In re Manhattan W. Mechanic's Lien Litig.

131 Nev., Advance Opinion 10
IN THE SUPREME COURT OF THE STATE OF NEVADA
IN RE: MANHATTAN WEST No. 61131
MECHANIC'S LIEN LITIGATION.
APCO CONSTRUCTION, A NEVADA
CORPORATION; ACCURACY GLASS & ALE
MIRROR COMPANY, INC.; BRUIN
PAINTING CORPORATION;
SEP 2 4 2015
BUCHELE, INC.; CACTUS ROSE LINDEMAN
EME CCG-13RT
CONSTRUCTION; FAST GLASS, INC.;
HD SUPPLY WATERWORKS, LP;
HEINAMAN CONTRACT GLAZING;
HELIX ELECTRIC OF NEVADA, LLC;
INTERSTATE PLUMBING & AIR
CONDITIONING; SWPPP
COMPLIANCE SOLUTIONS, LLC; AND
WRG DESIGN, INC.,
Petitioners,
vs.
THE EIGHTH JUDICIAL DISTRICT
COURT OF THE STATE OF NEVADA,
IN AND FOR THE COUNTY OF
CLARK; AND THE HONORABLE
SUSAN SCANN, DISTRICT JUDGE,
Respondents,
and
SCOTT FINANCIAL CORPORATION, A
NORTH DAKOTA CORPORATION;
AHERN RENTALS, INC.; ARCH
ALUMINUM AND GLASS CO.; ATLAS
CONSTRUCTION SUPPLY, INC.;
BRADLEY J. SCOTT; CABINETEC,
INC.; CAMCO PACIFIC
CONSTRUCTION CO., INC.;
CELLCRETE FIREPROOFING OF
NEVADA, INC.; CLUB VISTA
FINANCIAL SERVICES, LLC;
CONCRETE VISIONS, INC.; CREATIVE
HOME THEATRE, LLC; CUSTOM
SUPREME COURT
OF
NEVADA
(7) 1947A
SELECT BILLING, INC.; DAVE
PETERSON FRAMING, INC.; E&E
FIRE PROTECTION, LLC; EZA, P.C.;
FERGUSON FIRE AND FABRICATION,
INC.; GEMSTONE DEVELOPMENT
WEST, INC.; GRANITE
CONSTRUCTION COMPANY; HARSCO
CORPORATION; HYDROPRESSURE
CLEANING; INQUIPCO; INSULPRO
PROJECTS, INC.; JEFF HEIT
PLUMBING CO., LLC; JOHN DEERE
LANDSCAPE, INC.; LAS VEGAS
PIPELINE, LLC; NEVADA PREFAB
ENGINEERS; NOORDA SHEET
METAL COMPANY; NORTHSTAR
CONCRETE, INC.; PAPE MATERIAL
HANDLING; PATENT
CONSTRUCTION SYSTEMS;
PRESSURE GROUT COMPANY;
PROFESSIONAL DOOR AND MILL
WORKS, LLC; READY MIX, INC.;
RENAISSANCE POOLS & SPAS, INC.;
REPUBLIC CRANE SERVICE, LLC;
STEEL ENGINEERS, INC.; SUNSTATE
COMPANIES, INC.; SUPPLY
NETWORK, INC.; THARALDSON
MOTELS II, INC.; TRI CITY DRYWALL,
INC.; UINTAH INVESTMENTS, LLC;
AND ZITTING BROTHERS
CONSTRUCTION, INC.,
Real Parties in Interest.
Original petition for writ of mandamus and prohibition
challenging a district court order granting summary judgment in a
mechanic's lien action.
Petition denied.
SUPREME COURT
OF
NEVADA
2
(0) 1 ,147A e
Howard & Howard Attorneys PLLC and Wade B. Gochnour and Gwen
Rutar Mullins, Las Vegas,
for Petitioner APCO Construction.
