Badger v. Eighth Jud. Dist. Ct. , 2016 NV 39 ( 2016 )

132 Nev., Advance Opinion -51
IN THE SUPREME COURT OF THE STATE OF NEVADA
DARRIN D. BADGER, AN No. 67835
INDIVIDUAL,
Petitioner,
vs.
THE EIGHTH JUDICIAL DISTRICT
COURT OF THE STATE OF NEVADA,
IN AND FOR THE COUNTY OF Fl ED
CLARK; AND THE HONORABLE
JERRY A. WIESE, DISTRICT JUDGE,
MAY 2 6 2016
Respondents, CLERK
TRACIE K LINDEMAN
OF SUPREME COURT
and BY _ $
DEPUTY CLERK
OMNI FAMILY LIMITED
PARTNERSHIP, A NEVADA
DOMESTIC LIMITED PARTNERSHIP,
Real Party in Interest.
Original petition for a writ of mandamus or prohibition
challenging a district court order denying a motion for summary judgment
and a motion to dismiss an action for breach of guaranty.
Petition granted.
Reid Rubinstein & Bogatz and I. Scott Bogatz, Charles M. Vlasic, III, and
Jaimie Stilz, Las Vegas,
for Petitioner.
Roger P. Croteau & Associates, Ltd., and Roger P. Croteau and Timothy E.
Rhoda, Las Vegas; Lewis Roca Rothgerber, LLP, and Daniel F. Polsenberg
and Joel D. Henriod, Las Vegas,
for Real Party in Interest.
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BEFORE THE COURT EN BANC.
OPINION
By the Court, GIBBONS, J.:
In this opinion, we consider whether a creditor's amended
complaint seeking a deficiency judgment against petitioner may relate
back to a timely complaint against a different party pursuant to NRCP
15(c), so as to satisfy NRS 40.455(1)'s six-month deadline for an
application for a deficiency judgment against petitioner. We conclude that
the district court erred in permitting real party in interest's amended
complaint to relate back to the timely original complaint pursuant to
NRCP 15(c), so as to satisfy the six-month deadline for an application for a
deficiency judgment against petitioner, as required by NRS 40.455(1).
Additionally, we conclude that the timely complaint against the borrowers
does not constitute a valid application for deficiency judgment against the
unnamed petitioner. Finally, we conclude that petitioner did not waive his
right to object under NRS 40.455(1). Accordingly, we conclude that the
district court erred in denying petitioner's motion for summary judgment
in the guaranty action and motion to dismiss in the borrower action, and
we grant the petition for writ of mandamus.
FACTS AND PROCEDURAL HISTORY
Southwest Desert Equities, LLC (the Borrower) borrowed from
OneCap Mortgage Corporation (OneCap), where OneCap was the
predecessor-in-interest to real party in interest Omni Family Limited
Partnership (Omni). On the same day that the Borrower took out the
loan, petitioner Darrin Badger (the Guarantor) personally guaranteed the
Borrower's loan by executing a continuing guaranty.
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After the Borrower defaulted on the loan, the Guarantor
allegedly breached the guaranty. Omni filed a complaint against the
Guarantor for the alleged default on the guaranty (referred to as the
Guaranty Action or Guaranty Complaint).
While the Guaranty Action was pending, Omni foreclosed on
the property securing the underlying loan. The August 13, 2013,
foreclosure triggered the six-month deadline for Omni to file an
application for a deficiency judgment against either or both the Borrower
and the Guarantor pursuant to NRS 40.455(1). Omni applied for a
deficiency judgment against the Borrower within the six-month deadline
by virtue of filing a complaint against the Borrower (referred to as the
Borrower Action or Borrower Complaint) but failed to file a timely
application for a deficiency judgment against the Guarantor before the
lapse of the six-month deadline on February 13, 2014. On April 15, 2014,
the parties filed a stipulation and order to consolidate the Guaranty
Action with the Borrower Action. On September 18, 2014, the Guarantor
filed a motion for summary judgment in the Guaranty Action, seeking
dismissal of Omni's claims against him due to Omni's failure to apply for a
deficiency judgment against the Guarantor within the six months
following the foreclosure sale pursuant to NRS 40.455(1).
