not the individual deponent’s.”  Great Am. Ins, Co. of N.Y. v. Vegas Const. Co., 251 F.R.D. 534, 538 (D. Nev. 2008) (Rule 30(b)(6) designee binds company regardless of designee’s personal knowledge on the subject).[2]

The Notice

As a practical matter, the party wishing to take the deposition uses Rule 30(b)(6) to name the company (not an individual) as a witness whose testimony it desires.  The deposing party must designate (as part of the deposition notice), with “reasonable particularity”, the subject matters of the deposition.  There is no limit to the number of subjects.  Wise practitioners keep the topics broad enough to allow them to follow where the topic leads during the deposition, but specific enough to reasonably put the company on notice that it may expect questions about that topic.

Objections; Protective Orders

The company may object to topics outlined in a Rule 30(b)(6) notice, but some authorities suggest the company must also seek a protective order from the court before going forward with the deposition.  U.S. E.E.O.C. v. Caesars Entm’t, Inc., 237 F.R.D. 428, 436 (D. Nev. 2006) (discussing the circumstances under which a protective order to Rule 30(b)(6) topics may be appropriate); Beach Mart, Inc. v. L & L Wings, Inc., 302 F.R.D. 396, 406 (E.D. N.C. 2014) (“The proper procedure to object to a Rule 30(b)(6) deposition notice is not to serve objections on the opposing party, but to move for a protective order.”).  Moreover, the filing of a motion does not relieve a deponent from appearing at a deposition—that obligation is only relieved by a protective order.  Nationstar Mortg., LLC v. Flamingo Trails No. 7 Landscape Maint. Ass’n, 316 F.R.D. 327, 336–37 (D. Nev. 2016) (citing Pioche Mines Consol., Inc. v. Dolman, 333 F.2d 257, 269 (9th Cir. 1964) (“unless [the movant] has obtained a court order that postpones or dispenses with his duty to appear, that duty remains”); see also In re Toys “R” Us–Delaware, Inc. Fair & Accurate Credit Transactions Act (FACTA) Litig., No. ML 08–1980 MMM (FMOx), 2010 WL 4942645, at *3 & n. 2 (C.D.Cal. July 29, 2010) (collecting cases, and finding failure to attend *337 deposition was unexcused despite the pendency of a motion for protective order)).

The Testimony

Magistrate Judge Leen explains the obligation to prepare a witness to testify:

The duty to prepare a Rule 30(b)(6) designee goes beyond matters personally known to the witness or to matters in which the designated witness was personally involved. Buycks-Roberson v. Citibank Federal Savs. Bank, 162 F.R.D. 338, 343 (N.D. Ill.1995); Securities and Exchange Commission v. Morelli, 143 F.R.D. 42, 45 (S.D. N.Y.1992). The duty to produce a prepared witness on designated topics extends to matters not only within the personal knowledge of the witness but on matters reasonably known by the responding party. Alexander v. Federal Bureau of Investigation, 186 F.R.D. 137, 141 (D. D.C.1998). By its very nature, a Rule 30(b)(6) deposition notice requires the responding party to prepare a designated representative so that he or she can testify on matters not only within his or her personal knowledge, but also on matters reasonably known by the responding entity.” Alliance v. District of Columbia, 437 F.Supp.2d 32, 37 (D.D.C.2006), citing Alexander, supra, at 141.

Great Am. Ins., 251 F.R.D. at 539.

[1] Assuming the owners uphold corporate formalities.  Failing to do so could invite a claim for piercing the corporate veil.

[2] Magistrate Judge Peggy Leen provided a great overview of the obligations of the parties relative to Rule 30(b)(6) in the Great American case.  It is a worthwhile read for every practitioner.

Matters Outside the Pleadings are Allowed on a Motion to Dismiss for Lack of Personal Jurisdiction and Forum Non Conveniens.

A motion to dismiss a complaint for lack of personal jurisdiction and forum non conveniens may properly attach matters outside the pleadings.   The Ninth Circuit has long held that for the purposes of considering a motion to dismiss on the grounds of subject matter jurisdiction, a court may consider matters outside the pleadings.  See generally Association of American Medical Colleges v. U.S., 217 F.3d 770, 778 (9th Cir. 2000).  “There never has been any serious doubt as to the availability of extra-pleading material on these motions.”  Michel v. Am. Capital Enterprises, Inc., 884 F.2d 582 (9th Cir. 1989) (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure: Civil § 1366, at 676 (1969) (footnote omitted)).

That fact does not allow the Court to thereafter consider those same documents on a Rule 12(b)(6) motion, however.  The Court may similarly entertain a motion for injunctive relief and thereafter consider a Rule 12(b)(6) without considering the matters once before the Court.  See Santa Monica Community College v. Mason, 952 F.2d 407, 1991 WL 270727, *3 (9th Cir. 1991) (concluding that the submission of declarations and exhibits from a motion for preliminary injunction to the court on a motion to dismiss constitutes submission of matters outside the pleadings).

In fact, several courts have entertained such motions at the same time (motion to dismiss for lack of jurisdiction and for failure to state a claim) and have allowed the outside documents for the jurisdictional analysis, but refused to allow them for the Rule 12(b)(6) purposes.  U.S. E.E.O.C. v. Pioneer Hotel, Inc., No. 2:11-CV-1588-LRH-RJJ, 2013 WL 129390, at *2 (D. Nev. Jan. 9, 2013) reconsideration denied, No. 2:11-CV-1588-LRH-GWF, 2013 WL 3353389 (D. Nev. July 2, 2013) (considered matters outside pleadings when determining Motion to Dismiss for lack of jurisdiction, but refused to consider regarding Rule 12(b)(6) for failure to state a claim upon which relief may be granted); Osborn v. United States, 918 F.2d 724, 729 (8th Cir. 1990); Stewart v. Screen Gems-EMI Music, Inc., 81 F. Supp. 3d 938, 951 (N.D. Cal. 2015) (citing Righthaven, LLC v. Va. Citizens Def. League, Inc., No. 1:10–cv–01783–GMN, 2011 WL 2550627, at *6 & n. 1 (D. Nev. June 23, 2011) (considering a declaration in the context of determining personal jurisdiction but not to determine the sufficiency of the complaint); High v. Choice Mfg. Co., No. C–11–5478– EMC, 2012 WL 3025922, at *4–6 (N.D. Cal. July 24, 2012) (where both personal jurisdiction and the sufficiency of the complaint both turned on the question of alter ego, considering extra-pleading evidence with respect to the 12(b)(2) challenge but excluding the extra-pleading evidence from the 12(b)(6) analysis); Abosakem v. Royal Indian Raj Int’l Corp., No. C–1001781 MMC, 2011 WL 635222, at *10 n. 7 (N.D. Cal. Feb. 11, 2011) (considering a declaration in the context of determining personal jurisdiction but not to determine the sufficiency of the complaint)).

