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Breach of Contract

 

Breach of Contract

Elements

To prevail on a claim for breach of contract in Nevada, a plaintiff must prove:

(1) the existence of a valid contract,

(2) a breach by the defendant, and

(3) damage as a result of the breach.

Example Cases

Golden v. McKim, 37 Nev. 205, 141 P. 676, 678 (1914); Richardson v. Jones, 1 Nev. 405, 405 (1865); Cohen-Breen v. Gray Television Group, Inc., 661 F. Supp. 2d 1158, 1171 (D. Nev. 2009); Brown v. Kinross Gold U.S.A., Inc., 531 F. Supp. 2d 1234, 1240 (D. Nev. 2008); Saini v. Int’l Game Tech., 434 F. Supp. 2d 913, 919–20 (D. Nev. 2006); Calloway v. City of Reno, 116 Nev. 250, 256, 993 P.2d 1259, 1265 (Nev. 2000)(quoting Bernard v. Rockhill Dev. Co., 103 Nev. 132, 135, 734 P.2d 1238, 1240 (1987)).

Proof

Basic contract principles require, for an enforceable contract, an offer and acceptance, meeting of the minds, and consideration.  May v. Anderson, 121 Nev. 668, 672, 119 P.3d 1254, 1257 (2005)..

“Consideration” is a term of art, a word with a well-understood meaning in the law, embracing any “right, interest, profit or benefit.”  Ducey v. United States, 713 F.2d 504, 510 (9th Cir. 1983)..

English law requires that consideration—”something of value in the eye of the law”—be given in exchange for a promise in order to make the promise an enforceable contract. The same requirement applies in the case of an amendment to a contract. Either a benefit to the promisor or a detriment to the promisee can provide consideration. So long as a contract provides some consideration, it may be minimal—even a peppercorn. Courts do not inquire into the value or adequacy of the consideration. RLS Assocs., LLC v. United Bank of Kuwait PLC, 380 F.3d 704, 709 (2d Cir. 2004) (internal citations omitted).

The actual value of the property at the time of the transfer, a vigorously contested fact, is immaterial. We recall the first lesson in contracts, the peppercorn theory-that courts will not inquire into the adequacy of consideration, so long as it was true and valuable. Pope v. Sav. Bank of Puget Sound, 850 F.2d 1345, 1356 (9th Cir. 1988).

The doctrine of promissory estoppel, which embraces the concept of detrimental reliance, is intended as a substitute for consideration, and not as a substitute for an agreement between the parties. Vancheri v. GNLV Corp., 105 Nev. 417, 421, 777 P.2d 366, 369 (1989).

Damages

As a general rule, an aggrieved party’s damages for breach of contract are limited to the amount specified in a valid liquidated damages clause. 5 Arthur L. Corbin, Corbin on Contracts § 1061 (1964). Thus, if the bond forfeiture served as liquidated damages, the trial court should not have awarded the city additional damages of $14,544.
American Fire & Safety, Inc. v. City of North Las Vegas, 109 Nev. 357, 359, 849 P.2d 352, 354 (Nev. 1993).

Defenses

The Parol-Evidence Rule

  • Prior negotiations merge with contract/not admissible

“Under [the parol-evidence] rule all prior negotiations and agreements are deemed merged in the written contract, and parol evidence is not admissible to vary or contradict its terms.”
Tallman v. First Nat’l Bank of Nev., 66 Nev. 248, 256–57, 208 P.2d 302, 306 (1949).

  • Prior negotiations merge with contract

“It is well settled, by a long line of decisions of this court, that, when the parties reduce their contract to writing, all oral negotiations and stipulations are merged therein.”
Gage v. Phillips, 21 Nev. 150, 26 P. 60, 61, 37 Am.St.Rep. 494. (Nev. 1891).

