Fleetwood Corp. v. the Dorothy Towne Trust

IN THE SUPREME COURT OF THE STATE OF NEVADA
FLEETWOOD CORPORATION, A No. 66450
NEVADA CORPORATION,
Appellant,
vs.
THE DOROTHY TOWNE TRUST,
FILED
Resnondent. MAR 1 8 2016
ORDER OF AFFIRMANCE
This is an appeal from a post-judgment order modifying the
judgment and denying a motion to enforce. Second Judicial District Court,
Washoe County; Patrick Flanagan, Judge.
Appellant Fleetwood Corporation challenges the district
court's interpretation of a lease term. The dispute between these parties
has a lengthy history. In 1991 the parties executed a geothermal lease
whereby respondent Dorothy Towne Trust leased "geothermal and surface
resources" to Fleetwood (master lease), referencing a sublease whereby
Fleetwood subleased the geothermal resources to a third party for the
purpose of generating electricity (sublease). In the course of their
disputes, the district court made certain findings pertinent to the scope of
those contested "surface resources."
The district court entered a May 19, 2011, order and found
that the master lease granted Fleetwood "surface resources" and "interests
to surface rights"; that the Trust retained all non-granted rights, including
all surface rights that were not "resources"; and that the income the Trust
received from the east-side parcels did not involve "surface resources."
The district court subsequently entered a November 18, 2011, judgment
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and found that Fleetwood was entitled to the "surface resources" of the
east-side parcels but not to offset its outstanding property-tax obligation
for those parcels with income the Trust received from that property.
After the Trust refused to convey the income received from
renting houses, billboards, and pasture located on the east-side parcels,
Fleetwood filed a motion to enforce the judgment, and the district court
denied the motion. In its post-judgment order, the district court
distinguished "surface resources" from "surface right[s]," concluding that
"surface resources" constituted vegetative organic resources and that
Fleetwood was entitled to the income generated by "natural surface
resources," including pasture-grazing fees, but excluding rental income
from houses and billboards. Fleetwood appealed, and this court reversed
and remanded. Fleetwood Corp. v. Dorothy Towne Trust, Docket No.
60866 (Order of Reversal and Remand, January 29, 2014). We noted that
the district court's definition of "surface resources" as "vegetative organic
resources" introduced a limitation that was not stated in the final
judgment and concluded that the district court improperly altered rights
granted to Fleetwood under the November judgment. Id. We also noted
that, even though the district court's definition encompassed income from
the pasture grazing, the court denied Fleetwood's motion as to this
portion. Id. We directed the district court to reconcile its May and
November decrees and to clarify the definition of "surface resources." Id.
On remand, the district court conducted a hearing and entered
an order that found that "surface rights" and "surface resources" were not
synonymous, that the parties intended to minimize the effect of
geothermal power generation on other uses of the surface, that Fleetwood
had the right to develop the geothermal resources that it subleased, and
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that the Trust had the right to retain income from non-geothermal uses of
the property. The district court provided the definition:
"Surface resources" are such limited surface rights
as are necessary to access the geothermal
resources located on the properties, and to allow
Fleetwood, or its sub-lessee, to conduct all
necessary operations or activities related to the
collection of geothermal resources.
Fleetwood first argues that the district court exceeded its
jurisdiction because no motion to amend had been filed and that the
district court improperly extinguished its rights in the judgment. We
review de novo whether the district court exceeded its jurisdiction.
Emerson v. Eighth Judicial Dist. Court, 127 Nev. 672, 677, 263 P.3d 224,
227 (2011). A district court has the inherent power to construe its
judgments to remove ambiguity, and this court will remand a matter to
relieve such ambiguity. Grenz v. Grenz, 78 Nev. 394, 401, 374 P.2d 891,
895 (1962) (remanding to clarify divorce decree). The district court had
jurisdiction to construe its prior decrees on the parties' post-judgment
motions and this court's remand. The district court then entered its order
on the narrow issue of reconciling the discrepancies in the "surface
resources" between the May order and the November judgment and
provided a clarifying definition of "surface resources" to settle the dispute.
As discussed below, the district court's clarification is consistent with the
contract language, and thus the district court did not extinguish
Fleetwood's rights. We conclude that Fleetwood's contention lacks merit.
Second, Fleetwood argues that the district court improperly
interpreted the meaning of "surface resources." Fleetwood argues that the
district court's definition was contrary to provisions of the master lease
and improperly relied on language from the sublease. We review contract
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interpretation de novo. May v. Anderson, 121 Nev. 668, 672, 119 P.3d
1254, 1257 (2005). Where a contract is clear and unambiguous, the court
enforces the contract as written. Kaldi v. Farmers Ins. Exch., 117 Nev.
273, 278-79, 21 P.3d 16, 20 (2001).
The master lease provides that the Trust conveyed to
Fleetwood its rights in geothermal and surface resources and that the
rights conferred were coextensive with those granted under the sublease.
The sublease provided the third party with certain geothermal rights and
the right to use the surface as necessary or convenient for geothermal
electricity production, which was to be exercised so as to minimize the
effect on the lessor's potential use of the surface. Pursuant to the master
lease reservation clause, the Trust reserved all of the other rights of the
sublease lessor except the right to receive funds, such that the only rights
not reserved were the rights expressly granted under the sublease to the
sublessee: namely, geothermal rights and the right to develop the surface
to facilitate generating geothermal electricity. Thus, as the district court
concluded, the sublease's terms are expressly referenced in and thus
relevant to the master lease's interpretation, and, as provided therein,
Fleetwood's surface rights are limited to developing the surface as
necessary or convenient for generating geothermal electricity.
Third, Fleetwood argues that the Trust should be estopped
from arguing that surface resources constitutes merely surface rights
necessary to develop geothermal energy because its prior counsel
previously argued for a broader definition. Judicial estoppel applies when
(1) the same party takes two positions (2) in judicial proceedings and (3)
successfully asserted the first position, (4) the two positions are totally
inconsistent, and (5) the first position was not taken by ignorance, fraud,
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or mistake. Marcuse v. Del Webb Cmtys., Inc., 123 Nev. 278, 287, 163 P.3d
462, 468-69 (2007). Fleetwood cites testimony by the Trust's former
counsel uttered as a witness during the 2011 trial when asked about his
understanding of the meaning of "surface resources." The Trust, however,
took the same position in that trial's closing arguments regarding
Fleetwood's limited surface rights that it takes here, as it has in
subsequent filings and argument. Accordingly, the Trust has not taken
two different positions, and estoppel does not apply. Fleetwood's
argument that the Trust should be estopped from denying that the east-
side parcels are part of the leased premises lacks merit, as the Trust never
argued that the east-side parcels were not part of the leased premises but
rather that Fleetwood's rights on the parcels were limited. We conclude
that Fleetwood's estoppel argument fails. Accordingly, we
ORDER the judgment of the district court AFFIRMED.'
, J.
Hardesty
Saitta
II J.
cc: Hon. Patrick Flanagan, District Judge
Carol Webster Millie, Settlement Judge
McDonald Carano Wilson LLP/Reno
McDonald Carano Wilson LLP/Las Vegas
Parsons Behle & Latimer/Reno
Washoe District Court Clerk
'We have considered Fleetwood's other arguments, including the
spa-related finding and the Trust's purported waiver, and conclude that
they lack merit.
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