Holland v. Anthony L. Barney ( 2023 )

139 Nev., Advance Opinion U4
IN THE COURT OF APPEALS OF THE STATE OF NEVADA
No. 84908-COA
FILED
NOV 22 2023
IEF
SEPT CLERK
GAIL HOLLAND, AN INDIVIDUAL,
Appellant,
vs.
ANTHONY L. BARNEY, LTD.,
Respondent.
Appeal from a district court order gr anting summary judgment
in a fraudulent transfer action. Eighth Judicial District Court, Clark
County; Crystal Eller, Judge.
Reversed and remanded.
Hutchison & Steffen, PLLC, and Robert E. Werbicky, Las Vegas; Mincin
Law, PLLC, and David Mincin. Las Vegas,
for Appellant.
Jerimy Kirschner & Associates, PLLC, and Jerimy L. Kirschner, Las Vegas,
for Respondent.
BEFORE THE COURT OF APPEALS, GIBBONS, C.J., and BULLA and
WESTBROOK, JJ.
. . OPINION
By the Court, BULLA, J.:
This case hag a lengthy and complex procedural history
involving multiple court orders and raises issues of Nevada law requiring
clarification as to the preclusive effect of those orders and the equitable
remedies available thereunder. We take this opportunity to provide
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guidance regarding these issues as they pertain to the centerpiece of this
appeal—the ownership of real property located at 10512 Loma Portal
Avenue, on which the bankruptcy court placed an equitable lien.
We conclude that an equitable lien placed on property to satisfy
a debt—while not vesting the lienholder with an interest in the property—
permits the lienholder to enforce the value of the equitable lien against the
debtor's property even where that property has been subsequently
transferred to a nondebtor spouse during divorce proceedings. In resolving
this appeal, we take the opportunity to address certain nuances of claim
preclusion. Here, based on the preclusive effect of prior court orders, we
conclude that an equitable lien is the only remedy available to satisfy
respondent’s interest concerning the Loma Portal property. Thus, the
district court erred in granting summary judgment by substituting other
remedies in place of the equitable lien. Further, because genuine disputes
of material fact remain as to the current value of the equitable lien placed
on the Loma Portal property, as well as the value of the property itself, we
reverse and remand for further proceedings consistent with this opinion.
FACTS AND PROCEDURAL HISTORY
The Howard Family Trust. (Howard Trust) was created in 1998.
Appellant Gail Holland’s former spouse, Gloyd Green, became the successor
trustee of the Howard Trust following the death of the last remaining settlor
of the trust in 2005. Thereafter, Green began misappropriating trust
assets, leading to litigation with the Howard Trust and its beneficiaries
(collectively referred to as the Howard Trust parties).
Prior district court actions
In 2008, beneficiaries of the Howard Trust—Oscar Brannon
Howard IT] (Howard) and Truman Holt (Holt)—became suspicious of
Green's handling of the Howard Trust and commenced an action in the
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probate court in the Eighth Judicial District to determine whether Green
had breached his fiduciary duties under the trust. Holland was not a party
in the probate action. The probate court ordered Green to provide an
inventory of the Howard Trust properties and a fuli accounting of trust
assets. When Green failed to do so, the probate court removed Green as
trustee and appointed Holt as the successor trustee in April 2008.
Several years later. in January 2012, Holland and Green
purchased the Loma Portal property via grant, bargain, and sale deed held
by the Holland-Green Family Trust (the HG Family Trust), of which they
were the sole beneficiaries. In August 2012, the Howard Trust parties filed
a civil suit in the Fighth Judicial District against Holland, Green, and the
HG Family Trust, attempting to recover Howard Trust assets. Holt, in his
capacity as trustee, also recorded a notice of lis pendens against the Loma
Portal property. While this civil litigation was ongoing, the probate court
enforced a forfeiture clause in the: Howard Trust against Green and
required him to “forfeit any and all beneficial interests” to which he might
have been entitled under the Howard Trust. Further, the court ordered
Green to return “any and all current property of the [Howard Trust]
previously taken by [Green] from the Trust.”!
Eventually, the district court in the civil action found that
Green embezzled funds from the Howard Trust and announced from the
bench its intention to enter judgment for $1.276,854.14 against Green,
which included $638,427.07 in compensatory damages traced from the
'We note that, contrary to respondent Anthony L. Barney, Ltd.’s
(Barney Ltd.) assertions, the Loma Portal property was never deterrnined
to be a property held by the Howard Trust and therefere was not a property
“taken” by Green from the trust.
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Howard Trust and an equal amount of punitive damages. But before this
oral ruling was reduced to a written judgment, Holland and Green filed a
petition under Chapter 11 of the Bankruptcy Code, and the action was
removed to the United States Bankruptcy Court for the District of Nevada.
The bankruptcy proceedings
Following removal, the civil case against Holland and Green,
previously pending in district court, continued as an adversary proceeding
alongside the bankruptey proceedings in the bankruptcy court. Upon
motion from the Howard Trust parties, the bankruptcy court concluded that
Holland and Green’s Chapter 11 petition was made in bad faith to delay
entry of judgment in the underlying state case and converted their case to
a proceeding under Chapter 7.”
The Loma Portal property settlement
During the bankruptcy proceedings, Holland and Green
attempted to declare a homestead exemption for the Loma Portal property
under NRS 21.090. However, the bankrupucy court denied Holland and
Green's request for a homestead exemption atter receiving evidence tnat the
funds used to purchase the Loma Portal property were misappropriated hy
Green from the Howard Trust.*
Holland and Green thereafter participated in settlement
iegotiations with the bankruptcy estate trustee, with the goai of purchasing
the bankruptcy estate’s interest in the Loma Portal property (and thereby
“The bankruptcy filings later acknowledged that the Howard Trust’s
claim comprised 99.04 percent of the liabilities owed by the bankruptcy
estate
‘Holland and Green appealed the denial of the homestead exemption
to the United States Court of Appeals for the Ninth Circuit, which
ultimately affirmed the underlying decision.
