Real Estate

Nevada Jury Instructions

NEV. J.I. 1.0               DUTY OF JUDGE AND JURY
NEV. J.I. 1.01             USE OF INSTRUCTIONS
NEV. J.I.1.03             WHAT IS AND WHAT IS NOT EVIDENCE  (more…)

Nevada’s Rules Governing Alternative Dispute Resolution defines Mediation as:

“Mediation” means a process whereby a neutral third person, called a mediator, acts to encourage and facilitate the resolution of a dispute between two or more parties. It is an informal and nonadversarial process with the objective of helping the disputing parties reach a mutually acceptable and voluntary agreement. In mediation, decision-making authority rests with the parties. The role of the mediator includes, but is not limited to, assisting the parties in identifying issues, fostering joint problem solving, and exploring settlement alternatives.



Rule 1.  The court annexed mediation program.

(A)  The Court Annexed Mediation Program (the program) is an alternative to the Court Annexed Arbitration Program and is intended to provide parties a prompt, equitable and inexpensive method of dispute resolution for matters otherwise mandated into the arbitration program.

(B)  These rules may be known and cited as the Nevada Mediation Rules, or abbreviated N.M.R.

[Added; effective March 1, 2005.]


Rule 2.  Matters entering the mediation program.  Any matter that is otherwise subject to the Court Annexed Arbitration Program may be voluntarily placed into the Mediation Program. Participation in the Mediation Program shall be by mutual consent of the parties pursuant to written stipulation. The stipulation must be filed with the commissioner within 15 days after the filing of an answer by the first answering defendant. For good cause shown, an appropriate case may be placed into the program upon the filing of an untimely stipulation; however, such filing may subject the parties to sanctions by the commissioner.

[Added; effective March 1, 2005.]


In Nevada, the elements for a claim of quiet title are:

  1. Action may be brought by any person against another who claims an estate or interest in real property, adverse to him, for the purpose of determining such adverse claims. NRS  40.010;
  2. Complaint must be verified. NRS 40.090-1;
  3. Summons must be issued within one year of filing the complaint and served per NRCP. NRS 40.100-1;
  4. Lis Pendens must be filed with the county recorder within 10 days of filing of the complaint. NRS 40.090-3;
  5. Copy of the Summons must be posted on the property within 30 days after the summons is issued, and an affidavit of posting must be filed with the court. NRS 40.100-2;
  6. Disclaimer must be filed. NRS 40.020;
  7. Affidavit to unknown heirs must be filed. NRS 14.040(3);
  8. Court must hold a hearing on the evidence in order to issue judgment. Quiet title may not be obtained through default judgment.  NRS 40.110; and
  9. Record a certified copy of the judgment quieting title. NRS 247.120(o).

Joyner v. Bank of America Home Loans, Case No. 2:09-CV-2406-RCJ-RJJ 2010 WL 2953969 (D. Nev. 2010); Kemberling v. Ocwen Loan Servicing, LLC, Case No. 2:09-CV-00567-RCJ-LRL, 2009 WL 5039495 (D. Nev. 2009); Del Webb Conservation Holding Corp. v. Tolman, 44 F. Supp. 2d 1105, 1109-10 (D. Nev. 1999); Union Mill v. Mining Co. v. Warren, 82 F. 519, 520 (D. Nev. 1897); Howell v. Ricci, 197 P.3d 1044, 1046 n. 1 (Nev. 2008); Breliant v. Preferred Equities Corp., 112 Nev. 663, 669, 918 P.2d 314, 318 (Nev. 1996); Sceirine v. Densmore, 87 Nev. 9, 12, 479 P.2d 779 (1971); MacDonald v. Krause, 77 Nev. 312, 317-18, 362 P.2d 724 (Nev. 1961); Clay v. Scheeline Banking & Trust Co., 40 Nev. 9, 159 P. 1081, 1082-83 (1916).


See elements for other claims at the Nevada Law Library






NRS 38.206             Short title.

NRS 38.207             Definitions.

NRS 38.208             “Arbitral organization” defined.

NRS 38.209             “Arbitrator” defined.

NRS 38.211             “Court” defined.

NRS 38.212             “Knowledge” defined.

NRS 38.213             “Record” defined.

NRS 38.214             Notice.

NRS 38.216             Applicability.

NRS 38.217             Waiver of requirements or variance of effects of requirements; exceptions.

NRS 38.218             Application for judicial relief; service of notice of initial motion.

NRS 38.219             Validity of agreement to arbitrate.

NRS 38.221             Motion to compel or stay arbitration.

NRS 38.222             Provisional remedies.

NRS 38.223             Initiation of arbitration.

NRS 38.224             Consolidation of separate arbitration proceedings.

NRS 38.226             Appointment of arbitrator; service as neutral arbitrator.

NRS 38.227             Disclosure by arbitrator.

NRS 38.228             Action by majority.

NRS 38.229             Immunity of arbitrator; competency to testify; attorney’s fees and costs.

NRS 38.231             Arbitration process.

NRS 38.232             Representation by lawyer.

NRS 38.233             Witnesses; subpoenas; depositions; discovery.

NRS 38.234             Judicial enforcement of preaward ruling by arbitrator.

NRS 38.236             Award.

NRS 38.237             Change of award by arbitrator.

NRS 38.238             Remedies; fees and expenses of arbitration proceeding.

NRS 38.239             Confirmation of award.

NRS 38.241             Vacating award.

NRS 38.242             Modification or correction of award.

NRS 38.243             Judgment on award; attorney’s fees and litigation expenses.

NRS 38.244             Jurisdiction.