On December 1, 2014—approximately 16 months after the
foreclosure sale—Omni filed an amended complaint in the Borrower
Action (referred to as the Amended Borrower Complaint) naming the
Guarantor as an additional defendant and seeking to relate the Amended
Borrower Complaint back to the Borrower Complaint pursuant to NRCP
15(c), where the Borrower Complaint constituted a timely application for a
deficiency judgment against the Borrower.
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In addition to the earlier motion for summary judgment in the
Guaranty Action, the Guarantor filed a motion to dismiss the Amended
Borrower Complaint. The district court denied both motions and
concluded that the Amended Borrower Complaint related back to the
timely Borrower Complaint pursuant to NRCP 15(c), thereby curing
Omni's failure to apply for a deficiency judgment against the Guarantor
within the six-month time frame required by NRS 40.455(1). The
Guarantor then filed this petition for writ of mandamus or prohibition.
DISCUSSION
Consideration of the writ petition
"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. 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). While this court will not normally entertain a writ petition that
challenges the denial of a motion to dismiss, "we may do so where, as here,
the issue is not fact-bound and involves an unsettled and potentially
significant, recurring question of law." Buckwalter v. Eighth Judicial
Dist. Court, 126 Nev. 200, 201, 234 P.3d 920 921 (2010). Additionally,
this court may address writ petitions when "summary judgment is clearly
required by a statute or rule." ANSE, Inc. v. Eighth Judicial Dist. Court,
124 Nev. 862, 867, 192 P.3d 738, 742 (2008).
We exercise our discretion to consider this writ petition
because the petition involves a significant and potentially recurring
question of law, the petition is not fact-based, and the district court failed
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to grant summary judgment where a Nevada statute required it.
Specifically, the district court's application of NRCP 15(c) to supplement
the deadline contained in NRS 40.455(1) reveals confusion with our
previously strict application of the deadline. We believe that consideration
of this petition will clarify our position and prevent further misapplication
of NRCP 15(c) in cases that are subject to NRS 40.455(1). Accordingly, we
conclude that this writ petition warrants our consideration.
Merits of the writ petition
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., Adv. Op. 86, 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). Further, this court is "loath to depart
from the doctrine of stare decisis." City of Reno v. Howard, 130 Nev., Adv.
Op. 12, 318 P.3d 1063, 1065 (2014) (quoting Armenta-Carpio v. State, 129
Nev., Adv. Op. 54, 306 P.3d 395, 398 (2013)).
A writ of mandamus is available "to control an arbitrary or
capricious exercise of discretion." Humphries v. Eighth Judicial Dist.
Court, 129 Nev., Adv. Op. 85, 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." State, Dep't of
Public Safety v. Coley, 132 Nev., Adv. Op. 13, 368 F'.3d 758, 760 (2016)
(internal quotations omitted).
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The district court erred in permitting the Amended Borrower
Complaint to relate back to the timely Borrower Complaint under
NRCP 15(c) to satisfy the six-month deadline required by NRS
40.455(1)
Omni argues that the district court properly denied summary
judgment and the Guarantor's motion to dismiss because Omni's Amended
Borrower Complaint related back to the timely Borrower Complaint
pursuant to NRCP 15(c), thereby satisfying NRS 40.455(1)'s six-month
deadline for an application for a deficiency judgment against the
Guarantor. We disagree.