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continuing to use the property as their primary residence). As relevant
here, the bankruptcy court approved the settlement and allowed Holland
and Green to purchase the bankruptcy estate’s interest in the Loma Portal
property for $340,000 using untainted funds. In its order approving the
settlement agreement, the bankruptcy court noted that the Howard Trust
parties received notice of the settlement agreement “as required by law.”*
Importantly, the order approving the settlement noted that the
bankruptcy estate’s interest in the Loma Portal property was subject to any
existing liens and encumbrances:
IT IS FURTHER ORDERED that the
[bankruptcy estate trustee] is authorized to release
and transfer the estate’s interest, if any, in the real
property located at 10512 Loma Portal Avenue, Las
Vegas, NV 89166 (the “Loma Property”) also
designated as Clark County Assessor Parcel
Tumber 126-24-113-016, “as is, where 1s,” and
subject to any liens and encumbrances, to [Green
and Holland] in exchange for payment of $340,000
due no later than September 22, 2017.8
4We note that attorney Anthony L. Barney represented Howard in the
bankruptcy proceedings and approved the settlement agreement on behalf
of his client.
5Under 11 U.S.C. § 541(a), the bankruptcy estate obtained all legal or
equitable interests of the debtor’s separate property and all interests of the
debtor and the debtor’s spouse in community property. Accordingly, to the
extent that the Loma Portal property was not subject to any prior liens or
encumbrances, the bankruptcy estate obtained all of Holland and Green’s
legal and equitable interests in the Loma Portal property.
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(Emphases added.) At the time of the purchase of the Loma Portal property
with the untainted funds as permitted by the settlement agreement there
was no evidence of any prior liens or encumbrances on the property.®
The order approving the settlement also expressly reserved
rights held by the Howard Trust, its trustee, or its beneficiaries against the
property:
IT IS FURTHER ORDERED that all rights
held or claimed by the [Howard Trust] and/or its
trustee or beneficiaries against the Loma Property,
including those asserted in [the proceedings]
pending herein, are expressly reserved
notwithstanding approval of this settlement
agreement.
Holland and Green thereafter timely paid $340,000 to the bankruptcy
estate to purchase the Loma Portal property.’ Pursuant to the terms of the
settlement agreement, the bankruptcy trustee’s final report designated the
Loma Portal property as community property and Holland and Green's
primary residence.
The adversary proceedings and bankruptcy judgment
At trial on the adversary proceedings related to the Howard
Trust parties’ claims against Holland and Green, the parties litigated
various federal claims under 11 U.S.C. § 523 and several state causes of
‘We note that the lis pendens recorded by Holt on behalf of the
Howard Trust parties is not a lien but only notice of a legal dispute
concerning the property. See 51 Am. Jur. 2d Lis Pendens § 2 (2010)
(explaining that a lis pendens serves to alert third parties to the fact of an
existing suit on property).
7A copy of a check for $377,553.71 was provided in the record,
indicating that Holland and Green tendered payment of $340,000, plus
additional funds, to the bankruptcy trustee.
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action, including (1) intentional misrepresentation, (2) fraud, (3) breach of
fiduciary duty, (4) conversion, (5) constructive fraud, (6) unjust enrichment,
(7) embezzlement, (8) civil theft, (9) breach of constructive trust, and
(10) unfair and deceptive trade practices.
Following a three-day trial, the bankruptcy court dismissed
“each and all” of the Howard Trust parties’ claims against Hoiland. The
kankruptcy court also dismissed the Howard Trust’s parties’ claims against
Green for larceny under 11 U.S.C. § 523(a)(4), as well as the state law claims
for embezzlement, civil theft, breach of constructive trust, and unfair and
deceptive trade practices. Nevertheless, the bankruptcy court determined
that the remaining claims against Green, including breach of fiduciary
duty, intentional misrepresentation, and fraud, had merit and entered
judgment in favor of the Howard Trust parties and against Green in the
amount of $1,570,145.36, inclusive of compensatory damages, punitive
damages, and prejudgment interest.
The bankruptcy court also made findings related to the Lonia
Fortal property in its judgment, determining that “it is easily more likely
than not under the preponderance of the evidence standard, that 100
percent of the funds used to [initially] purchase the Loma Portal property
were assets of the Howard Trust.” However, the bankruptcy court declined
to grant the Howard Trust parties’ request for a constructive trust on the
property and ultimately dismissed the constructive trust claim in favor of
awarding an equitable lien. in doing so, the bankruptcy court found that
“the allegations in the amended complaint failed to set forth sufficient
factuai allegations to constitute a demand for imposition of a constructive
trust, and even if this claim was adequately pleaded, and the Court finds
that it is not, plaintiffs are not entitled to the remedy they seek.” The
p
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bankruptcy court also found that the repurchase of the Loma Portal
property by Holland and Green with untainted funds through the
settlement agreement constituted “a partial, if not complete restitution of
the Howard Trust funds that [Green] used to acquire the [Loma Portal]
property when he paid $340,000 to the Chapter 7 trustee.” Further, because
the settlement agreement effectively repaid the funds misappropriated by
Green, the bankruptcy court found that “money damages will make [the
Howard Trust parties] whole” and, therefore, “a constructive trust is not
essential to the effectuation of justice.”
