Estate of Adams ex rel. Estate v. Fallini

• Decision Date: 29 December 2016
• Docket Number: No. 68033,68033
• Citation: 386 P.3d 621,132 Nev. Adv. Op. 81
• Parties: Estate of Michael David Adams, By and Through His Mother Judith Adams, Individually and on Behalf of The Estate, Appellants, v. Susan Fallini, Respondent.
• Court: Nevada Supreme Court

386 P.3d 621

132 Nev. Adv. Op. 81

Estate of Michael David Adams, By and Through His Mother Judith Adams, Individually and on Behalf of The Estate, Appellants,

v.Susan Fallini, Respondent.

No. 68033

Supreme Court of Nevada.

December 29, 2016

Aldrich Law Firm, Ltd., and John P. Aldrich, Las Vegas, for Appellants.

Fabian VanCott and David R. Hague, Las Vegas, for Respondent.

BEFORE PARRAGUIRRE, C.J., HARDESTY and PICKERING, JJ.

OPINION

By the Court, PARRAGUIRRE, C.J.:

In this case, we consider whether a party may appeal a district court's order granting an NRCP 60(b) motion to set aside a final judgment for fraud upon the court. We hold that such an order is interlocutory in nature and, thus, may not be appealed until there has been a final judgment. In addition, we consider whether the district court's consideration of the NRCP 60(b) motion was barred by various preclusive doctrines and whether plaintiff's counsel committed a fraud upon the court. We hold that the district court did not err in considering the motion, nor did it abuse its discretion in granting relief based on fraud upon the court given the unique circumstances presented here. Therefore, we affirm the district court's order dismissing the action.

FACTS AND PROCEDURAL HISTORY

Michael Adams struck respondent Susan Fallini's cow while driving on a portion of highway designated as open range.¹ Adams died as a result, and Adams' estate (the Estate) sued Fallini for negligence. The Nevada Highway Patrol's accident report indicated that the accident had occurred on open range. Additionally, Adams' family appears to have created a memorial website for Adams prior to the lawsuit, which explained that Adams' accident occurred on open range and opined that open range laws are unjust.

Fallini's initial counsel filed an answer, arguing that Fallini could not be held liable under Nevada law because the accident occurred on open range. See NRS 568.360. However, Fallini's counsel subsequently failed to participate in the case.² The Estate's counsel submitted several discovery requests, including a request for Fallini to admit that her property was not located on open range. Fallini's counsel did not respond to any of the discovery requests, and the Estate's counsel filed an unopposed motion for partial summary judgment as to Fallini's negligence, arguing that Fallini had effectively admitted, inter alia , that her property was not located within open range. The district court granted the motion.

Eventually, Fallini discovered that her counsel had failed to respond to opposing counsel's discovery requests and motions, and she promptly obtained new counsel and sought reconsideration of the district court's prior orders. The district court denied reconsideration and, after striking Fallini's answer, entered a default judgment for the Estate, which we affirmed in substance but remanded with respect to the district court's award of damages. Fallini v. Estate of Adams , Docket No. 56840, 2013 WL 1305503 (Order Affirming in Part, Reversing in Part and Remanding, March 29, 2013). On remand, the district court entered a final judgment against Fallini for $1,294,041.85.

Subsequently, Fallini brought an NRCP 60(b) motion, arguing that the district court should set aside the judgment because the Estate's counsel committed a fraud upon the court when he sought and relied on the admission that the accident did not occur on open range. The district court granted the motion. Thereafter, Fallini filed a motion for entry of final judgment, arguing that NRS 568.360 (providing that an owner of animals has no duty to prevent the animals from entering a highway traversing open range and will not be subject to liability for injuries resulting from a motor vehicle collision with the animals on any such highway) established a complete defense to the Estate's claims. The district court granted the motion and dismissed the action, and the Estate now appeals.

DISCUSSION

On appeal, the Estate argues that (1) the mandate rule, the law-of-the-case doctrine, and the doctrine of issue preclusion prohibited the district court from considering NRCP 60(b) relief; and (2) the district court abused its discretion in finding fraud upon the court. Additionally, Fallini argues that, because the Estate did not appeal directly from the district court's order granting NRCP 60(b) relief, this court does not have jurisdiction to review that order in the present appeal from the final judgment.