Sterling Law, LLC, and Beau Sterling, Las Vegas; Peel Brimley LLP and
Richard L. Peel and Michael T. Gebhart, Henderson,
for Petitioners Accuracy Glass & Mirror Company, Inc.; Bruin Painting
Corporation; Buchele, Inc.; Cactus Rose Construction; Fast Glass, Inc.; HD
Supply Waterworks, LP; Heinaman Contract Glazing; Helix Electric of
Nevada, LLC; Interstate Plumbing & Air Conditioning; SWPPP
Compliance Solutions, LLC; and WRG Design, Inc.
Lionel Sawyer & Collins and A. William Maupin, Las Vegas; Meier &
Fine, LLC, and Glenn F. Meier and Rachel E. Donn, Las Vegas;
Hutchinson & Steffen, LLC, and Michael K. Wall, Las Vegas,
for Real Party in Interest Scott Financial Corporation.
Kemp, Jones & Coulthard, LLP, and J. Randall Jones, Las Vegas,
for Real Parties in Interest Bradley J. Scott and Scott Financial
Corporation.
Snell & Wilmer, LLP, and Robin E. Perkins, Las Vegas,
for Real Party in Interest Ahern Rentals, Inc.
Holley, Driggs, Walch, Puzey & Thompson and Jeffrey R. Albregts, Las
Vegas,
for Real Party in Interest Arch Aluminum and Glass Co.
Tony Ditty, Escondido, California,
for Real Party in Interest Atlas Construction Supply, Inc.
Premier Legal Group and R. Christopher Reade, Las Vegas,
for Real Party in Interest Cellcrete Fireproofing of Nevada, Inc.
Grant Morris Dodds PLLC and Steven L. Morris, Henderson,
for Real Party in Interest Camco Pacific Construction Co., Inc.
Greenberg Traurig, LLP, and Mark E. Ferrario, Tami Cowden, and
Moorea Katz, Las Vegas,
for Real Parties in Interest Club Vista Financial Services, LLC; and
Tharaldson Motels II, Inc.
SUPREME COURT
OF
NEVADA
3
(0) I947A
Koch & Scow, LLC, and David R. Koch, Henderson,
for Real Parties in Interest Creative Home Theatre, LLC; and Renaissance
Pools & Spas, Inc.
T. James Truman & Associates and T. James Truman, Las Vegas,
for Real Parties in Interest Dave Peterson Framing, Inc.; E&E Fire
Protection, LLC; Noorda Sheet Metal Company; Pressure Grout Company;
and Professional Door and Mill Works, LLC.
Williams & Associates and Donald H. Williams, Las Vegas,
for Real Parties in Interest Eza, P.C.; Harsco Corporation; and Patent
Construction Systems.
Fennemore Craig Jones Vargas and David W. Dachelet, Las Vegas,
for Real Party in Interest Ferguson Fire and Fabrication, Inc.
Watt, Tieder, Hoffar & Fitzgerald, LLP, and David R. Johnson, Las Vegas,
for Real Party in Interest Granite Construction Company.
Dickinson Wright PLLC and Eric Dobberstein, Las Vegas,
for Real Party in Interest Insulpro Projects, Inc.
Keith E. Gregory & Associates and Keith E. Gregory, Las Vegas,
for Real Party in Interest Jeff Heit Plumbing Co., LLC.
Varricchio Law Firm and Philip T. Varricchio, Las Vegas,
for Real Parties in Interest John Deere Landscape, Inc.; and Supply
Network, Inc.
Smith & Shapiro, LLC, and James E. Shapiro, Henderson,
for Real Party in Interest Las Vegas Pipeline, LLC.
Jolley Urga Wirth Woodbury & Little and Martin A. Little, Las Vegas,
for Real Parties in Interest Nevada Prefab Engineers; Pape Material
Handling; and Steel Engineers, Inc.
Pezzillo Lloyd and Jennifer R. Lloyd, Las Vegas,
for Real Parties in Interest Northstar Concrete, Inc.; and Tri City Drywall,
Inc.