NRS 38.246             Venue.

NRS 38.247             Appeals.

NRS 38.248             Uniformity of application and construction. (more…)

Jay Young, Nevada Business Attorney and Arbitrator

Jay Young is a Las Vegas, Nevada Arbitrator, Mediator, and Supreme Court Settlement Judge

For downloadable pdf of this article, click here.

Many of the complaints that I hear from litigators about arbitration could be resolved if the arbitration clause which forced the parties into litigation were written better.  Arbitrations are, of course, a creature of contract.[1]  Therefore, the parties’ arbitration agreement[2] is often the beginning and end of the arbitrator’s authority.[3]  The arbitrator is bound to give effect to the contractual rights and expectations of the parties “in accordance with the terms of the agreement.”[4]  In fact, although the Federal Arbitration Act presumes that arbitration awards will be confirmed except upon a few narrow circumstances,[5] the arbitrator who acts beyond the scope of the authority found in the parties’ arbitration clause risks having the award vacated.[6]  So, if you want the arbitrator to behave differently, write a better arbitration agreement.  (more…)

In Nevada, the elements for a claim slander of title are:

  1. Defendant makes false and malicious communications;
  2. Disparaging to one’s rights in land; and
  3. Plaintiff is damaged.

Robinson v. Ocwen Loan Servicing, LLC, Case No. 2:10-CV-321 JCM , 2010 WL 2834895, *2 (D. Nev. 2010); Exec. Mgt., Ltd. v. Ticor Title Ins. Co., 962 P.2d 465, 478 (Nev. 1998).


See elements for other claims at the Nevada Law Library

NRS 40.455, 457 and 459.

  1. Application by judgment creditor or beneficiary of trust within 6 months after the date of foreclosure sale or trustee sale per NRS 107.080. (NRS 40.455);
  2. Showing that there is a deficiency. (NRS 40.457);
  3. Hearing must be held before making award and evidence shall be heard regarding fair market value of the property as of the date of the foreclosure/sale. (NRS 40.459)   ; and
  4. Deficiency judgment shall be lesser of amount owed minus the fair market value, or the amount owed minus the actual sales price of property (plus interest from date of sale).

See elements for other claims at the Nevada Law Library

In Nevada, a Lis Pendens is a document recorded with the recorder’s office giving all the world constructive notice that the plaintiff in a lawsuit claims an interest in certain real property.  The recording of a lis pendens requires the filing of a lawsuit and that the lawsuit involves some claim legal interest in the real property, such as a title dispute, a line dispute, or a lien foreclosure.  In re Bradshaw, 315 B.R. 875 (Bkrtcy. D. Nev. 2004); see also NRS 14.010 (a party to a civil action “for the foreclosure of a mortgage upon real property or affecting title or possession of real property” may record a lis pendens).

A lis pendens may not properly be used to obtain lien or judgment against the property which can later be used in the eventual collection of a judgment.  Levinson v. Eighth Jud. Dist. Ct., 1109 Nev. 747, 857 P.2d 18, 20-21 (1993).    “As a general proposition, lis pendens are not appropriate instruments for use in promoting recoveries in actions for personal or money judgments; rather, their office is to prevent the transfer or loss of real property which is the subject of dispute in the action that provides the basis for the lis pendens.”  Levinson, 857 P.2d at 20.  NRS 14.015(2), (3); NGA#2, LLC v. Rains, 113 Nev. 151, 163 (1997).


See elements for other claims at the Nevada Law Library


A Homestead Declaration is a simple document that can protect your home’s equity from attack by creditors. It prevents a forced sale of your home to satisfy your debts to most creditors (unpaid medical bills, bankruptcy, charge card debts, business/personal loans, accidents). Nevada Revised Statutes, Chapter 115 governs the declaration of a homestead. It declares that a homestead is limited to your primary residence. It protects your land with a dwelling on it (including a mobile home or condominium) where you reside. It does not protect any investment or rental property that you own. You are protected up to $550,000 in equity in your primary residence in Nevada. (more…)

The following abstract explains Nevada law regarding equitable liens.


The Nevada Supreme Court has acknowledged equitable liens as a remedy where an intention to create such a lien appears, and where the property which is to become subject to the lien is identifiable.  Union Indemnity co. v. A.D. Drumm, Inc., 57 Nev. 242, 70 P.2d 767 (1937).      The Nevada Supreme Court has relied upon Professor Pomery’s definition of an equitable lien:

In order, however, that a lien may arise in pursuance of the doctrine of equitable lien, agreement must deal with some particular property, either by identifying it, or by so describing it that it can be identified, and must indicate with sufficient clearness an intent that property so described, or rendered capable of identification, it to be held, or transferred as security for the obligation. (more…)

In Nevada, one must prove the following in order for a court to impose a constructive trust:

  1. A confidential relationship between the parties;
  2. Retention of legal title by defendant against plaintiff would be inequitable under the circumstances; and
  3. Existence of trust is essential to the effectuation of justice.

Constructive trusts are those that arise purely by construction of equity, are entirely independent of any actual or presumed intention of the parties, and are often directly contrary to such an intention. Omer v. Omer, 523 P.2d 957, 961 (Wash.App. 1974).  Constructive trusts are entirely in invitum and are forced upon the conscience of the trustee for working out justice or frustrating fraud.  Id. (citing Carkonen v. Alberts, 83 P.2d 899 (Wash. 1938)).