Accordingly, the court instead imposed an equitable len on
Green's interest in the Loma Portal property:
JUDGMENT IS FURTHER ENTERED in
favor of [the Howard Trust parties] and against
[Green], and an equitable lien is imposed under
Nevada state law upon his interest in the Loma
Portal property referenced in the Court’s—
September 20, 2018, oral ruling. That lien shall be
reduced dellar for dollar by any funds [the Howard
Trust parties] receive from the Chapter 7 trustee in
the bankruptcy case filed jointly by [Holland and
Green], as a result of the $340,000.00 settlement
payment made by [Holland and Green] to purchase
the estate’s interest in the Loma Portal property.
(Emphases added.) We clarify that in its oral ruling, the court determined
that the amount of the equitable lien would be equal to $340,000, which was
the purchase price of the Loma Portal property under the settlement
agreement.®
8During the September 20, 2018, hearing the bankruptcy court
clarified that the Howard Trust parties “seek an equttable lien on the
Loma—Loma Portal property for its full value. [They] do not state what
that value purports to be, and given Green’s recent purchase of the
The bankruptcy trustee's final accounting
Following conclusion of the adversary proceedings, the
bankruptcy trustee submitted—and the bankruptcy court approved—the
trustee’s final report, which confirmed that the bankruptcy estate had
received $340,000 in funds from Holland and Green to purchase the estate’s
interest in the Loma Portal property and that the Howard Trust received
$377,553.71 as its pro-rata share of the bankruptcy estate. The bankruptcy
court approved the final accounting without revision and entered judgment
accordingly. The Howard Trust parties did not appeal from either the order
approving the repurchase of the Loma Portal property or the final
judgment.
The divorce proceedings
After receiving her bankruptcy discharge in April 2019, Holland
filed a complaint for divorce and alleged marital waste of community
property by Green. Green defaulted, and the district court entered a divorce
decree granting Holland scle ownership of the Loma Portal property to
account for marital waste by Green. In addition, the divorce decree provided
that all necessary action could be taken to ensure the transfer of the
property to Holland. including execution of a quitclaim deed, and noted that
if the parties could not accomplish this on their own, the clerk of the court
would be authorized to prepare the documents to effectuate the transfer.
Later, Holland, as a trustee of the HG Family Trust, recorded a
quitclaim deed transferring any interest the trust had in the Loma Portal
[bankruptcy] estate’s interest in that property for $340,000, the Court finds
that this is the value [they] are referring to.”
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properiy to herself as an individual, in accordance with the divorce decree.”
The existence of the equitable lien. placed by the bankruptcy court on
Green's interest in the Loma Portal property. was not addressed in the
divorce decree.
The underlying district court aciton
Subsequently, Howard (through his estate) assigned his
interest and right to recovery of the judgment entered by the bankruptcy
court to Barney Ltd.. and during subsequent litigation in state probate
court, the district court determined that Holt had withdrawn from the
litigation and that Barney Ltd. was “the only remaining reai party in
interest with legal standing to pursue collection” under the bankruptcy
judgment. In April 2021, Barney Ltd. initiated a suit in the Eighth Judicial
District Court against Holland and Green alleging four claims for relief:
quiet title. fraudulent transfer, constructive trust, and conversion. Holland
filed an answer to-the complaint, but Barney Ltd. was unable to serve Green
with the complaint.!?
Barney Ltd. filed a motion for summary judgment on all four
claims, primarily arguing that the bankruptcy judgment established an
equitable lien on the Loma Portal property in the amount of $1,276,854.14-—
the entirety of the remaining bankruptcy judgment after receipt of the
bankruptey distribution. Related to the alleged fraudulent transfer, Barney
Ltd. argued that the divorce proceeding did not give Green the right to
“During oral argument, Holland’s counsel indicated that the Loma
Portal property had been repurchased by Holland ana Green individually
and held as community property.
“Green's current whereabouts are apparently unknown, and he was
later voluntarily dismissed from this action by stipulation of the parties.
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convey title to the Loma Portal property to Holland and maintained that
the quitclaim deed from Holland as a trustee of the HG Trust to Holland
personally was void. And because this fraudulent transfer voided the
transaction, Barney Ltd. argued that the district court should quiet title in
his favor and impose a constructive trust on the property.
Holland opposed the motion and filed a countermotion for
summary judgment. Holland primarily argued that res judicata apphed,
given that the bankruptcy court had dismissed all claims against her with
prejudice, including claims related to conversion and a constructive trust
against the Loma Portal property.!' In addition, Holland argued that while
the bankruptcy court placed an equitable hen on the Loma Portal property,
that lien only applied to Green’s community interest in the property
(approximately $211,120), which had already been satisfied by the $340,000
settlement payment. Holland further contended that the $340,000 amount
comprised the majority of the total $377.553.71 disbursement received by
the Howard Trust parties in the bankruptcy discharge. Holland also
asserted that the claim for fraudulent transfer failed as a matter of law
because Barney Ltd. could not show that Green fraudulently transferred his
interest to Holland.
In supplemental briefs requested by the district court, Barney
Ltd. contended that—irrespective of any payments already made—the
Loma Portal property continued to be encumbered by the amount of the
judgment against Green. Barney Ltd. argued that the equitable lien ran
We reiterate that the Howard Trust parties’ state law claims for
intentional misrepresentation, fraud, breach of fiduciary duty, conversion,
constructive fraud, unjust enrichment, embezzlement, civil theft, breach of
constructive trust, and unfair and deceptive trade practices against Holland
were dismissed in the bankruptcy action.