SUPREME COURT
OF
NEVADA
4
(0) 1947A
Brian K. Berman, Las Vegas,
for Real Party in Interest Ready Mix, Inc.
Law Office of Hayes & Welsh and Garry L. Hayes, Henderson,
for Real Party in Interest Sunstate Companies, Inc.
Procopio, Cory, Hargreaves & Savitch, LLP, and Andrew J. Kessler, San
Diego, California,
for Real Party in Interest Uintah Investments, LLC.
Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, and Reuben H.
Cawley, Las Vegas,
for Real Party in Interest Zitting Brothers Construction, Inc.
Cabinetec, Inc.; Concrete Visions, Inc.; Custom Select Billing, Inc.;
Gemstone Development West, Inc.; Hydropressure Cleaning; Inquipco;
Republic Crane Service, LLC,
In Pro Se.
BEFORE HARDESTY, CA., DOUGLAS and CHERRY, JJ.
OPINION
By the Court, HARDESTY, C.J.:
In this writ proceeding, we must determine whether a
subordination agreement that subordinates a lien for original land
financing to a new construction deed of trust affects the priority of a
mechanic's lien for work performed after the date of the original loan but
before the date of the construction deed of trust. Because contractual
partial subordination differs from complete subordination, we agree that a
contractual partial subordination by creditors of a common debtor do not
subordinate a first priority lien to a mechanic's lien. Further, nothing in
NRS 108.225 changes the priority of a mechanic's lien to a partially
SUPREME COURT
OF
NEVADA
5
(0) 1947A
subordinated lien recorded before the mechanic's lien became effective.
Thus, the priority of the mechanic's lien remains junior to the amount
secured by the original senior lien.
PROCEDURAL AND FACTUAL HISTORY
Gemstone Apache, LLC (Apache), intended to develop a
mixed-use property (Manhattan West) in Las Vegas. Real party in
interest Scott Financial Corporation (SFC) made multiple loans to Apache
for this purpose. The first three loans, which were recorded in July 2006,
totaled $38 million (the Mezzanine Deeds of Trust) and financed the
purchase of the property. In April 2007, petitioner APCO Construction
(APC0), 1 the contractor hired by Apache, began construction on
Manhattan West, setting the priority date for mechanic's lien services. In
May and October of 2007, the Mezzanine Deeds of Trust were amended to
secure additional funds for the project. 2
In early 2008, Gemstone Development West, LLC (GDW),
purchased Manhattan West from Apache, assuming Apache's loan
obligations. To obtain financing for construction, GDW borrowed an
additional $110,000,000 from SFC (the Construction Deed of Trust),
recording the deed of trust on February 7, 2008. As part of the overall
'There are multiple petitioners appearing in this matter, and
petitioners have filed a joint petition with this court. We collectively refer
to petitioners as APCO.
2Although APCO frames these amendments as a refinance, the
parties present no argument regarding whether these amendments served
to refinance the Mezzanine Deeds of Trust or what effect a refinance
would have on lien priority, and thus, we do not consider this issue. See
Edwards v. Emperor's Garden Rest., 122 Nev. 317, 330 n.38, 130 P.3d
1280, 1288 n.38 (2006).
SUPREME COURT
OF
NEVADA
6
0:1) 194Th e
transaction, SFC and GDW entered into a subordination agreement
subordinating the Mezzanine Deeds of Trust to the Construction Deed of
Trust. SFC indicated that its intent for the subordination agreement was
for SFC to determine "in what order SFC's debts would be satisfied." The
subordination agreement did not state whether the subordination was
complete or partial, nor did it address the priority of any potential
mechanics' liens.
The relationship between APCO and GDW deteriorated.