It is well-settled that every obligation secured by property
through a mortgage or a deed of trust is subject to Nevada's antideficiency
statutes. First Interstate Bank of Nev. v. Shields, 102 Nev. 616, 620-21,
730 P.2d 429, 432 (1986). Indeed, "the Legislature has shown a strong
inclination towards protecting an obligor's rights under the antideficiency
statutes." Lavi v. Eighth Judicial Dist. Court, 130 Nev., Adv. Op. 38, 325
P.3d 1265, 1268 (2014). Accordingly, Nevada's deficiency judgment
statutes are intended not only to protect borrowers, but to protect
guarantors as well. Shields, 102 Nev. at 621, 730 P.2d at 432. Such
protection furthers Nevada public policy goals because "[a] guarantor is
the favorite of the law." Tri-Pac. Commercial Brokerage, Inc. v. Boreta,
113 Nev. 203, 206, 931 P.2d 726, 729 (1997) (citation omitted).
Consistent with these policy rationales, NRS 40.455(1)
requires that an application for a deficiency judgment be made within six
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months after the date of a foreclosure sale. NRS 40.455(1), 1 see also Lavi,
130 Nev., Adv. Op. 38, 325 P.3d at 1268 (holding that a "timely application
for a deficiency judgment must be made under NRS 40.455" in order to
seek a deficiency judgment), 2 see also Walters, 127 Nev. at 728, 263 P.3d at
234 ("Under the clear and unambiguous language of NRS 40.455(1), an
1-NRS 40.455 was amended in 2015. See 2015 Nev. Stat., ch. 518,
§ 8, at 3340. The dissent contends that the 2015 amendment should apply
retroactively to the facts of this case. However, neither party raised this
argument to this court. See Edwards v. Emperor's Garden Rest., 122 Nev.
317, 330 n.38, 130 P.3d 1280, 1288 n.38 (2006) (noting that this court need
not consider claims that are not cogently argued or supported by relevant
authority). Moreover, this court applies a strong presumption against
retroactivity to statutes that affect vested rights where the Legislature
has not explicitly provided for retroactivity, and this court has determined
that the right to a deficiency judgment is a vested right. See Sandpointe
Apts. v. Eighth Judicial Dist. Court, 129 Nev., Adv. Op. 87, 313 P.3d 849,
853-56 (2013). This conclusion is consistent with the legislative history of
NRS 40.455, which contemplated neither retroactive application of the
2015 amendment nor reversing this court's holdings in Lavi and Walters.
See, e.g., Hearing on S.B. 453 Before the Senate Judiciary Comm., 78th
Leg. (Nev., May 15, 2015); Hearing on S.B. 453 Before the Senate
Judiciary Comm., 78th Leg. (Nev., May 1, 2015); Hearing on S.B. 453
Before the Senate Judiciary Comm., 78th Leg. (Nev., April 3, 2015);
Hearing on S.B. 453 Before the Senate Judiciary Comm., 78th Leg. (Nev.,
March 31, 2015); 2015 Nev. Stat., ch. 518, § 8, at 3340.
2 0mni contends that our decision in Lavi changed existing law, and
that prior to Lavi, its Guaranty Complaint, wherein Omni sued the
Guarantor for breach of guaranty prior to the foreclosure sale, would have
been sufficient to satisfy NRS 40.455(1). We reject this argument because,
as this opinion demonstrates, Lavi merely reiterated the bright-line rule
established in existing Nevada caselaw and the plain language of NRS
40.455(1). See, e.g., Walters v. Eighth Judicial Dist. Court, 127 Nev. 723,
728, 263 P.3d 231, 234 (2011) (stating that NRS 40.455(1) requires an
application within six months after a foreclosure sale).
