Berkson v. LePome

• Decision Date: 16 December 2010
• Docket Number: No. 49261.,49261.
• Citation: 245 P.3d 560
• Parties: Marilyn BERKSON, an Individual; and Gertrude Malacky, an Individual, Appellants, v. Robert C. LEPOME, individually and as Husband of Barbara Lepome; Barbara Lepome, Individually and as Wife of Robert C. Lepome; John Gorman, Esq.; Howard Bloom; and Richard Donaldson, Esq., Respondents.
• Court: Nevada Supreme Court

245 P.3d 560

Marilyn BERKSON, an Individual; and Gertrude Malacky, an Individual, Appellants,

v.Robert C. LEPOME, individually and as Husband of Barbara Lepome; Barbara Lepome, Individually and as Wife of Robert C. Lepome; John Gorman, Esq.; Howard Bloom; and Richard Donaldson, Esq., Respondents.

No. 49261.

Supreme Court of Nevada.

Dec. 16, 2010.

Cary Colt Payne, Las Vegas; Bruce L. Gale, Las Vegas, for Appellants.

Marquis & Aurbach and Terry A. Coffing, Micah S. Echols, and Lisa A. McClane, Las Vegas, for Respondents.

Before the Court En Banc.¹

OPINION

By the Court, HARDESTY, J.:

For the first time, we consider NRS 11.340, a statute enacted by the Legislature in 1911 ² that provides a plaintiff whose judgment is subsequently reversed on appeal with the right to file a new action within one year after the reversal. We conclude that this statute violates the separation of powers doctrine because it unconstitutionally interferes with the judiciary's authority to manage the judicial process and this court's ability to finally resolve matters on appeal by precluding subsequent and repetitive efforts to relitigate the same claims. As we strike NRS 11.340, we necessarily examine the district court's dismissal of the underlying action on preclusion grounds. We affirm the district court's order because appellants relied solely on NRS 11.340 and failed to provide any arguments to explain why claim and issue preclusion should not apply. Finally, we conclude that the district court abused its discretion in awarding attorney fees and costs to respondents to sanction appellants for filing a frivolous complaint, and therefore, we reverse the post-judgment attorney fees and costs award to respondents.

BACKGROUND AND PROCEDURAL HISTORY

In 2001, respondent Howard Bloom filed a petition in the district court seeking the appointment of special administrators for the estate of Rose Miller. The petition was subsequently opposed by two of Miller's nieces, appellants Marilyn Berkson and Gertrude Malacky, on the grounds of undue influence and a lack of testamentary capacity. Bloom also filed a separate petition for the appointment of a trustee regarding the Rose Miller Living Trust, which was also opposed by appellants on the same grounds. Berkson and Malacky subsequently filed a civil complaint in district court against respondent Barbara LePome. These three actions were ultimately consolidated by the district court, which later dismissed Berkson and Malacky's civil complaint, concluding that the causes ofaction raised were either not recognized in Nevada or were duplicative of the claims raised in the estate and trust actions. In 2004, the district court dismissed the lack-of-testamentary-capacity claims pending in the estate and trust actions and concluded that the sole issue remaining for trial was the undue influence issue. At the trial, the jury found in favor of Berkson and Malacky, but this court reversed that judgment on appeal, in a July 12, 2006, unpublished order, concluding that the jury's verdict was not supported by substantial evidence.

Thereafter, in November 2006, Berkson and Malacky filed a new complaint in district court asserting claims for undue influence, breach of contract, fraud, elder abuse and neglect, intentional misstatement of facts, negligence, conspiracy and per se violation of Nevada law, and misconduct. Their complaint also sought attorney fees and costs. This complaint continued the litigation against Barbara LePome and Bloom and added respondents Robert LePome, John Gorman, and Richard Donaldson as additional defendants. Respondents moved the district court to dismiss the complaint based on, among other things, their assertion that the complaint was barred by claim and issue preclusion. The district court subsequently entered an order summarily granting the motion to dismiss the complaint "in its entirety" over Berkson and Malacky's opposition. Berkson and Malacky have now appealed the district court's dismissal order. After the notice of appeal was filed, the district court awarded respondents attorney fees and costs to sanction Berkson and Malacky for filing a frivolous complaint. Berkson and Malacky have also appealed from this post-judgment award.