APCO stopped work on Manhattan West and filed suit against GDW, SFC,
and others. SFC and APCO both moved for summary judgment on the
issue of lien priority. SFC argued that the subordination agreement
partially subordinated the Mezzanine Deeds of Trust to the Construction
Deed of Trust, giving the Construction Deed of Trust senior priority for
$38 million and leaving APCO's mechanics' liens unaffected. APCO
argued that the subordination agreement completely subordinated the
Mezzanine Deeds of Trust to the Construction Deed of Trust, prioritizing
the Mezzanine Deeds of Trust after APCO's mechanics' liens and the
Construction Deed of Trust. It further argued that NRS 108.225
precluded the Construction Deed of Trust from taking priority over
APCO's mechanics' liens.
The district• court initially granted summary judgment in
favor of APCO, but, after SFC filed a motion for reconsideration, the
district court granted summary judgment in favor of SFC. 3 The district
3 APCO argues that the district court erred in reconsidering the
motion. APCO's argument is without merit because NRCP 54(b) permits
the district court to revise a judgment that adjudicates the rights of less
than all the parties until it enters judgment adjudicating the rights of all
continued on next page...
SUPREME COURT
OF
NEVADA
7
(0) I94Th
court determined that the subordination agreement only partially
subordinated the Mezzanine Deeds of Trust to the Construction Deed of
Trust and left the mechanics' liens in the second-priority position. APCO
petitioned for a writ of mandamus 4 to compel the district court to vacate
its order and recognize APCO's mechanics' liens as holding a first priority.
DISCUSSION
"A writ of mandamus is available to compel the performance of
an act that the law requires as a duty resulting from an office, trust, or
station or to control an arbitrary or capricious exercise of discretion." Int'l
Game Tech., Inc. v. Second Judicial Dist. Court, 124 Nev. 193, 197, 179
P.3d 556, 558 (2008) (internal citation omitted); see NRS 34.160. We
exercise our discretion to entertain this writ petition because an important
issue of law requires clarification—whether a mechanic's lien takes
priority over a contractually subordinated debt by creditors of a common
debtor either because (1) the subordination agreement constitutes a
complete subordination, or (2) NRS 108.225 (Nevada's mechanic's lien
statute) precludes the partial subordination of an existing lien.
...continued
the parties. See Bower v. Harrah's Laughlin, Inc., 125 Nev. 470, 479, 215
P.3d 709, 716 (2009). Here, the district court's order determining lien
priority adjudicated the rights of only a few of the parties.
4 1nthe alternative, APCO petitions for a writ of prohibition, arguing
that the district court did not have authority to rehear the case. We
conclude, however, that a writ of prohibition is improper here because the
district court had jurisdiction to hear and determine the motion to
reconsider pursuant to NRCP 54(b). See Goicoechea v. Fourth Judicial
Dist. Court, 96 Nev. 287, 289, 607 P.2d 1140, 1141 (1980) (stating that this
court will not issue a writ of prohibition "if the court sought to be
restrained had jurisdiction to hear and determine the matter under
consideration").
SUPREME COURT
OF
NEVADA
8
(0) 1947A
Contractual subordination allows creditors of a common
debtor to contractually rearrange the priority of their enduring liens or
debt positions. See Robin Russell, Distinction Between Contractual and
Equitable Subordination, 2 Tex. Prac. Guide: Fin. Transactions § 10:10
(Robin Russell & J. Scott Sheehan eds., 2014); see also George A. Nation,
III, Circuity of Liens Arising From Subordination Agreements: Comforting
Unanimity No More, 83 B.U. L. Rev, 591, 591-92 (2003) (describing
subordination). Central to this case is the distinction between complete
and partial contractual subordination, which differ on their
rearrangements of the priorities of lienholders.
In a complete subordination, the agreement subordinating the
senior lien to a junior lien effectively also subordinates the senior lien to
intervening liens.° See George A. Nation, III, Circuity of Liens Arising
From Subordination Agreements: Comforting Unanimity No More, 83 B.U.