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application must be made within six months."). It follows that a complaint
filed prior to a foreclosure sale cannot sufficiently put an obligor on notice
of a deficiency claim. Lavi, 130 Nev., Adv. Op. 38, 325 P.3d at 1269. As a
general principle, this court will not interpret statutes so as to render the
statutory language meaningless. In re Parental Rights as to S.M.M.D.,
128 Nev. 14, 24, 272 P.3d 126, 132 (2012).
Under NRCP 15(c), "[w]henever the claim or defense asserted
in the amended pleading arose out of the conduct, transaction, or
occurrence set forth or attempted to be set forth in the original pleading,
the amendment relates back to the date of the original pleading." The
relation-back doctrine applies to both the addition and substitution of
parties, and will be liberally construed unless the opposing party is
disadvantaged by relation back. Costello v. Casler, 127 Nev. 436, 441, 254
P.3d 631, 634 (2011). However, in Garvey v. Clark County, this court
expressly refused to allow an amended complaint to relate back after a
limitations period had run where the plaintiff elected not to name the
proposed defendant as a party in the original action. 91 Nev. 127, 128,
532 P.2d 269, 270-71 (1975).
[Generally], an amended pleading adding a
defendant that is filed after the statute of
limitations has run will relate back to the date of
the original pleading under NRCP 15(c) if "the
proper defendant (1) receives actual notice of the
action; (2) knows that it is the proper party; and
(3) has not been misled to its prejudice by the
amendment."
Costello, 127 Nev. at 440-41, 254 P.3d at 634 (quoting Echols v. Summa
Corp., 95 Nev. 720, 722, 601 P.2d 716, 717 (1979)). Similarly, we have
previously refused to allow a new claim based upon a new theory of
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liability asserted in an amended pleading to relate back under NRCP 15(c)
after the statute of limitations had run. Nelson v. City of Las Vegas, 99
Nev. 548, 556-57, 665 P.2d 1141, 1146 (1983).
We conclude that relation back pursuant to NRCP 15(c) may
not be utilized to save an untimely application for a deficiency judgment
under NRS 40.455(1). We emphasized in both Lavi and Walters that the
six-month statutory deadline is a rigid one, and we reiterate here that a
creditor's failure to timely file an application for a deficiency judgment per
NRS 40.455 is fatal. To permit relation back pursuant to NRCP 15(c) in
this case would allow creditors to bypass the deadline entirely with
intentions to amend a pending complaint later. Such an outcome would be
inconsistent with Nevada's aim to protect borrowers and guarantors as
articulated in Shields and would fail to provide guarantors with adequate
notice of a deficiency claim as we required in Lavi. Therefore, the district
court erred in permitting the Amended Borrower Complaint to relate back
to the timely Borrower Complaint under NRCP 15(c), so as to satisfy NRS
40.455(1)'s six-month deadline for application for a deficiency judgment
against the Guarantor.
Because we strictly construe NRS 40.455(1) to conclude that
the six-month deadline is not subject to relation back, we need not
entertain Omni's contention, pursuant to the first two requirements of
Costello, that the Guarantor had actual notice of the action and knowledge
that they were the proper party.
The timely Borrower Complaint does not constitute a valid
application for a deficiency judgment against the unnamed
Guarantor
Omni argues that its timely Borrower Complaint constitutes a
valid application for a deficiency judgment against the unnamed
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Guarantor because it mentions the Guarantor in the "General Allegations"
section of the complaint and it meets the definition of "application" that
this court applied in Walters. We disagree.
NRS 40.455(1) bars a judgment creditor from proving a
deficiency unless the creditor files an application for a deficiency judgment
within the six months following a foreclosure sale, but "application"
remains undefined in the statute. See generally NRS 40.455. As a result,
we have applied the following definition as stated in NRCP 7(b)(1): "[amn
application to the court for an order shall be by motion which. . . shall be
made in writing, shall state with particularity the grounds therefor, and
shall set forth the relief or order sought." See Walters, 127 Nev. at 728,
263 P.3d at 234. In applying this definition, we have found that a
creditor's motion for summary judgment constituted a valid application for
a deficiency judgment where it named the guarantor as a defendant, was
filed within the six months following the trustee's sale of the underlying
property, and otherwise met the three requirements of NRCP 7(b)(1). Id.
