Cox v. Dist. Ct.
| Decision Date | 02 October 2008 |
| Docket Number | No. 50118.,50118. |
| Citation | 193 P.3d 530 |
| Parties | H. Bruce COX and Sue Ann Cox, Husband and Wife, Petitioners, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, in and for The COUNTY OF CLARK, and The Honorable Elizabeth Goff Gonzalez, District Judge, and The Honorable Jackie Glass, District Judge, Respondents, and Michael Gaughan and Paula Gaughan, Husband and Wife, Real Parties in Interest. |
| Court | Nevada Supreme Court |
Hutchison & Steffen, LLC, and Michael K. Wall and Kevin M. Sutehall, Las Vegas, for Petitioners.
Gerrard, Cox & Larsen and Douglas D. Gerrard and Gary C. Milne, Henderson, for Real Parties in Interest.
BEFORE HARDESTY, PARRAGUIRRE and DOUGLAS, JJ.
This original proceeding stems from an appeal in a case concerning a complaint for partition or sale of certain Clark County real property. In that case, the court reversed the district court's judgment transferring the property from petitioners to real parties in interest through a judicial sale and remanded the matter to the district court for further proceedings. When petitioners took steps to undo the judicial sale in light of the court's order, real parties in interest obtained a temporary restraining order from a different district court department, barring petitioners from further challenging the judicial sale. The temporary restraining order was premised on the general principle that valid judicial sales to bona fide purchasers survive appellate reversals. Petitioners are seeking a writ of mandamus directing the district court to vacate its temporary restraining order, allowing them to continue with their efforts to reacquire the property.
In considering this petition, we clarify that bona fide purchasers at judicial sales are not protected under the general principle that judicial sales survive appellate reversals if the district court lacked jurisdiction to order the sale. In this situation, judicial sales may be challenged collaterally or in remanded proceedings in the original action.
Here, before ordering petitioners' property sold in the partition action, the district court improperly denied petitioners' motion to dismiss the action pursuant to NRCP 41(e)'s requirement that an action be brought to trial within five years from the date that a complaint is filed. After the five-year deadline for bringing the case to trial expired, dismissal was mandatory under that rule. Thus, we conclude that the district court lacked jurisdiction to take the partition action to judgment and order the judicial sale of petitioners' real property. Accordingly, the judicial sale is void, and we grant this petition.
The partition action
In 1974, petitioners H. Bruce and Sue Ann Cox, together with Reed Scott, his wife, and another couple, purchased a 9.34-acre parcel of land in the Gilcrease Ranch area of Clark County. The couples agreed to divide the land into six irrigable basins, taking an individual interest in two basins apiece. The deed, however, mistakenly conveyed the six basins as a single parcel, giving each couple an equal undivided interest in the whole parcel as joint tenants. The deed was never reformed.1
On March 31, 1999, claiming that the couples were tenants in common, Scott brought an action before respondent District Judge Jackie Glass in Department 5 to have the entire 9.34-acre parcel partitioned or sold under NRS Chapter 39.2 The Coxes answered Scott's complaint, opposed a sale, and asserted various counterclaims and defenses. Thereafter, except for an isolated discovery request and a renewed motion for partition or sale, the case lay dormant for over three years, until the parties tentatively agreed to partition the property at a settlement conference.
NRCP 41(e) violation
On March 31, 2004, NRCP 41(e)'s five-year deadline for bringing the case to trial expired and the case was closed with no motions pending. Nevertheless, Scott moved to re-calendar the case and for reconsideration of his motion for partition or sale. The Coxes responded by moving to dismiss under NRCP 41(e) for want of prosecution. The district court denied the Coxes' motion to dismiss, wrongly believing that the rule's five-year period was tolled by the parties' settlement conference, and re-calendared the case.
Summary judgment and order of sale
At a June 9, 2004, hearing, the district court granted Scott's motion for reconsideration of his motion for partition or sale and orally ordered the 9.34-acre parcel to be sold through a judicial sale. Around this time, Scott found a buyer for the parcel, real parties in interest Michael and Paula Gaughan. Meanwhile, the Coxes unsuccessfully moved to stay the sale, then filed a notice of appeal to this court on July 9, 2004.