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with the property and that neither the divorce decree nor the subsequent
transfer could eliminate this obligation without complete payment of the
entire judgment. Holland countered these arguments, highlighting the
specific language in the bankruptcy judgment indicating that the equitable
lien, if it survived, would apply only to Green’s interest in the Loma Portal
property.
Following a hearing, the district court entered summary
judgment against Holland, granted Barney Ltd. a constructive trust on the
Loma Portal property, and quieted title to the property in Barney Ltd.'s
favor. In its order, the court found that res judicata!’ applied to the 2012
probate court order (which directed Green to return any and all property of
the Howard Trust to the trustees) and concluded that the Loma Portal
property should have been surrendered to the Howard Trust during the
probate action when the court instructed Green to return all property he
had taken from the Trust, past or present. The district court also appeared
to recognize that res judicata played a role in the bankruptcy court
proceedings.
Consequently, the district court ruled that because Green had
initially purchased the Loma Portal property entirely with stolen funds, he
acquired the property illegally. Therefore, the court decided any held title
was legally void—including the transfer of the property to Holland
individually—leaving nothing for subsequent conveyance and supporting
summary judgment in Barney Ltd.’s favor on its quiet title, fraudulent
transfer, and conversion claims. The district court quieted title in Barney
'2We note that the modern trend is to refer to res judicata as claim
and issue preclusion. See Five Star Capital Corp. v. Ruby, 124 Nev. 1048,
1051, 194 P.3d 709, 711 (2008).
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Ltd.’s name and imposed a constructive trust on the property, finding that
Holland's actions amounted to acts of conversion against Barney Ltd. On
March 24, 2022, one day aiter entry of the summary judgment order, Barney
Ltd. recorded the order despite the 30-day automatic stay on the execution
of judgments pursuant to NRCP 62 as revised in 2019. On May 2, Barney
Ltd. initiated eviction proceedings against Holland. On June 21, the district
court denied Holland’s motion for relief from judgment, and this court
ultimately granted a stay of the proceedings below pending this appeal.?*
ANALYSIS
On appeal, Holland asks this court to reverse and remand the
district court’s grant of summary judgment, arguing that the district court
erred when it awarded a constructive trust and quieted title in Barney Ltd.'s
favor. Holland primarily contends that the district court erred in failing
to properly consider the preclusive effect of the prior orders and judgments
in bankruptcy court and family court. And although Holland recognizes
that the bankruptcy court imposed an equitable lien on the property, she
contends that genuine disputes of material fact remain as to the amount of
that lien in relation to the value of the Loma Portal property. Barney Ltd.
contends that summary judgment was warranted, as the district court
appropriately considered the prior judgments from the earlier litigation,
13In light of this opinion, we lft this court’s June 29, 2022, Order
Granting Stay.
'4Holland also argues that the district court abused its discretion in
resolving her motion for stay and her post-judgment motion seeking relief
from its order granting summary judgment and contends that Barney Ltd.
violated NRCP 62 by taking actions to enforce the judgment of the district
court before the judgment became final. We need not address these issues
in light of our holding in this opinion.
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and that a constructive trust is an appropriate equitable remedy to redress
Green’s (and by extension Holland's) misdeeds against the Howard Trust.
A district court’s decision to grant summary judgment is
reviewed de novo. Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026.
1029 (2005). Before a district court may grant summary judgment, the
moving party must “show[] that there is no genuine dispute as to any
material fact.” NRCP 56(a); see also Wood, 121 Nev. at 729, 121 P.3d at
1029 (“Summary judgment is appropriate ... when the pleadings and other
evidence on file demonstrate that no genuine [dispute] of material fact
[remains] and that the moving party is entitled to judgment as a matter of
law.” (alteration in original, internal quotation marks omitted)). All
evidence must be viewed in a light most favorable to the nonmoving party.
Wood, 121 Nev. at 729, 121 P.3d at 1029. To withstand summary judgment,
the nonmoving party cannot rely solely on general allegations and
conclusions set forth in the pleadings but must instead present specific facts
demonstrating the existence of a genuine factual dispute supporting their
claims. NRCP 56(e); see also Wood. 121 Nev. at 731. 121 P.3d at 1030-31.
For foundational purposes. we first discuss Nevada's
jurisprudence regarding constructive trusts and equitable liens placed on
real property to secure a debt. Next, because our resolution of this appeal
ultimately rests on the preclusive effects of prior court orders, we provide
guidance on that subject. Finally. we address genuine disputes of material
fact that prevent the granting of summary judgment.
Nevada recognizes both equitable liens and constructive trusts to address
unjust enrichment
Equitable remedies, such as equitable liens and constructive
trusts, are available to a piaintiff when “legal remedies, such as statutory
review, are not available or are inadequate.” State, Dep’? of Health &
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Human Servs. v. Samaniha Inc.. 133 Nev. 809, 812, 407 P.3d 327, 329
(2017) (quoting Richard J. Pierce Jr., Administrative Law Treatise, 1701
(5th ed. 2010)). The Nevada Supreme Court previously approved the use of
the Restatement (First) of Restitution (1937) in Namow Corp. v. Egger, 99
Nev. 590, 592, 668 P.2d 265, 267 (1983),'® and recognized both equitable
liens and constructive trusts as remedies to restore property belonging to
another.
An equitable lien can be a proper remedy to reimburse a
creditor whose money was stolen and used to purchase real property. See
Maki v. Chong, 119 Nev. 390, 393-94, 75 P.3d 376, 379 (2003). While a lien
is a security interest in property, it does not confer a title interest or
ownership. Nev. Ass’n Serus., Inc. v. Eighth Judicial Dist. Court, 130 Nev.
