Helfstein v. Eighth Judicial Dist. Court of State

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Docket Number

No. 65409.

Attorney(S)

Foley & Oakes, PC, and J. Michael Oakes, Las Vegas, for Petitioners. Holley, Driggs, Walch, Fine, Wray, Puzey & Thompson and Jeffrey R. Albregts, Las Vegas, for Real Parties in Interest.

Judges

Michael A. Cherry

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Smart Summary

Factual and Procedural Background

Real parties in interest Ira Seaver, the Ira Seaver and Edythe Seaver Family Trust, and Circle Consulting Corporation (collectively, Seaver) filed a complaint against petitioners Lewis and Madalyn Helfstein; Summit Laser Products, Inc.; and Summit Technologies, LLC (collectively, the Helfsteins), as well as against Uninet Imaging, Inc. and Nestor Saporiti. The claims arose from contract and tort causes related to agreements between the Helfsteins and Seaver following Uninet's purchase of the Helfsteins' Summit companies. Uninet refused to assume liability for the consulting agreement between the Helfsteins and Seaver, which Seaver objected to, but the sale proceeded. Prior to answering the complaint, the Helfsteins settled with Seaver, leading Seaver to voluntarily dismiss their claims against the Helfsteins pursuant to NRCP 41(a)(1)(i). Fourteen months after the dismissal, Seaver filed a notice of rescission alleging fraudulent inducement and failure of the Helfsteins to disclose material facts or produce relevant documents. Without the Helfsteins as parties, Seaver and Uninet proceeded to a bench trial resolving their claims. Twenty-six months after filing the notice of rescission, Seaver filed an NRCP 60(b) motion to set aside the settlement agreement and voluntary dismissal to reinstate claims against the Helfsteins. The district court ordered an evidentiary hearing and permitted discovery but denied the Helfsteins' motion to dismiss based on lack of jurisdiction and procedural impropriety of the NRCP 60(b) motion. The Helfsteins also unsuccessfully sought to disqualify Judge Gonzalez. They then petitioned the Supreme Court of Nevada, which stayed the evidentiary hearing pending resolution of the writ petition.

Legal Issues Presented

Whether NRCP 60(b) can be used to set aside a voluntary dismissal or a settlement agreement.
Whether Seaver's NRCP 60(b) motion, filed 40 months after the voluntary dismissal, was timely under the six-month limitation prescribed by NRCP 60(b).
Whether the district court had personal jurisdiction over the Helfsteins to proceed on Seaver's original complaint.
Whether Judge Gonzalez should be disqualified from the case.

Arguments of the Parties

Petitioners (Helfsteins)

Argued that Seaver's NRCP 60(b) motion to set aside the settlement agreement and voluntary dismissal was untimely and should be denied.
Contended that the district court lacked personal jurisdiction over them and that the motion to dismiss should be granted.
Asserted that NRCP 60(b) cannot be used to set aside a voluntary dismissal or settlement agreement.
Requested disqualification of Judge Gonzalez if the prior relief was denied.

Real Parties in Interest (Seaver)

Filed a motion under NRCP 60(b) to set aside the settlement agreement and voluntary dismissal, alleging fraudulent inducement and failure to disclose material facts by the Helfsteins.
Sought to proceed on their original claims against the Helfsteins despite the prior voluntary dismissal.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Union Petrochemical Corp. of Nev. v. Scott, 96 Nev. 337, 609 P.2d 323 (1980)	Clarifies that the six-month time limit in NRCP 60(b) begins to run from the date of the challenged proceeding or upon service of written notice of entry of the judgment or order.	Applied to determine that the six-month limitation for filing an NRCP 60(b) motion started at the voluntary dismissal date, making the motion filed 40 months later untimely.
Stoecklein v. Johnson Elec., Inc., 109 Nev. 268, 849 P.2d 305 (1993)	Established that NRCP 60(b) motions must be made within a reasonable time, with six months as the extreme limit.	Used to reinforce that Seaver's motion was filed well beyond the reasonable time limit.
Nev. Indus. Dev., Inc. v. Benedetti, 103 Nev. 360, 741 P.2d 802 (1987)	Explains that the primary purpose of NRCP 60(b) is to redress injustices caused by excusable neglect or misconduct of an adverse party.	Referenced to frame the purpose of NRCP 60(b) in the context of the present motion.
Int'l Game Tech., Inc. v. Second Judicial Dist. Court, 124 Nev. 193, 179 P.3d 556 (2008)	Defines writ of mandamus as a tool to compel required acts or control arbitrary discretion.	Guided the court's decision to grant writ relief to correct the district court's error.
Pan v. Eighth Judicial Dist. Court, 120 Nev. 222, 88 P.3d 840 (2004)	Confirms that writ relief is extraordinary and generally not granted when an adequate remedy by appeal exists.	Used to justify the court's discretion in considering the writ petition due to judicial economy and importance of the issue.
Moseley v. Eighth Judicial Dist. Court, 124 Nev. 654, 188 P.3d 1136 (2008)	Establishes standard of review: de novo for questions of law, including interpretation of NRCP rules.	Applied to review the legal question of NRCP 60(b)'s applicability and time limits.

