Detwiler v. Eighth Judicial Dist. Court of Nev.

• Decision Date: 06 May 2021
• Docket Number: No. 81220,81220
• Citation: 486 P.3d 710
• Parties: Edward N. DETWILER, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF CLARK; and the Honorable Richard Scotti, District Judge, Respondents, and Baker Boyer National Bank, Real Party in Interest.
• Court: Nevada Supreme Court

486 P.3d 710

Edward N. DETWILER, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF CLARK; and the Honorable Richard Scotti, District Judge, Respondents, and Baker Boyer National Bank, Real Party in Interest.

No. 81220

Supreme Court of Nevada.

FILED MAY 06, 2021

Hutchison & Steffen, LLC, and Brenoch R. Wirthlin, Mark A. Hutchison, and Michael K. Wall, Las Vegas, for Petitioner.

Lewis Roca Rothgerber Christie LLP and John E. Bragonje, Daniel F. Polsenberg, and Abraham G. Smith, Las Vegas, for Real Party in Interest.

BEFORE THE SUPREME COURT, PARRAGUIRRE, STIGLICH, and SILVER, JJ.

OPINION

By the Court, STIGLICH, J.:

In this opinion, we examine the appropriate scope of compensatory fines and attorney fees imposed as sanctions in contempt proceedings. We conclude that monetary sanctions payable to the opponent are civil—not criminal—in nature because they serve a remedial purpose. However, these sanctions must be limited to the opponent's actual loss caused by the contemptuous conduct. To the extent such a sanction exceeds the opponent's actual loss, it is invalid. More specifically, an attorney fee award must not include fees that were incurred before the contemptuous conduct began, and an award of other damages must be based on evidence of an actual loss.

Before reaching this central issue, we address two threshold issues. First, we consider the effect of an error in naming a party—here, the erroneous description of a national bank as "a Washington corporation." We hold that where the correct parties are in fact involved and no party is actually misled or prejudiced by the naming error, such an error is purely clerical and the district court may correct it at any time. Second, we address the proper time for an accused contemnor to demand a change of judge under NRS 22.030(3). We hold that such a demand must be made before the contempt trial. Although we need not decide whether any more stringent time limit applies, we encourage litigants to act without undue delay in exercising peremptory challenges to judges.

FACTS AND PROCEDURAL HISTORY

Real party in interest Baker Boyer National Bank loaned over $1 million to James Foust, who claimed an extensive classic car collection valued at several million dollars among his assets on his loan application. ¹ Foust defaulted on the loan, and in July 2017, the Bank obtained a money judgment against him in Washington State for over $800,000.

Foust did not pay the judgment, and so the Bank began to seek out assets from which it could satisfy the judgment. As the classic car collection was—at least ostensibly—located in Nevada, the Bank applied to this state's district court for enforcement of the judgment. The Bank then moved the district court to require Foust to turn over the cars, or some subset of the cars, to satisfy the judgment under NRS 21.320. Foust opposed the motion. He claimed that he had liquidated his entire collection of cars and had no other assets. The district court was skeptical and ordered Foust to produce concrete evidence that he no longer owned the cars. At an evidentiary hearing, Foust represented that he had sold some of the cars, including a 1998 Prevost Marathon Motorcoach, ² to Harry Hildibrand, LLC (HH), a Montana limited liability company. He testified that he owned less than one percent of HH. Nevertheless, the court authorized the Bank to seize the Motorcoach from an RV park in Las Vegas. The Motorcoach was the only vehicle that the Bank successfully located.

The court then granted the Bank's motion in full, permitting the Bank to maintain possession of the Motorcoach pursuant to its prior order and ordering Foust to produce all other cars identified in the Bank's motion. As Foust continued to insist that HH owned the Motorcoach, the court ordered Foust to produce evidence that the sale was legitimate. Foust produced only an uncertified photocopy of the Motorcoach's title indicating that HH was the owner. After another hearing, the court found that "no sale actually occurred and that Mr. Foust continues to own" the Motorcoach. It relied on evidence that Foust was not a minority owner of HH, but was in fact its sole member. It found Foust's testimony that he had "divested his interest on some uncertain date he could not recall" to be not credible in the face of contradictory documentary evidence. Accordingly, the court found the purported sale was fraudulent and void.

