Knowlton v. Linder ( 2022 )

IN THE SUPREME COURT OF THE STATE OF NEVADA
BRAD L. KNOWLTON, AN No. 82694
INDIVIDUAL,
Appellant,
vs.
WILLIAM L. LINDER, AS TRUSTEE OF
THE WILLIAM L. LINDER AND FILED
MAXINE G. LINDER TRUST OF 1988;
JUEL A. PARKER, AS TRUSTEE OF
APR 2 7 2022
A. BROWN
THE JUEL A. PARKER FAMILY UPREME COURT
TRUST; LISA PARKER, AS TRUSTEE CLEM
OF THE JUEL A. PARKER FAMILY
TRUST; LISA PARKER, AN
INDIVIDUAL; AND S. BRUCE
PARKER, AS TRUSTEE OF THE
STEVEN BRUCE PARKER FAMILY
TRUST,
Res ondents.
ORDER OF AFFIRMANCE
This is an appeal from a district court summary judgment in a
business dispute. Eighth Judicial District Court, Clark County; Elizabeth
Gonzalez, Judge.
Respondents William Linder, Juel Parker, Lisa Parker, and S.
Bruce Barker (the Trustees) controlled 61% of Valley Ascent, LLC (Valley
Ascent) on behalf of several trusts. Appellant Brad Knowlton owned 39%
of Valley Ascent and served as its manager. After the Trustees removed
Knowlton as the manager of Valley Ascent, he filed a complaint alleging
that he was wrongfully removed and that the Trustees were causing harm
to Valley Ascent. Later, Knowlton divorced his spouse in Utah. Pursuant
to the Utah decree of divorce, Knowlton agreed to an assignment of interest
(the assignment) that transferred all rights and claims relating to his
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ownership interest in Valley Ascent to his former spouse. Knowlton's
former spouse requested that he dismiss his complaint against the Trustees.
He refused. The Trustees moved for summary judgment on the ground that
Knowlton lacked standing to maintain his complaint because he assigned
away all rights and claims relating to his ownership interest in Valley
Ascent. The district court agreed and entered summary judgment in favor
of the Trustees.
On appeal, Knowlton argues that the district court erroneously
concluded that he lacked standing because (1) the Utah decree of divorce,
which contained the assignment that transferred his interest in Valley
Ascent to his former spouse, was not a final judgment, (2) the assignment
unambiguously transferred only his prospective rights as an owner of Valley
Ascent to his former spouse, and (3) his claims as the former manager of
Valley Ascent survive the assignment. We disagree with each of Knowlton's
arguments and affirm.
A summary judgment will be affirmed if this coures de novo
review of the trial record—viewed in the light most favorable to the
nonmovant—shows "that no genuine issue as to any material fact [remains]
and that the moving party is entitled to a judgment as a matter of law."
Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005)
(alteration in original) (internal quotation marks omitted). Likewise,
"[s]tanding is a question of law reviewed de novo." Arguello v. Sunset
Station, Inc., 127 Nev. 365, 368, 252 P.3d 206, 208 (2011). A party has
standing if it "possesses the right to enforce the claim and has a significant
interest in the litigation." Id. (internal quotation marks omitted).
First, Knowlton argues that the Utah decree of divorce was not
a final judgment because (1) it is currently being appealed in Utah, and (2)
his motion to alter or amend the decree of divorce was pending in the Utah
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district court when the Nevada district court granted summary judgment.
We reject both contentions because Knowlton included no documentation in
the trial or appellate records—other than counsel's statements—to show the
status of the proceedings in Utah. See Jain v. McFarland, 109 Nev. 465,
475-76, 851 P.2d 450, 457 (1993) ("Arguments of counsel are not evidence
and do not establish the facts of the case."); Smithart v. State, 86 Nev. 925,
930, 478 P.2d 576, 580 (1970) ("On appeal this court will not consider
anything outside the trial record."). Due to the inadequate record on appeal,
we are unable to conclude that the district court erred by concluding that
the Utah decree of divorce was a final judgment. Moreover, Utah law
provides that a judgment is final unless a stay has been entered pending
appeal, 2DP Blanding, LLC v. Palmer, 423 P.3d 1247, 1251 (Utah 2017),
and Knowlton included nothing in the record to show that the decree of
divorce was stayed pending appeal. Thus, this argument is meritless.
