The State v. The Eighth Judicial Dist. Court of State

• Decision Date: 18 February 2022
• Docket Number: 82701
• Court: Nevada Supreme Court
• Parties: THE STATE OF NEVADA COMMISSIONER OF INSURANCE, BARBARA D. RICHARDSON, IN HER OFFICIAL CAPACITY AS RECEIVER FOR SPIRIT COMMERCIAL AUTO RISK RETENTION GROUP, INC., Petitioner, v. THE EIGHTH JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA, IN AND FOR THE COUNTY OF CLARK; AND THE HONORABLE MARK R. DENTON, DISTRICT JUDGE, Respondents, and

THE STATE OF NEVADA COMMISSIONER OF INSURANCE, BARBARA D. RICHARDSON, IN HER OFFICIAL CAPACITY AS RECEIVER FOR SPIRIT COMMERCIAL AUTO RISK RETENTION GROUP, INC., Petitioner, v. THE EIGHTH JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA, IN AND FOR THE COUNTY OF CLARK; AND THE HONORABLE MARK R. DENTON, DISTRICT JUDGE, Respondents, and THOMAS MULLIGAN, AN INDIVIDUAL; CTC TRANSPORTATION INSURANCE SERVICES OF MISSOURI, LLC, A MISSOURI LIMITED LIABILITY COMPANY; CTC TRANSPORTATION INSURANCE SERVICES LLC, A CALIFORNIA LIMITED LIABILITY COMPANY; CTC TRANSPORTATION INSURANCE SERVICES OF HAWAII LLC, A HAWAII LIMITED LIABILITY COMPANY; CRITERION CLAIMS SOLUTIONS OF OMAHA, INC., A NEBRASKA CORPORATION; PAVEL KAPELNIKOV, AN INDIVIDUAL; CHELSEA FINANCIAL GROUP, INC., A CALIFORNIA CORPORATION; CHELSEA FINANCIAL GROUP, INC., A MISSOURI CORPORATION; CHELSEA FINANCIAL GROUP, INC., A NEW JERSEY CORPORATION, D/B/A CHELSEA PREMIUM FINANCE CORPORATION; FOURGOREAN CAPTIAL, LLC, A NEW JERSEY LIMITED LIABILITY COMPANY; KAPA MANAGEMENT CONSULTING, INC., A NEW JERSEY CORPORATION; KAPA VENTURES, INC., A NEW JERSEY CORPORATION; GLOBAL FORWARDING ENTERPRISES LIMITED LIABILITY COMPANY, A NEW JERSEY LIMITED LIABILITY COMPANY; NEW TECH CAPITAL, LLC, A DELAWARE LIMITED LIABILITY COMPANY; LEXICON INSURANCE MANAGEMENT LLC, A NORTH CAROLINA LIMITED LIABILITY COMPANY; ICAP MANAGEMENT SOLUTIONS, LLC, A VERMONT LIMITED LIABILITY COMPANY; SIX ELEVEN LLC, A MISSOURI LIMITED LIABILITY COMPANY; 10-4 PREFERRED RISK MANAGERS INC., A MISSOURI CORPORATION; IRONJAB LLC, A NEW JERSEY LIMITED LIABILITY COMPANY; YANINA G. KAPELNIKOV, AN INDIVIDUAL; IGOR KAPELNIKOV, AN INDIVIDUAL; QUOTE MY RIG LLC, A NEW JERSEY LIMITED LIABILITY COMPANY; MATTHEW SIMON, AN INDIVIDUAL; DANIEL GEORGE, AN INDIVIDUAL; JOHN MALONEY, AN INDIVIDUAL; JAMES MARX, AN INDIVIDUAL; CARLOS TORRES, AN INDIVIDUAL; VIRGINIA TORRES, AN INDIVIDUAL; SCOTT MCCRAE, AN INDIVIDUAL; BRENDA GUFFEY, AN INDIVIDUAL; AND 195 GLUTEN FREE LLC, A NEW JERSEY LIMITED LIABILITY COMPANY, Real Parties in Interest.

No. 82701

Supreme Court of Nevada

February 18, 2022

UNPUBLISHED OPINION

ORDER DENYING PETITION

Parraguirre, C.J.

