Ford v. Branch Banking & Trust Co. , 2015 NV 53 ( 2015 )

131 Nev., Advance Opinion 53
IN THE SUPREME COURT OF THE STATE OF NEVADA
BARRY A. FORD, AN INDIVIDUAL; No. 65242
AND PATRICIA A. FORD, AN
INDIVIDUAL,
Appellants,
vs.
FILED
BRANCH BANKING AND TRUST JUL 2 3 2015
COMPANY, SUCCESSOR-IN- glE K. LINDEMAN
INTEREST TO COLONIAL BANK BY aaRAWAUPttceME
A cal R
ACQUISITION OF ASSETS FROM THE
FDIC AS RECEIVER FOR COLONIAL
BANK, A NORTH CAROLINA
BANKING CORPORATION
ORGANIZED AND IN GOOD
STANDING UNDER THE LAWS OF
THE STATE OF NORTH CAROLINA,
Respondent.
Appeal from a district court order denying a motion for NRCP
60(b) relief in a breach of guaranty action. Eighth Judicial District Court,
Clark County; Jerry A. Wiese, Judge.
Affirmed.
Law Office of Timothy P. Thomas, LLC, and Timothy P. Thomas, Las
Vegas,
for Appellants.
Sylvester & Polednak, Ltd., and Ryan W. Daniels, Allyson R. Noto, and
Jeffrey R. Sylvester, Las Vegas,
for Respondent.
BEFORE PARRAGUIRRE, DOUGLAS and CHERRY, JJ.
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OPINION
By the Court, PARRAGUIRRE, J.:
NRCP 60(b)(5) allows the district court to set aside a judgment
when, in material part, "a prior judgment upon which it is based has been
reversed or otherwise vacated, or it is no longer equitable that an
injunction should have prospective application." Here, we are asked to
determine whether new or changed precedent from this court justifies
NRCP 60(b)(5) relief. We conclude that NRCP 60(b)(5) does not allow a
district court to set aside judgments solely based on new or changed
precedent. Additionally, we conclude that NRCP 60(b)(5) does not allow a
district court to set aside monetary judgments merely because new or
changed precedent makes enforcement inequitable. Accordingly, we
affirm the district court's order denying NRCP 60(b) relief.
FACTS
In 2004, appellants Barry and Patricia Ford guaranteed two
commercial loans made by Colonial Bank The FDIC subsequently
acquired the loans when it was appointed as the receiver for Colonial
Bank. The FDIC, in turn, assigned the loans to respondent Branch
Banking and Trust Company (BB&T) in August 2009. The properties
securing the commercial loans were foreclosed August 29, 2011, and
BB&T brought a breach of guaranty action against the Fords in December
2011. After a partial summary judgment hearing, the district court
determined that the amount of damages was the only issue remaining for
trial.
At trial, the parties disputed whether NRS 40.459(1)(c) (2013)
(current version codified at NRS 40.459(3)(c)), which reduces the amount
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of some deficiency judgments, could limit the amount the Fords owed
BB&T. The district court concluded that former NRS 40.459(1)(c) only
applied prospectively. Further, it concluded the statute would have an
impermissible retroactive effect if applied to loans, like this one, that were
assigned before NRS 40.459(1)(c) took effect on June 10, 2011. See 2011
Nev. Stat., ch. 311, §§ 5(c), 7 at 1740, 1743, 1748. Therefore, NRS
40.459(1)(c) could not apply to the Fords' loans, and they were liable for
the full deficiency. The Fords never appealed the district court's final
judgment.
