Mona v. Eighth Judicial Dist. Court of State
| Decision Date | 29 September 2016 |
| Docket Number | No. 68434,68434 |
| Parties | Rhonda Helene Mona; and Michael J. Mona, Jr., Petitioners, v. The Eighth Judicial District Court of the State of Nevada, in and for The County of Clark; and the Honorable Joseph Hardy, Jr., District Judge, Respondents, and Far West Industries, Real Party in Interest. |
| Court | Nevada Supreme Court |
Lemons, Grundy & Eisenberg and Robert L. Eisenberg, Reno, for Petitioner Rhonda Helene Mona.
Marquis Aurbach Coffing and Terry A. Coffing, Micah S. Echols, and Tye S. Hanseen, Las Vegas, for Petitioner Michael J. Mona, Jr.
Holley Driggs Walch Fine Wray Puzey & Thompson and F. Thomas Edwards, Rachel E. Donn, and Andrea M. Gandara, Las Vegas, for Real Party in Interest Far West Industries.
BEFORE THE COURT EN BANC.1
, J.:
In this opinion, we consider whether the district court may require a co-trustee of a judgment debtor trust to produce documents regarding the co-trustee's personal finances pursuant to NRS 21.270
, and subsequently order the co-trustee's personal bank accounts to be subject to execution pursuant to NRCP 37 and NRS 21.320 in partial satisfaction of a judgment. We conclude that the district court erred in ordering the co-trustee to produce documents and appear for an examination regarding her personal finances without the judgment creditor proceeding against the co-trustee in her individual capacity, or without the court clerk issuing a subpoena pursuant to NRCP 45 and the judgment creditor serving the subpoena upon the co-trustee. Additionally, we conclude that the district court erred when it ordered the co-trustee's personal bank accounts to be executed upon pursuant to NRCP 37
and NRS 21.320 and to be applied to partially satisfy a judgment.
Petitioners Michael and Rhonda Mona are co-trustees of the Mona Family Trust.2 Real party in interest and judgment creditor Far West Industries filed suit in California against Michael Mona both individually and in his capacity as trustee of the Mona Family Trust. Far West did not name Michael's wife, Rhonda Mona, either as an individual defendant or as a defendant in her capacity as a trustee of the Mona Family Trust. The California Superior Court found that Michael Mona committed fraud and awarded Far West a $17.8 million judgment against Michael—both individually and in his capacity as trustee of the Mona Family Trust. The California court also found that Michael was the alter ego of the Mona Family Trust, and that both Michael and the Mona Family Trust were liable for damages awarded to Far West. Far West then domesticated the California judgment in Nevada against Michael Mona and the Mona Family Trust.3
Just before Far West domesticated the California judgment, the Monas entered into a post-marital property settlement agreement, dividing the proceeds from a recent sale of corporate stock equally as their respective sole and separate property. After the California judgment was domesticated, the district court ordered Michael to appear for a judgment debtor examination and produce documents pursuant to NRS 21.270
. Michael failed to disclose and produce the post-marital agreement in violation of the court order. Far West subsequently requested to examine Rhonda, as a trustee of the Mona Family Trust, pursuant to NRS 21.270. In response, the district court ordered another round of judgment debtor examinations—one for Michael and one for Rhonda as a trustee of the Mona Family Trust. The district court also ordered the Monas to produce an exhaustive list of documents, which included some of Rhonda's personal financial documents. Rhonda did not produce documents in compliance with the court order. Michael failed to produce documents relating to three bank accounts that may have held community property because the accounts were in Rhonda's name.
The district court entered an order to show cause why Rhonda's accounts should not be subject to execution to satisfy Far West's judgment, and why the court should not find the Monas in contempt for failure to comply with the court orders and for lying during the judgment debtor examinations. Following a hearing, the district court entered an order sanctioning the Monas pursuant to NRCP 37
due to the Monas' failure to produce the post-marital agreement as ordered and disclose bank records for the three bank accounts in Rhonda's name. In considering the sanctions available under NRCP 37, the district court found that the creation and funding of the post-marital agreement was a fraudulent transfer intended to hinder, delay, or defraud Far West pursuant to NRS 112.180. The district court concluded that the funds in Rhonda's three bank accounts were community property and were subject to execution by Far West pursuant to NRS 21.320 to partially satisfy the judgment. The district court further concluded that it had “authority pursuant to NRS 21.280 and, to the extent [Rhonda] is considered a third party, pursuant to NRS 21.330, to order [Michael] and [Rhonda] to not dispose and/or transfer their assets.” The Monas subsequently filed this petition for writ of mandamus or prohibition seeking to vacate the district court's post-judgment sanctions order.