Court's Reasoning and Analysis

The court addressed whether NRCP 60(b) may be used to set aside a voluntary dismissal or settlement agreement but ultimately did not decide this issue. Instead, the court focused on the time limitation imposed by NRCP 60(b), which requires motions to be made within six months of the challenged proceeding or service of notice of entry of the judgment or order. The court emphasized that the six-month clock begins to run from the date of the challenged proceeding itself, not from any subsequent related orders or proceedings. Applying this principle, the court found that Seaver's NRCP 60(b) motion, filed 40 months after the voluntary dismissal, was untimely and therefore time-barred. Consequently, the district court erred by scheduling an evidentiary hearing on the motion. The court granted the writ petition to prohibit the district court from proceeding further on the untimely motion. The court declined to address the remaining issues raised by the Helfsteins, including personal jurisdiction and judicial disqualification, as they were rendered moot by the ruling on timeliness.

Holding and Implications

The Supreme Court of Nevada granted the Helfsteins' writ petition and issued a writ of prohibition instructing the district court to vacate its prior order regarding Seaver's NRCP 60(b) motion and to deny the motion as untimely.

The direct effect of this decision is that Seaver's attempt to set aside the voluntary dismissal and settlement agreement is barred due to the expiration of the six-month limitation period under NRCP 60(b). No new precedent was established regarding whether NRCP 60(b) may be used to set aside voluntary dismissals or settlement agreements generally, as the court expressly declined to reach that issue. The ruling prevents further proceedings on the underlying claims against the Helfsteins in this case based on the challenged motion.

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Lewis HELFSTEIN; Madalyn Helfstein; Summit Laser Products, Inc.; and Summit Technologies, LLC, Petitioners, v. The EIGHTH JUDICIAL DISTRICT COURT OF the State of Ne

By the Court, CHERRY, J.

Foley & Oakes, PC, and J. Michael Oakes, Las Vegas, for Petitioners.

Holley, Driggs, Walch, Fine, Wray, Puzey & Thompson and Jeffrey R. Albregts, Las Vegas, for Real Parties in Interest.

OPINION

By the Court, CHERRY, J.:

To resolve this original writ petition, petitioner asks us to consider whether NRCP 60(b) can be used to set aside a voluntary dismissal or a settlement agreement. While NRCP 60(b) imposes a 6–month time limit, real parties in interest filed their NRCP 60(b) motion 40 months after filing the voluntary dismissal. Without reaching whether NRCP 60(b) may be used to set aside a voluntary dismissal or a settlement order, we hold that NRCP 60(b)'s 6–month limitation begins running when the order, judgment, or

proceeding at issue is filed. Thus, even if NRCP 60(b) applies, the motion is time-barred. We therefore grant the petition.

FACTS AND PROCEDURAL HISTORY

Real parties in interest Ira Seaver, the Ira Seaver and Edythe Seaver Family Trust, and Circle Consulting Corporation (collectively, Seaver) filed a complaint in the district court against petitioners Lewis and Madalyn Helfstein; Summit Laser Products, Inc.; and Summit Technologies, LLC (collectively, the Helfsteins) and against Uninet Imaging, Inc., and Nestor Saporiti (collectively, Uninet). Seaver alleged contract and tort-based causes of action arising out of agreements between the Helfsteins and Seaver following Uninet's purchase of the Helfsteins' Summit companies. When Uninet purchased Summit, Uninet refused to be liable for the consulting agreement between the Helfsteins and Seaver. Seaver objected to the purchase agreement, but the Helfsteins proceeded with the sale.