949, 958, 338 P.3d 1250, 1256 (2014). The henholder does not obtain the
right to control or dispose of the property, and these rights remain with the
property owner until foreclosure proceedings are undertaken. Jd.
A constructive trust is also a remedy to restore stolen funds
used to purchase property. See Namow, 99 Nev. at 592, 668 P.2d at 267; see
also Restatement (First) of Restitution § 160 (1937). However, a
constructive trust is a remedial device “by which the holder of legal title to
property is deemed to be a trustee of that property for the benefit of another
who in good conscience is entitled to it.”. Namow, 99 Nev. at 592, 668 P.2d
at 267.
We recognize that there have been subsequent editions of the
Restatement of Restitution, but the edition adopted in Namow continues to
provide a workable framework for resclving the application of equitable
remedies.
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In this instance, a constructive trust and an equitable lien were
alternative equitable remedies available to the Howard Trust parties (and
by extension, Barney Ltd.) to redress the misappropriation of trust funds by
Green. See id. But where, as here, two alternative equitable remedies exist,
a plaintiff may have the “option of seeking to enforce one or the other, based
upon whichever result will maximize [their] recovery.” 51 Am. Jur. 2d Liens
§ 30 (2023). No matter which option a plaintiff decides to pursue, however,
the availability of a particular equitable remedy is not absolute and is
generally left to the discretion of the trial court. See Am. Sterling Bank v.
Johnny Mgmt. LV, Inc., 126 Nev. 423, 428, 245 P.3d 535, 538 (2010) (stating
that “district courts have full discretion to fashion and grant equitable
remedies’).
Here, the decision of whether to impose a constructive trust or
equitable lien was made by the bankruptcy court, which expressly rejected
the Howard Trust parties’ request for a constructive trust in favor of
awarding an equitable lien. As discussed below, the bankruptcy court’s
determination that an equitable lien was the appropriate remedy has
preclusive effect upon the parties and in subsequent legal proceedings.
Claim preclusion applies to the prior bankruptcy orders in this matter
A district court’s decision as to claim preclusion is reviewed de
novo. Alcantara v. Wal-Mart Stores, Inc., 130 Nev. 252, 256, 321 P.3d 912,
914 (2014). Central to this appeal is whether the bankruptcy judgment
precludes certain claims and issues raised by the parties. The doctrine of
claim preclusion serves “vital public interests beyond any individual judge’s
ad hoc determination of the equities in a particular case,” and “[t|here is
simply ‘no principle of law or equity which sanctions the rejection by
a...court of the salutary principle of res judicata.” Federated Dep’t Stores,
Inc. vu. Moitie, 452 U.S. 394, 401 (1981) (quoting Heiser v. Woodruff, 327 U.S.
16726, 733 (1946)). Because claim preclusion applies equally to actions at law
or in equity, see 50 C.J.S. Judgments § 926, we hold that the orders of the
bankruptcy court related to the Loma Portal property had preclusive effect
in the subsequent district court actions.
Claim preclusion aims to achieve finality by preventing another
lawsuit based on the same facts asin an initial suit. Five Star Capital Corp.
v. Ruby, 124 Nev. 1048, 1054, 194 P.3d 709, 712 (2008). It apphes when
“(1) the parties or their privies are the same. (2) the final judgment is valid,
and (3) the subsequent action is based on the same claims or any part of
them that were or could have been brought in the first case.” Jd. at 1054.
194 P.3d at 713 (internal footnote omitted). Claim preclusion “treats a
judgment, orice rendered, as the full measure of relief to be acccrded
between the same parties on the same claim.” 50 C.Jd.S. Judgments § 973.
We initially address the first two requirements of Five Star. in
this case, the parties stand in privity. Privity exists when a person has
“acquired an interest in the subject matter affected by the judgment
through... one of the parties, as by inheritance, succession, or purchase.”
Mendenhall v. Tassinari, 135 Nev. 614, 618, 403 P.3d 364, 369 (2017)
(omission in original) (internal quotation marks omitted), Here, Barney
Lred.. as assignee of its client’s interest in the bankruptcy judgment, steps
into the shoes of the Howard Trust and its beneficiaries and-—-based on
privity—is entitled te collect on the judgment only to the extent that the
Howard Trust and its beneficiaries would be entitled todo so. Thus, Barney
Ltd. and the Howard Trust parties are identical for the purpose of claim
preclusion. And because Holland was also a party to the bankruptcy
proceedings and the subsequent litigation, the first requirement is satisfied.
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Next, the parties are bound by matters decided after a
competent court has entered a final judgment on the merits. Russell v.
Comm’r, 678 F.2d 782, 786 (9th Cir. 1982). Therefore, the bankruptcy
judgment was final and, thus, binding on the parties in the appeal before
us.!6
Having concluded that the first two elements of Five Star have
been satisfied, we now consider the third element, whether the claims
brought in the district court action were based on “the same claims or any
part of them that were or could have been brought” in the bankruptcy
action, thereby addressing the parties’ arguments regarding the preclusive
effect as applied to those claims and issues in the district court’s order
granting Barney Ltd.’s motion for summary judgment.
The district court erred when it granted summary judgment on Barney Ltd.'s
claims for constructive trust, quiet title, fraudulent transfer, and conversion
On appeal, Holland argues that Barney Ltd.'s causes of action
for constructive trust, quiet title, fraudulent transfer, and conversion are
barred by claim preclusion and asks this court to reverse the district court’s
order granting summary judgment on those claims. Barney Ltd. responds
that its claims are not restrained by the judgment in the bankruptcy court,
as they arise not from the initial purchase of the property by Holland and
Green but rather from Holland’s subsequent transfer of the property
following the decree of divorce.