This original petition for a writ of mandamus challenges several orders in a contract and tort action. The district court placed Spirit Commercial Auto Risk Retention Group, Inc., into an involuntary receivership and appointed petitioner Commissioner of Insurance, Barbara Richardson as receiver. Richardson then sued the real parties in interest (RPIs) to recover money allegedly owed to Spirit. In her petition Richardson challenges district court orders compelling arbitration and dismissing the claims as to RPIs CTC Transportation Insurance Services of Missouri, LLC; CTC Transportation Services, LLC; CTC Transportation Services of Hawaii, LLC (collectively, CTC); and Criterion Claims Solutions of Omaha, Inc. (Criterion). Richardson also challenges the district court orders granting the remaining RPIs' motions for a stay of the proceedings pending arbitration.

"[W]here there is not a plain, speedy and adequate remedy in the ordinary course of law," a writ of mandamus may issue "to compel the performance of an act" that the law requires. NRS 34.160; NRS 34.170. Thus, "the right to appeal [a final judgment] is generally an adequate legal remedy that precludes writ relief." Pan v. Eighth Judicial Dist. Court, 120 Nev. 222, 224, 88 P.3d 840 841 (2004). Additionally, petitioner must have a legal right to a particular action by the district court. Walker v. Second Judicial Dist. Court, 136 Nev., Adv. Op. 80, 476 P.3d 1194, 1196 (2020). And, "where a district court [is] entrusted with discretion on an issue, . . . we can issue traditional mandamus only where the lower court has manifestly abused that discretion or acted arbitrarily or capriciously." Id. Ultimately, however, "because a writ of mandamus is an extraordinary remedy, the decision to entertain a petition for the writ lies within [this court's] discretion." Gonzalez v. Eighth Judicial Dist. Court, 129 Nev. 215, 217, 298 P.3d 448, 449-50 (2013).

Richardson has not carried her "burden of demonstrating that extraordinary relief is warranted." Pan, 120 Nev. at 228, 88 P.3d at 844.

Regarding the arbitration and dismissal orders, Richardson may appeal from the arbitrator's decision and, to the extent she wishes to challenge the agreements at issue based on fraud or illegality, she can raise these arguments with the arbitrator.^[1] See Rent-A-Ctr., W., Inc. v Jackson, 561 U.S. 63, 70-71 (2010) (holding that under the Federal Arbitration Act, a challenge to an arbitration provision is for the courts to decide, while a challenge to an entire contract which includes an arbitration provision is an issue for the arbitrator). Additionally, Richardson argues that her petition raises an important issue warranting writ relief because the district court . ordered arbitration despite her argument that the McCarran Ferguson Act, 15 U.S.C. § 1012(b) (providing that "[n]o Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, . . . unless such Act specifically relates to the business of insurance") and NRS Chapter 696B (addressing conservation, rehabilitation, and liquidation of delinquent insurers) reverse-preempt the Federal Arbitration Act, 9 U.S.C. § 2; see U.S. Home Corp. v. Michael Ballesteros Tr., 134 Nev. 180, 189, 415 P.3d 32, 40 (2018) (explaining that the FAA preempts state laws and legal doctrines that are "applied in a fashion that disfavors arbitration"). However, Richardson fails to demonstrate that the arbitration of Spirit's claims against RPIs for torts and contract breaches would impede a specific state law regulating the business of insurance. See Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 129 (1982) (holding that the hallmark of a regulation affecting "the business of insurance" is that the regulation affects the relationship between insured and insurer). And several courts have rejected Richardson's position. E.g., Milliman, Inc. v. Roof, 353 F.Supp.3d 588, 603 (E.D. Ky. 2018) (concluding that "[s]imply because the business is an insurance company and has become insolvent is not relevant to the regulation of the business of insurance"); Ommen v. Milliman, Inc., 941 N.W.2d 310, 320 (Iowa 2020) (holding under similar facts that "arbitration only alters the forum in which the [receiver] may pursue" common law claims); see also Suter v. Munich Reinsurance Co., 223 F.3d 150, 161 (3d Cir. 2000) (holding that enforcing an arbitration clause against a receiver would not impair the regulation of the business of insurance under a liquidation act, even assuming the liquidation act regulated the business of insurance, because the "proceeding [was] a suit instituted by the Liquidator ... to enforce contract rights for an insolvent insurer"). Lastly, Richardson argues that the arbitration orders impact her ability to fulfill her obligations as receiver and that the receivership order did not authorize her to initiate arbitration. However, she fails to demonstrate how her concerns are unique to the...