Considering Matters Outside the Pleadings

on a Motion to Dismiss

Rule 12(d) requires that if

matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.

As a rule, a court may not consider matters outside the challenged pleading on a motion to dismiss.  As is noted by leading commentators, Wright & Miller:

Most federal courts… have viewed the words “matters outside the pleading” as including any written or oral evidence introduced in support of or in opposition to the motion challenging the pleading that provides some substantiation for and does not merely reiterate what is said in the pleadings.[1]

Only materials which are a part of the complaint may be considered on a motion to dismiss.[2]  When matters outside the challenged document are presented, the Court must either: 1) exclude the additional material and decide the matter based on the Complaint alone; or 2) convert the matter to a motion for summary judgment under Rule 56 and afford Plaintiff the opportunity to present supporting materials.[3]

The court may consider matters of public record,[4] orders, items present in the record of the case when ruling on a motion to dismiss for failure to state a claim upon which relief can be granted.[5]  Further, the court may consider any exhibits attached to the complaint.[6]

Additionally, “if the documents are not physically attached to the complaint, they may be considered if the documents’ authenticity is not contested and the plaintiff’s complaint necessarily relies on them.”[7]  This rule applies to documents that form the basis of a plaintiff’s case or documents that are quoted extensively in the complaint, on the theory that these documents are not truly “outside” the complaint.[8]

 

Note: These holdings do not apply to a motion to dismiss for lack of jurisdiction.

 

[1] Wright & Miller Federal Practice & Procedure, § 1366 (3d Ed.) (citations omitted).

[2] See Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994) (overruled on other grounds by Galbraith v. Santa Clara, 307 F.3d 119 (9th Cir. 2002)); see also Gibb v. Scott, 958 F.2d 814, 816 (8th Cir. 1992) (any written or oral evidence in support of or in opposition to the pleading that provides some substantiation for and does not merely reiterate what is said in the pleadings constituted matters outside the pleadings); MacArthur v. San Juan, 309 F.3d 1216, 1221 (10th Cir. 2002) (court should not look beyond the confines of the complaint itself in deciding motion to dismiss); Schmitz v. Mars. Inc., 261 F.Supp.2d 1226, 1229 (D. Or. 2003) (citing Cooper v. Pickett, 137 F.3d 616, 622 (9th Cir. 1997) for the proposition that a Court must limit its review of the contents of the complaint itself on a motion to dismiss); Biospherics, Inc. v. Forbes, Inc., 989 F.Supp. 748, 749 (D. Md. 1997) (generally, when documents not appended to the complaint are submitted to the court, the documents are either stricken or the motion is converted to summary judgment with proper notice given); Schoolhouse, Inc. v. Anderson, 2001 WL 1640081, 6 (D. Minn).

[3] Friedl v. New York, 210 F.3d 79, 84 (2d Cir. 2000); see also Wright & Miller Federal Practice & Procedure, § 1366 (3d Ed.).

[4] See Gray v. Receivables Performance Mgmt., 2:10-CV-01240-GMN, 2011 WL 2433812 (D. Nev. June 13, 2011) (Under Fed. R. Evid. 201, a court may take judicial notice of “matters of public record.” (quoting Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir.1986)); See also Williston Basin Interstate Pipeline Co. v. An Exclusive Gas Storage Leasehold and Easement in the Cloverly Subterranean Geological Formation, 524 F.3d 1090, 1096 (9th Cir. 2008).

[5] Breliant v. Preferred Equities Corp., 109 Nev. 842, 847, 858 P.2d 1258, 1260 (1993) (citing 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure, Civil 2D § 1357 (2d ed. 1990); see also Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994); MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir.1986); Ferring B.V. v. Watson Laboratories, Inc. – (FL), 3:11-CV-00481-RCJ, 2012 WL 607539 (D. Nev. Feb. 24, 2012) order clarified, 3:11-CV-00481-RCJ, 2012 WL 3231005 (D. Nev. Aug. 3, 2012).

[6] See Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir.), cert. denied, 484 U.S. 944, 108 S.Ct. 330, 98 L.Ed.2d 358 (1987).

[7] Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001).

[8] Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994).  See also Hollymatic Corp. v. Holly Sys., Inc., 620 F.Supp. 1366, 1367 (D. III. 1985) (considering contract attached to complaint and admissions in answer and in reply to counterclaim); Berk v. Ascott Inv. Corp., 759 F.Supp. 245, 249 (D. Pa. 1991) (determining court may consider document incorporated by reference into the complaint).

Litigators, Is it Time (Yes, Even As You Are Practicing Social Distancing) to Add Video Conference Mediations to Your Practice?

Last Friday I mediated a matter involving 8 parties, with two attorneys in New York, one in California, and four in Nevada.  Not even one of them came to my office.  We held the entire mediation remotely via video conference.  We held joint sessions with all participants, attorneys-only sessions, and we held caucuses in virtual “rooms” for each group of parties or individual and their counsel.  I did my normal thing, shuffling ideas, reality testing, and communicating demands and offers throughout the day.  While I was in another “room”, those in a virtual room had their privacy and were able to speak among themselves securely, knowing that neither I nor the other parties could hear their deliberations.  Some participated with video and others only through audio.

With today’s video-conferencing capability, anyone with a smart phone can participate in a mediation remotely.  I held a mediation last month with two parties in Moscow and others in my office.  The world is shrinking, and we can use technology to conduct resolve disputes even as we are working from home during the COVID-19 shutdown.  Think about the cases on your docket right now that could be resolved while everyone is at home.  Put those smart phones to work and let’s get resolving your cases!  Call me to find out more.

Commercial (Business) Litigation Causes of Action

While not exhaustive, the following is a list of possible claims/remedies that you may consider making in your commercial litigation matters, linked to the elements for each claim.