\6We note, however, that to the extent the district court relied upon
the probate court’s 2008 order to apply claim preclusion against Holand,
this was in error, as the 2008 judgment was not a final judgment on the
issue, and Holland was not a party to that dispute.
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Constructive trust
Barney Ltd. requested that the district court place a
constructive trust on the Loma Portal property to satisfy Green’s debt
because he initially purchased the property with funds stolen from the
Howard Trust. Applying the doctrine of claim preclusion, we conclude that
Barney Ltd. is prevented from asserting the competing remedy of a
constructive trust in the underlying district court action based on Green’s
initial misappropriation of trust funds because the bankruptcy court
expressly considered and rejected that remedy and the Howard Trust
parties did not appeal from that decision. See Five Star, 124 Nev. at 1055,
194 P.3d at 713. Accordingly, the bankruptcy court’s findings on this matter
are final and binding upon Barney Ltd. as the assignee of the Howard Trust
parties. Therefore, we hold that the district court erred when it disregarded
the findings and conclusions of the bankruptcy court by substituting its own
remedy in place of the remedy already litigated and obtained by the parties.
See Federated Dep't Stores, 452 U.S. at 401.
Quiet title
As explained above, claim preclusion bars claims that were or
could have been raised in the prior action between the same parties. See
Five Star, 124 Nev. at 1054, 194 P.3d at 713. Here, the Howard Trust
parties commenced an adversarial proceeding against both Holland and
Green in bankruptcy court but did not assert a cause of action for quiet title.
The ownership of the Loma Portal property was unequivocally disputed in
the adversarial proceedings before the bankruptcy court, where the Howard
Trust and its beneficiaries attempted to lay claim to the title of the property
under the remedy of a constructive trust. In conjunction with their request
for a constructive trust, they also could have asserted a claim for quiet title
to the property. Therefore. we conciude that claim preclusion forecloses
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Barney Ltd. from now asserting a quiet title claim in this proceeding based
on Green's conduct already considered by the bankruptcy court.
Fraudulent transfer and conversion
{In the proceedings below, the district court granted Barney
Ltd.'s motion for summary judgment on his fraudulent transfer and
conversion claims. As to fraudulent transfer, Barney Ltd. alleges that
Holland never obtained title to the Loma Portal property because Green
purchased the Loma Portal property with funds misappropriated from the
Howard Trust—-rendering al! subsequent transfers of that property void ab
intiio and therefore fraudulent. But, as with Barney Ltd.’s quiet title claim,
the facts underlying this claim were available during the bankruptcy
proceedings.
At the time of the bankruptcy action, title under the grant,
bargain, and sale deed was held by the HG Family Trust with two
beneficiaries, Holland and Green. Thus, both Holland and Green held a
community ownership interest in the Loma Portal property when they filed
for bankruptey, which allowed the bankruptcy court to exercise jurisdiction
over the property. Sze 11 U.S.C. § 541(a). Moreover, Barney Ltd.'s privy-—
the Howard Trust parties—were present and consented to the entry of the
settlement agreement adopted by the court that allowed Holland and Green
to repurchase and hold title to the Loma Portal property as part of their
community property estate. As the Howard Trust parties failed to assert
the claim that Green's interest in the property was void ab initio during the
srior proceedings, Barney Ltd. is also precluded from asserting this claim
in the current action. See Five Star, 124 Nev. at 1054, 194 P.3d at 715.
Nevertheless, Barney Ltd. argues that its other grounds for its
claims of fraudulent transfer and conversion are not subject to claim
preclusion, as they do not result from Green's initial purchase of the
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property with Howard Trust funds, but instead originate from Holland's
purportedly wrongful transfer of title to the Loma Portal property from the
HG Family Trust to herself as an individual following the end of the
bankruptcy proceedings and as a result of the divorce proceedings. We
agree.
Although these claims meet the first two elements of claim
preclusion under Five Star, the alleged underlying fraudulent transfer and
conversion of Green’s share of the Loma Portal property to Holland occurred
after the bankruptcy proceeding and, therefore, were not and could not have
been brought during that first action. Jd. Accordingly, we now turn to
Barney Ltd.'s other arguments regarding its fraudulent transfer and
conversion claims.
We need not address Barney Ltd.’s conversion claim in detail as
the parties appear to concede, and we agree, that conversion applies only to
personal property. Accordingly, the conversion claim against Holland fails
because Barney Ltd. alleges that she converted real property belonging to
the Howard Trust. Thus, to the extent that the district court relied on
conversion to award Barney Ltd. the Loma Portal property, this was in
error. See, e.g., Edwards v. Emperor’s Garden Rest., 122 Nev. 317, 329, 130
P.3d 1280, 1287 (2006) (“Conversion is a distinct act of dominion wrongfully
exerted over personal property.”).
Turning to the fraudulent transfer claim, such a claim under
the Nevada Uniform Fraudulent Transfer Act is a “claim by a creditor that
a debtor transferred property with the intent to defraud the creditor by
placing the property out of the creditor’s reach.” Tahican, LLC v. Kighth
Judicial Dist. Court, 139 Nev.. Adv. Op. 2, 523 P.3d 550, 554 (2023); see also
NRS 112.180(1). When the creditor seeks a remedy for a fraudulent
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transfer under NRS 112.210(1)(a), the district court may void the transfer
and return the title to the debtor. Tahican, 139 Nev., Adv. Op. 2, 523 P.3d
at 554. Alternatively, after a creditor obtains a judgment on a claim against
the debtor, the court “may levy execution on the asset transferred or its
proceeds.” NRS 112.210(2).
