Pickett v. Comanche Const., Inc., 22246

Decision Date02 July 1992
Docket NumberNo. 22246,22246
Citation836 P.2d 42,108 Nev. 422
PartiesJ. Norton PICKETT and Vivian J. Pickett, husband and wife; John C. Brook and Alice M. Brook, husband and wife, Old Stone Mortgage Corporation, a Washington corporation, Timothy P. Regan and Kathleen M. Regan, husband and wife, Primerit Federal Savings Bank, Robert Tricarico and Frances Tricarico, husband and wife, Mohammad A. Mian and Cristina G. Mian, husband and wife, Charles E. Birba and Donna L. Birba, husband and wife, Raymond B. Cox and Dolores E. Cox, husband and wife, Salvador D. Rivera, Imco Realty Services, Inc., a Delaware corporation, Thomas L. Laney and Donna J. Laney, husband and wife, Merabank, Myron E. Carpenter and Patricia C. Carpenter, husband and wife, and Interwest Mortgage, a Nevada corporation, Appellants, v. COMANCHE CONSTRUCTION, INC., a Nevada corporation, Respondent.
CourtNevada Supreme Court

Bible, Hoy, Miller, Trachok & Wadhams, Terrill R. Dory, and Michael Hoy, Reno, for appellants.

George R. Carter, Las Vegas, for respondent.

OPINION

PER CURIAM:

Appellants ("homeowners") brought this independent action to set aside a default judgment ("Comanche Judgment") in favor of respondent Comanche Construction, Inc. ("Comanche"). The Comanche Judgment foreclosed mechanic's liens against homeowners' properties notwithstanding the fact that homeowners had not been parties to the proceedings. In this independent action to set aside the Comanche Judgment, the trial court concluded: (1) that the default judgment was res judicata on issues raised by the homeowners; (2) that sums awarded under the default judgment to Comanche should be allocated among the homeowners; and (3) that the preliminary injunction against the sale of the homeowners' properties to satisfy the liens should be lifted. For the reasons discussed below, we reverse the district court's order.

Facts

In October, 1986, Comanche filed twelve mechanic's liens on homeowners' lots in the Shenandoah Heights subdivision, a 101-lot project, for labor and materials. Each lien was originally for $12,763. W.R. Tipple ("Tipple") 1 sued Comanche for a declaration that the liens were invalid, and Comanche counterclaimed, requesting foreclosure of its liens and seeking punitive damages for fraud. (This is the action that eventually resulted in the Comanche Judgment.)

Before the Comanche Judgment was entered, Tipple filed for bankruptcy. Although duly noticed, neither Tipple nor the bankruptcy trustee appeared at trial. The homeowners were not named as parties in the action between Tipple and Comanche. In May 1990, the court entered the Comanche Judgment, wherein it (1) dismissed Tipple's complaint, (2) awarded Comanche damages, (3) declared the mechanic's liens foreclosed, and (4) ordered "that all of said lands and premises be sold."

The homeowners state that they first learned of the Comanche Judgment in late June 1990, when Comanche's counsel advised several of the homeowners of Comanche's intention to begin foreclosure of their properties.

Thereafter, the homeowners filed the present action ("Homeowners' Action") to set aside the Comanche Judgment and moved for a preliminary injunction enjoining any foreclosure proceedings. The homeowners alleged: (1) that they did not have actual notice of the action involving Tipple and Comanche until after judgment was entered; (2) that the validity of the liens was never litigated (because of Tipple's default); and (3) that the homeowners were necessary parties who had not been joined.

Judge Griffin issued an injunction (a foreclosure sale was pending) subject to the homeowners posting a $631,525.30 bond. The homeowners posted the bond, and Comanche moved to allocate the sums due under the Comanche Judgment.

At the hearing on allocation, Comanche argued that because Tipple absconded with the relevant records, a precise allocation according to the actual work done was impossible and that, consequently, the judgment should be allocated on a per square footage basis of the eleven properties. 2 The homeowners argued that the Comanche Judgment was inflated in that it included work performed on lots other than the twelve that were liened. They argued that the specific properties liened could only be subjected to a charge that was specifically tied to work actually performed on each property. Following the hearing, Judge Griffin continued the matter and advised Comanche to file a motion in Judge Fondi's department to clarify the Comanche Judgment.

Thereafter, Comanche filed a "motion for nunc pro tunc clarification of judgment pursuant to NRCP 60(a)" in the Comanche Judgment with Judge Fondi. The homeowners were not parties to this proceeding. Comanche raised two questions for clarification: (1) whether the court intended Comanche's lien to be against the entire project or only against the twelve properties listed in Comanche's counterclaim, and (2) whether the judgment should be apportioned equally against the twelve properties.