This court has jurisdiction to hear the appeal

As a threshold matter, Fallini contends that this court does not have jurisdiction to hear this appeal because the district court's NRCP 60(b) order was an appealable order, and the Estate did not file a timely notice of appeal for that order. We disagree. The district court's order granting Fallini's NRCP 60(b) motion for fraud upon the court was interlocutory and not appealable. See 11 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2871 (3d ed. 2016) (stating that "[a]n order granting a motion under [federal] Rule 60(b) and ordering a new trial is purely interlocutory and not appealable"). Therefore, the NRCP 60(b) order merged into the final judgment. See Am. Ironworks & Erectors , Inc. v. N. Am. Constr. Corp. , 248 F.3d 892, 897 (9th Cir. 2001) (noting that "a party may appeal interlocutory orders after entry of final judgment because those orders merge into that final judgment"); see also Consol. Generator–Nev., Inc. v. Cummins Engine Co. , 114 Nev. 1304, 1312, 971 P.2d 1251, 1256 (1998) (noting that this court may review an interlocutory order in the context of an appeal from a final judgment).³ As such, we conclude that this court has jurisdiction to consider challenges to the district court's NRCP 60(b) order in this appeal from the final judgment.

The district court properly addressed the merits of Fallini's NRCP 60(b) motion

The Estate contends that the district court's NRCP 60(b) order violated the mandate rule, the law-of-the-case doctrine, and the doctrine of issue preclusion, because this court had previously determined that the arguments underlying Fallini's NRCP 60(b) motion were without merit. We disagree.

We review questions of law de novo, S. Cal. Edison v. First Judicial Dist. Court , 127 Nev. 276, 280, 255 P.3d 231, 234 (2011), including the applicability of the mandate rule, the law-of-the-case doctrine, and the doctrine of issue preclusion, Wheeler Springs Plaza, LLC v. Beemon , 119 Nev. 260, 263, 71 P.3d 1258, 1260 (2003) (mandate rule); State , Univ. & Cmty. Coll. Sys. v. Sutton , 120 Nev. 972, 984, 103 P.3d 8, 16 (2004) (issue preclusion); see 18B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 4478 (2d ed. 2002) (noting that the mandate rule is nothing more than one of "many illustrations" of the law-of-the-case doctrine).

The mandate rule generally requires lower courts to effectuate a higher court's ruling on remand. See United States v. Thrasher , 483 F.3d 977, 981 (9th Cir. 2007). "The law-of-the-case doctrine refers to a family of rules embodying the general concept that a court involved in later phases of a lawsuit should not re-open questions decided (i.e., established as law of the case) by that court or a higher one in earlier phases." Recontrust Co. v . Zhang , 130 Nev. Adv. Op. 1, 317 P.3d 814, 818 (2014) (internal quotation marks omitted). However, both doctrines require that "the appellate court ... actually address and decide the issue [raised] explicitly or by necessary implication." Dictor v . Creative Mgmt. Servs., LLC , 126 Nev, 41, 44, 223 P.3d 332, 334 (2010). Similarly, issue preclusion requires, inter alia , that "the issue decided in the prior litigation must be identical to the issue presented in the current action." Five Star Capital Corp. v. Ruby , 124 Nev. 1048, 1055, 194 P.3d 709, 713 (2008) (internal quotation marks omitted).

Neither Fallini's motion for reconsideration nor the district court's denial of that motion addressed fraud upon the court; therefore, we likewise did not consider or resolve any fraud issues. As this issue was not previously litigated or decided, the district court properly addressed the merits of Fallini's NRCP 60(b) motion.

The district court did not abuse its discretion in granting Fallini's NRCP 60(b) motion

The Estate argues that the district court erred in granting NRCP 60(b) relief because the conduct involved did not rise to the level of fraud upon the court. We disagree.

This court reviews a district court's decision to set aside a judgment based on fraud upon the court for an abuse of discretion. NC–DSH, Inc. v. Garner , 125 Nev. 647, 650, 218 P.3d 853, 856 (2009). "[W]hen a judgment is shown to have been procured by fraud upon the court, no worthwhile interest is served in protecting the judgment." Id. at 653, 218 P.3d at 858 (internal quotation marks omitted). We have defined a "fraud upon the court" as "only that species of fraud which does, or attempts to, subvert the integrity of the court itself, or is a fraud perpetrated by officers of the court so that the judicial machinery cannot perform in the usual manner its impartial task of adjudging cases...." Id. at 654, 218 P.3d at 858 (emphasis added) (internal quotation marks omitted). "An attorney is an officer of the court"; as such, an attorney "owes a duty of loyalty to the court ..., [which] demands integrity and honest dealing with the court." Id. at 654–55, 218 P.3d at 858-59 (internal quotation marks omitted). "And when [an attorney] departs from that standard in the conduct of a case[,] he perpetrates fraud upon the court." Id. at 655, 218 P.3d at 859 (internal quotation marks omitted). Even then, relief from a judgment based on fraud upon the court is rare and normally "available only to prevent a grave miscarriage of justice." United States v. Beggerly , 524 U.S. 38, 47, 118 S.Ct. 1862, 141 L.Ed.2d 32 (1998) ; see also Bonnell v. Lawrence , 128 Nev. 394, 400, 282 P.3d 712, 715 (2012...