The transfer of the Loma Portal property pursuant to the divorce
decree was nol a fraudulent transfer
To the extent that Barney Ltd. argues that Holland’s transfer
of title to the property following the divorce decree was fraudulent and
voided title to the property, we disagree.'? Generally, courts must make an
equal division of community property in a divorce unless there is a
compelling reason, such as marital waste, to make an exception. Kogod v.
Cioffi-Kogod, 135 Nev. 64, 75, 439 P.3d 397, 406 (2019). Marital waste
includes one spouse’s deliberate misuse of community assets for unethical
or illegal purposes. Lofgren v. Lofgren, 112 Nev. 1282, 1288, 926 P.2d 296,
297 (1996). Family courts have jurisdiction to transfer property from one
spouse to another. Cf. Guerin v. Guerin, 116 Nev. 210, 212, 993 P.2d 1256,
1257 (2000) (affirming a district court order transferring property from one
spouse to another in a divorce decree); see also Landreth v. Malik, 127 Nev.
175, 184, 251 P.3d 163, 169 (2011) (recognizing that “the family court
division has original and exclusive jurisdiction over matters affecting the
familial unit including divorce, custody, marriage contracts, community and
separate property, child support, parental rights, guardianship, and
adoption”).
'7Because neither the Howard Trust parties nor Barney Ltd. had an
ownership interest in the Loma Portal property, they were not parties in
the family court proceedings.
92
Nevada law broadly provides that a “transfer” is “every mode,
direct or indirect, absolute or conditional, voluntary or involuntary, of
disposing of or parting with an asset cr an interest in an asset, and includes
payment of money, release, lease and creation of a lien or other
encumbrance.” NRS 112.150(12). In this case. after finding marital waste
by Green. the family court transferred the Loma Portal property from the
marital community to Holiand as her sole and separate property, as
permitted by Nevada law. See Kogod, 135 Nev. at 75, 439 P.3d at 406(allowing the family court to unequally dispose of assets in the event of
marital waste).'5
While the quitclaim deed from the HG Family Trust to Holland
was a transfer of ownership interest, it does not necessarily follow that it
was fraudulent, particularly where the transfer was authorized by the
family court when it made its property distribution to Holland.!® Indeed,
the family court merely equalized the remaining community assets by
awarding the Loma Portal property to Holland to compensate her for the
marital waste incurred by Green. And, as discussed further below, this
‘Although it is unclear from the record whether the family court was
aware of the equitable lien placed on Green's share of the Loma Portal
property by the bankruptcy court before transferring the property to
Holland, this did not prohibit the family court from adjudicating the
ownership of a marital asset.
18We note that in the divorce decree the family court explicitly stated
that the clerk of the court could sign any necessary documents, such as
quitclaim deeds, on behalf of an uncooperative party to effectuate property
distribution. Thus, assuming a quitclaim deed had been required to
effectuate the transfer cf the Loma Portal property to Holland, the divorce
decree authorized the use of a quitclaim deed for that purpose, Cf. Guerin,
116 Nev. at 212, 993 P.2d at 1257.
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transfer does not qualify as a fraudulent transfer, as Barney Ltd.’s equitable
lien runs with the property, and therefore Holland received title to the
property subject to that lien. See 51 Am. Jur. 2d Liens § 18. Because the
family court transferred the property as a valid exercise of its jurisdiction
and the equitable lien remained attached to the property, we conclude that
this transfer does not constitute a fraudulent transfer under NRS
112.180(1).
As established above, because Holland and Green had a valid
community property interest in the Loma Portal property, the family court
necessarily was able to transfer that property as a proper exercise of its
jurisdiction. Thus, to the extent that the district court’s order in the
underlying proceeding invalidated the divorce decree by voiding the
property transfer thereunder, the district court in this action exceeded its
jurisdiction. See NRS 3.220 (providing that district judges have equal and
coextensive jurisdiction and power). And it is well established that district
courts lack jurisdiction “to review the acts of other district courts.” Rohlfing
v. Second Judicial Dist. Court, 106 Nev. 902, 906, 803 P.2d 659, 662 (1990).
Because judges sitting in the family division have “all the constitutional
powers” of a district judge, Landreth, 127 Nev. at 185, 251 P.3d at 170, the
district court had no authority to disregard the family court's divorce decree.
Accordingly, Barney Ltd.’s arguments related to its fraudulent transfer and
conversion claims are unavailing.
The district courl erred when it failed to enforce the equitable lien established
under the bankruptcy judgment
In addition to the claims brought above, and as recognized by
both the parties during oral argument, Barney Ltd. argued in its motion for
summary judgment that the doctrine of claim preclusion prohibits Helland
from contesting the existence and validity of the equitable len placed upon
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the property by the bankruptcy court. See Five Star, 124 Nev. at 1054, 194
P.3d at 713. For the same reasons the claims above cannot be relitigated in
this new action, we conclude that the parties’ interests in the Loma Portal
property are subject to the equitable lien imposed by the bankruptcy court.
Accordingly, we conclude that the district court erred to the extent that it
failed to recognize the continued existence of the equitable lien and its
enforceability.
Indeed, Holland was aware of Barney Ltd.'s equitable lien, and
even if she misunderstood the effect of the lien on the property after her
discharge, she was bound by the bankruptcy judgment and took title to the
entire property subject to the equitable lien placed on Green’s interest. See
Bank of India v. Weg & Myers, P.C., 691 N.Y.S.2d 439, 445 (N.Y. App. Div.