Abuse of Process
Account Stated
Accounting, a Remedy
Anticipatory Repudiation
Appointment Of A Receiver
Breach of Contract
Breach of Duty of Loyalty
Breach of Express Warranty
Breach of Fiduciary Duty
Breach of Fiduciary Duty; Aiding and Abetting Another’s
Breach of Fiduciary Duty; Breach of the Duty of Loyalty; Usurpation of Corporate Opportunity; the Corporate Opportunity Doctrine
Breach of Implied Warranty of Habitability
Breach of Implied Warranty of Merchantability
Breach of the Covenant of Good Faith and Fair Dealing—Contract
Breach of the Covenant of Good Faith and Fair Dealing—Tort
Breach of the Covenant Not To Compete; Anti-Competition Covenant; Restrictive Covenant
Breach of Warranty of Fitness for a Particular Purpose
Civil Racketeering Influenced and Corrupt Organizations Act (RICO)
Conversion (Theft)
Declaratory Relief
Defamation
Defamation; Business Disparagement
Defamation by Libel
Defamation by Slander
False Advertising; Lanham Act Violation; Unfair Competition
False Designation of Origin, Description, and Dilution; Lanham Act Violation; Unfair Competition
False Light, Disclosure of; Invasion of Privacy
Fraud (Intentional Misrepresentation)
Fraud; Promise Without Intent To Perform
Fraud, Constructive
Fraud In The Inducement
Fraudulent Concealment
Fraudulent Transfer
Indemnity
Interference With Contractual Relations
Interference With Prospective Economic Advantage or Prospective Contractual Relationship
Malicious Prosecution
Misappropriation of Trade Secrets; Uniform Trade Secrets Act Violation; NRS Chapter 600A
Prima Facie Tort
Promissory Estoppel; Equitable Estoppel
Quantum Meruit; Quasi Contract; Unjust Enrichment
Receiver, Appointment of
Trademark Infringement

Nevada State Forms

Abandoned Vehicle
Nevada Commission on Judicial Discipline
Nevada Real Estate Division
Nevada Supreme Court – Appellate Practice Forms
Nevada Supreme Court Law Library

Official Form 2. Rule 4.1 Waiver of Service of Summons
Official Form 3. Consent to Service by Electronic Means Under Rule 5

(more…)

The elements of the prima facie tort are:

  1. an intentional, otherwise lawful act by the defendant;
  2. an intent to injure the plaintiff;
  3. injury to the plaintiff;
  4. action does not give rise to any other recognized tort;
  5. absence of justification, or insufficient justification for the defendant’s actions;
  6. causation; and
  7. damages.

Compelling Identification of Previously Bates Stamped Documents in Response to Discovery Requests

Opposing counsel responded to my interrogatories and requests for production of documents by stating that the responsive documents are among “all documents filed thus far in this case, and bates stamped 0001-3974.”  Unfortunately, even after an effort to meet and confer (including sharing with counsel the law included in this article), counsel refused to identify which of the bates stamped documents related to each individual interrogatory response, etc.  I was forced to file a motion and seek sanctions for having to do so.  This article contains the caselaw included in that persuasive motion.

The Rules of Civil Procedure provide a means by which a party can seek an order compelling answers to interrogatories or production of documents that an opposing party has failed to disclose in response to timely discovery requests. Rule 37(a)(3)(B).  Further, “an evasive or incomplete disclosure, answer or response is to be treated as a failure to disclose, answer or respond.”  Rule 37(a)(4).

NRCP 37(a) authorizes the Court to issue orders compelling discovery when a party fails to respond to a request for production of documents submitted under NRCP 34.  See Fire Ins. Exchange v. Zenith Radio Corp., 103 Nev. 648, 650, 747 P.2d 911, 913 (1987). NRCP 34 is limited to matters within the scope of NRCP 26(b), which permits the discovery of non-privileged material relevant to the claim or defense of any party. See NRCP 26(b) and 34(a); State ex rel. Tidvall v. Eighth Judicial Dist. Court, 91 Nev. 520, 527, 539 P.2d 456, 460 (1975).

Under EDCR 7.60(b)(4), the Court may impose “any and all sanctions which may, under the facts of the case, be reasonable, including the imposition of fines, costs or attorney’s fees when an attorney or a party without just cause . . . [f]ails or refuses to comply with these rules.”  Moreover, NRCP 37(a)(4) requires the offending party to reimburse reasonable attorney fees and other expenses incurred in bringing a motion to compel, since the wrongful conduct (failure to respond and/or failure to completely and accurately respond to  discovery requests) necessitated the expenditure of fees.  One can only avoid such payment only if she can show that her failure was “substantially justified or that other circumstances make an award of expenses unjust.”  NRCP 37(a)(4).

Where a party has already disclosed documents and Bates stamped them, courts have routinely rejected the notion that they may simply list in their interrogatory answer, the bates stamped range of all previously-disclosed documents.  Such a response constitutes an evasive and incomplete response which is treated as a failure to respond to a valid discovery request.  Buchanan v. Las Vegas Metro. Police Dep’t, 2012 WL 1640516, *1 (D. Nev. May 9, 2012) (citing USF Ins. Co. v. Smith’s Food and Drug Center, Inc., 2011 WL 2457655 at *3 (D. Nev. 2011)).  A discovering party is “entitled to know which documents are responsive to which responses.” Queensridge Towers, LLC v. Allianz Glob. Risks US Ins. Co., 2014 WL 496952, *6 (D. Nev. Feb. 4, 2014).  Accordingly, courts require parties to “supplement [her] responses to indicate which of the previously disclosed documents are responsive to each request for production.” Buchanan, 2012 WL 1640516 at *1; see also Wilson v. Greater Las Vegas Ass’n of Realtors, No. 214CV00362APGNJK, 2016 WL 1734082, at *3–4 (D. Nev. May 2, 2016); Koninklijke Philips Elecs. N.V. v. KXD Tech., Inc., No. 2:05CV01532RLH-GWF, 2007 WL 879683, at *4 (D. Nev. Mar. 20, 2007).

An account stated is “a writing which exhibits the state of account between parties and the balance owing from one to the other, and when it assented to… becomes the new contract.” See Gardner v. Watson, 170 cal. 570, 574 (1915).

An account stated claim has three elements:

  1. previous transactions between the parties establishing the relationship of debtor and creditor;
  2. an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; and
  3. a promise by the debtor, express or implied, to pay the amount due.

Good news!  The Nevada Supreme Court has finally approved the amendments to the Eighth Judicial District Court Rules (“EDCR”).  The proposed amendments were sent to the Court on July 12, 2019 and approved on November 27, 2019 by the Order.  The Order is effective January 1, 2020.