When a court of equity finds that a defendant is the holder of a property interest which he retains due to unjust, unconscionable, or unlawful means, it takes the interest from the defendant and vests it in the wronged party.  24 George G. Bogert, et al., Bogert’s Trusts and Trustees § 471 (3d ed. 2007).  Often this is accomplished by issuing a decree that the defendant conveys to the complainant.  Id.  If the property has been sold, the trust attaches to its proceeds in the hands of the defendant, or to other property purchased by defendant into which the original property or its proceeds can be traced.  Id.  The plaintiff has the election of suing in equity for the imposition of a constructive trust or seeking damages in an action at law for the value of the property.  Id.  Equity is not limited in the types of relief that may be granted to enforce a constructive trust.  Id.

The court must take into account not only the original situation, but also all of the events that have occurred since the defendant began to hold inequitably.  Id.  For example, if the trust property or its product can be traced into the hands of a third party, a constructive trust may be imposed upon the property in the hands of the third party unless he is a bona fide purchaser for value and without notice.   Id.

Because constructive trusts do not require that the parties specifically intended to create a trust, they may be imposed when title to property is acquired by fraud, duress, undue influence, or is acquired or retained in violation of a fiduciary duty.  Bemis, 114 Nev. at 1027, 967 P.2d at 441; See Estate of Campbell, 704 A.2d 329, 331 (Me. 1997).  To summarize, absent coercion, duress, or mistake a constructive trust is generally imposed in only two situations: (1) where actual or constructive fraud is considered as equitable grounds for raising the trust; and (2) where there is a fiduciary duty and a subsequent breach of that duty.  GGSI Liquidation, 351 B.R. at 593 (citing See e.g., Amendola v. Bayer, 907 F.2d 760, 762-63 (7th Cir. 1990)).

In Nevada, a constructive trust will arise and affect property acquisitions under circumstances where: (1) a confidential relationship exists between the parties; (2) retention of legal title by the holder thereof against another would be inequitable; and (3) the existence of such a trust is essential to the effectuation of justice.  Locken, 98 Nev. at 372, 650 P.2d at 805 (quoting Schmidt, 82 Nev. at 375, 418 P.2d at 993).  The requirement that a constructive trustee have title, to the property involved and not mere possession, is critical to the imposition of a constructive trust.  Danning, 86 Nev. at 871, 478 P.2d at 167.  Proof of those circumstances must be by clear and convincing evidence.  Randono v. Turk, 86 Nev. 123, 128, 466 P.2d 218, 222 (citing Garteiz v. Garteiz, 70 Nev. 77, 82, 254 P.2d 804 (1953).

Courts have consistently imposed a constructive trust arising out of the breach of an oral agreement, especially where a confidential relation existed between the parties.  Davidson v. Streeter, 68 Nev. 427, 437, 234 P.2d 793, 798 (1951).  Although the betrayal of such confidence is constructively fraudulent, it is independent of any element of actual fraud.  Id.

Whether relations are technically fiduciary or merely informal, a confidential relation exists between two persons whenever one trusts in and relies on the other.  Randono, 86 Nev. at 129, 466 P.2d at 222.  Because the relationship hinges on whether trust is reposed, in order for a confidential relationship to exist there must be evidence of a special trust with respect to the property or business.  Id.  When one uses a confidential relation to acquire an advantage, which he ought not in equity and good conscience to retain, the court will convert him into a trustee and compel him to restore what he seeks unjustly to retain.  Davidson, 68 Nev. at 438, 234 P.2d at 798.  Indeed, equity will not permit the confidence placed in the grantee to be betrayed.  Id. at 437, 798.  Nevada recognizes confidential relationships in (a) investment advisors, (b) family, and (c) attorney-client relations, as discussed below.

Investment advisors occupy a confidential relationship toward those whom they advise.  Randono, 86 Nev. at 129, 466 P.2d at 222.  Where a trustee or other fiduciary holds property to be used for the benefit of his cestui, it is a breach of his trust to employ the property for his own private advantage.  Id.  That is, where he spends or consumes it for his own benefit, or uses it directly to acquire other property in his own name.  Id.  From an equity stance, courts will view the breach of trust as reprehensible as the criminal act of embezzlement. Id.  Thus, it is readily admitted to be a sufficient basis for charging the fiduciary with a constructive trust as to any avails of the breach of his express trust.  Id.

Given the confidential relationship of investment advisors, joint adventurers own each other a fiduciary duty.  Randono, 86 Nev. at 129, 466 P.2d at 222.  In Randono, the Turks and Randono became good friends socially and developed a close relationship.  Id. at 126, 466 P.2d 218, 219.  Because Randono was a promoter of business deals and a real estate sales man, he undertook to aid, counsel and advise the Turks in the investment of their earnings and savings.  Id.  In fact, Randono informed the Turks about an opportunity to acquire a half interest in 320 acres of Arizona land, which the Turks could later subdivide and resell for a profit.  Id.  Specifically, Randono told the Turks that they should invest together and buy the 320 acres at $21 an acre.  Id.  As a result, the Turks advanced $3,364.14 toward the purchase of property, which in fact was only sold for $11 an acre.  Randono, 86 Nev. at 126, 466 P.2d at 219.  Randono failed to disclose the purchase of an additional 200 acres with the Turks’ advanced money.  Id.  Consequently, the Court imposed a constructive trust on the 520 acres of realty due to the confidential relationship between the Turks and Randono whereby Randono fraudulently induced the Turks to advance funds.  Id. at 129-30, 466 P.2d 218, 222-23.