On July 16, 2004, the district court entered a written order granting summary judgment to Scott. The order also acted as a self-executing order of sale by purporting to transfer title to the 9.34-acre parcel to the Gaughans, "irrevocably ... as if all of the parties had signed an agreement of sale." After this order was entered, the Gaughans paid the purchase price into escrow, which the district court later distributed to the parties. While the other parties to the partition action accepted their share of the sale proceeds, the Coxes refused payment.
Despite their refusal to collect payment, escrow closed on August, 2, 2004, leaving the Coxes an unclaimed balance of $986,375.83. The same day, unbeknownst to the Coxes, the Gaughans recorded the district court's July 16 order, purporting to complete the sale. Although the sale was allegedly complete, the Coxes renewed their motion to stay the sale with this court, arguing that the object of their appeal in the partition action would be defeated if the stay was denied. On August 4, 2004, while the stay motion was pending, the Gaughans served notice on the Coxes that the district court's July 16 order had been entered transferring the Coxes' land to them. On September 14, 2004, the court denied as moot the Coxes' motion to stay the sale.
Order of reversal and remand in the partition action
On appeal, a panel of this court reversed the district court's July 16 summary judgment, concluding that it should have dismissed Scott's partition action under NRCP 41(e) for want of prosecution. Although not a dispositive ground for reversal, the panel further noted that summary judgment was improper because "a number of issues of material fact ... remain[ed] unresolved," most notably "the nature and scope of the parties' interests in the ... property" and whether the judicial sale complied with NRS Chapter 39. The panel remanded the case to Department 5 for further proceedings consistent with its order.
Remanded proceedings
After succeeding on appeal, the Coxes recorded the panel's order, effectively clouding the Gaughans' title. In response, before the Coxes could further challenge the Gaughans' interest in the property, the Gaughans brought a quiet title action in Department 11 before respondent District Judge Elizabeth Goff Gonzalez, including claims for declaratory and injunctive relief, and applied for a temporary restraining order to enjoin the Coxes from taking any action that might interfere with the Gaughans' claim of ownership, including continuing with any proceeding intended to reacquire the property in a different district court department.
In their application, the Gaughans claimed that they would succeed on the merits of each of their substantive claims since, as bona fide purchasers, their purchase of the 9.34-acre parcel was final, even though the summary judgment order authorizing the sale in the partition action had been reversed. Relying on the panel's dispositional order, the Coxes responded that the judicial sale could be challenged as void since Department 5 lacked jurisdiction to order the sale after ignoring its mandatory duty to dismiss the case under NRCP 41(e).
Noting that the panel's order failed to use the terms "void" or "jurisdiction," Department 11 disagreed with the Coxes' position and granted the Gaughans' application for a temporary restraining order, which it extended for 90 days pending a consolidated preliminary injunction hearing and trial on the merits regarding the Gaughans' claim for injunctive relief. This petition followed.
The primary issue raised in this petition is whether a judicial sale to a bona fide purchaser may be challenged collaterally or in remanded proceedings after the judgment in the partition action that led to the judicial sale is reversed on appeal. Separately, we consider the jurisdictional implications of NRCP 41(e)'s requirement that an action be brought to trial within five years from the date that a complaint is filed.
Standard of review
When petitioners lack a plain, speedy, and adequate legal remedy, this court may issue a writ of mandamus "to compel the performance of an act which the law requires as a duty resulting from an office, trust, or station, or to control an arbitrary or capricious exercise of discretion."3 Since mandamus is an extraordinary remedy, it is within our sole discretion to determine if a petition will be considered.4
Challenging judicial sales collaterally or in remanded proceedings
In their petition, the Coxes argue that the judicial sale to the Gaughans is void for lack of jurisdiction and therefore subject to challenge in renewed proceedings following our order of reversal and remand in the partition action. By contrast, the Gaughans allege that they are entitled to retain the entire 9.34-acre parcel of land since they relied in good faith on Department 5's summary judgment when purchasing the property even though that judgment was ultimately reversed.
According to the majority of jurisdictions that have considered an issue similar to the one presented in this case, judicial sales to bona fide purchasers are accorded finality even if the underlying judgment is reversed on...
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