Posner v. Tassely ( 2015 )

 originally owned by Tassely (Vacant Lot), and a separate house purchased
by Consulting and Holding, LLC (Branding Iron).
After concluding that he needed to sell property to keep
Montecito, Tassely and Mr. Posner entered into a general agreement
(Initial Agreement) prepared by or at the direction of Mr. Posner for that
purpose. The day after Tassely executed the agreement, Mr. Posner
signed it, but only after inserting handwritten notes that purported to
include Tassely's equity interest in Montecito.
Mr. Posner and Tassely subsequently engaged in a series of
transactions related to Vacant Lot. In exchange for, among other things, a
non-interest bearing promissory note for $240,000.00 (Vacant Lot Note)
signed by the Posners, Tassely transferred title to Vacant Lot to Posner
Investments, Inc. After the Posners defaulted on payments required by
the terms of the Vacant Lot Note on March 3, 2008, Tassely accelerated all
amounts due. Ultimately, the district court concluded that the Posners
owed Tassely $118,999.00 plus interest from and after March 3, 2008, on
the Note.
Later, Mr. Posner, Consulting and Holding, LLC (C&H), and
MSG Design, LLC entered into an agreement with two other parties for
the purchase and sale of a house and real property (Branding Iron). 1 The
agreement identified MSG as a partner with C&H and mentioned a
"partnership interest." The agreement also required the delivery of cash
and personal property in the amount of $100,000.00, which Tassely
provided, acting on behalf of MSG. In connection with the purchase
'Posner signed the agreement individually and on behalf of C&H,
and Tassely signed the agreement on behalf of MSG only.
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agreement, Mr. Posner, individually and on behalf of C&H, executed and
delivered to MSG a promissory note for $100,000.00 (Branding Iron Note).
The Note provides that upon the sale of Branding Iron, C&H will pay
MSG $100,000.00 plus one-half of the equity in the property, less
maintenance costs. The Note also contained a provision requiring
payment in full after five years. Mr. Posner, individually and on behalf of
C&H, executed a trust deed to secure performance under the Branding
Iron Note. MSG then assigned its rights under the Note and Trust Deed
to Tassely.
When the market crashed, the Branding Iron property was
foreclosed upon and the $100,000.00 equity interest was lost. On June 2,
2009, the Branding Iron Note's $100,000.00 balloon payment provision
became effective. Posner and C&H never paid Tassely the $100,000.00.
Sanctions
During discovery, appellants' counsel failed to timely respond
to respondents' requests for admission. Due to this and other errors, the
discovery commissioner recommended that, inter alia, the district court
sanction appellants for $4,000.00 and deem the untimely responses to the
requests for admission admitted. The district court accepted the discovery
commissioner's recommendation, but reduced the sanctions to $2,000.00.
Based on this, respondents filed a motion in limine to prevent appellants
from presenting evidence contrary to the requests for admission deemed
admitted. Appellants filed an opposition to the motion and a
countermotion to strike the sanctions related to the admissions for being
unconstitutional. After a hearing, the district court rejected appellants'
constitutional argument but reinstated their answers to the requests for
admission, substituting a monetary sanction under NRCP 37 for
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$11,218.75. The monetary sanction was later deducted from respondents'
award of attorney fees.
DISCUSSION
Initial Agreement
Based on their contention that the Initial Agreement was an
enforceable contract, appellants argue that they are entitled to at least a
$250,000.00 offset from the judgment from the Montecito equity interest,
and therefore, owe respondents nothing. 2 Respondents assert that the
district court's finding that the Initial Agreement was unenforceable is
supported by substantial evidence.
"[W]hether a contract exists is [a question] of fact, requiring
this court to defer to the district court's findings unless they are clearly
erroneous or not based on substantial evidence." Certified Fire Prot., Inc.
v. Precision Constr., Inc., 128 Nev. , , 283 P.3d 250, 255 (2012)
(alterations in original) (internal quotation omitted). "Basic contract
principles require, for an enforceable contract, an offer and acceptance,
meeting of the minds, and consideration." Id. (internal quotation omitted).
For a meeting of the minds to exist, the parties must have agreed about
the contract's essential terms. Id.We conclude that substantial evidence supports the district
court's finding that the Initial Agreement was unenforceable because
there was no meeting of the minds. The record shows that Tassely signed
2Appellants' argument that the district court could not consider the
enforceability of the Initial Agreement lacks merit because they brought
that contract's validity into issue by raising it as the basis for their offset
claim.
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the agreement before Mr. Posner inserted his additional terms and
signature. It would be unreasonable to say that Tassely intended, post
execution, to be bound by new terms unilaterally added by Mr. Posner,
such as the inclusion of the Montecito equity interest. Because the
inclusion of that equity interest would have been an essential term,
substantial evidence supports the district court's finding that there was no
meeting of the minds, and therefore, the Initial Agreement was
unenforceable.