Where confidential relations between parent and child are shown to have existed and where a conveyance of property is made by the weaker to the dominant party, a presumption arises that the conveyance was obtained through the undue influence of the dominant party.  Schmidt, 82 Nev. at 376, 418 P.2d at 993.  The burden is on the dominant party claiming under the conveyance to show that the transaction was bona fide.  Id.

In Schmidt, a mother and father deeded land in California to their daughter and son jointly, indicating that they were to share alike in the property.  Id. at 374, 418 P.2d 991, 993.  However, when the father became ill and entered a hospital, the brother caused title to the property to be transferred from his father’s name to only his name.  Id. at 375, 418 P.2d 991, 993.  The brother argued that a constructive trust cannot result in this case where the conveyance is from the parent to an adult child because the parent is assumed to be the dominant party, and there can be no presumption of fraud or undue influence from the mere existence of the relationship.  Id.  Yet, the facts indicated that the father was an old man, very ill and suffering from hallucinations when the son acquired title of the property.  Schmidt, 82 Nev. at 376, 418 P.2d at 993.  Moreover, there was no evidence that consideration was given by the son to the father for the transfer.  Id.  Accordingly, the court held that the brother’s dealings clearly deprived his sister, the only other heir of the father and mother, of any share in the property.  Id.  Because a confidential relationship existed between the brother and father and the brother and sister, the Court found a constructive trust as to the property in favor of the daughter.  Id.

When an attorney deals with his client for the former’s benefit, the clearest and most satisfactory evidence can only overcome the presumptive invalidity of the transaction on the ground of constructive fraud.  Davidson, 68 Nev. at 440, 234 P.2d at 799.  This rule is founded in public policy, intended as a protection to the client against the strong influence to which the confidential relation naturally gives rise.  Id.  Thus, the requirement that the plaintiff’s proof must be clear and convincing proof to establish a constructive trust based upon violation of an oral trust arrangement, does not apply where the transfer is made to a fiduciary.  Id. at 439, 234 P.2d 793, 798-99.  Instead, in such an instance, the burden of overcoming certain presumptions is upon the fiduciary.  Id.

In Davidson, a fiduciary relationship existed between a seasoned attorney and a client who was, rather advanced in years of very limited education and with no experience in legal matters.  Id. at 441, 234 P.2d 793, 799.  The facts indicated that the client had complete confidence in her attorney and was satisfied with the work he had done for her in the past and therefore relied upon his advice.  Id.  The attorney had orally agreed to hold real property for the client’s benefit, to collect the rentals, and make the necessary payments under a subsisting contract of purchase.  Id. at 430, 234 P.2d 793, 794.  Even though the attorney carried out all of these promises, he eventually sold the premises, and upon the client’s demand for payment repudiated his oral agreement.  Id.  The Court found that the client transferred the deed to the attorney solely for him to hold the property in trust for her.  Davidson, 68 Nev. at 442, 234 P.2d at 800.  Specifically, no consideration was paid for the assignments or the deed, the transfer was not made for any preexisting indebtedness, nor was it given without consideration or given as a gift.  Id.  Therefore, the Court upheld a constructive trust upon the property in favor of the client based on their confidential relationship and her substantial interest in the property.  Id. at 430-32, 234 P.2d 793, 794-95.

A constructive trust will arise whenever the circumstances under which property was acquired make it inequitable that it should be retained by him who holds the legal title, as against another.  Schmidt, 82 Nev. at 375, 418 P.2d at 993.

In Bemis, a divorce decree provided that two minor sons would be entitled to equal payments from a $25,000 trust, when in the sole discretion of the trustees, payments shall be necessary for the support, education, or general welfare of either one of them.  Bemis, 114 Nev. at 1023, 967 P.2d at 439.  However, the father failed to establish the trust, which resulted in the sons never receiving any financial assistance from their father after the divorce.  Id.  When the father died, the sons filed creditors’ claims against their father’s estate to collect the money that the father had agreed to hold in trust pursuant to the divorce decree.  Id.  The Court found that the father’s retention of legal title of the funds that he promised to his sons in the divorce agreement was inequitable.  Id. at 1027, 967 P.2d 437, 441.  Because the other two elements of constructive trust were satisfied, the Court concluded that the father had held the monies designated for his sons in a constructive trust.  Id. at 1028, 967 P.2d 437, 442.  Therefore, upon the father’s death, the estate became the trustee of the constructive trust.  Bemis, 114 Nev. at 1028, 967 P.2d at 442.

The creation of a constructive trust arises when it is necessary to achieve justice.  See DeLee v. Roggen, 111 Nev. 1453, 1457, 907 P.2d 168, 170 (1995).  In DeLee, Sol sold property to a purchaser who went bankrupt shortly thereafter and the property was foreclosed.  Id. at 1454-55.  Morris, Sol’s brother, purchased the property at public auction held by the holder of the second mortgage and orally promised to give the property to Sol.  Id. at 1455, 907 P.2d 168, 169.  In exchange for the property, Sol promised to pay off farm equipment used in connection with the property, which constituted consideration for Morris’ promise to convey the 640 acres of land to Sol.  Id.  Although Sol completed payment on the equipment sometime in 1978, he made no demand on the property until Morris filed suit against Sol, ten years later, for default on loans totaling $100,000.  Id.

The Court held that justice does not require the creation of a trust to preserve Sol’s interest in the property because Sol refrained from making a demand on the property for over ten years mainly for self-serving reasons.  DeLee, 111 Nev. 1453, 1457, 907 P.2d 168, 170.  Specifically, Sol had so many debts that if he had made such a demand, the property would have been “gobbled up” by creditors.  Id.  Thus, the evidence fairly inferred that Sol never wanted the property in his name, but made the claim to it in an effort to deter Morris from collecting the sums due to him from Sol.  Id.  Since the existence of a constructive trust was not essential to the effectuation of justice, the Court did not address the other two requirements.  Id.