L. Rev. 591, 593 (2003). Here, for example, the Mezzanine Deeds of Trust
would simply become junior to the Construction Deed of Trust, which
would remain junior to the mechanics' liens, thus moving the mechanics'
liens to first priority. In contrast, partial subordination gives a junior lien
°Complete subordination occurs when the effect of a subordination
agreement subordinates the first-priority lien to the third-priority lien
but also has the effect of subordinating the first-priority lien to the
second-priority lien. For example, there are three liens on a property
with the following priority: lien A for $10,000, lien B for $5,000, and
lien C for $20,000. Complete subordination would mean that the
subordination agreement between the holders of lien A and lien C
resulted in the following priority: lien B for $5,000, lien C for $20,000,
and then lien A for $10,000. See George A. Nation, III, Circuity of Liens
Arising From Subordination Agreements: Comforting Unanimity No
More, 83 B.U. L. Rev. 591, 593 (2003).
SUPREME COURT
OF
NEVADA
9
(0) 1947A
priority over a senior lien to the extent that it does not affect the priority
of the intervening lien; thus, the junior lien only has priority over the
intervening lien in the amount of the senior lien.° Id. at 593-94;
Caterpillar Fin. Servs. Corp. v. Peoples Nat'l Bank, N.A., 710 F.3d 691,
693-94 (7th Cir. 2013). In other words, in partial subordination, the
priority of liens is contractually rearranged without affecting the position
of any intervening lien. Caterpillar, 710 F.3d at 693-94. Here, the
Construction Deed of Trust would partially subordinate the Mezzanine
Deeds of Trust, giving the Construction Deed of Trust $38 million in first
priority, leaving the mechanics' liens in second priority, and placing the
remainder of the Construction Deed of Trust in third priority over the
Mezzanine Deeds of Trust.
At issue is whether the subordination agreement effected a
complete subordination and whether Nevada caselaw and statutes
preclude partial subordination.
The subordination agreement effected a partial subordination
APCO argues that the district court erred when, in granting
summary judgment in favor of SFC, it determined that the subordination
agreement was intended to create a partial subordination, not a complete
°Partial subordination occurs when the effect of a subordination
agreement subordinates a first-priority lien to a third-priority lien
without affecting the priority of the second lien. For example, using the
factual scenario from footnote 4, partial subordination occurs when the
holders of lien A and lien C agree to subordinate lien A to lien C. After
the agreement, the lien priority would be lien C for $10,000, lien B for
$5,000, the remaining amount of lien C ($10,000), and then lien A for
$10,000. See George A. Nation, III, Circuity of Liens Arising From
Subordination Agreements: Comforting Unanimity No More, 83 B.U. L.
Rev. 591, 593-94 (2003).
SUPREME COURT
OF
NEVADA
10
(0) I907A ie9.•
subordination. We review an order granting summary judgment de novo,
viewing all evidence "in a light most favorable to the nonmoving party."
Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005). We
have held that "[s]ummary judgment is appropriate under NRCP 56 when
the pleadings, depositions, answers to interrogatories, admissions, and
affidavits, if any, that are properly before the court demonstrate that no
genuine issue of material fact exists, and the moving party is entitled to
judgment as a matter of law." Id. at 731, 121 P.3d at 1031. Additionally,
"[w]hen the facts in a case are not in dispute, contract interpretation is a
question of law, which this court reviews de novo." Lehrer McGovern
Bovis, Inc. v. Bullock Insulation, Inc., 124 Nev. 1102, 1115, 197 P.3d 1032,
1041 (2008).
Different courts have reached different conclusions about
whether a general subordination agreement effects complete or partial
subordination. See Caterpillar, 710 F.3d at 693-94; In IT Price Waterhouse
Ltd., 46 P.3d 408, 410 (Ariz. 2002); see also George A. Nation, III, Circuity
of Liens Arising From Subordination Agreements: Comforting Unanimity
No More, 83 B.U. L. Rev. 591, 592-93 (2003). The minority view concludes
that a general subordination agreement results in complete subordination.