While all practitioners should carefully read the rules and their amendments, here are some of the highlights from the amendments:

Deadlines regarding motion practice are as follows:

  • 2.20(d) – Joinders must be filed within 7 days after service of a motion
  • 2.20(e) – An Opposition or Notice of Nonopposition must be filed within 14 days after service of the motion or 5 days after service of a joinder
  • 2.20(g) – a Reply may be filed no later than 7 days before the matter is set for hearing, or 7 days after service of an opposition if a hearing has not been requested or set by the court

EDCR 1.90 Caseflow Management

  • 1.90(b)(3) – District Court Judges, not the Discovery Commissioner, issue scheduling orders
  • 1.90(b)(4) – Cases must be set for trial no later than 6 months after the close of discovery

EDCR 2.20 Motions; Contents; responses and replies; calendaring a fully briefed matter

  • 2.20(b)
    • all motions must include the designation “Hearing Requested” or “Hearing Not Requested” in the caption of the first page “directly below the Case Number and Department Number.”
    • Motions filed with the designation “Hearing Not Requested” will be set for a decision on the court’s “Chambers” calendar unless the court orders or an adverse party makes a request for a hearing. And adverse party may make such a request by including the designation “Hearing Requested” in the caption on the first page of the opposition “directly below the Case Number and Department Number.”
    • Motions to be heard by a Discovery Commissioner must include the designation “Discovery Hearing Requested” in the caption of the first page of the motion “directly below the Case Number and Department Number.”

EDCR 2.20(h) – A courtesy copy of the motion, all related briefing, affidavits, and exhibits shall be delivered “to the appropriate department” by “the movant” for any contested matter at least 7 days prior to the date of the hearing

  • If no hearing is set, the materials must be delivered “after the time for filing of the last briefing paper has run.” No other deadline is provided, but the logical conclusion is that the matter will not be decided until the courtesy copy is delivered
  • The rule does not require the parties opposing the matter to provide briefing, leading to a possible interpretation that the movant is responsible to provide the above-required material for all of the parties
  • Further, since a Reply brief may be due 7 days prior to a hearing, the courtesy copy must be delivered on that same date, meaning parties must be careful not to file a reply after hours if they cannot deliver a copy at the same time

EDCR 2.34 Discovery disputes; conferences; motions; stays.

  • 2.34(f)(1) – A party may object to a commissioner’s report and recommendation within 14 days after being served with a report
  • 2.34(f)(1) – Points and authorities are not required for filing an objection to a commissioner’s report and recommendation but may be filed
  • 2.34(f)(1) – If a party files points and authorities, any other party may file and serve responding points and authorities within 7 days after being served with the objections
  • 2.34(f)(2) – Upon receipt of a commissioner’s report, any objections, and any response, the District Court shall: (1) affirm, reverse, or modify the ruling without a hearing; (2) set the matter for a hearing; or (3) remand the matter to the commissioner for reconsideration or further action
  • 2.34(g) – A party submitting matters for in camera review by the commissioner must provide a copy of the same without redactions and a set with proposed redactions

EDCR 7.20(d) – any document filed after the complaint shall refer to the first party on each side and may refer generally to the other parties.

Like:

ABC, LLC, et. al.

Plaintiffs,

v.

FBH, Inc. et. al.

Defendants.

 Case No.:

Dept. No.:

And related matters

 

 

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Federal Court Civil Litigation Checklist: Get the Second Edition of this popular checklist.  It is a comprehensive “A to Z” approach to coach you from client intake to the first day of trial.   Although a majority of cases settle, a litigant who prepares each case as though it is going to trial better understands his or her case, and is likely to craft better written discovery and to take better depositions.  That litigant is ultimately better equipped to achieve a more favorable settlement than they otherwise would.

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A Litigator’s Guide to Federal Evidence and Objections: This pocket guide is designed to allow litigators to quickly reference to the Federal Rules of Evidence (“FRE”). It is presented in three parts. First is a quick reference guide to the FRE. Second is a guide to objections. It provides a tag line for the objection (i.e., “Objection! Assumes facts not in evidence”), followed rule(s) on which the objection relies and a short explanation of the rule/statute should you need additional support or rationale for the objection. Third, is a complete copy of the 2019 FRE.

Paperback Edition $44.99

Checklist: Move for the Admission of EvidenceJay Young, top business lawyer

  1. Present the court with competent witness (witness has the mental capacity, and the ability to perceive, remember, and testify in an understandable manner)
  2. The witness must testify from his or her personal knowledge
  3. Mark the desired Exhibit with the clerk. “Your Honor, may I have permission to approach the Clerk for the purpose of marking this document as proposed Exhibit 12?”
  4. Provide a copy to opposing counsel (unless pre-marked and agreed to, which you should always attempt) “Your Honor, may the record reflect that I am handing a copy of proposed Exhibit 12 to Defense Counsel?”
  5. Ask for permission to approach the witness, “Your Honor, may I approach the witness?”
  6. Record the fact that the witness has the proposed exhibit, “Your honor, may the record reflect that I have handed the witness what has been marked as Exhibit 12 for identification purposes?”;
  7. Have the witness identify the document
    • “Do you recognize Exhibit 12?”
    • “What is it?”
    • “Is that your signature on the 4th page of Exhibit 12?
  8. Ask the court to admit the evidence.  “Your honor, we move for the admission of Exhibit 12 into evidence”
  9. Now that the document has been admitted, seek relevant testimony about the document.  “Now, turning to the second paragraph on page one of Exhibit 12, why did . . . ”

Does it meet the test?

  1. Competent witness (FRE 602; NRS 50.025)
  2. Relevant evidence (FRE 401; NRS 48.015): tendency to make a fact more or less probable
  3. Admissible evidence (FRE 402; NRS 48.025): personal knowledge and the witness saw, felt, touched, or experienced it
  4. Tested for hearsay? (FRE 801-805; NRS 51.045-51.096)
  5. Authentication (FRE 901/902; NRS 52.015-52.165)

Sample Form Nevada Answer to Complaint

There are few circumstances in which the law requires that a party must file a complaint under oath.  The requirement is called “verification.”  NRS 15.010 requires that where verification is required, a pleading shall contain “the affidavit of the party shall state that the same is true of the party’s own knowledge, except as to the matters which are therein stated on the party’s information and belief, and as to those matters that the party believes it to be true.”  The affidavit may be in substantially the following form and need not be subscribed before a notary public:

Under penalties of perjury, the undersigned declares that he or she is the ………………………….. (plaintiff, defendant) named in the foregoing ………………………….. (complaint, answer) and knows the contents thereof; that the pleading is true of his or her own knowledge, except as to those matters stated on information and belief, and that as to such matters he or she believes it to be true.

NRS 15.010(5).