Partnership
Appellants next argue that because the Branding Iron
purchase agreement created a partnership or joint venture between
appellants and respondents, respondents have no right to the $100,000.00
owed on the Branding Iron Note. Appellants also contend that
respondents have no right to that money because the contingency
triggering payment—the property's sale—never occurred. Respondents
urge us to defer to the district court's determination that no partnership
existed and that the $100,000.00 is due.
Whether a partnership or joint venture arises out of a written
agreement is a question of fact. See Dieleman u. Sendlein, 99 Nev. 768,
769-70, 670 P.2d 578, 579 (1983); see also Radaker u. Scott, 109 Nev. 653,
658, 855 P.2d 1037, 1040 (1993) (stating that "principles of law regarding
general partnerships encompass joint ventures"). "[A] partnership is an
association of two or more persons to carry on as co-owners a business for
profit," NRS 87.060(1), whereas "[a] joint venture is a contractual
relationship in the nature of an informal partnership wherein two or more
persons conduct some business or enterprise, agreeing to share jointly, or
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in proportion to capital contributed, in profits and losses." Bruttomesso v.
Las Vegas Metro. Police Dep't, 95 Nev. 151, 154, 591 P.2d 254, 256 (1979).
Although the Branding Iron purchase agreement stated that
MSG was a partner with C&W, the agreement did not relate to or create a
business for profit, and thus, did not create a partnership. Moreover, we
conclude that the agreement was insufficient alone to create a joint
venture because it failed to identify a business objective between
appellants and respondents and did not speak to the parties jointly or
proportionally sharing profits and losses. Having determined that the
agreement created neither a partnership nor a joint venture, we next
consider whether the $100,000.00 owed on the Branding Iron Note was
contingent upon the property's sale.
We review contractual interpretation de novo. Anvui, LLC v.
G.L. Dragon, LLC, 123 Nev. 212, 215, 163 P.3d 405, 407 (2007). When a
contract's language is unambiguous, this court will interpret that
language according to its plain meaning. Dickenson v. State, Dep't of
Wildlife, 110 Nev. 934, 937, 877 P.2d 1059, 1061 (1994). Although poorly
written, the repayment terms are unambiguous when reading the Note as
a whole. The terms provide that appellants are required to repay the full
$100,000.00 plus one-half of the equity interest in the Branding Iron
property upon its sale and, if the property is not sold, to repay any balance
on the loan in full after June 2, 2009. Accordingly, the district court
properly construed this contract by requiring payment of the loan in full
plus interest from and after June 2, 2009. 3
3 We reject appellants' allegation of improper judicial conduct by the
district court because (1) they failed to offer evidence that they preserved
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Sanctions
Appellants next argue that the district court abused its
discretion by deeming admitted their tardy answers to respondents'
requests for admission. Moreover, appellants contend that the district
court impermissibly conditioned their right to go to trial on their payment
of $11,218.75 and violated their due process by not allowing them the
opportunity to submit evidence or assert a defense. Respondents assert
that the district court's reinstatement of appellants' untimely answers and
deduction of the sanctions from respondents' award of attorney fees
renders this issue moot.
This court has "a duty to decide actual controversies by a
judgment which can be carried into effect, and not to give opinions upon
moot questions or abstract propositions, or to declare principles of law
which cannot affect the matter in issue before [it]." Majuba Mining, Ltd.
v. Pumpkin Copper, Inc., 129 Nev. , 299 P.3d 363, 364 (2013)
(internal quotation omitted). A moot question is one that has no practical
. . . continued
the claim below, (2) they waited too long before raising the allegation, and
(3) the record does not support the allegation. See Foley v. Morse &
Mowbray, 109 Nev. 116, 120, 848 P.2d 519, 521 (1993) (stating that a
party must make a specific objection at trial to preserve a claim of judicial
misconduct); Ainsworth v. Combined Ins. Co. of Am., 105 Nev. 237, 260,
774 P.2d 1003, 1019 (1989) (explaining that when counsel knows of facts
that would support a motion for reconsideration, recusal, or vacatur based
on judicial "bias and impropriety[, counsel] may not lie in wait and raise
those allegations . . . only after learning the court's ruling on the merits"
(internal quotations omitted)), abrogated on other grounds by Powers v.
United Servs. Auto. Ass'n, 114 Nev. 690, 962 P.2d 596 (1998).
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significance. See Black's Law Dictionary 1099 (9th ed. 2009). Appellants'
arguments on this issue have no practical significance because the district
court reinstated appellants' answers to respondents' requests for
admission and deducted the monetary sanctions from respondents' final
award of attorney fees. Accordingly, this issue is moot and we need not
decide it. 4
We therefore ORDER the judgment of the district court
AFFIRMED.
, C.J.
Saitta
Pitfeu ity
cc: Hon. Ronald J. Israel, District Judge
Jerry J. Kaufman, Settlement Judge
Robert W. Lueck, Esq.
Nitz Walton & Heaton, Ltd.
Eighth District Court Clerk
4We also decline to consider appellants' challenge to the
constitutionality of SCR 123 as it was not properly raised.
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