Land Resources Development v. Kaiser Aetna, No. 12336

Docket NºNo. 12336
Citation676 P.2d 235, 100 Nev. 29
Case DateJanuary 25, 1984
CourtSupreme Court of Nevada

Page 235

676 P.2d 235
100 Nev. 29
LAND RESOURCES DEVELOPMENT, a California corporation, Appellant,
v.
KAISER AETNA, a California general partnership, Respondent.
KAISER AETNA, a California general partnership; Aetna Life
Insurance Company; Temecula Properties, Inc.;
Kaiser Rancho California, Inc.; and
Kaiser Hawaii Kai Development
Company, Appellants,
v.
HOLLAND PACIFIC HITCH COMPANY, Respondent.
No. 12336.
Supreme Court of Nevada.
Jan. 25, 1984.

Page 236

[100 Nev. 30] Burd, Friedman, Bartko & Welsh, San Francisco, Cal., Fahrenkopf, Mortimer, Sourwine, Mousel & Sloane, Reno, for Land Resources.

Miller, Starr & Regalia, Oakland, Cal., Lionel, Sawyer & Collins, Reno, for Kaiser, et al.

Lester H. Berkson, Zephyr Cove, Hale, Lane, Peek, Dennison & Howard, Reno, for Holland Pacific.

[100 Nev. 31] OPINION

PER CURIAM:

Respondent and cross-appellant, Kaiser Aetna (Kaiser), was a general partnership engaged in the business of buying, selling and developing real property. Kaiser owned eighty-four approved condominium lots in a Lake Tahoe area subdivision known as Pinewild. At some time in 1976, the partners of Kaiser decided to dissolve the partnership and liquidate their assets. Consequently, a number of land developers were informed that the eighty-four Pinewild lots owned by Kaiser were for sale.

Several parties expressed an interest in purchasing the Pinewild property. Appellant, Land Resources Development (Land Resources), and Holland Pacific Hitch Company (Holland Pacific), respondent in this consolidated action, both submitted [100 Nev. 32] offers to purchase the property. On March 14, 1977, Kaiser accepted the offer submitted by Land Resources.

The purchase and sale agreement between Kaiser and Land Resources required an immediate initial deposit of $35,000.00 to open escrow, with the balance to be paid within twenty days after execution of the agreement. Land Resources' initial check for $35,000.00 was made payable to the

Page 237

title company, rather than to Kaiser. When Kaiser attempted to negotiate a new check made payable to Kaiser, it was returned for insufficient funds. Thereafter, Land Resources assured Kaiser that funds were available to cover the check. Kaiser again attempted to negotiate the check, and once again, it was returned for insufficient funds.

After Land Resources' check was dishonored the second time, Kaiser advised the defaulting purchaser that the sales agreement would be terminated unless Kaiser received a cashier's check for $35,000.00 on or before the date scheduled for the close of escrow. Kaiser did not receive the funds on the date specified. Consequently, Kaiser deemed its agreement with Land Resources terminated, and commenced negotiations with Holland Pacific.

On April 19, 1977, counsel for Land Resources wrote a letter to Kaiser's Division Manager, Mr. Kalman Rowan, which stated:

We have been asked to advise you that our client intends to enforce its rights under the Agreement. We seek a meeting with you to discuss the issues. If we have not heard from you on or before Monday, April 25, 1977, we have been instructed to file suit to enforce the terms and conditions of the Agreement of Purchase and Sale.

On April 20, 1977, negotiations between Kaiser and Holland Pacific concluded with an agreement to sell Pinewild to Holland Pacific for 1.5 million dollars, with escrow to close on April 29, 1977. During the course of negotiations between Holland Pacific and Kaiser, there was no mention of the previous transaction with Land Resources or of Land Resources' threat to file suit.

On May 8, 1977, Land Resources filed suit against Kaiser seeking specific performance of the earlier agreement between the parties. Land Resources also recorded a lis pendens on the property. A short time later, Land Resources amended its complaint to join Holland Pacific as an additional defendant.

Holland Pacific brought a cross claim against Kaiser for fraud, negligent misrepresentation, indemnity and breach of [100 Nev. 33] covenant of marketable title. With the exception of the indemnity claim, Holland Pacific's claims against Kaiser were specifically conditioned upon a finding of liability against Holland Pacific and Kaiser in favor of Land Resources.

In turn, Kaiser counterclaimed against Land Resources for damages occasioned by its alleged breach of contract.

On the eve of trial, Holland Pacific entered into a settlement agreement with Land Resources. Pursuant to the terms of the settlement, Land Resources agreed to dismiss its claims against Holland Pacific and lift the lis pendens from the property. In exchange, Holland Pacific agreed to sell twenty-six of the eighty-four Pinewild lots to Land Resources for $611,000.00.

After a lengthy jury trial, a general verdict was entered in favor of Kaiser and against Land Resources. Additionally, the jury found against Kaiser on its counterclaim. The jury also awarded Holland Pacific $347,840.00 on its cross-claim against Kaiser.

At the outset, Land Resources challenges the district court's jury instruction defining "bad faith," contending the instruction was clearly erroneous and misleading.