The law requires a verified complaint in the following circumstances:

  1. A derivative action by a shareholder against a corporate entity.  NRCP 23.1
  2. A petition to perpetuate testimony prior to filing a suit.  NRCP 27(a)(1)
  3. A petition for an ex parte temporary restraining order.  NRCP 65(b)(1)
  4. Petition for eminent domain, or public taking.  NRS 37.060
  5. Complaint for adverse possession.  NRS 40.090
  6. Quiet Title.  NRS 40.090; 40.091
  7. Eviction.  NRS 40.370
  8. Petition to establish the termination of a life estate.  NRS 40.515
  9. Petition for the termination of the interest of a deceased person in real property.  NRS 40.525
  10. Compromise the claim of a minor.  NRS 41.200
  11. Petition to determine and establish facts relative to vital statistics.  NRS 41.220
  12. Petition for a name change.  NRS 41.270
  13. Emancipation of a minor.  NRS 41.295
  14. Complaint by shareholder against corporation or association to enforce secondary rights.  NRS 41.520
  15. Divorce.  NRS 125.020
  16. Expedited relief for unlawful removal or exclusion of tenant from premises.  NRS 118A.390

Litigator's Guide to Nevada Evidentiary ObjectionsA motion in limine (Latin: [ɪn ˈliːmɪˌne]; “at the start”, literally, “on the threshold”) is a motion filed for the purpose of making an evidentiary decision outside the presence of the jury and before trial begins.  There are generally two types of motions in limine in a civil setting.  The first is to procure a definitive ruling on the admissibility of certain evidence, often on the basis that the evidence is prejudicial, irrelevant, or otherwise inadmissible.  Born v. Eisenman, 114 Nev.  854, 962 P.2d 1227 (1998).  The second is a prophylactic Motion that seeks to prevent counsel for the other party from mentioning inadmissible evidence or limiting the use of the evidence.  NRS 47.080.

The use of a motion in limine is not specifically authorized by  NRCP, but it is authorized by EDCR 2.47 after counsel has made a good faith effort to “meet and confer” and resolve the matter prior to filing the motion.  Further, the Nevada Supreme Court approved the practice in State ex. Rel. Dept. of Highways v. Nevada Aggregates & Asphalt Co., 92 Nev. 370, 551 P.2d 1095 (1976).  Trial judges are authorized to rule on motions in limine pursuant to their inherent authority to manage trials. See Luce v. U.S., 469 U.S. 38, 41 n.4 (1984) (citing Fed. R. Evid. 103(c) (providing that trial should be conducted so as to “prevent inadmissible evidence from being suggested to the jury by any means”)) (as cited by  Demaree, Lindsay and Hostetler, Jennifer K.,  Making the Most of Motions In Limine, COMMUNIQUÉ (April 2014, Vol. 35, No. 4).

Consider filing a motion in limine to exclude certain testimony or witness, to exclude evidence, publicity, obtain approval of demonstrative exhibits, PowerPoint presentations, to declare a witness unavailable, and to determine which portions of testimony are to be read to the jury, etc.  

Top Las Vegag Arbitrator

The Federal Arbitration Act (“FAA”), which has been the law in the United States since 1925, preempts any state law that disfavors the ability of two parties to contractually bind themselves to arbitrate a dispute.  Since 2013, Nevada law has required that any contract containing an arbitration provision must include a “specific authorization for the provision which indicates that the person has affirmatively agreed to the provision”.  Not surprisingly, the Nevada Supreme Court recently held that the Nevada law is preempted by the FAA.  (For an overview of the FAA, see this post)

MMAWC (then doing business as the World Series of Fighting) and its affiliates (collectively “MMAWC”), together with the Zion Wood Obi Wan Trust and its affiliates (collectively “Zion Wood”), were involved in litigation that resolved by negotiated settlement agreement.  That settlement agreement incorporated and restated portions of two other agreements, including a requirement that any dispute between the parties be resolved by litigation.  Zion Wood alleged that MMAWC breached the settlement agreement and sued.  MMAWC, LLC v. Zion Wood Obiu Wan Trust, 135 Nev. Adv. Op. 38, __ P.3d __ (Sep. 5, 2019).

MMAWC filed a motion to dismiss the suit and to compel arbitration pursuant to the incorporated arbitration clause.  The Honorable Nancy L. Allf denied the motion on the basis that the arbitration clause failed to include the “specific authorization” required by NRS 597.995 and was therefore unenforceable.  MMAWC appealed.

In coming to its decision, the Nevada Supreme Court relied heavily on Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681, 683, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996), which explained “that under the FAA. courts may not ‘invalidate arbitration agreements under state laws applicable only to arbitration provisions,’ as Congress has ‘precluded [s]tates from singling out arbitration provisions for suspect status’ and requires arbitration provisions to be placed on ‘the same footing as other contracts.’”  The Court concluded that NRS 597.995 similarly imposes a special requirement on arbitration clauses that is not applicable to other contracts, “it singles out arbitration provisions as suspect and violates the FAA.”  The Court therefore held the FAA preempts NRS 597.995.

For some history on this statute, see Is Your Arbitration Agreement Enforceable in Nevada? and Is Your Arbitration Agreement Void, or Enforceable in Nevada?

What is a Notice of Breach and Opportunity to Cure?

Many contracts contain a clause requiring a notice of default and opportunity to cure prior to filing suit or demanding arbitration.  For a contract with such a clause, before an action can be taken, the party claiming the other has breached an agreement must: 1) send a notice describing the way(s) in which the party is in default of the agreement; 2) provide an opportunity to cure the default; 3) wait the ascribed period of time for the defaulted party to cure; and 4) file suit or demanding arbitration only if the other party fails to cure its default.

“The common meaning of ‘cure’ is to remedy, restore, remove, or rectify … and as the term relates to defaults, ‘cure’ means to restore matters to the status quo ante.”[1] The object of a notice of breach and opportunity to ‘cure’ is to give a party another chance to perform substantially and a second chance to perform according to the contract.  The cure requires performance to the level of substantial performance under the contract.[2]

Fairness dictates that the opportunity to “cure” be more than illusory.  A party must be given time and a real opportunity to cure prior to termination.[3]  “The right of a breaching party to be given an opportunity to cure its alleged material breach is an ancient equitable principle intended to: (1) prevent forfeiture by termination; (2) allow the breaching party to mitigate damages, (3) avoid similar future deficiencies in performance, and (4) promote the informal settlement of disputes.”[4]  In fact, where a party is not given more than an illusory opportunity to cure, there is no breach.[5]

In a contract with a cure requirement, the opportunity to actually cure the default is essential to the contract.  Therefore, when one party prevents another from performing an essential task under an Agreement—like the cure—the other party is excused from performing.[6]  The opportunity to cure becomes illusory and unattainable, and the complaining party may not maintain an action for breach for its own failure to allow the other to perform.