See, e.g., AmSouth Bank, N.A. v. J & D Fin. Corp., 679 So. 2d 695, 698
(Ala. 1996). Relying on Black's Law Dictionary's definition of
"subordination agreement," this view contends that "[13137 definition,
'subordination' contemplates a reduction in priority. Nothing in the
definition contemplates raising a lower priority lienholder up to the
position of the subordinating party." Id. Thus, this view holds that
lienholders can only step into the shoes of another lienholder when the
SUPREME COURT
OF
NEVADO,
11
(0) 1947A e
agreement explicitly indicates that there is a transfer of priority rights.
Id.
In contrast, the United States Court of Appeals for the
Seventh Circuit adopted the majority approach and held in favor of partial
subordination when the subordination agreement was silent on the issue.
Caterpillar, 710 F.3d at 693-94. This approach holds that nonparties are
unaffected by the subordination agreement and "simply swaps the
priorities of the parties to the subordination agreement." Id. It reasoned
that the party agreeing to subordinate its higher-priority lien surely wants
the subsequent loan to occur so that the debtor would be strengthened, but
that complete subordination would "drop the subordinating creditor to the
bottom of the priority ladder," thus benefiting "a nonparty to the
subordination agreement." Id. Therefore, as a practical matter, the court
"cfouldin't think why [the subordinating party] would have insisted on
complete subordination." Id. at 694.
We agree with the reasoning in Caterpillar. In the instant
case, complete subordination would move APCO's mechanics' liens
(nonparties to the subordination agreement) into the first-priority position
and leave SFC's liens junior to all mechanics' liens. Partial subordination,
however, would leave $38,000,000 of the Construction Deed of Trust in
first priority and the mechanics' liens in the same position they were in
prior to the subordination agreement. We cannot determine any reason
SFC would have intended to completely subordinate the Mezzanine Deeds
of Trust, only for APCO's mechanics' liens to then take the first-priority
position. Moreover, this aligns with SFC's claimed intent for the
subordination agreement—that it should be "allowed to freely contract the
order of payment as between" itself. The subordination agreement neither
SUPREME COURT
OF
NEVADA
12
(U) PJ47A
stated it intended to create complete subordination nor mentioned the
mechanic's lien. Absent this clear intent, we conclude that a common-
sense approach weighs in favor of partial subordination.
NRS 108.225 does not preclude partial subordination
APCO argues that, while parties may contractually
subordinate the priorities of their liens, NRS 108.225 does not permit
partial subordination, only complete subordination; specifically, APCO
asserts that NRS 108.225 prevents SFC from partially subordinating the
Mezzanine Deeds of Trust in favor of the Construction Deed of Trust.
That statute, which protects the right to payment for those who have
worked to improve property, states, in pertinent part, that mechanics' and
materialmen's liens are senior to "[a]ny lien, mortgage or other
encumbrance which may have attached to the property after the
commencement of construction of a work of improvement." NRS
108.225(1)(a); see In re Fontainebleau Las Vegas Holdings, LLC, 128 Nev.,
Adv. Op. 53, 289 P.3d 1199, 1211 (2012); Hardy Cos., Inc. v. SNMARK,
LLC, 126 Nev. 528, 538, 245 P.3d 1149, 1156 (2010). SFC argues that
NRS 108.225 does not preclude other lienholders from contracting for a
partial subordination with respect to their lien priorities. This court
reviews questions of statutory construction de novo. L Cox Constr. Co. v.
CH2 Invs., LLC, 129 Nev., Adv. Op. 14, 296 P.3d 1202, 1203 (2013).
The statute gives priority to mechanics' liens over liens that
attach after the commencement of the work of improvement. It does not,
however, address subordination agreements between other lienholders. 7
7 Tobe sure, contractual partial subordination differs from equitable
subrogation, which we addressed in In re Fontainebleau Las Vegas
Holdings, LLC, 128 Nev., Adv. Op. 53, 289 P.3d 1199, 1209-12 (2012)
continued on next page...
SUPREME COURT
OF
NEVADA
13
(CI) 1947A e
This court does not "fill in alleged legislative omissions based on
conjecture as to what the [IA] egislature would or should have done."
