Britz v. Consolidated Casinos Corp.

Decision Date15 September 1971
Docket NumberNo. 6349,6349
Citation87 Nev. 441,488 P.2d 911
PartiesAlfred H. BRITZ and Louis Marder, Appellants, v. CONSOLIDATED CASINOS CORP., a Nevada corporation, Respondent.
CourtNevada Supreme Court

Calvin C. Magleby, Las Vegas, for appellants.

Lionel, Sawyer, Collins & Wartman and Steve Morris, Las Vegas, for respondent.

OPINION

BATJER, Justice.

Action was commenced in the district court by the respondent to collect a debt of $100,000, as well as for compensatory and punitive damages against the appellants in the amount of $350,000, charging a conspiracy by the appellants to defraud the respondent.

On December 23, 1969, the trial court found a conspiracy on the part of the appellants and entered a default judgment awarding the respondent compensatory damages in the sum of $100,000, and punitive damages in the amount of $30,000.

On January 7, 1970, seeking relief within NRCP 60(b), the appellants filed a motion asking the trial court to set aside the default judgment on grounds of mistake, inadvertence, surprise or excusable neglect. Along with this motion they filed a proposed answer and an affidavit by the appellant, Alfred H. Britz. A hearing was held and the motion was denied. From that denial this appeal is taken.

The litigation arose after two checks, each in the amount of $50,000, signed by the appellants as officers of Westward Investment Corporation, were cashed at the respondent's Sahara Hotel in Las Vegas, Nevada. Payment was stopped on one check and the other was returned to the respondent because of insufficient funds.

The check dated June 27, 1969, was made payable to James Morse. Testimony at the hearing on the motion indicated that Morse was to retain the check until such time as he had purchased stock in Delta Corporation, that stock had been resold, and sufficient funds had been placed in the Westward Investment Corporation account to cover the check. Instead of holding the check, Morse took it to the Sahara Hotel and cashed it at the cashier's window. The appellant Britz claimed that the Delta stock purchased by Mr. Morse was not transferable and payment on the check was stopped.

The other check, dated July 29, 1969, was made payable to cash. The legend on the check read 'Shield Industries.' Upon the request of appellants, the check was taken to the Sahara Hotel and cashed by a Mr. Topel, who was deceased at the time of the hearing on the motion. The appellants had made prior arrangements with the casino cashier to cash checks in large amounts. The funds from this check were taken to California and invested in stock of Shield Industries. At the time this second check was chased there were insufficient funds in the Westward Investment Corporation account to cover it. No effort to redeem these checks was ever made. As a result of this $50,000 investment, Westward Investment Corporation gained 58% ownership of Shield Industries.

In a reverse merger, Westward Investment Corporation (along with the 58% interest in Shield Industries) merged with Spectrum, Limited, and each appellant received stock in Spectrum. Westward Investment Corporation is now in dissolution and its assets have been transferred to Spectrum, Limited.

The appellants contend that the district court abused its discretion when it denied their motion to set aside the default judgment because they had demonstrated mistake, inadvertence, surprise or excusable neglect as well as a meritorious defense to the respondent's complaint. They further contend that the judgment is void and that the district court erroneously admitted into evidence unsigned self-serving documents.

The appellants in their motion only claimed that the default judgment was taken against them through their mistake, inadvertence, surprise or excusable neglect. In Hotel Last Frontier v. Frontier Prop., 79 Nev. 150, 154, 380 P.2d 293, 295 (1963), this court considered the preexisting case law on the question of setting aside default judgments and set forth certain requirements which must be met before such a judgment may be set aside: '(1) The showing required by NRCP 60(b)(1), formerly NCL 8640, of mistake, inadvertence, surprise, or excusable neglect, singly, or in combination, must, of course, be made(, )' and '(2) The showing required by case precedent that a 'meritorious defense' exist to the claim for relief asserted, also must be made.' The appellants contend that through the affidavit and testimony of the appellant, Alfred H. Britz, they showed mistake, inadvertence, surprise and excusable neglect. Britz testified that he had a conversation on December 20, 1969, with the respondent's attorney, Stephen L. Morris, and at that time he advised Morris that an arrangement was made for settlement with Westward Investment Corporation and that in fact $30,500 had been paid to the respondent in part settlement. Britz also claimed that he was advised by Morris that he need not answer the complaint or be concerned about being present for the taking of his deposition which had previously been noticed and that in the event any problems arose Morris would notify him before any action was taken. The affidavit and testimony of Britz was directly controverted by the testimony of Morris. The trial judge chose to Believe Morris.

An examination of the testimony of Morris and the exhibits in evidence shows that the appellants were not entitled to relief under NRCP 60(b)(1). The trial court had the witnesses directly before it and was able to consider not only their testimony, but also their demeanor. When there is substantial conflict in the evidence, and sufficient evidence to support a finding for either party, the decision of the trial court must be sustained on appeal. Friendly v. Larsen, 62 Nev. 135, 144 P.2d 747 (1944); Nevada Bank of Commerce v. Esquire Real Estate, Inc., 86 Nev. 238, 468 P.2d 22 (1970); Lazovich and Lazovich, Inc. v. Harding, 86 Nev. 434, 470 P.2d 125 (1970).

During the course of the hearing the trial judge became concerned that respondent's counsel was asking questions on crossexamination beyond the realm of materiality and requested a statement from him explaining what bearing his line of questioning had on the motion. Respondent's counsel, in his statement, touched upon the merits of the case and it was to some extent conclusory. The appellants claim that the statement was highly improper, decidedly prejudicial, scandalous and that it unquestionably influenced the court. They have cited no authority to support their claim of error. We find their contention to be without merit. Riverside Casino v. J. W. Brewer Co., 80 Nev. 153, 390 P.2d 232 (1964).

The appellants also contend that they were unduly prejudiced when the trial court admitted into evidence a proposed stipulation which had been signed by Stephen L. Morris and mailed to George E. Graziadei, an attorney who was the resident agent for Westward Investment Corporation and who had been in communication with the appellants regarding this litigation. Because it was only signed by the sender, Stephen L. Morris, it merely expressed the terms upon which he would be willing to extend time for taking the deposition of Alfred H. Britz and for the defendants to file an answer. The contents of the proposed stipulation as evidence was in the same category as a letter. It expressed the intent of the sender and became notice to the recipient. At most the proposed stipulation was cumulative evidence. Again the appellants have cited no authority to support their contention that the trial court erred when it received the proposed stipulation into evidence. We also find this contention to be without merit. Riverside Casino v. J. W. Brewer Co., supra.

Having concluded that the trial court was justified in deciding that the appellants had failed to make a showing of mistake, inadvertence, surprise or excusable neglect, we need not consider whether they had a meritorious defense.

Although we favor adjudication of cases upon their merits, the trial judge is free to judiciously and reasonably exercise discretion in determining whether a default judgment should be set aside. 'A court has wide discretion in...

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    • June 14, 2002
    ...require fraud plaintiffs to allege the specific date, place, or time of each misrepresentation); Britz v. Consolidated Casinos Corp., 87 Nev. 441, 488 P.2d 911, 915-16 (1971) ("failure of a plaintiff to comply with [the particularity requirement of pleading fraud] ... only subjects the comp......
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