More than one year after the district court entered its
judgment, this court published Sandpointe Apartments v. Eighth Judicial
District Court, 129 Nev., Adv. Op. 87, 313 P.3d 849 (2013). Sandpointe
holds that "NRS 40.459(1)(c) only applies prospectively," and an
application of the statute is prospective if there has been no foreclosure
sale on the underlying loan as of June 10, 2011, the date the statute was
enacted. Sandpointe, 129 Nev., Adv. Op. 87, 313 P.3d at 851. Whether or
when a loan is assigned is not material. Id. Therefore, the district court
erred in holding that NRS 40.459(1)(c) would be retroactive if applied to
the Fords' loans because the foreclosure sale occurred August 29, 2011,
more than two months after NRS 40.459(1)(c) took effect. Shortly after
the Sandpointe opinion was published, the Fords asked the district court
to set aside the judgment against them pursuant to NRCP 60(b)(5). The
district court denied the Fords' motion, holding that NRCP 60(b)(5) was
not an appropriate avenue for seeking relief based on new or changed
precedent. The Fords now appeal that decision.
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DISCUSSION
On appeal, the Fords argue they can invoke NRCP 60(b)(5) to
set aside the judgment against them because (1) Sandpointe reversed "a
prior judgment upon which" the judgment against them was based, and (2)
"it is no longer equitable" to enforce the judgment against them in light of
this court's Sandpointe opinion. NRCP 60(b)(5).
Generally, we review a trial court's decision "to grant or deny
a motion to set aside a judgment under NRCP 60(b)" for an abuse of
discretion. Cook v. Cook, 112 Nev. 179, 181-82, 912 P.2d 264, 265 (1996).
However, we review de novo the district court's interpretation of the
Nevada Rules of Civil Procedure, See Moseley v. Eighth Judicial Dist.
Court, 124 Nev. 654, 662, 188 P.3d 1136, 1142 (2008); see also Webb ex rel.
Webb v. Clark Cnty. Sch. Dist., 125 Nev. 611, 618, 218 P.3d 1239, 1244
(2009). The district court denied the Fords' NRCP 60(b)(5) motion based
on its interpretation of that rule, holding NRCP 60(b)(5) does not permit
district courts to set aside judgments based on new or changed precedent.
Therefore, de novo review is appropriate here. See Moseley, 124 Nev. at
662, 188 P.3d at 1142; Webb, 125 Nev. at 618, 218 P.3d at 1244.
The material portions of NRCP 60(b)(5) allow the district court
to set aside a judgment when 11] a prior judgment upon which [the
challenged judgment] is based has been reversed or otherwise vacated, or
[2] it is no longer equitable that an injunction should have prospective
application." "Rule 60(b) of the Nevada Rules of Civil Procedure is
modeled on Rule 60(b) of the Federal Rules of Civil Procedure, as written
before the [FRCP's] amendment in 2007." Bonnell v. Lawrence, 128 Nev.,
Adv, Op. 37, 282 P.3d 712, 714 (2012). "Federal cases interpreting the
Federal Rules of Civil Procedure 'are strong persuasive authority, because
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the Nevada Rules of Civil Procedure are based in large part upon their
federal counterparts." Exec. Mgmt., Ltd. v. Ticor Title Ins. Co., 118 Nev.
46, 53, 38 P.3d 872, 876 (2002) (quoting Las Vegas Novelty, Inc. v.
Fernandez, 106 Nev. 113, 119, 787 P.2d 772, 776 (1990)).
The Fords contend that Sandpointe reversed a "prior
judgment" that formed the basis of the judgment against them, meaning
they may be entitled to relief under NRCP 60(b)(5). We reject the Fords'
interpretation.
The "prior judgment" language in NRCP 60(b)(5) is identical to
the pre-2007 version of its federal counterpart and substantively the same
as the current federal rule. 1 Compare NRCP 60(b)(5) (the court may set
aside a judgment when "a prior judgment upon which it is based has been
reversed or otherwise vacated"), with FRCP 60(b)(5) (2006) (same), and
FRCP 60(b)(5) (2014) (the court may set aside a judgment when "it is
based on an earlier judgment that has been reversed or vacated"). The
"prior judgment" portion of FRCP 60(b)(5) "does not apply merely because
a case relied on as precedent by the court in rendering the present
judgment has since been reversed." 11 Charles Alan Wright, Arthur R.
Miller & Mary Kay Kane, Federal Practice and Procedure § 2863 (3d ed.