Consideration of the writ petition
The Monas argue that this court should entertain the petition because (1) Rhonda was not a party to the district court litigation and cannot appeal or exercise any other remedy available at law, (2) the sanctions order is not appealable, and (3) the matter is urgent because the district court's post-judgment sanctions order will result in the release of all funds in Rhonda's separate bank account unless this court intervenes.
“This court has original jurisdiction to issue writs of mandamus and prohibition.” MountainView Hosp., Inc. v. Eighth Judicial Dist . Court, 128 Nev. 180, 184, 273 P.3d 861, 864 (2012)
; see also Nev. Const. art. 6, § 4 (1). Where there is no “plain, speedy, and adequate remedy” available at law, extraordinary relief may be available. NRS 34.170 ; Smith v. Eighth Judicial Dist. Court, 107 Nev. 674, 677, 818 P.2d 849, 851 (1991). However, even if an adequate legal remedy exists, this court will consider a writ petition if an important issue of law needs clarification or if review would serve a public policy or judicial economy interest. See
Diaz v. Eighth Judicial Dist. Court, 116 Nev. 88, 93, 993 P.2d 50, 54 (2000). This court will examine each case individually, granting extraordinary relief if the “circumstances reveal urgency or strong necessity.” See
Jeep Corp. v. Second Judicial Dist. Court , 98 Nev. 440, 443, 652 P.2d 1183, 1185 (1982).
A writ of prohibition is the appropriate remedy for a district court's improper exercise of jurisdiction. See NRS 34.320
; see also
Smith, 107 Nev. at 677, 818 P.2d at 851. “A writ of mandamus is available ... to control an arbitrary or capricious exercise of discretion.” Humphries v. Eighth Judicial Dist. Court, 129 Nev. ––––, ––––, 312 P.3d 484, 486 (2013) (quoting Int'l
Game Tech., Inc. v. Second Judicial Dist. Court, 124 Nev. 193, 197, 179 P.3d 556, 558 (2008) ). “An exercise of discretion is considered arbitrary if it is founded on prejudice or preference rather than on reason and capricious if it is contrary to the evidence or established rules of law.” Nev. Dep't of Pub. Safety v. Coley , 132 Nev. ––––, ––––, 368 P.3d 758, 760 (2016) (internal quotations omitted). As a general principle, we practice judicial restraint, avoiding legal and constitutional issues if unnecessary to resolve the case at hand. Miller v. Burk, 124 Nev. 579, 588–89, 188 P.3d 1112, 1118–19 (2008).
A sanctions order is final and appealable. See Bahena v. Goodyear Tire & Rubber Co., 126 Nev. 243, 245–46, 235 P.3d 592, 594 (2010)
. However, where the sanctioned party was not a party to the litigation below, he or she has no standing to appeal. Emerson v. Eighth Judicial Dist. Court , 127 Nev. 672, 676, 263 P.3d 224, 227 (2011) ().
In this matter, we exercise our discretion to consider this writ petition because the petition involves the district court's improper exercise of jurisdiction in a judgment creditor's attempt to proceed against a nonparty in a collection matter. This is a significant and potentially recurring question of law that requires clarification. Additionally, since Rhonda was not a party to the litigation below, she has no standing to appeal. Therefore, we conclude that extraordinary relief is warranted.
Merits of the writ petition
“When interpreting Nevada's Rules of Civil Procedure, we turn to the rules of statutory interpretation.” Rock Bay, LLC v. Eighth Judicial Dist. Court, 129 Nev. 205, 210, 298 P.3d 441, 445 (2013)
. Even in the context of a writ petition, statutory interpretation is a question of law that this court reviews de novo. Otak Nev., LLC v. Eighth Judicial Dist. Court , 129 Nev. ––––, ––––, 312 P.3d 491, 498 (2013). Statutory language must be given its plain meaning if it is clear and unambiguous. D.R. Horton, Inc. v. Eighth Judicial Dist. Court, 123 Nev. 468, 476, 168 P.3d 731, 737 (2007). Additionally, whether personal jurisdiction has been established is a question of law that this court reviews de novo. Viega GmbH v. Eighth Judicial Dist. Court , 130 Nev. ––––, ––––, 328 P.3d 1152, 1156 (2014). However, we review a district court's imposition of discovery sanctions under NRCP 37(b)(2) for an abuse of discretion. See
Foster v. Dingwall, 126 Nev. 56, 65, 227 P.3d 1042, 1048 (2010).
Writ relief requested as to Michael
After reviewing the petition, we conclude that Michael is not entitled to relief from the post-judgment sanctions order. The district court properly ordered Michael as a party to appear for a judgment debtor examination and produce the identified documents pursuant to NRS 21.270
, NRCP 34, and NRCP 69. As Michael was a named defendant, the district court had personal...
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