Second, Knowlton contends that the assignment only
transferred his prospective rights as an owner of Valley Ascent, so he can
still assert retrospective claims relating to his ownership interest. If a
contract is unambiguous, this court will effectuate the ordinary meaning of
the words in the contract. See Dickenson v. State, Dep't of Wildlife, 110 Nev.
934, 937, 877 P.2d 1059, 1061 (1994) (stating that summary judgment is
improper if the contract is ambiguous). Here, the assignment states that
Knowlton assigned to his former spouse "any and all rights, interests,
and/or claims related to his ownership interest in Valley Ascent." Because
'We decline Knowlton's request to take judicial notice of the Utah
proceedings because doing so would require this court to go outside of the
record to obtain Utah court records. See Mack v. Estate of Mack, 125 Nev.
80, 91, 206 P.3d 98, 106 (2009) (stating that, even if cases are related, this
court will generally not take judicial notice of records in a separate case).
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(0) 1947A 446144.
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the assignment plainly and unambiguously states that Knowlton assigned
away any and all claims, we conclude that he assigned away every claim
(i.e., both prospective and retrospective claims) related to his ownership
interest in Valley Ascent. Cf. Coffee v. Henry, 240 P.3d 1056, 1057 (Okla.
2010) (stating that "Nile term 'every ordinarily means 'any' or 'all"). Thus,
Knowlton lacked standing, as he no longer "possesse[d] the right to enforce"
any claim related to his interest in Valley Ascent. Arguello, 127 Nev. at
368, 252 P.3d at 208 (internal quotation marks omitted). Because the
Trustees were entitled to judgment as a matter of law on the claims relating
to Knowlton's former ownership interest, the district court did not
erroneously grant summary judgment.
Third, Knowlton contends that his claims for breach of contract,
breach of implied covenant of good faith and fair dealing, and breach of
fiduciary duty survive in his capacity as the former manager of Valley
Ascent.2 Valley Ascent's operating agreement unambiguously states that
its "[Manager shall not have any contractual right to such position." Thus,
Knowlton's claims for breach of contract and breach of implied covenant of
good faith and fair dealing—both of which require a contract—fail as a
matter of law because he had no contractual right to be the manager of
Valley Ascent. See State, Dep't of Transp. v. Eighth Judicial Dist. Court,
133 Nev. 549, 554, 402 P.3d 677, 682 (2017) (explaining that a breach of
contract is the failure to perform a duty created by an agreement); see also
id. at 555, 402 P.3d at 683 (noting that contracts contain "an implied
2Because Knowlton assigned away his ownership interest in Valley
Ascent, he lacked standing to assert these claims derivatively on behalf of
the company. Cf. Parametric Sound Corp. v. Eighth Judicial Dist. Court,
133 Nev. 417, 424, 401 P.3d 1100, 1106 (2017) (explaining that former
shareholders of a company lack standing to bring a derivative claim).
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(0) 1947A 40101:.
covenant of good faith and fair dealing, which prohibits arbitrary or unfair
acts by one party that work to the disadvantage of the othee (internal
quotation marks omitted)). Likewise, we reject Knowlton's contention that
he can maintain a claim for breach of fiduciary duty as the former manager
of Valley Ascent. Knowlton cites only NRS 86.291(3), which states that a
limited liability company can be member-managed or manager-managed,
but this statute does not show that Valley Ascent or its members owed
Knowlton fiduciary duties in his capacity as the manager of the company.
Knowlton cited no other authority below or on appeal to show the existence
of such a fiduciary duty and therefore he has failed to cogently argue this
point. See Edwards v. Emperor's Garden Rest., 122 Nev. 317, 330 n.38, 130
P.3d 1280, 1288 n.38 (2006) (stating that we will not consider arguments
unsupported by relevant authority); cf. NRS 86.298(2) (stating that an
operating agreement can impose fiduciary duties on the manager). Because
Knowlton's claims as the former manager of Valley Ascent fail as a matter
of law, the district court correctly granted summary judgment in favor of
the Trustees.
Accordingly, we
ORDER the judgment of the district court AFFIRMED.
0.4.4g.D J.
Silver
.
J.
Cadish Pickering
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(0) 1947* cligbly•
cc: Hon. Linda Marie Bell, Chief Judge
Eighth Judicial District Court, Department 11
Carolyn Worrell, Settlement Judge
Erickson & Whitaker PC
Greenberg Traurig, LLP/Las Vegas
Eighth District Court Clerk
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10) I947A