At least one Nevada Supreme court decision holds that a “[constructive] trust can be established only by allegations of extrinsic fraud pleaded with particularity and supported by clear and convincing proof.”  Garteiz v. Garteiz, 70 Nev. 77, 82, 254 P.2d 804, 806 (1953).  This rule of law has been carried into the Nevada Rules of Civil Procedure, which first became effective January 1, 1953.  Id.  NRCP 9(b) provides that “in all averments of fraud or mistake, the circumstances constituting fraud or mistake, shall be stated with particularity.”  NRCP 9(b).

While a constructive trust is usually invoked when property has been acquired by fraud, such a trust may also be imposed where it is against the principles of equity that a certain person retain the property even though the property was acquired without fraud.  See Ferguson v. Owens, 459 N.E.2d 1293, 1295-96 (Ohio 1984).  In fact, to have a constructive trust imposed on property wrongfully held by the defendant, it is not necessary to prove that the petitioner suffered any pecuniary loss or that defendant personally profited from the acquisition and retention.  24 Bogert’s Trusts and Trustees § 471.  For example, in Bemis, the court explained that constructive trusts are no longer limited to fraud and misconduct, but are implemented to redress any unjust enrichment.  Bemis, 114 Nev. at 1027, 967 P.2d at 441.  In other words, a constructive trust is a remedial device not solely arising in cases of outright wrongdoing.  Id.  As stated, to establish a claim for imposition of a constructive trust in Nevada, the complaint must allege facts sufficient to show the abuse of a confidential relationship, the retention of legal title would be inequitable, and unjust enrichment.  See Locken, 98 Nev. at 372, 650 P.2d at 805.

The party seeking to establish a constructive trust has the burden of proving the facts alleged to give rise to the existence of such a trust.  See In re Goldberg, 168 B.R. 382, 384 (9th Cir. 1994).  The standard of proof demanded by the Ninth Circuit and Nevada Courts is usually clear and convincing evidence.  See Id.; Randono, 86 Nev. at 128, 466 P.2d at 222 (citing Garteiz, 70 Nev. 77, 82, 254 P.2d 804, 806 (1953)).  In fact, it is well settled that a constructive trust cannot be established by a mere preponderance of evidence, but must be established by evidence that is clear, definite, unequivocal, and satisfactory.  Moore v. DeBernardi, 47 Nev. 33, 220 P. 544, 545 (1923).  Where the existence of a confidential or fiduciary relationship is a necessary factor in the determination of whether a constructive trust should be declared, the burden is on the party seeking to impose the constructive trust to show the existence of such relationship.  See Davidson, 68 Nev. at 439-40, 234 P.2d at 798-99.

Parol evidence is admissible to prove the facts and circumstances constituting fraud from which the constructive trust arises.  Randono, 86 Nev. at 128, 466 P.2d at 222 (citing Moore, 47 Nev. 33, 50, 213 P. 1041, 220 P. 544 (1923)).  Parol evidence may be introduced to establish a constructive trust because it is a trust that arises by operation of law whereby the statute of frauds is of no impediment to its existence.  See Locken, 98 Nev. at 372, 650 P.2d at 804.  Indeed, any evidence that tends to prove or disprove actual or constructive fraud and is necessary to constitute a constructive trust is admissible.  Moore, 220 P. at 545.  However, the evidence must not be objectionable as to the relevancy, competency, and materiality, and the evidence must be clear and convincing.  See Id.  In fact, some jurisdictions require that parol evidence must be so clear, strong, and unequivocal as to remove from the mind every reasonable doubt as to the existence of the trust.  In Re Woolum, 279 B.R. 865, 870 (M.D. Fla. 2002).

Proof of an oral promise is not a violation of the parol evidence rule, when granting the necessary relief through parol, because it does not contradict the deed, but arises out of equity.  Davidson, 68 Nev. at 438, 234 P.2d at 798.  In essence, equity binds the grantee’s conscience to hold the land for the real purposes of the conveyance where the use of the deed according to its legal operation would work a fraud.  Id.  Therefore, parol evidence explains the transaction out of which the equity arises.  Id.

Under the statute of frauds, a contract to convey land is void unless in writing and no trust in real property is valid unless created by writing or operation of law.  Id. at 437, 234 P.2d 793, 797-98.  Accordingly, an oral promise to re-convey property is invalid and cannot be enforced.  Id.  However, in Nevada, the imposition of a constructive trust does not conflict with the statute of frauds when there is an oral agreement between parties for the conveyance of land.  Locken, 98 Nev. at 372, 650 P.2d at 804.  In particular, NRS 111.205 provides in pertinent part:

1)  No estate or interest in lands shall be created, granted, assigned, surrendered or declared, unless by act or operation of law, or by deed or conveyance, in writing….

2)  Subsection 1 shall not be construed to affect in any manner the power of a testator in the disposition of his real property by a last will and testament, nor to prevent any trust from arising or being extinguished by implication or operation of law.

NRS § 111.205 (1861).  NRS 111.205(2) sets forth an exception to the statute of frauds, which permits the imposition of a constructive trust to avert the type of fraud the statute is designed and intended to prevent.  Locken, 98 Nev. at 372, 650 P.2d at 804.  Namely, Nevada courts have consistently imposed a constructive trust arising out of the breach of the oral agreement, especially where a confidential relation existed between the parties.  Davidson, 68 Nev. at 437, 234 P.2d at 798.  The betrayal of such confidence is constructively fraudulent and is independent of any element of actual fraud.  Id.  As such, in Nevada it is well settled that the statute of frauds is not an impediment to the existence of a constructive trust.  Locken, 98 Nev. at 372, 650 P.2d at 804.