Soon afterwards, in March 2018, HH appeared in the lawsuit for the first time. It claimed a right in the Motorcoach and demanded a hearing to determine title. As NRS 31.070(1) required, the third-party claim included a sworn declaration by HH's manager and agent, petitioner Edward N. Detwiler. Detwiler swore that HH purchased the Motorcoach in early 2017, before the Washington judgment was entered, for approximately $135,000. But the district court denied the third-party claim. The case was then stayed for several months when HH filed for bankruptcy protection in California.

The Bank obtains an order requiring Detwiler to turn over certain cars

The California bankruptcy case was eventually dismissed, and the Nevada district court then held a hearing to determine whether HH and Foust were in privity such that HH could be bound by the court's order finding the sale fraudulent. In a January 9, 2019, order (the January turnover order), the court found that, though ostensibly separate, Foust and HH acted under common legal representation coordinated across judicial fora. The court further found that Foust "retained possession or control of the property transferred after the [purported] transfer," indicating the sale was fraudulent. Ultimately, it found that the relationship between Foust and HH "appears to the Court to be a scam for frustrating creditors’ claims." It thus ruled in favor of the Bank on all claims. Crucially, it ordered Foust, HH, and any of their agents, employees, or affiliates—specifically including Detwiler—to turn over the cars on penalty of contempt.

Detwiler is held in contempt

The Bank unsuccessfully sought Foust's, Detwiler's, and HH's compliance with the January turnover order. In February 2019, the Bank moved to have Foust, Detwiler, and HH held in civil contempt of court. The court issued an order to show cause and scheduled a hearing. The order warned Foust, Detwiler, and HH that they faced "civil contempt" and noted that their failure to appear could result in a warrant for their arrest.

The hearing lasted four days in April and May 2019. Both Detwiler and Foust testified. ³ Not long after, the court held Foust in contempt. But Foust absconded to California, and the Bank remained unable to secure his compliance. Several months after holding Foust in contempt, the district court announced by minute order that it would hold Detwiler and HH in contempt for refusing to turn over the cars and issued a warrant for Detwiler's arrest. However, the clerk did not enter on the docket the court's written order implementing its minute order, despite the written order being signed on December 16, 2019. Three days after signing the written order, the court sua sponte stayed the enforcement of Detwiler's arrest warrant and eventually set a new hearing for late January 2020.

Days before that hearing, Detwiler informed the court that he had resigned as a manager of HH in September, after the contempt hearing but before the court announced it was holding him in contempt. On the day of the January hearing, Detwiler for the first time sought to peremptorily challenge the judge pursuant to NRS 22.030(3). Detwiler argued that this motion was timely since the written contempt order had not been entered. After the hearing that day, the court entered the written contempt order signed on December 16, without modifications. It set a new hearing for February 12 and stayed Detwiler's arrest until then.

Detwiler then moved for relief from the judgment, for reconsideration, and for a new trial. He argued that his resignation as HH's manager made it impossible for him to comply with the order by turning over the cars. He further argued that as the district court had found that Foust owned the cars, it was contradictory to ask HH to turn them over.

At a hearing on the reconsideration motion, the court indicated that it believed Detwiler had been untruthful and that he had, at some point, had the ability to turn over the cars. The court asked the parties to address whether the resignation "convert led] this from a civil contempt to criminal contempt" by making it impossible for Detwiler to comply. The court remarked that "if it's no longer civil ...due process requires ... a new evidentiary hearing." The court ultimately found that Detwiler had the ability to comply with the court's order, at least until he resigned as manager of HH, and failed to do so. But the court agreed with Detwiler that his resignation now made it impossible for him to comply. As Detwiler could no longer comply, the district court vacated its order for his arrest. Instead, it ordered him to pay the Bank's attorney fees incurred since HH filed its NRS Chapter 31 third-party claim to the Motorcoach in March 2018. Further, the court imposed an additional fine of $100,000 payable to the Bank, which it explained was a fraction of the cars’ value. The fine was not conditional, although the court noted it would be open to reconsideration if the cars were turned over. Detwiler now petitions this court for a writ of mandamus or prohibition, challenging the contempt order.

DISCUSSION

Where no rule or statute provides for an appeal of a contempt order, the order may properly be reviewed by writ petition. Pengilly v. Rancho Santa Fe Homeowners Ass'n, 116 Nev. 646, 649-50, 5 P.3d 569, 571 (2000). "Whether a person is guilty of contempt is generally within the particular knowledge of the district court, and the district court's order should not lightly be...