We reject Omni's argument that its timely Borrower
Complaint constitutes an application for a deficiency judgment against the
Guarantor because, while the Borrower Complaint states with
particularity the causes of action alleged against the Borrower to satisfy
the second prong of the Walters test, the Borrower Complaint does not do
the same as against the Guarantor where the language referring to
"defendants" can only be logically construed to refer to the defendant(s)
named in the complaint. To bind unnamed parties by the allegations in a
complaint based on a loose compliance with NRCP 7(b)(1) would lead to an
absurd result and contravene the Nevada Rules of Civil Procedure. See
NRCP 10(a) (naming a party to a suit requires that a complaint contain in
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the title of the action the names of all the parties, save for a limited
exception when a party's name is initially unknown). Therefore, we
conclude that the timely Borrower Complaint did not constitute a valid
application for a deficiency judgment against the Guarantor.
The subsequent consolidation of the Guaranty Action and the
Borrower Action pursuant to NRCP 42(a) did not merge the two
actions to satisfy NRS 40.455(1)
Omni argues that the consolidation of the Guaranty Action
and the timely Borrower Action pursuant to NRCP 42(a) serves to merge
the parties and claims of the two separate actions to satisfy the time
requirements of NRS 40.455(1). Further, by virtue of the consolidation,
Omni claims that each of the defendants consented to the complaints
being combined into one single action, meaning that the Guarantor are
also subject to Omni's claim for deficiency. We disagree.
We decline to delve into the merits of Omni's consolidation
argument because the April 15, 2014, stipulation and order to consolidate
cases occurred nearly two months after the six-month deadline for filing a
deficiency judgment had lapsed. Thus, even if the consolidation served to
merge the two complaints as Omni contends, the consolidation would still
fail to qualify as a timely application for a deficiency judgment against the
Guarantor under NRS 40.455(1).
The Guarantor did not waive his right to object under NRS 40.455(1)
Finally, Omni argues that the Guarantor contractually waived
his right to object under NRS 40.455(1). While the terms of the Guaranty
suggest that the Guarantor waived the time requirements of NRS
40.455(1), we decline to uphold the waiver as a matter of public policy. See
Lavi, 130 Nev., Adv. Op. 38, 325 P.3d at 1268 (stating that "the
Legislature has shown a strong inclination towards protecting an obligor's
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rights under the antideficiency statutes"); see also Shields, 102 Nev. at
620-21, 730 P.2d at 432 (stating that every obligation secured by property
through a mortgage or a deed of trust is subject to Nevada's antideficiency
statutes); NRS 40.453 (providing that courts will not enforce a provision
related to the sale of real property whereby a guarantor waives any right
secured to him by the laws of this state); Lowe Enters. Residential
Partners, LP v. Eighth Judicial Dist. Court, 118 Nev. 92, 1034, 40 P.3d
405, 412 (2002) (reasoning that the Legislature passed NRS 40.453 with
the intent to preclude lenders from forcing borrowers to waive their rights
pursuant to the antideficiency statutes).
CONCLUSION
Having considered the parties' filings and the attached
documents, we choose to entertain the Guarantor's petition for a writ of
mandamus. In doing so, we conclude that the district court erred in
permitting Omni's Amended Borrower Complaint to relate back to the
timely Borrower Complaint pursuant to NRCP 15(c), so as to satisfy the
six-month deadline for an application for a deficiency judgment required
by NRS 40.455(1). Additionally, we conclude that the timely Borrower
Complaint does not constitute a valid application for deficiency judgment
against the unnamed Guarantor. Finally, we conclude that the Guarantor
did not waive his right to object under NRS 40.455(1). Therefore, we
conclude that the district court erred in denying the Guarantor's motion
for summary judgment in the Guaranty Action and motion to dismiss in
the Borrower Action. Accordingly, we grant the Guarantor's petition for
writ of mandamus and direct the clerk of this court to issue a writ of
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mandamus instructing the district court to enter an order granting the
Guarantor's motion to dismiss and motion fox summary judgment.
Gibbons
We concur:
, C.J.