A complainant seeking the establishment of a constructive trust is naturally subject to the ordinary rules of equity that he must come into court with clean hands and that he must do equity if he is to obtain equity.  24 Bogert’s Trusts and Trustees § 472 (3d ed. 2007).  In the rare case where the property in question was originally acquired by some artifice or illegal act, the subsequent possessor may try to oppose the imposition of the constructive trust doctrine by invoking the clean-hands doctrine.  See Locken, 98 Nev. at 372-73, 650 P.2d at 805.  In Locken, a father and son verbally agreed that the father was to make certain improvements upon the land, and after an awaited patent was granted, the son was to convey the property to his father.  Id. at 370, 650 P.2d 803, 804.  Although the father fulfilled his part of the agreement, expending considerable time, effort and money, the son refused to convey the property as agreed.  Id.  Specifically, the son argued that his father should be denied equitable relief because of the father’s affidavit accompanying the land patent application stating that the father had no interest in that parcel of land to be placed in the son’s name.  Id. at 373, 650 P.2d 803, 805.  The Court rejected this argument stating that, without condoning the father’s misstatement, such conduct, standing alone, absent an intent to deceive, does not amount to unclean hands.  Id.

Moreover, courts may overlook that the agreement was illegal or against public policy where: (1) the public interest cannot be restored because of the completed transaction; (2) no serious moral turpitude was involved; (3) the [subsequent possessor] is guilty of greater moral fault than the [initial possessor]; and (4) application of the rule would permit the [subsequent possessor] to be unjustly enriched at the expense of [the initial possessor].  Locken, 98 Nev. at 373, 650 P.2d at 805.  Essentially, the success or failure of this defense will turn on whether courts find the initial possessor’s acts of greater moral fault than the subsequent possessor’s act, which initially led to the constructive trust analysis in the first instance.

Because it is a remedy, the right to a constructive trust is subject to the statute of limitations on the underlying action that gives rise to the right to a constructive trust.  In re Advent Management Corp., 178 B.R. 480, 488 (9th Cir. 1995).  In Nevada, the statute of limitations begins to run from the time when the wronged party knows or should have known of the inequitable conduct of the titleholder.  Bemis, 114 Nev. at 1028, 967 P.2d at 442.

In Bemis, two sons first learned about the trust that their father was obligated to create for them after their father’s death on February 11, 1995.  Id.  Soon after, the two sons promptly filed creditors’ claims against the estate, but were denied.  Id.  Nevertheless, the district court held that the trust was repudiated in 1984 when the eldest son reached the age of twenty-five.  Id.  However, the Nevada Supreme Court held that when one seeks the imposition of a constructive trust in equity, the statue of limitations accrues when the wronged party knows or should have known about the constructive trustee’s wrongful holding.  Id.  Therefore, the district court erred in holding that the trust was repudiated because the sons only first learned about their father’s failure to create a trust for their benefit shortly before they filed their creditors’ claims in 1995.  Bemis, 114 Nev. at 1028, 967 P.2d at 442.

Yet, where the cause of action does not arise until a demand and refusal, and it is within the plaintiff’s power to make such a demand, the statute will commence to run after the lapse of a reasonable time.  Southward v. Foy, 65 Nev. 694, 705-06, 201 P.2d 302, 307 (1948).  The nature of the contract and the circumstances surrounding it will determine what qualifies as a “reasonable time.”  Id.

NRS 11.190(2)(c) provides that an action must be brought within four years upon a contract, obligation or liability not founded upon an instrument in writing.  NRS §  11.190(2)(c) (2007).  Moreover, the statute of limitations applies even when parties are in a fiduciary relationship.  DeLee, 111 Nev. at 1458, 907 P.2d at 170.  In DeLee, Morris purchased the property, paid all taxes and other costs and held title to the property.  Id.  Sometime between 1974 and 1976, Morris and Sol made an oral agreement and by 1978 Sol had performed his part of the agreement.  Id.  Unfortunately, Sol refrained from demanding the property for over ten years.  Id.  The Court held that Sol cannot, by withholding his demand, forever stay the running of the statute of limitations and then demand the property when it is most profitable to him.  Id.  Thus, Sol did not make a demand within a reasonable time after he had performed in 1978 and the four-year statute of limitations ran prior to his 1990 claim for the property.  DeLee, 111 Nev. at 1458, 907 P.2d at 170.

Laches may be a defense to an action to establish and enforce a trust.  Murphy v. Emery, 629 S.W.2d 895, 898 (Tenn. 1982).  The doctrine of laches applies to an action for breach of trust to the same extent that it applies to any other action in equity.  See Murphy, 629 S.W.2d at 897.  In particular, the doctrine is based on several equitable principles: (1) equity never lends its aid to one who, with knowledge of his rights and with opportunities to assert them, delays unreasonably to do so; (2) equity aids those who are vigilant, not those who sleep on their rights, and always discourages stale demands; (3) time, in equity, is a witness that what has long been acquiesced in must have originally been founded on some right.  Id.

As a defense, the elements of laches to an action by a beneficiary against a trustee are namely, lapse of time, want of diligence, knowledge or inexcusable ignorance, and change in the value of the property after the cause of action arises.  See Swanson v. Swanson, 501 S.E.2d 491, 493 (Ga. 1998).  These factors are relevant because laches is not merely a question of time, but principally a matter of inequity in permitting the claim to be enforced.  Id. at 494.  However, lapse of time is an important element and in some cases may be in itself telling on the question of inequity.  Id.