Falcke v. Cnty. of Douglas, 116 Nev. 583, 589, 3 P.3d 661, 665 (2000)
(internal quotations omitted). Therefore, we conclude that NRS 108.225
does not prohibit negotiations between lienholders with priority over
mechanics' liens and those with lesser priority in situations where the
mechanics' liens will be left in exactly the same position as if the
subordination agreement had never occurred. In other words, the statute
does not preclude partial subordination.
Here, when APCO began work on Manhattan West, it did so
with notice of SFC's Mezzanine Deeds of Trust and knowledge that its
mechanics' liens would be in second priority to those liens. Crucially,
nothing about the subordination agreement alters the amount of debt that
APCO was junior to, and thus, the subordination agreement does not
violate NRS 108.225. To read the statute in a way that would grant APCO
first priority even though the subordination agreement did not prejudice
...continued
(concluding that NRS 108.225 precludes the application of equitable
doctrines that would advance the priority of a junior lienholder above the
priority of a mechanic's lien). We note that Fontainebleau's distinguishing
factor is that the mechanic's lien claimants there were parties to the
subordination agreement and attempted to subordinate their priority
positions despite NRS 108.225's constraints. Id. at 1208. Unlike
Fontainebleau, APCO is not a party to the subordination agreement and
the subordination agreement has not changed APCO's priority position.
Here, the contractual partial subordination arises as a result of a
subordination agreement, not equity principles. See, e.g., Bratcher v.
Buckner, 109 Cal. Rptr. 2d 534, 53940 (Ct. App. 2001) (court relied on
subordination agreement, not equitable principles, "to enforce the
objective intent of the parties").
SUPREME COURT
OF
NEVADA
14
(0) 19474 mtIrp
APCO's lien position—or change APCO's status whatsoever—would be an
over-reading of the statute.
CONCLUSION
The district court did not improperly determine that the
subordination contract effected a partial subordination. Further, NRS
108.225 does not preclude parties from contracting for a partial
subordination.
Accordingly, we deny APCO's petition for a writ of mandamus
and prohibition.
C.J.
Hardesty
I concur:
J.
Douglas
SUPREME COURT
OF
NEVADA
15
(0) 1947A ,Pe
CHERRY, J., dissenting
I would not entertain this writ at this stage of the proceedings.
A short order stating that intervention is unnecessary at this time would
suffice
I am troubled by the fact that this court previously denied
APCO's request for a stay, which would have allowed the district court to
conclude this case with a final disposition that could then be appealed to
this court.
In reviewing the district court's order granting Scott Financial
Corporations' motion for summary judgment filed on May 7, 2012, some
three years ago, the order states:
IT IS FURTHER ORDERED, ADJUDGED,
AND DECREED that SFC's loan of
$110,000,000.00 is in first position priority
regarding the other claimants in the principal
amount of $38,000,000.00. Thereafter, the
mechanic lien claimants are in second position and
the remainder of SFC's $110,000,000.00 principal
amount loan, namely $72,000,000.00 in principal
is in third position, and the Original Mezzanine
Deeds of Trust along with the post-April 2007
Mezzanine Deeds of Trust are in junior priority
position to the aforementioned encumbrances.
IT IS FURTHER ORDERED, ADJUDGED
AND DECREED a further stay of this litigation is
granted pending a petition to the Nevada Supreme
Court provided such is timely filed and for which
no bond is required.
In cases such as this one, where the right to appeal a final
disposition is still viable, the best practice would have been to not only
deny APCO's motion for a stay, but also to immediately deny APCO's writ
as soon as possible without the necessity of extensive appellate
proceedings.
SUPREME COURT
OF
NEVADA
(01 1447A e
For the above reasons, I would agree the writ should be
denied, but I worry that in considering the writ, we are sending the wrong
message to the Nevada Bar concerning pretrial extraordinary writs.'
"This is not to say that the published opinion by the majority is not
an excellent appellate disposition because it is a well-written opinion
affirming the district court in all respects.
SUPREME COURT
OF
NEVADA
2
(0) 1947A