VARGAS v. J MORALES INC. , 2022 NV 38 ( 2022 )

138 Nev., Advance Opinion 3g
IN THE SUPREME COURT OF THE STATE OF NEVADA
MAX VARGAS, INDIVIDUALLY, No. 82218
Appellant,
vs. FILE
J MORALES INC.,
Respondent.
Appeal from a district court order setting aside a default
judgment pursuant to NRCP 60(b)(1) and (6). Eighth Judicial District
Court, Clark County; Rob Bare, Judge.
Reversed and remanded.
Peralta Law Group and Oscar Peralta, Las Vegas,
for Appellant.
Lewis Roca Rothgerber Christie LLP and Ogonna M. Brown and Adrienne
R. Brantley-Lomeli, Las Vegas,
for Respondent.
BEFORE THE SUPREME COURT, HARDESTY, STIGLICH, and
HERNDON, JJ.
OPINION
By the Court, HERNDON, J.:
NRCP 60(b) provides various grounds for relief from a final
judgment, including mistake or excusable neglect, see NRCP 60(b)(1), newly
discovered evidence, see NRCP 60(b)(2), fraud, see NRCP 60(b)(3), or "any
other reason that justifies relief," see NRCP 60(b)(6). Any such relief must
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be sought within a "reasonable time and, more specifically, when the relief
is sought under NRCP 60(b)(1), (2), or (3), within 6 months after service of
written notice of the judgment's entry. See NRCP 60(c)(1). Furthermore,
NRAP 3A(b)(8) provides for appeals from "[a] special order entered after
final judgment, excluding an order granting a motion to set aside a default
judgment under NRCP 60(b)(1) when the motion was filed and served
within 60 days after entry of the default judgment."
The instant appeal was taken from a district court order that
granted a motion for relief from a default judgment under NRCP 60(b)(1)
and (6), although the motion was filed over 14 months after service of
written notice of entry of the default judgment.
In resolving this appeal, we address two separate issues. First,
we clarify that, per NRAP 3A(b)(8), this court has appellate jurisdiction over
orders granting NRCP 60(b)(1) relief when the motion is filed more than 60
days after entry of judgment. Second, we clarify that the "any other reason
that justifies relief provision under NRCP 60(b)(6) is mutually exclusive of
the relief provided in NRCP 60(b)(1)-(5) and may not be used to circumvent
the 6-month time constraints imposed under that rule. Applying these
principles, we conclude that we have jurisdiction over this appeal but that
the underlying NRCP 60(b)(1) motion was untimely because it was filed
more than 6 months after written notice of the default judgment's entry was
served. Furthermore, because the requested relief was based on allegations
constituting only mistake or excusable neglect, which fall under NRCP
60(b)(1), relief under NRCP 60(b)(6) was not available. Thus, the district
court abused its discretion in granting NRCP 60(b) relief. Accordingly, we
reverse the district court's order and remand this matter for further
proceedings consistent with this opinion.
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FACTS AND PROCEDURAL HISTORY
Appellant Max Vargas filed a complaint alleging that he was
attacked by security guards on a premises owned by respondent J Morales
Inc. (JMI) and that JMI was negligent in its duty to maintain the premises
in a reasonably safe condition. JMI was served with the complaint through
its registered agent on February 16, 2018. It is undisputed that Jose
Morales, the owner and sole corporate officer for JMI, received the
complaint but did not follow up on it. Instead, he allegedly relied on the
advice of his insurance agent, who told him he was not liable in the matter
because he did not own the subject property at the time of the incident. On
April 13, 2018, default was entered against JMI, and JMI was properly
served with a copy of the notice of entry of default on April 17, 2018.
Subsequently, a default judgment of over $1.7 million in compensatory and
punitive damages was entered against JMI on July 25, 2019, and JMI was
served with notice of entry of the default judgment on August 6, 2019. JMI,
however, claims that it learned about the judgment in September 2020,
when its bank account was garnished.
On October 26, 2020, over 14 months after entry of the default
judgment, JMI filed a motion to set aside the judgment and stay execution
on the grounds of mistake or excusable neglect under NRCP 60(b)(1) and
[(
any other reason justifying relier under NRCP 60(b)(6). The district court
granted JMI's motion, finding sufficient grounds for relief under both NRCP
60(b)(1) and (6).