For laches to apply, repudiation of the constructive trust is not required, and the time usually runs from the moment that the trust arises by operation of law.  76 Am. Jur. 2d, Trusts § 721 (2d ed. 2007).  Laches is an affirmative defense to be pleaded and proved by the defendant in an action to impose a constructive trust.  See Swanson, 501 S.E.2d 491.  In particular, the defendant must establish unreasonable delay on the part of the plaintiff in filing suit, and hardship or disadvantage to the defendant as a result of such delay.  See Mills v. Holcomb, 389 So.2d 223 (Fla. App. 1980).

A party may attempt to invoke the homestead exemption as a defense to the imposition of a constructive trust.  However, the homestead exemption does not apply to transactions involving fraud or similar tortious conduct.  Maki v. Chong, 119 Nev. 390, 391, 75 P.3d 376, 377 (2003).

Nevada has a time-honored principle that states that she who keeps property that she knows belongs to another must restore that property.  Id. at 392, 75 P.3d 376, 379.  In Maki, Chong purchased real property from funds belonging to Maki who signed a limited power of attorney allowing Chong to cash his State Industrial Insurance System settlement check.  Id.  Although the purpose of the homestead exemption is to preserve the family home despite financial distress, insolvency, or calamitous circumstances, the Court found that Chong was undeserving of protection because she fraudulently obtained the funds to purchase her home.  Id. at 393-94, 75 P.3d 376, 379.  Specifically, the Court held that one cannot defeat the right to enforce a constructive trust or equitable lien against the property on the ground that the homestead exemption applies.  Id.  Otherwise, the entire purpose of the exemption would be defeated because it only provides protection to individuals who file the homestead exemption in good faith.  Maki, 119 Nev. at 394, 75 P.3d at 379.

When a plaintiff succeeds in enforcing a constructive trust, courts treat her as if she were enforcing a duty to deliver property under an express trust.  Capital Inv. Co. v. Executors of Estate of Morrison, 800 F.2d 424, 427 (4th Cir. 1986).  Consequently, plaintiff has the right to receive the property or its proceeds from a constructive trustee, as well as the right to receive a money judgment for property received against the constructive trustee.  Id.  Where it is necessary to make the successful plaintiff whole, the plaintiff may be allowed to recover a portion of the trust property or its proceeds along with a money judgment for the remainder.  Id.

A court of equity may decree an injunction for certain purposes, such as to restrain an unauthorized sale or diversion of the trust property.  76 Am. Jur. 2d, Trusts § 669 (2d ed. 2007).  For instance, a temporary injunction lies to freeze the res (Latin: “thing,” An object, interest or status, as opposed to a person.  Black’s Law Dictionary (8th ed. 2004)) of an alleged trust upon a showing that the res is in probable danger of dissipation and that there is a reasonable likelihood of success on the merits with respect to the constructive trust claim.  Korn v. Ambassador Homes, Inc., 546 So.2d 756, 757 (Fla. Dist. Ct. App. 1989).


See elements for other claims at the Nevada Law Library

In Nevada, the elements for a claim of fraudulent transfer are:

  1. A transfer was made with actual intent to hinder, delay, or defraud any creditor of the debtor;
  2. Without receiving a reasonably equivalent value in exchange for the transfer or obligation;
  3. The debtor was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction;
  4. Debtor intended to incur, or believed, or reasonably should have believed, that he would incur debt beyond his ability to pay as they became due; and
  5. There is heightened scrutiny if the transfer or obligation was to an insider as defined by statute.

NRS 112.180; NRS 112.210; NRS 112.190; In re: FSG-R, LLC, 2012 WL 753353; In re 155 East Tropicana, LLC, 2012 WL 668579; Herup v. First Boston Financial, LLC, 123 Nev. 27, 162 P.3d 870, 873 (2007); Montana Nat’l. Bank v. Michels, 631 P.2d 1260 (Nev. 1981); Crescent v. White, 92 Nev. 661, 556 P.2d 1265 (1976); Matusik v. Large, 85 Nev. 202, 462 P.2d 457 (1969); 32 Am. Jur. 2d Fraudulent Conveyances § 10, at 701.


See elements for other claims at the Nevada Law Library

In Nevada, the elements for a claim of breach of the implied warranty of habitability are:

  1. All landlords shall maintain the dwelling unit at all times during the tenancy in a habitable condition;
  2. The dwelling unit is not habitable, as its condition violates provisions of relevant health, sanitation, and safety requirements of the statute(s);
  3. Tenant has delivered to landlord, sufficient notice in writing specifying each failure of the landlord to maintain the dwelling in a habitable condition and requesting the landlord remedy the same, as required by NRS 118A.355;
  4. Landlord has failed in good faith to remedy the failures outlined in the notice within fourteen days thereof;
  5. Tenant is entitled to termination of the rental agreement, or to withhold rent that becomes due without incurring a late fee, until the landlord has remedied the failure; and
  6. Tenant is entitled to recover actual damage caused by the landlord’s failures.

NRS 118A.290 and NRS 118A.355.