[1] Matter of Clark, 738 F.2d 869, 871 (7th Cir. 1984).
[2] 8 Catherine M.A. McCauliff, Corbin on Contracts, § 36.7 at 349 (1999).
[3] See Restatement Second, Contracts § 241; II Farnsworth on Contracts §§ 8.17, 8.18 (2d ed 1998).
[4] 5 Bruner & O’Connor Construction Law § 18:15 Principle Of Cure And Its Implications Upon Materiality (June 2016).
[5] Burras v. Canal Const. and Design Co., 470 N.E.2d 1362, 1367 (Ind. Ct. App. 1st Dist. 1984) (because the subcontractor “was not given an opportunity to remedy any alleged defects, any incidence of defective performance did not constitute a breach of the construction contract”).
[6] Chamani v. Mackay, 124 Nev. 1457, 238 P.3d 800 (2008) (citing Cladianos v. Friedhoff, 69 Nev. 41, 45–46, 240 P.2d 208, 210 (1952)).

Frustration of Purpose Defense

The doctrine of commercial frustration applies to discharge a party’s contractual obligation when “[p]erformance remains possible but the expected value of performance to the party seeking to be excused has been destroyed by a fortuitous event, which supervenes to cause an actual but not literal failure of consideration.” Graham v. Kim, 111 Nev. 1039, 899 P.2d 1122 (1995) (quoting Lloyd v. Murphy, 25 Cal.2d 48, 153 P.2d 47, 50 (1944)).  The doctrine of commercial frustration does not apply to relieve party of contractual obligation, where contingency affecting expected value of party’s performance is one which party should have foreseen, and for which he should have provided.  Id.

Impossibility of Performance

Impossibility of performance is a defense to breach of contract or excuse of non-performance for events that occur after a contract is entered into.  Mere unexpected difficulty, expense, or hardship involved in the performance of a contract does not excuse performance.  Where the difficulty or obstacle does not make performance objectively impossible, and the personal inability of a promisor to perform (frequently designated as subjective impossibility, being impossibility which is personal to the promisor and does not inhere in the nature of the act to be performed) does not excuse nonperformance of the contractual obligation.  84 A.L.R.2d 12, Modern Status of the Rules Regarding Impossibility of Performance as Defense in Action for Breach of Contract (2005).

In Nebaco, Inc. v. Riverview Realty Co., the Nevada Supreme Court determined that one who contracts to render a performance for which government approval is required, assumed duty of obtaining such approval and risk of its refusal is on him.  87 Nev. 55, 57-58, 482 P.2d 305, 307.  Nebaco sought to set aside its obligations under a lease executed with Riverview Realty on the ground that performance became impossible because improvement contingent upon approval by a bank authority was denied.  The lease specified that Nebaco would have a period of time to obtain interim or long-term financing for the improvements.  If Nebaco failed to terminate the lease prior to the deadline or when it obtained financing the lease termination option expired.  The Court concluded that termination of the lease rested upon the inability to obtain the required permission of the banking authority, not upon failure to obtain financing.  The doctrine of impossibility becomes unavailable because the contingency which arose should have been foreseen.

Generally, the defense of impossibility of performance is available to promisor where his performance is made impossible or highly impractical by occurrence of unforeseen contingencies, but if the unforeseen contingency is one which the promisor should have foreseen, and for which he should have provided, the defense is unavailable to him.  Id. at 57.  Although, the Court did qualify that if the foreseeable consequence is provided for in the contract, its occurrence does provide an excuse for non-performance.  Id. at 57 (citing Williston on Contracts sec. 1968 (1938)).  The distinction here involved the fact that the lease specified financing as a contingency and not approval by the banking authority.  Id. at 57.

Impossibility is a doctrine of contract interpretation. W.R. Grace and Co. v. Local Union 759, Intern. Union of United Rubber, Cork, Linoleum and Plastic Workers of America, 103 S.Ct. 2177 (1983).  Foreseeability of impossibility of performance is generally a relevant but not dispositive factor in determining applicability of impossibility defense.  There is no reason to look further when risk was foreseen to be more than minimally likely, goes to the central purpose of the contract, and can easily be allocated in different manner had parties chosen to do so. U.S. v. Winstar Corp., 116 S.Ct. 2432 (1996).

In the linked blog post below, Howard & Howard‘s Mike Braun explains a recent decision where a court denied an employer’s request for a preliminary injunction against the company’s former President and its IT manager who took flash drives with company information (containing the company’s vendors and suppliers list, sales data, pricing and cost information, and profit margins), then went to work for a competitor.

The Court found that the employer failed to take adequate steps to protect its supposed trade secrets and was therefore not entitled to protection under the law.  According to Braun, the case acts as “a virtual checklist of the steps a company should consider if it wants its important information to be treated as a trade secret.”

As this article suggests, if you want others to treat your information as a trade secret, you have to treat it like a trade secret, by:

  1. Using a confidentiality agreement;
  2. Clearly identify confidential information;
  3. Train your employees to treat the information as confidential;
  4. Restrict access to confidential information; and
  5. Address confidential information when employees terminate employment

When Is a Trade Secret Not a Trade Secret? When You Don’t Protect It Like One

Is My Arbitration Confidential?

Most questions regarding the enforceability of arbitration obligations begin with the Federal Arbitration Act, 9 U.S.C. §1 et seq. (the “FAA”), which governs the enforcement of arbitration agreements.  9 U.S.C. §§ 1-2; Prima Paint Corp. v. Flood & Conklin Mfg. Co., 398 U.S. 395, 402 (1967).  The FAA was signed into law in 1925 and governs the enforcement of arbitration agreements, but does not require that the parties or the arbitrator hold the matter in confidence.

Nevada Revised Statutes, Chapter 38 is Nevada’s version of the Uniform Arbitration Act of 2000.  While it allows an arbitrator to issue a protective order against the disclosure of confidential and trade secret information (NRS 38.233(5)), it is silent on the issue of whether the parties to an arbitration or their arbitrator must keep the fact of the arbitration or its result a secret. (more…)

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This article was originally published in the COMMUNIQUÉ, the official publication of the Clark County Bar Association. (May 2019).

Form 2.  Rule 4.1 Waiver of Service of Summons

(Attorney or Plaintiff Information)

(Caption)

Waiver of Service of Summons under Rule 4.1 of the Nevada Rules of Civil Procedure

To (name the plaintiff’s attorney or the self-represented plaintiff):

I have received your request to waive service of a summons in this lawsuit along with a copy of the complaint, two copies of this waiver form, and a prepaid means of returning one signed copy of the form to you.