DISCUSSION
This court has jurisdiction over this appeal
As a preliminary matter, JMI asserts that this court lacks
appellate jurisdiction over this matter, pointing to Estate of Adarns v.
Fallini, 132 Nev. 814, 816, 386 P.3d 621, 623 (2016), which determined that
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an order granting relief frorn fraud upon the court under NRCP 60(b)(3) was
not appealable. We take this opportunity to clarify that we have appellate
jurisdiction over orders granting an NRCP 60(b)(1) motion that was filed
more than 60 days after entry of a default judgment.
This court has jurisdiction to consider an appeal only when
authorized by statute or court rule. Taylor Constr. Co. v. Hilton Hotels
Corp., 100 Nev. 207, 209, 678 P.2d 1152, 1153 (1984). NRAP 3A(b)(8)
provides for appeals from "lal special order entered after final judgment,
excluding an order granting a motion to set aside a default judgment under
NRCP 60(b)(1) when the motion was filed and served within 60 days after
entry of the default judgment." (Emphasis added.) To be appealable, a
special order entered after final judgment "must be an order affecting the
rights of some party to the action, growing out of the judgment previously
entered . . . affecting rights incorporated in the judgment." Guninz v.
Main.or, 118 Nev. 912, 914, 59 P.3d 1220, 1221 (2002).
In 1978, NRAP 3A(b)1 was amended to exclude orders granting
NRCP 60(b)(1) motions made within 60 days after entry of a default
judgment from the ambit of appealable special orders. Before then, this
court regularly accepted appeals from orders setting aside judgments,
implicitly treating such orders as special orders entered after a final
judgment. See, e.g., Helitzer Advert., Inc. v. Seven Star Media Corp., 89 Nev.
411, 412, 514 P.2d 214, 214 (1973) (appeal from order setting aside);
Johnston, Inc. v. Weinstein, 88 Nev. 7, 9, 492 P.2d 616, 617 (1972) (same);
'Special orders after final judgment were formerly addressed under
NRAP 3A(b)(2). The rule was renumbered as NRAP 3A(b)(8). See Yonker
Constr., lnc. U. Hultne, 126 Nev. 590, 592, 248 P.3d 313, 314 (2010) (noting
that NRAP 3A(b)(8) was formerly NRAP 3A(b)(2)).
4
Blakeney v. Fremont Hotel, Inc., 77 Nev. 191, 193, 360 P.2d 1039, 1040
(1961) ([A]ppeal is from the order setting aside the entry of default and the
judgment."), Cicerchia v. Cicerchia, 77 Nev. 158, 159, 360 P.2d 839, 840
(1961) (same).
In 2004, we confirmed in Lindblom v. Prime Hospital Corp.,
that lain order setting aside a default judgment is appealable as a special
order after judgment if the motion to set aside is made more than sixty days
after entry of the judgment." 120 Nev. 372, 374 n.1, 90 P.3d 1283, 1284 n.1
(2004). Subsequently, in Fallini, we concluded that an order granting
NRCP 60(b)(3) relief for fraud upon the court was interlocutory and not
appealable, having merged with the final judgment. 132 Nev. 814, 816, 386
P.3d 621, 623 (2016) (emphasis added). More recently, in Meisel u.
Archstone Investment Partners, LP, we cited NRAP 3A(b)(8) and Lindblom
in concluding that this court had jurisdiction over an appeal from a district
court order granting NRCP 60(b)(1) relief through a motion filed more than
6 months after the entry of judgment. See No. 68122, 2017 WL 4618618, at
*1 n.1 (Nev. Oct. 13, 2017) (Order of Reversal and Remand).
While JMI contends that Fallini abrogated Lindblom, JMI
overlooks the fact that Fallini dealt only with the narrow instance where
the NRCP 60(b) motion was granted for fraud upon the court pursuant to
NRCP 60(b)(3). That is not the issue presented here and was not the issue
raised in Lindblom or Meisel. The sole issue here is this court's jurisdiction
over NRCP 60(b)(1) orders. And we see no reason to depart from our
previous decisions—Lindblom and Meisel—that specifically acknowledged
our appellate jurisdiction over orders granting NRCP 60(b)(1) motions filed
more than 60 days after the entry of judgment.
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We now explicitly hold that all orders granting NRCP 60(b)(1)
motions filed more than 60 days after entry of the judgment are appealable
as special orders in accordance with Lindblom, Meisel, and the plain
language of NRAP 3A(b)(8).2 See also Gumm, 118 Nev. at 914, 59 P.3d at
1221. A contrary holding would render the 60-day exception in NRAP
3A(b)(8) meaningless. Moreover, Nevada has a long-standing history of
treating orders granting NRCP 60(b)(1) motions as special orders after final
judgment, see generally Banks v. Heater, 95 Nev. 610, 600 P.2d 245 (1979)
(impliedly determining the court's jurisdiction by reviewing the district
court's NRCP 60(b)(1) order); Ogle v. Miller, 87 Nev. 573, 491 P.2d 40 (1971)
(same), and this court in Fallini seemingly did not intend to overturn this
long-standing practice.
Here, the district court's order granted a motion to set aside the
default judgment filed and served over 60 days after entry of the default
judgment, thus falling outside the exclusion in NRAP 3A(b)(8). Thus, this
2We do not address our jurisdiction over orders granting relief under
NRCP 60(b)(2)-(5) at this time, as that issue is not currently before the
court. The court's jurisdiction over NRCP 60(b)(6) orders is also not at issue
because, as discussed post, the underlying motion only supported a request
for relief pursuant to NRCP 60(b)(1).
Likewise, we need not address our jurisdiction over orders granting
NRCP 60(b) relief where the order has merged into the final judgment. See
Am. Ironworks & Erectors, Inc. v. N. Am. Constr. Corp., 248 F.3d 892, 897
(9th Cir. 2001) (noting that "a party may appeal interlocutory orders after
entry of final judgment because those orders merge into that final
judgment"); see also Consol. Generator-Nev., Inc. v. Cummins Engine Co.,
114 Nev. 1304, 1312, 971 P.2d 1251, 1256 (1998) (noting that this court may
review an interlocutory order in the context of an appeal from a final
judgment).
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court is authorized to consider Vargas's challenge to the order, and we must
now turn to the merits of Vargas's appeal.
The district court abused its discretion. in granting NRCP 60(b) relief
The district court has wide discretion to grant or deny a motion
to set aside a judgment under NRCP 60(b), and its determination will not
be disturbed on appeal absent an abuse of that discretion. See Cook v. C.:gook,
112 Nev. 179, 181-82, 912 P.2d 264, 265 (1996). A district court may abuse
its discretion in ruling on an NRCP 60(b)(1) motion if it disregards legal
principles. Willard, 136 Nev. at 469, 469 P.3d at 179.
NRCP 60(b)(1) motion was untimely
Generally, an aggrieved party must seek relief under NRCP
60(b) "within a reasonable time." NRCP 60(c)(1). However, a motion
seeking relief under NRCP 60(b)(1) must be filed within 6 months of service
of written notice of entry of the judgment. NRCP 60(c)(1.); see also Doan. v.
Wilkerson, 130 Nev. 449, 454, 327 P.3d 498, 501 (2014) (providing that any
NTRCP 60(b)(1) motion filed outside of 6 rnonths is untimely and must be
denied), superseded by statute on other grounds as recognized in Kilgore v.
Kilgore, 135 Nev. 357, 449 P.3d 843 (2019).
Here, JMI filed its motion to set aside the default judgment on
October 27, 2020. This was more than 14 months after the notice of the
entry of default judgrnent was served on August 6, 2019. Thus, because JMI
filed its motion beyond the 6-month time limit, the district court abused its
discretion in granting NRCP 60(b)(1) relief.
NRCP 60(b)(6) relief was unavailable
NRCP 60(b)(6) was added as part of the 2019 amendments to
Rule 60 and permits a judgment to be set aside for "any other reason that
justifies relief." The purpose of these amendments was to "generally
conform [NRCP] 60 to FRCP 60, including incorporating FRCP 60(b)(6) as
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[NRCP160(b)(6)." NRCP 60, Advisory Committee Note--2019 Amendment.
Because we have not yet had an opportunity to consider NRCP 60(b)(6),
which is identical to its federal analog, we look to federal cases for guidance.
See McClendon v. Collins, 132 Nev. 327, 330, 372 P.3d 492, 494 (20] 6)
(noting that the "fflederal cases interpreting the Federal Rules of Civil
Procedure are strong persuasive authority, because the Nevada Rules of
Civil Procedure are based in large part upon their federal counterparts"
(internal quotations omitted)); see also Byrd v. Byrd, 137 Nev., Adv. Op. 60,
501 P.3d 458, 462-63 (Ct. App. 2021) (finding NRCP 60(b)(6) relief was
unavailable where relief sounded in NRCP 60(b)(1) or NRCP (b)(3)).
The United States Supreme Court has stated that FRCP
60(b)(6) relief is available only under "extraordinary circumstances."
Gonzalez v. Crosby, 545 U.S. 524. 535 (2005). FRCP 60(b)(6) was enacted
to go beyond the grounds for relief previously provided where justice so
requires. See 11 Charles Alan Wright, Arthur R. Miller & Mary K. Kane,
Federal Practice and Procedure § 2864 (3d ed. 2012). Implicitly. this means
a party cannot utilize FRCP 60(b)(6) for the relief provided by FRCP
60(b)(1)-(5). See Pioneer Inu. Servs. Co. v. Brunswick Assocs. Ltd. P'ship,
507 U.S. 380, 393 (1993) (explaining that FRCP 60(b)(6) and the other
subsections of FRCP 60(b) provide mutually exclusive grounds for relief);
Liljeberg v. Health Serus. Acquisition Corp., 486 U.S. 847, 863 n.11 (1988)
Cclause (6) and clauses (1) through (5) are mutually exclusive"); United
States u. Fernandez, 797 F.3d 315, 319 (5th Cir. 2015) C[I]f a motion was Of
a type that must be brought within a year, and that year passed without
filing, the inovant cannot resort to Rule 60(b)(6); rather, it finds . . . itself
without Rule 60(b) remedy altogether."); Lyon v. Agusta S.P.A., 252 F.3d
1078, 1088 (9th Cir. 2001) (time bar could not be avoided to pursue remedy
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under Rule 60(0(6) where relief under other provisions of Rule 60(b) was
available, but not timely sought). As these authorities are sound, we see no
reason to depart from the federal interpretation of FRCP 60(b)(6). Thus, we
hold that relief may not be sought under NRCP 60(b)(6) when it would have
been available under NRCP 60(b)(1)-(5). See Byrd, 137 Nev., Adv. Op. 60,
501 P.3d 458, 462-63.
In this case, the relief JMI requested would have fallen under
NRCP 60(b)(1) had it been timely sought.3 The district court recognized two
bases for NRCP 60(b) relief: (1) Morales allegedly relied on the advice of his
insurance agent, who told him that he would not face liability related to this
matter because he did not own the subject property at the time of the
underlying incident, and (2) Morales lacks knowledge of the procedural
rules and has a significant language barrier. These bases for NRCP 60(b)
relief would be available under NRCP 60(b)(1) as mistake or excusable
neglect.• Thus, the district court abused its discretion when it granted relief
for "any other reason" under NRCP 60(b)(6), as JMI's grounds for seeking
relief were available to it under NRCP 60(b)(1) but JMI failed to timely file
an NRCP 60(b)(1) motion.4
CONCLUSION
First, we clarify -that NRAP 3A(b)(8) provides this court with
appellate jurisdiction over orders granting NRCP 60(b)(1) relief when the
motion is filed more than 60 days after the judgment. Second, we adopt the
3 NRCP 60(b)(1) provides that a district "court may relieve a party or
its legal representative from a final judgment, order, or proceeding based
on a finding of "mistake, inadvertence, surprise, or excusable neglect."
4 Tothe extent. Vargas challenges the timeliness of JM1's NRCP
60(b)(6) motion, we need not. reach this issue because the motion was not
properly seeking relief under NRCP 60(b)(6).
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federal approach and conclude that NRCP 60(b)(6)'s "any other reason
justifying relief provision is mutually exclusive with the provisions
outlined in NRCP 60(b)(1)-(5). Importantly, NRCP 60(b)(6) may not be used
as a subterfuge to circumvent the time limits that apply to a request for
relief based on NRCP 60(b)(1). Accordingly, we conclude that the district
court abused its discretion when granting JMI relief, and we reverse the
district court's order and remand this matter for proceedings consistent
with this opinion.
Herndon
We concur:
Hardesty
Ale.Q5CA-S9 , J.
Stiglich
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