See elements for other claims at the Nevada Law Library


In Nevada, in order to obtain a temporary restraining order, preliminary injunction, or permanent injunction, generally, the following are considered by the courts:

  1. A party must demonstrate that it has a reasonable probability of success on the merits of its underlying claims;
  2. Without injunctive relief, plaintiff will suffer irreparable harm for which compensatory damages are inadequate;
  3. The court may weigh the public’s interest in seeing the harm stopped, as well as the relative hardships of the parties should the court take or refuse to take action; and
  4. The purpose of the restraining order/injunction is to preserve the status quo, or to “preserve a business or property interest.” Buion v. Terra Mktg. of Nev., Inc., 90 Nev. 237, 240, 523 P.2d 847, 848 (1974).
  5. Imposition of a bond is required by NRCP 65(c).



Diagnosis: Predatory Lending

Much has been said and written about abuses in the Mortgage and Escrow industries here in Nevada and elsewhere.  In an effort to police these professionals, Nevada’s legislature passed laws governing their actions.  This article summarizes these changes in Nevada law.


Any person who engages in the escrow, mortgage broker agent, or mortgage banker businesses without a license does so at his own peril.  Nevada law requires that any contract with an unlicensed person in those businesses may be voided.  In other words, the person dealing with the unlicensed mortgage agent may unwind the contract such that the law will place the parties in the position they would have been in had they never had the contract.

The Commissioner of Mortgage Lending may also require “escrow agents, escrow agencies, mortgage brokers, mortgage agents, and mortgage bankers” to pay restitution to any person who has suffered an economic loss as a result of a violation of law by an escrow agent or agency.  The law authorizes a $50,000 administrative fine for persons engaging in the escrow business or the business of mortgage broker agent or banker without a license.  Further, a person who engages in any of these businesses is subject to a civil action for actual and consequential damages for harm caused, as well as for punitive damages and attorney fees.

Bonding Requirement

Mortgage brokers must now deposit a $50,000 bond naming as principals the mortgage broker and all mortgage agents employed by or associated with the mortgage broker for the principal office and an additional $25,000 for each additional office (not to exceed a total of $75,000).  Any person claiming against the bond may file civil action on the bond for damages within three years of the harmful act.  The bonding company may bring an action for interpleader against all claimants.  All claims against the bond will have equal priority and will be paid on a pro rata basis if the bond is insufficient to pay all claims.

New Fiduciary Duties

By statute, all those who are licensed as escrow agencies, escrow agents, mortgage brokers, mortgage agents, and mortgage bankers now have a fiduciary obligation to their clients.  This law does not impose a requirement to offer or obtain access to loan product or services for a client other than those that are offered at the time of the transaction.  The law defines the “fiduciary obligation” as “a duty of good faith and fair dealing,” including, without limitation, the duty to”: 1) act in the client’s best interest; 2) conduct only mortgage transactions which are suitable for the client’s needs; 3) disclose any financial business or professional interest the licensee has in conducting the transaction; 4) disclose any material fact that the person knows or should know may affect the client’s rights; 5) provide any accounting to the client which lists all money and property received from the client; 6) not accept or collect any fee rendered unless the fee was disclosed; and 7) exercise reasonable care in performing all other duties related to a mortgage transaction.

Nevada law prohibits the disbursement of money held in escrow accounts until deposits that are at least equal to the disbursements have been received.  It also prohibits disbursements on the same business day as the funds are deposited unless deposits are made in forms which allow for immediate withdrawal of money.

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Renters Become Victims of Foreclosures

Many innocent renters have been victimized by foreclosures in Nevada.  The scam goes like this:  A Borrower who intends to default on his mortgage payments moves out of the home and rents it to a Tenant, who pays the usual deposits and rent.  While Tenant is dutifully paying rent, Borrower/landlord pockets that money instead of passing it on to the lender.  Borrower did not, of course, inform the Tenant of the impending default or of the eventual foreclosure.  Once the house is foreclosed on, Tenant is suddenly faced with a new landlord who wants the Tenant out of the house and Tenant does not get credit for his deposits, etc. (more…)


What is a Deficiency Judgment?

Most homes in Nevada have loans against them for an amount greater than the actual market value of the home.  If a homeowner owes $200,000 and the property is sold at foreclosure for $100,000, there is a $100,000 deficiency owed by the borrower.  Nevada laws generally provide that the lender can sue the borrower or guarantor for this deficiency after the foreclosure and obtain a judgment against the borrower or guarantor for the same.  This is known as a deficiency judgment.  As of October 1, 2009, however, lenders who are a financial institution may not seek a deficiency judgment in some circumstances.

What is a “Financial Institution”?

A “financial institution” is defined in the new law in broad terms as applying to any entity required to be licensed or registered under state or federal law to loan money.  The definition specifically excludes credit unions from this definition, meaning that they are still free to seek deficiency judgments.   This law applies prospectively, meaning that it only applies to loans written and secured by real property after October 1, 2009.  Further, it only applies where: 1) the real property is a single-family dwelling and the debtor owns the real property; 2) the debtor used the loan to purchase the property; 3) the debtor occupied the property continuously after obtaining the loan; and 4) the debtor did not refinance the property after obtaining the loan from the judgment creditor.

Lenders are no longer able to sue the homeowner if the foreclosure sale does not yield enough money to cover the debt.  This is a significant development in Nevada law.  While its full effects are not known, this law will surely result in changes in how and whether financial institutions lend money for homes in Nevada.  Further, one may anticipate that credit unions may eventually have a market advantage over other financial institutions, as their risk will be less because of their ability to seek and obtain deficiency judgments.  Since the law does not have a sunset clause, this is not a temporary advantage, although in the current market, it is doubtfully much of an advantage at all.  To combat this advantage, other financial institutions are sure to find other ways to level the playing field, such as requiring personal guarantees from all borrowers.


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