Pursuant to the motion, Judge Fondi ordered that the Comanche Judgment be apportioned equally among the properties subject to the mechanic's liens. Adopting Judge Fondi's allocation, Judge Griffin reduced the Comanche Judgment by 1/12 leaving the remaining 11/12 of the Comanche Judgment as a claim against the eleven remaining lots.

Judge Griffin also found that the Comanche Judgment signed by Judge Fondi was res judicata on the same issues in the Homeowners' Action. The court ordered that each of the eleven lots be charged with $40,474.60 and dissolved the preliminary injunction.

We now address the homeowners' contention on appeal that the district court erred because: (1) the Homeowners' Action was not barred by the doctrine of res judicata; (2) the Comanche Judgment was void, because the trial court substantially changed the judgment more than six months after it was originally entered; (3) Comanche failed to join necessary parties in the foreclosure proceedings; and (4) the Comanche Judgment was improperly allocated.

Discussion

A preliminary injunction may be issued to preserve the status quo if the party seeking it shows: (1) that the party enjoys a reasonable "likelihood of success" on the merits; and (2) the party will be subjected to "irreparable harm." Dixon v. Thatcher, 103 Nev. 414, 415, 742 P.2d 1029, 1029 (1987). We conclude that if Comanche were allowed to sell the liened properties, the homeowners would be subjected to irreparable harm and that compensatory damages would be inadequate. Whether the homeowners enjoy a reasonable likelihood of success in setting aside the Comanche Judgment requires a determination of the issues discussed below.

Res judicata's applicability to the Homeowners' Action

Whether a party's claim is barred by res judicata presents a legal question. Lake at Las Vegas Investors Group, Inc. v. Pacific Malibu Dev. Corp., 933 F.2d 724, 725 (9th Cir.1991); Cole v. Kunzler, 115 Idaho 552, 768 P.2d 815, 818 (Ct.App.1989); Smith v. Smith, 793 P.2d 407, 409 (Utah App.1990).

Although the district court ruled that the Comanche Judgment was res judicata as to the same issues in the Homeowners' Action, the homeowners correctly argue that because they had not been parties, res judicata does not preclude an independent action to set aside a prior judgment.

NRCP 60(b) provides two methods for obtaining relief from a final judgment: either by motion or by independent action. Nevada Indus. Dev. v. Benedetti, 103 Nev. 360, 364, 741 P.2d 802, 805 (1987). When the statutory period to obtain relief from a judgment by motion has expired, an independent action may be brought to modify a prior judgment. Id. at 363, 741 P.2d 802; see also Amie v. Amie, 106 Nev. 541, 542, 796 P.2d 233, 234 (1990) ("The right to bring an independent action for equitable relief is not necessarily barred by res judicata.").

Comanche argues that Benedetti is distinguishable from the instant case because the homeowners were never parties to the first action and because this is not a case of mutual mistake. 3 First, while equitable relief from a judgment is generally given only to the parties to the action or those in privity, relief may be granted to one who is not a party to the judgment if he demonstrates that he is directly injured or jeopardized by the judgment. 49 C.J.S. Judgments § 344 (1947); Lieberman v. Aetna Ins. Co., 249 Cal.App.2d 515, 57 Cal.Rptr. 453, 458 (1967). Because the Comanche Judgment subjected the homeowners (who were not parties) to liability, we conclude that they properly brought this equitable independent action.

Second, Benedetti is not limited to cases of "mutual mistake." If any of the grounds set forth in Rule 60(b) are shown, the purposes of res judicata can be outweighed by the policies for granting relief. See, e.g., Carr v. District of Columbia, 543 F.2d 917 (D.C.Cir.1976) (independent action was properly based on newly discovered evidence); see also Filler v. Richland County, 247 Mont. 285, 806 P.2d 537, (1991) (pursuant to Rule 60(b), trial court may entertain independent action to set aside a judgment for extrinsic fraud). Moreover, in Amie, although appellant "arguably" sought relief for mutual mistake, our emphasis was on whether the equitable action violated the policies and purposes of the doctrine of res judicata. Amie, 106 Nev. at 541, 796 P.2d at 234-35.

We conclude that the Comanche Judgment is not res judicata to the Homeowners' Action.

Alteration to the Comanche Judgment

The homeowners argue that Judge Fondi made substantive changes to the Comanche Judgment more than six months after it was entered and that the judgment is therefore void. Comanche argues that Judge Fondi only corrected a clerical error pursuant to NRCP 60(a).

Clerical mistakes in judgments may be corrected by the district court at any time, NRCP 60(a); whereas, the district court can substantively alter a judgment only within six months after the judgment was entered. 4 NRCP 60(b). We have...

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