2012). Rather, "[t]his ground is limited to cases in which the present
judgment is based on the prior judgment in the sense of claim or issue
preclusion." Id.; accord Tomlin v. McDaniel, 865 F.2d 209, 210-11 (9th
'In 2007, the federal rules were amended to make stylistic changes
only; the changes were not intended to modify the substance of the rules.
FRCP 60 advisory committee's note (2007 amendments).
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Cir. 1989), overruled on other grounds by Gonzalez v. Crosby, 545 U.S. 524
(2005); Comfort v. Lynn Sch. Comm., 560 F.3d 22, 27 (1st Cir. 2009).
We find the federal analysis of FRCP 60(b)(5) persuasive and
conclude NRCP 60(b)(5)'s "prior judgment" language does not reach new or
changed precedent. The Fords' matter and Sandpointe do not involve the
same parties or loans such that concerns about claim or issue preclusion
arise. See Weddell v. Sharp, 131 Nev., Adv. Op. 28, P.3d (2015)
(clarifying the elements of claim preclusion); Five Star Capital Corp. v.
Ruby, 124 Nev. 1048, 1054, 194 P.3d 709, 713 (2008) (setting forth the
basic elements for claim and issue preclusion); see also Sandpointe, 129
Nev., Adv. Op. 87, 313 P.3d 849. Therefore, Sandpointe is merely new
precedent, and NRCP 60(b)(5)'s "prior judgment" language does not apply
here.
The Fords also argue they are entitled to relief under NRCP
60(b)(5) because, after Sandpointe, it is no longer equitable to enforce the
judgment against them. We also reject this interpretation of NRCP
60(b)(5).
NRCP 60(b)(5) allows a district court to set aside a judgment
when "it is no longer equitable that an injunction should have prospective
application." (Emphasis added.) The pre-2007 version of FRCP 60(b)(5)
allows a district court to set aside a judgment when "it is no longer
equitable that the judgment should have prospective application."
(Emphasis added.) 2 Nevada's Advisory Committee expressly noted that it
The current version of FRCP 60(b)(5) allows a judgment to be set
2
aside when "applying [the judgment] prospectively is no longer equitable."
continued on next page . . .
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was modifying the federal rule such that the Nevada rule would only
consider the prospective application of injunctions, not judgments
generally.' NRCP 60 advisory committee's note. Therefore, NRCP
60(b)(5)'s drafters evidenced a clear intent to set aside only injunctions
where continued enforcement would be inequitable. See Moseley, 124 Nev.
at 662 n.20, 188 P.3d at 1142 n.20 (stating this court may interpret the
NRCP like a statute and subject to de novo review). The judgment against
the Fords is purely monetary, and BB&T neither sought nor obtained an
injunction. Therefore, the judgment against the Fords cannot be set aside
under NRCP 60(b)(5), even if enforcement might be inequitable.
Thus we conclude that new or changed precedent does not
constitute reversal of a "prior judgment" under NRCP 60(b)(5).
Additionally, NRCP 60(b)(5) relief is not available for monetary judgments
simply because enforcement of the judgment might be inequitable in light
. . . continued
The change here was meant to be purely stylistic, not substantive. FRCP
60 advisory committee's note (2007 amendments).
3 The Advisory Committee's Note states, "Mlle federal rule is revised
as follows . . . [fin part (4), the words 'an injunction' are substituted for 'the
judgment." NRCP 60 advisory committee's note. The reference to "part
(4)" is clearly a typographical error. Part (4) of both the FRCP 60(b) and
NRCP 60(b) simply state "the judgment is void." Therefore, "part (4)" was
not modified at all. However, as discussed above, part (5) of NRCP 60(b)
substitutes the words "the judgment" from the federal rules with the
words "an injunction." As such, Nevada's Advisory Committee clearly
intended to reference part (5) in its note, but mistakenly wrote part (4).
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of new or changed precedent. Accordingly, we affirm the district court's
order denying the Fords' NRCP 60(b)(5) motion.
We concur:
44
Douglas ,
J.
Cherry
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