DISCUSSION

We begin our discussion of the issues presented in this appeal by addressing Berkson and Malacky's challenge to the district court's application of the doctrines of claim and issue preclusion to their complaint. After concluding that the district court properly dismissed the underlying complaint on this basis, we then turn to Berkson and Malacky's appellate arguments related to the post-judgment award of attorney fees and costs to respondents, which, for the reasons set forth below, we conclude must be reversed.³

Dismissal of Berkson and Malacky's complaint

On appeal, Berkson and Malacky argue that the district court erred in dismissing their complaint because NRS 11.340 clearly and unambiguously granted them the right to file a new complaint after this court reversed the jury verdict in their favor. NRS 11.340 provides that

[i]f an action shall be commenced within the time prescribed therefor, and a judgment therein for the plaintiff be reversed on appeal, the plaintiff, or if the plaintiff dies and the cause of action survives, the plaintiffs heirs or representatives, may commence a new action within 1 year after the reversal.

According to Berkson and Malacky, because NRS 11.340 authorizes the filing of a new complaint after the reversal on appeal of a judgment in their favor, that statute necessarily precludes the application of claim and issue preclusion to their new complaint, and thus, the district court's dismissal of their complaint on such grounds was improper. This court has not previously addressed NRS 11.340, which has not been substantively amended or altered since its enactment.⁴

Words in a statute will be given their plain meaning unless such an approach would violate the spirit of the act. V & S Railway v. White Pine County, 125 Nev. ----, ----, 211 P.3d 879, 882 (2009). Further, a statute will be construed in order togive meaning to its entirety, and this court " 'will read each sentence, phrase, and word to render it meaningful within the context of the purpose of the legislation.' " Harris Assocs. v. Clark County Sch. Dist., 119 Nev. 638, 642, 81 P.3d 532, 534 (2003) (quoting Coast Hotels v. State, Labor Comm'n, 117 Nev. 835, 841, 34 P.3d 546, 550 (2001)).

As Berkson and Malacky correctly point out, the plain language of NRS 11.340 explicitly authorized their filing of a new action after this court reversed the judgment in their favor on appeal. And if NRS 11.340 is to have any real effect, it necessarily follows that the doctrines of claim and issue preclusion could not be applied to bar a new action filed based on that statute. Claim and issue preclusion essentially bar recovery on or prevent relitigation of previously resolved issues. See Five Star Capital Corp. v. Ruby, 124 Nev. 1048, 1054-55, 194 P.3d 709, 713 (2008) (explaining that claim preclusion acts to bar claims brought in a subsequent action between the same parties that either were brought or could have been brought in a prior action, and issue preclusion applies, under certain circumstances, when issues addressed in an earlier suit arise again in a later suit). To that end, these principles would apply to bar an action brought under NRS 11.340 and would render the statute meaningless, as any new action filed under the statute would automatically be subject to summary dismissal on preclusion grounds, which is exactly what happened in the underlying case. Thus, under this court's established rules of statutory construction, NRS 11.340 must be read as not only authorizing the filing of a new action after the reversal of a judgment in plaintiffs' favor on appeal, but as barring the application of claim and issue preclusion to any new action filed under the statute.

This conclusion does not end our analysis, however. In responding to Berkson and Malacky's appellate contentions, respondents argue that NRS 11.340 violates the separation of powers doctrine and should be struck down as unconstitutional. Specifically, they contend that the statute unduly hampers the judiciary's ability to manage litigation through the application of the doctrines of claim and issue preclusion, and as a result, runs afoul of separation of powers principles. Berkson and Malacky dispute that respondents' separation of powers arguments provide a basis for affirming the district court's decision. For the reasons set forth below, we agree with respondents' contention that NRS 11.340 violates the separation of powers doctrine.

NRS 11.340 violates separation of powers

Separation of powers

The separation of powers doctrine is the most important foundation for preserving and protecting liberty by preventing the accumulation of power in any one branch of government. Secretary of State v. Nevada State Legislature, 120 Nev. 456, 466, 93 P.3d 746, 753 (2004). Nevada's separation of powers provision, contained in Article 3, Section 1(1) of the Nevada Constitution, provides that

[t]he powers of the Government of the State of Nevada shall be divided into three separate departments,—the Legislative,—the Executive and the Judicial; and no persons charged with the exercise of powers properly belonging to one of these departments shall exercise any functions, appertaining to either of the others, except in the cases expressly directed or permitted in this constitution.

The Constitution further embodies this concept of limited government by specifically delineating the powers granted to the three distinct and coequal branches of government, as set forth in Article 4 (legislative), Article 5 (executive), and Article 6 (judicial). Commission on Ethics v. Hardy, 125 Nev. ----, ----, 212 P.3d 1098, 1103 (2009). As coequal branches, each of the three governmental departments has "inherent power to administer its own...