Willard v. Berry-Hinckley Indus.

• Docket Number: 83640,84848
• Decision Date: 30 November 2023
• Parties: LARRY J. WILLARD, INDIVIDUALLY AND AS TRUSTEE OF THE LARRY JAMES WILLARD TRUST FUND; ANDOVERLAND DEVELOPMENT CORPORATION, A CALIFORNIA CORPORATION, Appellants, v. BERRY-HINCKLEY INDUSTRIES, A NEVADA CORPORATION; JERRY HERBST, AN INDIVIDUAL; AND TIMOTHY P. HERBST, AS SPECIAL ADMINISTRATOR OF THE ESTATE OF JERRY HERBST, DECEASED, Respondents. LARRY J. WILLARD, INDIVIDUALLY AND AS TRUSTEE OF THE LARRY JAMES WILLARD TRUST FUND; AND OVERLAND DEVELOPMENT CORPORATION, A CALIFORNIA CORPORATION, Appellants, v. BERRY-HINCKLEY INDUSTRIES, A NEVADA CORPORATION; JERRY HERBST, AN INDIVIDUAL; AND TIMOTHY P. HERBST, AS SPECIAL ADMINISTRATOR OF THE ESTATE OF JERRY HERBST, DECEASED, Respondents.
• Court: Nevada Supreme Court

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139 Nev.Adv.Op. 52

LARRY J. WILLARD, INDIVIDUALLY AND AS TRUSTEE OF THE LARRY JAMES WILLARD TRUST FUND; ANDOVERLAND DEVELOPMENT CORPORATION, A CALIFORNIA CORPORATION, Appellants,
v.
BERRY-HINCKLEY INDUSTRIES, A NEVADA CORPORATION; JERRY HERBST, AN INDIVIDUAL; AND TIMOTHY P. HERBST, AS SPECIAL ADMINISTRATOR OF THE ESTATE OF JERRY HERBST, DECEASED, Respondents.

LARRY J. WILLARD, INDIVIDUALLY AND AS TRUSTEE OF THE LARRY JAMES WILLARD TRUST FUND; AND OVERLAND DEVELOPMENT CORPORATION, A CALIFORNIA CORPORATION, Appellants,
v.
BERRY-HINCKLEY INDUSTRIES, A NEVADA CORPORATION; JERRY HERBST, AN INDIVIDUAL; AND TIMOTHY P. HERBST, AS SPECIAL ADMINISTRATOR OF THE ESTATE OF JERRY HERBST, DECEASED, Respondents.

Nos. 83640, 84848

Supreme Court of Nevada, En Banc

November 30, 2023

Consolidated appeals from district court orders denying NRCP 60(b) relief. Second Judicial District Court, Washoe County; Lynne K. Simons, Judge.

Affirmed.

Lemons, Grundy & Eisenberg and Robert L. Eisenberg, Reno; Robertson, Johnson, Miller & Williamson and Richard D. Williamson and Jonathan J. Tew, Reno, for Appellants.

Dickinson Wright, PLLC, and John P. Desmond, Brian R. Irvine, and Anjali D. Webster, Reno, for Respondents.

BEFORE THE SUPREME COURT

OPINION

STIGLICH, C.J.

In this opinion, we consider whether the district court abused its discretion in denying appellants relief under NRCP 60(b)(1), NRCP 60(b)(5), and NRCP 60(b)(6). We have not previously resolved whether an order of dismissal applies "prospectively" for purposes of NRCP 60(b)(5) and today conclude that it does not.

The underlying proceedings commenced with a complaint sounding in breach of contract. After appellants generally failed to prosecute their case, the district court granted respondents' motion for sanctions, dismissing the case with prejudice. Appellants moved for NRCP 60(b)(1) relief, which the district court denied. In a first appeal, this court

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reversed and remanded for the district court to make findings as to the factors set forth in Yochum v. Davis, 98 Nev. 484, 653 P.2d 1215 (2018). Willard v. Berry-Hinckley Indus., 136 Nev. 467, 471, 469 P.3d 176, 180 (2020). On remand, the district court again denied the NRCP 60(b)(1) motion, now providing detailed findings as to the Yochum factors. The district court also denied a subsequent motion for relief under NRCP 60(b)(5) or NRCP 60(b)(6). Appellants appealed both denial orders, and we have consolidated the appeals.

As to the denial of appellants' NRCP 60(b)(1) motion, we conclude that the district court's decision is supported by substantial evidence and therefore does not constitute an abuse of discretion. As to NRCP 60(b)(5), we follow persuasive federal authority and clarify that orders of dismissal are not "prospective" within the meaning of the rule. Therefore, NRCP 60(b)(5) was not an appropriate vehicle by which appellants could obtain relief. Finally, we conclude that the district court did not abuse its discretion in denying relief under NRCP 60(b)(6), given that appellants sought relief on a basis that was cognizable under NRCP 60(b)(1), which is mutually exclusive from NRCP 60(b)(6) relief. Accordingly, we affirm the district court's orders denying NRCP 60(b) relief.

FACTS AND PROCEDURAL HISTORY

Appellants Larry J. Willard and the Overland Development Corporation (collectively, Willard) sued respondents Berry-Hinckley Industries and Jerry Herbst^[1] (collectively, Berry-Hinckley) on claims sounding in breach of contract. After three years of Willard failing to comply with discovery requirements and various court orders and otherwise

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failing to prosecute the case, Berry-Hinckley moved for sanctions, seeking dismissal with prejudice. Willard did not oppose, and the district court granted the motion. Willard did not appeal the sanctions order.