Douglas
rts#:
e
Cherry
•
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Saitta
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PICKERING, J., with whom HARDESTY, J., agrees, dissenting:
In Lavi v. Eighth Judicial District Court, 130 Nev., Adv. Op.
38, 325 P.3d 1265 (2014), a divided court held that a pre-foreclosure
complaint against a guarantor who had waived the one-action rule did not
qualify as the "application. . . within 6 months after the date of the
foreclosure sale" that NRS 40.455 requires to recover the post-sale
deficiency. This holding was not required by the plain text of the statute
and, in fact, conflicted with prior decisions of this court and the United
States District Court for the District of Nevada, applying Nevada law. See
Lavi, 130 Nev., Adv. Op. 38, 325 P.3d at 1272-73 (Pickering and Hardesty,
JJ., dissenting) (noting that First Interstate Bank of Nevada v. Shields,
102 Nev. 616, 618 n.2, 730 P.2d 429, 430 n.2 (1986), had held that,
"to make application for a 'deficiency judgment' the lender must file
a complaint against the guarantor within the time set by NRS
40.455," and that Interim Capital, LLC v. Herr Law Group, Ltd.,
2:09-CV-1606-KJD-LRL, 2011 WL 7053806 (D. Nev. Aug. 23, 2011),
rejected the argument that the pre-foreclosure complaint against the
guarantors did not suffice as the predicate "application" required to obtain
a deficiency judgment against the guarantors).
The split decision in Lavi would be so much water under the
bridge except that, before Lavi had been on the books for a year, the
Nevada Legislature amended NRS 40.455 to add new paragraph 4, which
defines "application" as the Lavi dissent and Herr did. New NRS
40.455(4) reads in full as follows:
For purposes of an action against a guarantor,
surety or other obligor of an indebtedness or
obligation secured by a mortgage or lien upon real
property pursuant to NRS 40.495, the term
"application" includes, without limitation, a
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complaint or other pleading to collect the
indebtedness or obligation which is filed before the
date and time of the foreclosure sale unless a
judgment has been entered in such action as
provided in paragraph (b) of subsection 4 of NRS
40.495.
2015 Nev. Stat., ch. 518, § 8(4), at 3340 (emphases added). The 2015
amendments to NRS 40.455 make clear that, contrary to Lavi and
contrary to today's opinion, a pre-foreclosure complaint against a
guarantor does constitute an "application. . . within 6 months after the
date of the foreclosure sale" for purposes of NRS 40.455(1). And, if the
language of the 2015 amendment to NRS 40.455 left room for doubt, the
Legislative Counsel's Digest introducing Senate Bill 453 settles the point:
Under existing law, to obtain a deficiency
judgment after a foreclosure sale, a creditor must
file an application with the court within 6 months
after the date of the foreclosure sale. (NRS
40.455). Existing law further provides that in
certain circumstances a creditor may bring an
action against a guarantor, surety or other obligor
who is not the borrower to enforce the obligation to
pay, satisfy or purchase all or part of the
obligation secured by a mortgage or lien on real
property. (NRS 40.495). Section 8 provides that
the complaint or other pleading in this action
constitutes the application for a deficiency
judgment and, thus, the creditor is not
required to file an application for a
deficiency judgment after the foreclosure
sale.
2015 Nev. Stat., ch. 518, Legislative Counsel's Digest, at 3335 (emphasis
added).
Without even acknowledging the text, much less the context,
of the 2015 amendments to NRS 40.455, the majority dismisses them as
irrelevant, citing the general rule against applying new statutes
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retroactively. See supra note 1, at 7. But as with most general rules, the
rule against retroactivity has exceptions, particularly where, as here, the
new statute adds to or amends an existing statute. In the context of
statutory amendments, the new enactment's applicability depends on
whether it clarifies or changes the existing statutory scheme. If the
amendment clarifies the law, the rule against retroactivity does not apply.