The district court defined "bad faith" as follows: "[b]ad faith implies fraud and concealment." It is Land Resources' position that by equating the term "fraud" with "bad faith," the jury believed they had to find clear and convincing evidence of fraud before they could find Kaiser acted in bad faith.

Under certain circumstances, the word "fraud" has been found to be synonymous with "bad faith." See Schaffer v. Wolbe, 113 Ga.App. 448, 148 S.E.2d 437 (1966) ("... bad faith involves actual or constructive fraud or a design to mislead or deceive another, or a neglect or a refusal to fulfill some duty or some contractual obligation,

Page 238

not prompted by an honest mistake, but prompted by some sinister motive."); Pabst Brewing Co. v. Nelson, 108 Okl. 286, 236 P. 873 (1925) (the term "bad faith" means with actual intent to mislead or deceive another; "bad faith" and "fraud" synonymous).

Generally, however, the concepts of "bad faith" and "fraud" are separate and distinct, requiring the allegation and proof of different elements. See Pixley v. First Fed. Sav. & Loan, 110 Cal.App.2d 427, 243 P.2d 100 (1952).

Our review of the evidence in this case, however, reveals that Land Resources did not present a prima facie case of bad faith against Kaiser-Aetna under any definition of the term. The evidence[100 Nev. 34] shows that throughout its negotiations with Land Resources, Kaiser exhibited the utmost good faith. After having twice...

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7 practice notes
  • K-Mart Corp. v. Washington, K-MART
    • United States
    • Nevada Supreme Court of Nevada
    • December 30, 1993
    ...effect so outweighs its probative value that admission constitutes a clear abuse of discretion.' " Land Resources Dev. v. Kaiser Aetna, 100 Nev. 29, 34, 676 P.2d 235, 238 (1984) (quoting F/V American Eagle v. State, 620 P.2d 657, 672 (Alaska 1980)). Evidence is relevant where it has some te......
  • Rish v. Simao, Nos. 58504
    • United States
    • Nevada Supreme Court of Nevada
    • March 17, 2016
    ...whether to admit or exclude evidence, this court will overturn the district court's determination. Land Res. Dev. v. Kaiser Aetna, 100 Nev. 29, 34, 676 P.2d 235, 238 (1984).During the proceedings below, Simao argued that Hallmark precludes all testimony, evidence, argument, and insinuation ......
  • Palevac v. Mid Century Non Auto, No. 16253
    • United States
    • Nevada Supreme Court of Nevada
    • December 31, 1985
    ...Nev. 838] for nonobligatory or voluntary payments made to a third party under the Surety Bond. Land Resources Development v. Kaiser Aetna, 100 Nev. 29, 676 P.2d 235 (1984); Carson Opera House Ass'n v. Miller, 16 Nev. 327 (1881); Jones v. Childs and Vansickle, 8 Nev. 121 (1872). In the insta......
  • Larson v. State, No. 16908
    • United States
    • Nevada Supreme Court of Nevada
    • October 8, 1986
    ...issues justified exclusion. We are unwilling to say the ruling was an abuse of discretion. See, e.g., Land Resources Dev. v. Kaiser Aetna, 100 Nev. 29, 34-35, 676 P.2d 235, 238 The judgment is vacated as to the second count of kidnapping with the use of a deadly weapon, and the judgment is ......
  • Request a trial to view additional results
7 cases
  • K-Mart Corp. v. Washington, K-MART
    • United States
    • Nevada Supreme Court of Nevada
    • December 30, 1993
    ...effect so outweighs its probative value that admission constitutes a clear abuse of discretion.' " Land Resources Dev. v. Kaiser Aetna, 100 Nev. 29, 34, 676 P.2d 235, 238 (1984) (quoting F/V American Eagle v. State, 620 P.2d 657, 672 (Alaska 1980)). Evidence is relevant where it has some te......
  • Rish v. Simao, Nos. 58504
    • United States
    • Nevada Supreme Court of Nevada
    • March 17, 2016
    ...whether to admit or exclude evidence, this court will overturn the district court's determination. Land Res. Dev. v. Kaiser Aetna, 100 Nev. 29, 34, 676 P.2d 235, 238 (1984).During the proceedings below, Simao argued that Hallmark precludes all testimony, evidence, argument, and insinuation ......
  • Palevac v. Mid Century Non Auto, No. 16253
    • United States
    • Nevada Supreme Court of Nevada
    • December 31, 1985
    ...Nev. 838] for nonobligatory or voluntary payments made to a third party under the Surety Bond. Land Resources Development v. Kaiser Aetna, 100 Nev. 29, 676 P.2d 235 (1984); Carson Opera House Ass'n v. Miller, 16 Nev. 327 (1881); Jones v. Childs and Vansickle, 8 Nev. 121 (1872). In the insta......
  • Larson v. State, No. 16908
    • United States
    • Nevada Supreme Court of Nevada
    • October 8, 1986
    ...issues justified exclusion. We are unwilling to say the ruling was an abuse of discretion. See, e.g., Land Resources Dev. v. Kaiser Aetna, 100 Nev. 29, 34-35, 676 P.2d 235, 238 The judgment is vacated as to the second count of kidnapping with the use of a deadly weapon, and the judgment is ......
  • Request a trial to view additional results

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