Willard moved to set aside the sanctions order under NRCP 60(b)(1) based on excusable neglect. He argued that mental health issues had caused his lead attorney, Brian Moquin, to constructively abandon the case, ultimately resulting in the dismissal of the action. The district court denied Willard's motion without addressing the factors set forth in Yochum, and Willard appealed.

In resolving the appeal, we held that when determining whether NRCP 60(b)(1) relief is warranted, the district court must address the Yochum factors regardless of whether the movant seeks relief from an order or a judgment. Willard, 136 Nev. at 470, 469 P.3d at 179. We concluded that the district court abused its discretion by failing to set forth findings as to the Yochum factors, reversed the district court's order denying Willard's NRCP 60(b)(1) motion, and remanded the case for further proceedings. Id. at 471, 469 P.3d at 180.

Berry-Hinckley moved for en banc reconsideration. This court denied reconsideration but clarified that the parties were precluded from presenting new evidence or arguments on remand and that the district court's consideration of the Yochum factors was limited to the record currently before the court.

On remand, the district court held a status hearing and requested proposed orders from the parties. The district court subsequently issued an order denying Willard's NRCP 60(b)(1) motion with consideration of the Yochum factors. Willard appealed the order denying the NRCP 60(b)(1) motion.

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While that appeal was pending, Willard moved for relief under NRCP 60(b)(5) or (6). Willard explained that attorney Moquin had admitted he violated the rules of professional conduct with regard to Willard's case in a guilty plea entered pursuant to attorney discipline proceedings. In re Discipline of Moquin, No. 78946, 2019 WL 5390401 (Nev. Oct. 21, 2019) (Order Approving Conditional Guilty Plea Agreement and Enjoining Attorney From Practicing Law in Nevada). Willard argued that Moquin's admissions constituted a change in conditions that made application of the sanctions order prospectively no longer equitable and thus that relief was warranted under NRCP 60(b)(5). Willard also argued that Moquin's admissions constituted new evidence of the mental illness that allegedly caused Moquin's failures during the district court proceedings and that relief was warranted on that basis. The district court denied Willard's motion. The court ruled that NRCP 60(b)(5) relief was not warranted because the guilty plea did not constitute a significant change in factual conditions and that NRCP 60(b)(6) relief was not available because Willard's allegations sounded in excusable neglect under NRCP 60(b)(1). It alternatively ruled that Willard did not show extraordinary circumstances to justify reopening the case. Willard appealed the district court order denying the motion seeking relief pursuant to NRCP 60(b)(5) and (6). We have consolidated Willard's appeals.

DISCUSSION

Standard of review

We review a district court's decision "to grant or deny a motion to set aside a judgment under NRCP 60(b)" for abuse of discretion. Cook v. Cook, 112 Nev. 179, 181-82, 912 P.2d 264, 265 (1996). An abuse of discretion occurs when the district court's decision is not supported by substantial evidence, which is evidence that a reasonable mind might accept as

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adequate to support a conclusion, see Otak Nev., LLC v. Eighth Judicial Dist. Court, 129 Nev. 799, 805, 312 P.3d 491, 496 (2013), or when the district court disregards established legal principles, Willard, 136 Nev. at 469, 469 P.3d at 179.

The district court did not abuse its discretion in denying relief under NRCP 60(b)(1)

Willard argues that the district court misapplied the Yochum. factors, as each factor favored granting the NRCP 60(b)(1) motion. Berry-Hinckley counters that the district court correctly considered and applied each of the Yochum factors.

Under NRCP 60(b)(1), a district court "may relieve a party . . . from a final judgment, order, or proceeding" on grounds of "mistake, inadvertence, surprise, or excusable neglect." An NRCP 60(b)(1) movant bears the burden of establishing, by a preponderance of the evidence, that such grounds for relief exist. See Willard, 136 Nev. at 470, 469 P.3d at 179-80. To determine whether such grounds for relief exist, the district court must consider the following four factors, set forth by this court in Yochum: "(1) a prompt application to remove the judgment; (2) the absence of an intent to delay the proceedings; (3) a lack of knowledge of procedural requirements; and (4) good faith." Id. at 470, 469 P.3d at 179 (quoting Yochum, 98 Nev. at 486, 653 P.2d at 1216). The district court "must issue express factual findings, preferably in writing, pursuant to each Yochum factor." Id. at 468, 469 P.3d at 178. And the district court must consider Nevada's policy of "deciding] cases on the merits whenever feasible when evaluating an NRCP 60(b)(1) motion." Id. at 470, 469 P.3d at 179.

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While the district court found that Willard filed the NRCP 60(b)(1) motion promptly with respect to the first Yochum factor, it concluded that the Yochum factors as a whole weighed against granting relief. We conclude that substantial evidence supports the district court's findings and that the district court did not abuse its discretion in denying Willard NRCP 60(b)(1) relief.

We note that neither party contests the district court's finding on the first factor on appeal. As to the second Yochum factor, the district court found, given Willard's failures to comply with procedural obligations and other conduct causing delay, intent to delay proceedings. The record supports this finding. Willard's initial disclosures did not provide a computation of alleged damages, which was required by NRCP 16.1(a)(1)(A)(iv) and necessary to enable Berry-Hinckley to complete discovery. Larry J. Willard personally appeared at least once at a hearing at which this deficiency was addressed and thus knew of this omission, which contributed to the delay. Willard...