1999) (“A subsequent holder of the property takes it subject to the rights of
the equitable henor . . . including the right of restitution to the extent of the
lien.” (internal citation omitted)); 51 Am. Jur. 2d Liens § 18. Further, as a
party to the prior district court and bankruptcy proceedings, Holland was
aware of the lis pendens providing notice of the Howard Trust parties’
purported interest in the property. See Weddell v. H20, Inc., 128 Nev. 94,
106, 271 P.8d 743, 751 (2012) (“The doctrine of lis pendens provides
constructive notice to the world that a dispute involving real property is
ongoing.”), abrogated on other grounds by Tahican, 189 Nev., Adv. Op. 2,
523 P.3d 550; see also NRS 14.010(3) (stating that a lis pendens constitutes
“constructive notice to a purchaser or encumbrancer of the property affected
thereby”). Thus, Holland cannot be considered a bona fide purchaser of the
property, and her interest is subject to the equitable hen. See Restatement
(First) of Restitution § 168 cmt. b (recognizing that “where a person holds
property subject to an equitable lien in favor of another and transfers it to
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a person who is not a bona fide purchaser, the latter holds the property
subject to the equitabie lien”).*"
Questions of fact remain regarding the remaining value of ihe equitable lien
and tive value of Green’s share of the Lama Portal property to satisfy any
remutning portion of the equitable lien
Finally, genuine disputes of material fact remain, rendering
summary judgment inappropriate under NRCP 56. Because the
bankruptey court unequivocally imposed an equitable lien on Green's
interest in the Loma Portal property, we hold that the district court erred
when it failed to recognize and adjudicate the rights and interests
associated with Barney Ltd.’s equitable len on the property.2! Indeed,
Holland conceded at oral argument before this court that genuine disputes
of material fact remain as to the value of Green’s share of the property that
remains to satisfy the hen. We therefore reject the parties’ contentions that
summary judgment should be granted and, for the reasons discussed below,
reverse and remand.
The initial amount of the equitable lien
Holland contends that the value of the equitable len is limited
to the amount of Green’s interest in the property, whereas Barney Ltd.
contends that the value of the equitable lien is inclusive ot the remaining
judgment (in excess of $1.2 million. dollars). However, both parties’
interpretations of the amount of the equitable lien are belied by the record.
20We reject Barney Ltd.’s argument that a lis pendens secures an
ownership interest in property, as it only provides notice of legal
proceedings involving the property.
2IWe reject Holiand’s argument that the subsequent transfer of titie
to the property extinguished the equitable lien.
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Thus, we reject the parties’ interpretations and hold that the
bankruptey court imposed an equitable fen upon Green's interest in the
Loma Portal property in the amount of $340,000—the property's value
based on the purchase price paid at the time of the bankruptcy settlement,
as clarified by the bankruptcy court in its oral statement as to the value of
the lien, relied upon in its written judgment.
The remaining value of the equitable lien
Finally; we conclude that a genuine dispute of material fact
exists regarding the amounts paid, if any, from the bankruptcy settlement
to satisfy the equitable lien. Our review of the record suggests that the
Howard Trust was to receive a distribution of funds in the amount of
$377,553.71 at the conclusion of the bankruptcy proceedings as approved by
the bankruptcy court. What is unciear is how much of this distribution was
applied toward satisfying the equitable len that was placed on the Loma
Portal property. The bankruptcy court specifically included a provision in
its erder that the amount of the equitable lien would he reduced “dollar for
dollar’ by any distribution received by the Howard Trust and its
beneficiaries from the bankruptcy trustee. Thus, the bankruptcy court
unquestionably anticipated that some, if not all, of the setilemeut proceeds
reveived by the bankruptcy trustee from Holland and Green -would satisty
the lien placed on Gréen’s share of the property. On remand, the district
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court will need to make this determination in the first instance.
““We-also note that Barney Ltd. appears to suggest that Holland
failed to raise election of remedies as ar affirmative deferise. However. we
need not address this argument, as the election of a constructive trust, was
rejected by the bankruptcy court. Because claim preclusion resolves this
issue, there is no further e'ection te be made.
``
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The value of the Loma Portal property
To enforce the equitable lien against Green’s interest in the
property, which is now held by Holland, the district court will also
necessarily need to determine the current value of the Loma Portal
property. The equitable lien attaches only to Green’s share of the property,
which in a community property state such as Nevada equals one-half of the
property's value, notwithstanding that the title to the entirety of the
property remains with Holland. On remand, the district court will need to
determine the current value of the Loma Portal property and make the
necessary calculations to determine the value of one-half of the property
that is encumbered by the equitable lien. Then, the court will need to
determine the remainder of the equitable lien amount that Barney Ltd. is
entitled to enforce. Unless the entire repurchase price of $340,000 was
accounted for in the distribution to the Howard Trust parties by the
bankruptey trustee, Barney Ltd. is entitled to enforce the remainder of the
equitable lien against Green’s share of the Loma Portal property.
CONCLUSION
We conclude that the district court failed to recognize the
preclusive effect of prior court orders and to properly apply the doctrine of
claim preclusion when considering Barney Ltd.'s motion for summary
judgment. Because the bankruptcy court placed an equitable ler on
Green's interest in the Loma Portal property, Barney Ltd. is entitled to
enforce any remainder of the equitable lien in accordance with Nevada law,
but it is not entitled to a constructive trust, title to the property. or recovery
for fraudulent transfer or conversion. And as genuine factual disputes
remain as to the current value of the equitable lien and the value of the
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Loma Portal property, we reverse the judgment of the district court and
remand for further proceedings consistent with this opinion.
Bulla
We concur:
a f C.J.
Gibbons ¥
Udeel—_
Westbrook
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