Prior to answering the complaint, the Helfsteins settled with Seaver, and Seaver voluntarily dismissed their claims against the Helfsteins. Fourteen months after voluntarily dismissing the Helfsteins from the suit, Seaver filed a notice of rescission. In the notice, Seaver alleged that the Helfsteins fraudulently induced them to settle and that the Helfsteins failed to inform them of material facts or produce relevant documents, which the Helfsteins were obligated to produce pursuant to their fiduciary duties and discovery obligations.

The voluntary dismissal stated that the action was dismissed pursuant to NRCP 41(a)(1)(ii). However, the dismissal is not a stipulation and should have stated that the action was dismissed pursuant to NRCP 41(a)(1)(i).

Without the Helfsteins as a party to the litigation, Seaver and Uninet tried the claims between them at a bench trial, and the district court issued findings of fact and conclusions of law that resolved those claims. One year after the bench trial and 26 months after filing the notice of rescission, Seaver filed an NRCP 60(b) motion to set aside the settlement agreement, and, implicitly, the voluntary dismissal and sought to proceed on their claims against the Helfsteins. The Helfsteins opposed the motion claiming, inter alia, that the motion was procedurally improper. At the hearing on Seaver's motion, the district court ordered an evidentiary hearing and permitted discovery. The Helfsteins subsequently filed a motion to dismiss, arguing that the district court lacked jurisdiction over them and that the NRCP 60(b) motion was procedurally improper. The district court denied the motion. Finally, the Helfsteins moved to have Judge Gonzalez disqualified from the case, which the district court chief judge heard and denied. The Helfsteins then filed the instant petition. The district court stayed the evidentiary hearing pending this court's resolution of this writ petition.

After the Helfsteins settled with Seaver, Uninet answered the complaint, filed a counterclaim, and filed a cross-claim against the Helfsteins. The Helfsteins moved to, inter alia, compel arbitration. That motion was ultimately granted, completely dismissing the Helfsteins from the underlying action. Helfstein v. UI Supplies, Docket No. 56383, 2011 WL 1344239 (Order of Reversal and Remand, April 7, 2011) (reversing the district court's order denying the motion to compel arbitration and remanding the matter to the district court to enter an order compelling arbitration and dismissing Uninet's causes of action against the Helfsteins).

DISCUSSION

The Helfsteins' petition seeks the following relief: (1) that this court order the district court to deny as untimely Seaver's motion to set aside the settlement agreement and proceed on the original complaint; (2) that this court order the district court to grant their motion to dismiss Seaver's original complaint against them because the lower court does not have personal jurisdiction over them; and (3) if this court denies their requests for the preceding relief, that this court order the district court to grant their motion to disqualify Judge Gonzalez. The Helfsteins additionally argue that NRCP 60(b) cannot be used to set aside a voluntary dismissal or a settlement agreement.

Writ relief

“A writ of mandamus is available to compel the performance of an act that the

law requires ... or to control an arbitrary or capricious exercise of discretion.” Int'l Game Tech., Inc. v. Second Judicial Dist. Court, 124 Nev. 193, 197, 179 P.3d 556, 558 (2008); see also NRS 34.160; Humphries v. Eighth Judicial Dist. Court, ––– Nev. ––––, ––––, 312 P.3d 484, 486 (2013). A writ of prohibition may be warranted when a district court acts without or in excess of its jurisdiction. NRS 34.320; Club Vista Fin. Servs. v. Eighth Judicial Dist. Court, ––– Nev. ––––, ––––, 276 P.3d 246, 249 (2012); see also Smith v. Eighth Judicial Dist. Court, 107 Nev. 674, 677, 679, 818 P.2d 849, 851, 853 (1991).

Where there is no “plain, speedy, and adequate remedy in the ordinary course of law,” extraordinary relief may be available. NRS 34.170; NRS 34.330; see Oxbow Constr., LLC v. Eighth Judicial Dist. Court, –––Nev. ––––, ––––, 335 P.3d 1234, 1238 (2014). A petitioner bears the burden of demonstrating that the extraordinary remedy of mandamus or prohibition is warranted. Pan v. Eighth Judicial Dist. Court, 120 Nev. 222, 228, 88 P.3d 840, 844 (2004). Determining whether to consider a petition for extraordinary relief is solely within this court's discretion. Smith, 107 Nev. at 677, 818 P.2d at 851.