See Pub. Emps.' Benefits Program v. Las Vegas Metro. Police Dep't, 124
Nev. 138, 157 n.52, 179 P.3d 542, 555 n.52 (2008) ("[A]n amendment
which, in effect, construes and clarifies a prior statute will be accepted as
the legislative declaration of the original act." (quoting Police Pension Bd.
v. Warren, 398 P.2d 892, 896 (Ariz. 1965)); 1A Norman J. Singer & J.D.
Shambie Singer, Statutes and Statutory Construction § 22:31, at 374-75
(7th ed. 2012) ("An amendment which in effect construes and clarifies a
prior statute must be accepted as the legislative declaration of the
meaning of the original act, [especially] where the amendment was
adopted soon after. . . controversy arose concerning the proper
interpretation of the statute." (footnote omitted)). This is so because,
when an amendment clarifies a pre-existing law, "courts. . . logically
conclude that [the] amendment was adopted to make plain what the
legislation had been all along from the time of the statute's original
enactment." 1A Singer & Singer, Statutes and Statutory Construction §
22:31, at 375.
The question becomes, then, whether the 2015 amendments
clarify or change NRS 40.455. "Whether a subsequent statute or
amendment sheds light upon the meaning of a former statute depends
upon a number of circumstances." 2B Singer & Singer, Statutes and
Statutory Construction § 49:10, at 135.
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The force which should be given to
subsequent legislation, as affecting prior
legislation, depends largely upon the
circumstances under which it takes place. If it
follows immediately and after controversies upon
the use of doubtful phraseology therein have arisen
as to the true construction of the prior law it is
entitled to great weight.
Id. (emphasis added) (quoting People ex rel. Westchester Fire Ins. Co. v.
Davenport, 91 N.Y. 574, 591-92 (1883)).
The 2015 amendment to NRS 40.455 defines what the statute
means by "application." It does not delete old language and replace it with
new. Textually, therefore, it appears to clarify the existing statute, not to
change it. Context supports this conclusion. As noted above, in 2014,
controversy arose over whether and how to apply NRS 40.455's
"application" requirement to pre-foreclosure suits against guarantors, a
controversy that divided this court internally and produced a split
between this court and Nevada's federal district court. In 2015, the
Legislature amended NRS 40.455 to resolve that controversy, adding
subparagraph 4 to define "application" as the Lavi dissent and Herr
decision had. As this amendment immediately followed the LavilHerr
split, it is "entitled to great weight" in determining whether new NRS
40.455(4) clarifies, or changes, the "application" requirement stated in
NRS 40.455(1).
Applying a clarifying amendment to an existing suit does not,
as the majority suggests, disturb vested rights. This suit was filed, and
the foreclosure sale in this case held, before the Lavi opinion was
published. If, as the 2015 clarifying amendments to NRS 40.455 confirm,
the pre-foreclosure complaint qualified as the "application" that NRS
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40.455(1) requires, the guarantor in this case did not have a vested right
to more.
No doubt stare decisis counsels adherence to prior decisions by
this court. Armenta-Carpio v. State, 129 Nev., Adv. Op. 54, 306 P.3d 395,
398 (2013). Nonetheless, "when governing decisions prove to be
unworkable or are badly reasoned, they should be overruled," Harris V.
State, 130 Nev., Adv. Op. 47, 329 P.3d 619, 623 (2014) (internal quotations
omitted), especially where, as here, the unworkable decision is so recent
that reliance interests have not accrued. See Helvering v. Hallock, 309
U.S. 106, 119 (1940). The Legislature sets policy, not the court, and here
the Legislature has disavowed the rigid public policy cited by the majority
as support for the creditor's loss of rights against the guarantor in this
case, whom the creditor sued and thus gave notice of its intent to sue,
before the foreclosure sale occurred. For these reasons, I would deny writ
relief in an opinion that overrules Lavi as resting on a misinterpretation of
the application requirement in NRS 40.455(1).
I dissent.
,
Pickering P‘ekilit
I concur:
5