I, or the entity I represent, agree to save the expense of serving a summons and complaint in this lawsuit.

I understand that I, or the entity I represent, will keep all defenses or objections to the lawsuit, the court’s jurisdiction, and the venue of the lawsuit, but that I waive any objections to the absence of a summons or of service.

I also understand that I, or the entity I represent, must file and serve an answer or a motion under Rule 12 of the Nevada Rules of Civil Procedure within 60 days from _____________________, the date when this request was sent (or 90 days if it was sent outside the United States). If I fail to do so, a default judgment will be entered against me or the entity I represent.

Date: _____________________________

 

_________________________________________

(Signature of the attorney or unrepresented party)

 

_________________________________________

(Printed name)

_________________________________________

(Address)

_________________________________________

(Email address)

_________________________________________

(Telephone number)

      [Added; effective March 1, 2019.]

See the article here

According to Russell Korobkin, “Psychological Impediments to Mediation Success,” 21 Ohio St. J. on Disp. Resolution 281, 287 (2006), 80% of professional truckers believe they are safer than average and 94% of college professors think they are above average.
 
Lawyers and litigants tend to suffer from the same fate–having overconfidence in their likelihood of success.  In fact, 44% of attorneys who were asked in one study to predict outcomes at trial were overconfident in their prediction of their success.  Goodman-Delahunty, “Insightful or Wishful: Lawyers’ Ability to Predict Case Outcomes,” 16 Psych., Pub. Policy & Law 133 (2010).  Most of my attorney friends who just read that statistic are thinking, “I would be one of the 79% who predicted my success correctly.”[1]

The Randall Kiser Study, released in the Journal of Empirical Legal Studies, found that parties who reject the last and best offer at mediation overwhelmingly regret the decision.  The study surveyed thousands of cases in California and New York over a five-year period.  It found that plaintiffs who rejected the last settlement offer and proceeded to trial do worse a whopping 61% of the time, while defendants did worse than their last offer 24% of the time.  In only 15% of the cases did both sides obtain a better result at trial.

All is not good news for defendants, however.  Although they seem to do better at predicting outcomes, the 24% of the time they are wrong ends up being much more costly to them.  Defendants who fail to do better than the Plaintiff’s last demand, ended up with a verdict that was on average $1.1 Million more than the Plaintiff’s last demand.  On the other hand, plaintiffs received on average $43,000 less than the last offer given before trial.

Mediators assist often entrenched parties who each have a greater belief in the value of their position than they ought to have, to reach a middle position. The uncertainty of a litigated outcome alone justifies considering alternatives to a litigated result.  Every experienced and honest litigator can point to cases they won when they didn’t think they had a chance winning.  They can also point to times when if there was any justice, they would have won, but lost.  There simply is no way to accurately predict with certainty the outcome of a litigated case whether decided by a judge, a jury, or an arbitrator.

Some studies suggest that 95% or more of lawsuits settle rather than go to trial.  Assuming that is true, your case seems destined to settle; therefore, why not resolve it now rather than later?  Doing so may save time, aggravation, stress, and money.  That said, mediation will not be an easy process.  At times, you may feel uncomfortable, pressured, and perhaps even emotional.  If the process were easy, the parties wouldn’t need a mediator’s assistance to settle the matter.  A mediated result gives you certainty without the risk of litigation.

[1] Attorneys are also not known to be terribly good at math.

nevada law blogIn many states, courts will enforce a written promise that one will not compete with another party to the agreement, such as a key executive promising not to compete with her employer if she leaves the company.   What would happen if the executive left the company, then helped someone else to compete with the executive’s former company?  Courts can keep the executive from continuing to compete by enjoining the activity, but what can be done about the party who has no agreement (“the non-signatory”) with the company?  Can a court enjoin the non-signatory from competing with the company?  The answer is yes.

A court may enjoin someone one who does not sign a non-compete covenant when the non-signatory “breaches the covenant in active concert with the principal party enjoined and with knowledge of the covenant.” Las Vegas Novelty, Inc. v. Fernandez, 106 Nev. 113, 116-117 (1990) (citing McCart v. H & R Block, Inc., 470 N.E.2d 756 (Ind.Ct.App. 1984)).   The plain language of NRCP 65(d) further supports the notion, as it requires an injunction to bind the parties, as well as their agents and any other persons participating or acting in concert with the parties. See NRCP 65(d).

Enjoining a non-signatory preserves the purposes of the covenant; otherwise, permitting someone to intentionally end-run around a non-competition provision essentially renders that provision useless. See Day Cos. V. Patat, 440 F.2d 1343 (5th Cir. 1971), cert. denied, 404 U.S. 830, 92 S.Ct. 71, 30 L.Ed.2d 59 (reasoning a non-signatory to a covenant will be bound because a covenantor will not be allowed to do through others what he or she could not do directly); H&R Block Tax Servs., LLC v. Strauss, 2015 WL 470644, at *6 (N.D.N.Y. Feb. 4, 2015) (enjoining non-signatories where evidence showed the non-signatories were acting in active concert with the covenantor); Dad’s Properties, Inc. v. Lucas, 545 So.2d 926 (Fla. Dist. Ct. App. 1989) (even though wife was the sole owner of competing business, she was properly enjoined from competing because she was aiding and abetting her husband to violate his covenant).

Accordingly, those “who benefit[] from the covenantor’s relationship with a competing business must abide by the same restrictive covenant agreed to by the covenantor.” Tantopia Franchising Co., LLC v. W. Coast Tans of PA, LLC, 918 F.Supp.2d 407, 416–17 (E.D.Pa.2013) (citing Total Car Franchising Corp. v. L & S Paint Works, Inc., 981 F.Supp. 1079, 1082 (N.D.Tenn.1997) (not only covenantor and new company bound but also his “servants or agents and those acting in collusion or combination with him”).  The lesson here is that people who have a covenant not to compete should not try to nevertheless compete through a straw person.  Both could end up as defendants in a very expensive lawsuit.

 

PERSONAL INJURY FREQUENTLY ASKED QUESTIONS

I Was Injured In An Accident.  What Should I do?

Hurt in an Auto Accident

For starters, check yourself for injuries and call the police or ask someone else to call for you if you, your passengers, or occupants of the other vehicle(s) are injured.  If you or someone else is seriously injured, try not to move the injured person while waiting for an ambulance.  Even if nobody is injured, and regardless of who you think was at fault, call the police so they can issue an accident report.  Your insurance company may require it in order to cover damages to your vehicle or to the other vehicle.

Turn on your hazard lights if they are working or put out road flares if you have them.  If the vehicles are causing a hazard, consider pulling yours to the side of the road.  Otherwise, leave them where they are and get to the side of the road or a safe distance from traffic if you can. (more…)

“Those who cannot remember the past are condemned to repeat it.”[1]

It is the dawn of a new era in Nevada state civil court discovery. The Nevada Supreme Court has adopted the Federal Rules of Civil Procedure-style proportionality standard for determining the appropriate scope of discovery.  Gone are the days of discussions over whether discovery is “reasonably calculated to lead to the discovery of admissible evidence.”  But is the proportionality standard really new?  Or is it just in vogue again?  This article discusses cases decided in the Nevada U.S. District Court and elsewhere that should inform how practitioners implement Rule 26 of the Nevada Rules of Civil Procedure.  They read as a cautionary tale.

The 2019 amended Rule 26 says:

(b)     Discovery Scope and Limits.

(1)   Scope. Unless otherwise limited by order of the court in accordance with these rules, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claims or defenses and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.[2] (more…)

Eighth Judicial District Court Rules are amended to comply with 2019 Nevada Rules of Civil Procedure

Chief Judge Linda Marie Bell issued Administrative Order 19-03 on behalf of the Eighth Judicial District Court on March 12, 2019.   It suspends many Eighth Judicial District Court Rules which are in conflict with the amended NRCP.  The purpose of the order is stated:

[f]or the benefit of the bar and to ease confusion until the EJDC amends its local rules to conform to the amended NRCP, NRAP, and NEFCR, the EJDC finds it necessary to suspend or modify certain District Court Rules.  Additionally, to the extent any other rule of the Eighth Judicial District Court conflicts with the revised NRCP, NRAP, and NEFCR, the NRCP, NRAP, and NEFCR control.  

The Order alters the rules as follows until the EDCR can be amended (the stricken language below is suspended by the Order):

Rule 1.14.  Time; judicial days; service by mail.

(more…)

Nevada Rules of Civil Procedure

Rule 86. Effective Dates

(a)      In General. These rules and any amendments take effect on the date specified by the Supreme Court. They govern all proceedings:

(1)      in actions commenced after the effective date; and

(2)      in actions then pending, unless:

(A)      the Supreme Court specifies otherwise, or

(B)     the court determines that applying them in a particular action would not be feasible or would work an injustice.

(b)     Effective Date of Amendments. The Nevada Rules of Civil Procedure became effective January 1, 1953. Subsequent amendments have been as follows:

(1)      Amendment of Rules 5(b) and (d), effective January 4, 1954.

(2)      Amendment of Rules 11 and 45(d)(1), effective May 15, 1954.

(3)      Amendment of Rule 51, effective February 15, 1955.

(4)      Amendment of Rules 3, 75(b), and 75(g), effective October 1, 1959.

(5)      Amendment of Rules 38(b), 38(d), 65(b), 73(c), and 73(d), effective September 1, 1960.

(6)      Amendment of Rules 4(d)(2), 5(a), 5(b), 6(a), 6(b), 7(a), 13(a), 14(a), 15(d), 24(c), 25(a)(1), 25(d), 26(e), 28(b), 30(f)(1), 41(b), 41(e), 47(a), 48, 50(a), 50(b), 50(c), 50(d), 52(b), 54(b), 56(c), 56(e), 59(a), 62(h), 77(c), 86, Forms 22-A and 22-B, 27, 30, 31, and 32, effective March 16, 1964.

(7)    Amendment of Rule 86 and Form 31, effective April 15, 1964.

(8)    Amendment of Rules 73(c), 73(d)(1), and 86, effective September 15,1965.

(9)    Amendment of Rules 4(b), 5(a), 8(a), 12(b), 12(g), 12(h), 13(h), 14(a), 17(a), 18(a), 19, 20(a), 23, 23.1, 23.2, 24(a), 26, 29, 30, 31, 32, 33, 34, 35, 36, 37(a), 37(b), 37(c), 37(d), 41(a), 41(b), 42(b), 43(f), 44(a), 44(b), 44(c), 44.1, 45(d)(1), 47(b), 50(b), 53(b), 54(c), 65(a), 65(b), 65(c), 65.1, 68, 69(a), 77(e), 86(b), and Form 24, effective September 27, 1971.

(10)    Amendment of Rules 6 and 81, effective July 1, 1973; the abrogation of Rules 72, 73, 74, 75, 76, 76A, and Form 27, effective July 1, 1973.

(11)    Amendment of Rules 1, 4, 5, 6, 8, 9, 10, 11, 13, 14, 15, 16, 16.1, 17, 18, 19, 20, 22, 23, 23.1, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 41, 43, 44, 44.1, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 58, 59, 60, 62, 63, 64, 65, 65.1, 67, 69, 71, 77, 78, 81, and 83 and Forms 3, 19, 31, and the Introductory Statement to the Appendix of Forms, effective January 1, 2005, and the adoption of new Form 33.

(12)    Adoption of Rules 4.1, 4.2, 4.3, 4.4, 5.1, 5.2, 62.1, and 71.1, the amendment of all other rules and the introduction to the Appendix of Forms, the deletion of the former forms, and the adoption of Forms 1 through 6, effective March 1, 2019.

Nevada Rules of Civil Procedure

Rule 62.1. Indicative Ruling on a Motion for Relief That Is Barred by a Pending Appeal

(a)    Relief Pending Appeal. If a timely motion is made for relief that the court lacks authority to grant because of an appeal that has been docketed and is pending, the court may:

(1)     defer considering the motion;

(2)     deny the motion; or

(3)    state either that it would grant the motion if the appellate court remands for that purpose or that the motion raises a substantial issue.

(b)    Notice to the Appellate Court. The movant must promptly notify the clerk of the supreme court under NRAP 12A if the district court states that it would grant the motion or that the motion raises a substantial issue.

(c)    Remand. The district court may decide the motion if the appellate court remands for that purpose.

Advisory Committee Note—2019 Amendment

This new rule is modeled on FRCP 62.1 and works in conjunction with new NRAP 12A. Like its federal counterpart, Rule 62.1 does not attempt to define the circumstances in which a pending appeal limits or defeats the district court’s authority to act. See FRCP 62.1 advisory committee’s note (2009 amendment). Rather, these rules provide the procedure to follow when a party seeks relief in the district court from an order or judgment that the district court has lost jurisdiction over due to a pending appeal of the order or judgment, consistent with Huneycutt v. Huneycutt, 94 Nev. 79, 575 P.2d 585 (1978), and its progeny.

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