This court has consistently held that an appeal is generally an adequate remedy precluding writ relief. Pan, 120 Nev. at 224, 88 P.3d at 841; see also Bradford v. Eighth Judicial Dist. Court, ––– Nev. ––––, ––––, 308 P.3d 122, 123 (2013). Because an appeal is ordinarily an adequate remedy, this court generally declines to consider writ petitions challenging interlocutory district court orders. Oxbow Constr., ––– Nev. at ––––, 335 P.3d at 1238. But we may consider writ petitions when an important issue of law needs clarification and considerations of sound judicial economy are served. Renown Reg'l Med. Ctr. v. Second Judicial Dist. Court, –––Nev. ––––, ––––, 335 P.3d 199, 202 (2014). We elect to consider this writ petition because consideration of the writ petition will serve judicial economy.

Standard of review

In the context of writ petitions, we review district court orders for an arbitrary or capricious abuse of discretion. Int'l Game Tech., 124 Nev. at 197, 179 P.3d at 558. However, we review questions of law, such as the interpretation of and interplay between NRCP 41(a)(1) and 60(b), de novo, even in the context of writ petitions. Moseley v. Eighth Judicial Dist. Court, 124 Nev. 654, 662, 188 P.3d 1136, 1142 (2008).

NRCP 41(a)(1) and NRCP 60(b)

Seaver settled with the Helfsteins and filed a voluntary dismissal pursuant to NRCP 41(a)(1)(i). Nevertheless, more than three years after filing the voluntary dismissal, Seaver filed a motion to set aside the settlement agreement and voluntary dismissal pursuant to NRCP 60(b). The district court did not grant the motion, but it ordered an evidentiary hearing to determine whether the Helfsteins fraudulently induced Seaver to settle.

NRCP 60(b) permits a court to set aside a final judgment, order, or proceeding in certain circumstances:

On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reason[ ]: ... (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party.... The motion shall be made within a reasonable time, ... not more than 6 months after the proceeding was taken or the date that written notice of entry of the judgment or order was served.

(Emphasis added.) The primary “purpose of Rule 60(b) is to redress any injustices that may have resulted because of excusable neglect or the wrongs of an opposing party.” Nev. Indus. Dev., Inc. v. Benedetti, 103 Nev. 360, 364, 741 P.2d 802, 805 (1987). We have not previously considered whether a settlement agreement or an NRCP 41(a)(1) voluntary dismissal qualifies as a “final judgment, order, or proceeding” that may be set aside under NRCP 60(b). However, we need not reach this issue here.

An NRCP 60(b) motion must be made “not more than 6 months after the proceeding was taken or the date that written notice of entry of the judgment or order was served.” This 6–month period begins to run from the date of the challenged proceeding or upon service of “written notice of entry” of the challenged judgment or order; nothing in NRCP 60(b) bases the 6–month time frame on a subsequent judgment, order or proceeding. See Union Petrochemical Corp. of Nev. v. Scott, 96 Nev. 337, 338–39, 609 P.2d 323, 323–24 (1980). We have also previously held that an NRCP 60(b) “motion must be made within a reasonable time and that the six-month period represents the extreme limit of reasonableness.” Stoecklein v. Johnson Elec., Inc., 109 Nev. 268, 272, 849 P.2d 305, 308 (1993). Accordingly, assuming that an NRCP 60(b) challenge may also be made to a settlement agreement, such a challenge is also time-barred here because it was made well after 6 months had elapsed.

In this matter, Seaver voluntarily dismissed the Helfsteins on November 23, 2009, and filed his NRCP 60(b) motion 40 months later, far beyond the 6–month time limit. Thus, if a voluntary dismissal is a final judgment, order, or proceeding from which a party may receive relief through NRCP 60(b), then the filing of the voluntary dismissal starts the 6–month clock. Because Seaver filed the motion more than three years after he voluntarily dismissed the Helfsteins from the suit, we conclude that Seaver's NRCP 60(b) motion is time-barred and that the district court erred in scheduling an evidentiary hearing.

CONCLUSION

Accordingly, we grant the Helfsteins' writ petition. The clerk of this court shall issue a writ of prohibition instructing the district court to vacate its previous order regarding Seaver's NRCP 60(b) motion and enter a new order denying the motion.

In light of our decision, we decline to reach the remaining issues in the Helfsteins' petition.
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We concur: PARRAGUIRRE, and DOUGLAS JJ.

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Notes: