Cornwell v. Schultz ( 2022 )

IN THE SUPREME COURT OF THE STATE OF NEVADA
THOMAS L. CORNWELL, A NEVADA No. 82106
RESIDENT,
Appellant,
vs. FILED
NEIL E. SCHULTZ, A NEVADA
RESIDENT, A/K/A THE NEIL E. MAR 3 O 2022
SCHULTZ TRUST DATED JANUARY ELIZABETH A. BROWN
CLERK CIF SUPREME COURT
29, 2016, By
5 NI
DEPUTY CL.ERK
Res • ondent.
ORDER OF AFFIRMANCE
This is an appeal from a district court order, pursuant to a
bench trial, granting quiet title. First Judicial District Court, Carson City;
James E. Wilson, Judge.
Respondent Neil E. Schultz acquired a promissory note from
the nonparty promisee, George Soetje, in 2018. The promissory note,
executed in 2003, was secured by a deed of trust to a parcel of land at 2355
Columbia Way, Carson City ("the property"). Appellant Thomas L.
Cornwell had acquired title to the property in 2017 via a quitclaim deed
granted to him by nonparty Karen Lynn Clarke, the promisor to the 2003
promissory note. Cornwell lives in a mobile home classified as personal
property, to which he does not retain title, that sits on the property. Schultz
initiated a nonjudicial foreclosure of the property following his acquisition
and recordation of the assignment of the deed of trust. The Neil E. Schultz
Trust, of which Schultz is a trustee, purchased the property at the trustee's
sale. Schultz filed this quiet title action after Cornwell refused to leave the
property. After a bench trial, the district court concluded that Schultz
acquired superior title to the property pursuant to a valid nonjudicial
foreclosure because the promissory note, secured by the deed of trust to the
property, was in default. This appeal followed.
The district court did not abuse its discretion in admitting hearsay
testimony, and substantial evidence otherwise supports the district court's
findings of fact and conclusions of law
Cornwell argues that Schultz relied exclusively on inadmissible
hearsay evidence to prove the default of the promissory note: (1) a sworn
declaration by Soetje that Clarke failed to make any payments on the note
since June 2010;1 (2) testimony by Schultz that Soetje told him that the last
payment made on the note occurred in 2010; (3) Cornwell's testimony, which
Schultz characterizes as corroborative of his own testimony, that Soetje told
Cornwell "that no payments had been made on the [promissory] note since
May 2010," but that Cornwell "ignored these statements," instead believing
that Clarke "was making at least some paymente; and (4) a handwritten
note from Soetje to a title company in which Soetje listed the principal
balance, interest, and fees outstanding on the promissory note at the time
Schultz acquired it. Cornwell contends that because Schultz failed to offer
admissible evidence, the "district court improperly relied on" these pieces of
inadmissible hearsay to conclude that Schultz acquired superior title, and
Schultz failed to prove his quiet-title claim without these pieces of
evidence.2 We disagree.
1We do not consider whether the declaration was inadmissible
hearsay because the district court never admitted it into evidence.
2 We decline to review Cornwell's claims of error in the admission of
Schultz's testimony and Soetje's handwritten note because he failed to
object to these pieces of evidence below. See Canfield v. Gill, 101 Nev. 170,
171 n.1, 697 P.2d 476, 477 n.1 (1985) (declining to review admission of
evidence because "[t]he failure to object to this evidence constitute[d] a
waivee). Cornwell's lack of legal representation and "alleged ignorance of
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2
We defer to the district court's findings of fact so long as
substantial evidence supports them. Sowers v. Forest Hills Subdivision,
129 Nev. 99, 105, 294 P.3d 427, 432 (2013). We define "substantial evidence
as that which 'a reasonable mind might accept as adequate to support a
conclusion.'" Bacher v. Office of State Ener of Nev., 122 Nev. 1110, 1121,
146 P.3d 793, 800 (2006) (quoting State Enip't Sec. Dep't v. Hilton Hotels
Corp., 102 Nev. 606, 608, 729 P.2d 497, 498 (1986)). Additionally, we review
a district court's decision to admit evidence for an abuse of discretion.
Hansen v. Universal Health Servs. of Nev., Inc., 115 Nev. 24, 27, 974 P.2d
1158, 1160 (1999). "An abuse of discretion occurs if the district court's
decision is arbitrary or capricious or if it exceeds the bounds of law or
reason." Skender v. Brunsonbuilt Constr. & Dev. Co., 122 Nev. 1430, 1435,
148 P.3d 710, 714 (2006).
Even if Cornwell's testimony constituted inadmissible hearsay,
and the district court improperly admitted it, the error did not affect the
outcome because Schultz's trustee's deed provided evidence for a reasonable
mind to accept as sufficient to support the finding of fact that a default
occurred.3 Indeed, the district court's findings of fact do not even reference
the law does not "protect him from the consequences of failing to comply
with" evidentiary rules and appellate procedure. See Rodriguez v. Fiesta
Palms, L.L.C., 134 Nev. 654, 659, 428 P.3d 255, 259 (2018), modified on
other grounds, Willard v. Berry-Hinckley Indus., 136 Nev. 467, 471 n.6, 469
P.3d 176, 180 n.6 (2020).
3 Even if his hearsay testimony factored into the district court's
decision, Cornwell never objected to Schultz's examination of him, instead
offering a narrative unprompted by any particular question. And arguably,
the statement was offered to show its effect on Cornwell, a nonhearsay
reason, to admit the testimony, see, e.g., Grosjean v. Imperial Palace, Inc.,
125 Nev. 349, 362-63, 212 P.3d 1068, 1078 (2009) (explaining that a
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the challenged portion of Cornwell's testimony. Instead, the district court
referred repeatedly to the recitals contained in the trustee's deed, which
stated, in relevant part, that a missed payment in June 2010, and continued
missed payments thereafter, formed the basis to declare the note in default.
Cornwell did not and does not challenge the authenticity of the deed, the
admission of the deed into evidence, or the district court's reliance on the
deed. See Back Streets, Inc. v. Campbell, 95 Nev. 651, 653, 601 P.2d 54, 55
(1979) (concluding that the "right to object to the evidence" on appeal was
"waive& for failure to object to the evidence at its admission). Accordingly,
we conclude that substantial evidence supported the district court's factual
and legal conclusions on the status of the note, regardless of whether
Cornwell's testimony constituted inadmissible hearsay.1
The district court did not shift the burden of proof to Cornwell to prove
superior title
Cornwell contends that the district court's consideration of
Cornwell's failure to provide admissible documentation to support his list
of purported payments made towards the promissory note to conclude
Schultz held superior title "improperly shift[ed] the burden of proof to"
Cornwell. We disagree.
statement offered for a purpose other than its truth, such as "to show its
effect on" the listener, makes the statement nonhearsay), such that the
district court's decision to not strike it sua sponte falls within its wide
discretion.
1 Because substantial evidence supports the district court's factual
finding regarding the default, and by consequence, the conclusion that the
default permitted Schultz to foreclose on the property, we do not address
Cornwell's challenge to the district court's alternative conclusion that the
due-on-sale clause permitted Schultz to conduct the foreclosure sale.
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We review de novo the district court's application of the legal
principles of burdens of production and persuasion. Gunderson v. D.R.
Horton, Inc., 130 Nev. 67, 82, 319 P.3d 606, 616 (2014). We conclude that
the district court did not shift the burden to Cornwell to prove the quiet-
title claim, see W. Sunset 2050 Tr. v. Nationstar Mortg., 134 Nev.
352, 354, 420 P.3d 1032, 1034-35 (2018) (noting that the plaintiff bears the
burden to prove "good title (internal quotation marks omitted) (quoting
Breliant v. Preferred Equities Corp., 112 Nev. 663, 669, 918 P.2d 314, 318
(1996))), because the court merely permitted Cornwell to come forward with
rebuttal evidence to show that payments were made, cf. Weaver v. State
Dep't of Motor Vehicles, 121 Nev. 494, 501, 117 P.3d 193, 198 (2005)
(concluding that the decision to allow a party to present evidence to rebut
the administrative law judge's conclusion "did not shift the burden of
proof'). Contrary to Cornwell's argument, the district court referenced
Cornwell's general failure to provide any documentation or proof to
substantiate his testimony that Clarke made the payments, despite that he
did not make the payments and that he did not know whether Clarke
missed payments. As discussed above, substantial evidence supports the
fact of default. Without any rebuttal evidence from Cornwell, that evidence
supported the foreclosure. Thus, the district court did not improperly shift
the burden to Cornwell to prove that he held superior title.5
W e decline to address Cornwell's final argument that equity requires
he receive protections provided to homeowners in proceedings for
nonjudicial foreclosures to correct for the perceived "inequitable"
circumstances of this quiet-title action. Not only does Cornwell raise the
argument for the first time on appeal, see Old Aztec Mine, Inc. v. Brown, 97
Nev. 49, 52, 623 P.2d 981, 983 (1981) (explaining that "[a] point not urged
in the trial court, unless it goes to the jurisdiction of that court, is deemed
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Accordingly, we
ORDER the judgment of the district court AFFIRMED.
Li, 8,4,0 J.
Silver
J.
Cadish
to have been waived and will not be considered on appeal"), but also he fails
to cogently argue the claim, see Edwards v. Emperor's Garden Rest., 122
Nev. 317, 330 n.38, 130 P.3d 1280, 1288 n.38 (2006) (declining to address
arguments where party failed "to cogently argue" them). His reliance on
our statement that equity jurisdiction "consider[s] the entirety of the
circumstances that bear upon the equities," Shadow Wood Homeowners
Ass'n v. N.Y. Ginty. I3ancorp, Inc., 132 Nev. 49, 63, 366 P.3d 1105, 11.14.
(2016), divorces the principle of equity from the various rules and doctrines
that comprise it, see generally 27A Am. Jur. 2d Equity § 2 (2021) (explaining
that the concept of equity does not permit courts to fashion relief "without
regard to precedents and established principlee). Cornwell identifies no
applicable equitable doctrine to warrant voiding the foreclosure sale and
applying the protections applicable to foreclosure of homes to the
foreclosure of a parcel of land. The court's equitable powers do not exist to
vindicate a party's perception of subjective unfairness in the legal outcome.
Because we do not address Cornwell's equity argument, we do not
need to reach Schultz's argument that the limitations periods in subsections
(5) and (6) of NRS 107.080 bar Cornwell's challenge to the foreclosure sale.
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cc: Ron. James E. Wilson, District Judge
Garman Turner Gordon
John Bartlett, Attorney at Law
Carson City Clerk
Legal Aid Center of Southern Nevada, Barbara E. Buckley, Executive
Director
Anne R. Traurn, Coordinator, Appellate Litigation Section, I ro Bono
Committee, State Bar of Nevada
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