  • Couching parol evidence as a “fraud” argument is not allowed

“The general rule is that, when parties have committed their agreements to writing, all oral negotiations and stipulations are embodied in the writing itself. Now, in this case, while it is contended that the fraud practiced was in obtaining the contract, the real matter relied upon goes to show an agreement different in terms from that signed by the parties. This is the veriest sophistry. To sanction this contention would be to permit the solemn written contract of the parties to be overthrown by showing that the parties agreed orally to something entirely at variance from the written contract. This cannot be.”
Nev. Mining & Exploration Co. v. Rae, 47 Nev. 173, 828, 223 P. 825, 828 (1924).

  • Not allowed to use parol evidence to show “true” intentions of parties

“The invoked rule, though by custom called a rule of evidence, is in fact a rule of substantive law, as has often been explained. . . When the plaintiff pleads that the writing (a release) does not express the intentions of the parties to it at the time, he pleads something which the law will not permit him to prove.” Natrona Power Co. v. Clark, 31 Wyo. 284, 225 P. 586, 589.”
Tallman v. First Nat. Bank of Nev., 66 Nev. 248, 257, 208 P.2d 302, 306 (Nev. 1949).

Misc. Defenses

Misc

  • The Existence of a Valid Contract

Basic contract principles require, for an enforceable contract, an offer and acceptance, meeting of the minds, and consideration. With respect to contract formation, preliminary negotiations do not constitute a binding contract unless the parties have agreed to all material terms. A valid contract cannot exist when material terms are lacking or are insufficiently certain and definite. A contract can be formed, however, when the parties have agreed to the material terms, even though the contract’s exact language is not finalized until later. In the case of a settlement agreement, a court cannot compel compliance when material terms remain uncertain.FN6 The court must be able to ascertain what is required of the respective parties.
May v. Anderson, 121 Nev. 668, 119 P.3d 1254, 1257 (2005).

  • Breach of Covenant Not to Compete

NRS 613.200 Prevention of employment of person who has been discharged or who terminates employment unlawful; criminal and administrative penalties; exception.
1. Except as otherwise provided in this section, any person, association, company or corporation within this State, or any agent or officer on behalf of the person, association, company or corporation, who willfully does anything intended to prevent any person who for any cause left or was discharged from his, her or its employ from obtaining employment elsewhere in this State is guilty of a gross misdemeanor and shall be punished by a fine of not more than $5,000.
2. In addition to any other remedy or penalty, the Labor Commissioner may impose against each culpable party an administrative penalty of not more than $5,000 for each such violation.
3. If a fine or an administrative penalty is imposed pursuant to this section, the costs of the proceeding, including investigative costs and attorney’s fees, may be recovered by the Labor Commissioner.
4. The provisions of this section do not prohibit a person, association, company, corporation, agent or officer from negotiating, executing and enforcing an agreement with an employee of the person, association, company or corporation which, upon termination of the employment, prohibits the employee from:
(a) Pursuing a similar vocation in competition with or becoming employed by a competitor of the person, association, company or corporation; or
(b) Disclosing any trade secrets, business methods, lists of customers, secret formulas or processes or confidential information learned or obtained during the course of his or her employment with the person, association, company or corporation,

  • Valuable Consideration

We recognize “that noncompetition covenants must be supported by valuable consideration, which may include continued employment after the employee’s agreement to the covenant,”

Traffic Control Servs., Inc. v. United Rentals Nw., Inc., 120 Nev. 168, 174–75 n.14, 87 P.3d 1054, 1059 n.14 (2004).

“[A]n at-will employee’s continued employment is sufficient consideration for enforcing a non-competition agreement.”
Camco, Inc. v. Baker, 113 Nev. 512, 517, 936 P.2d 829, 832 (1997).]

  • Reasonability
    “A restrictive covenant on employment will be upheld only if it is reasonably necessary to protect the business and goodwill of the employer. Hansen v. Edwards, 83 Nev. 189, 191, 426 P.2d 792, 793 (1967). The amount of time the covenant lasts, the territory it covers, and the hardship imposed upon the person restricted are factors for the court to consider in determining whether such a covenant is reasonable. Id. Here, the restrictive covenant prohibited Jones from competing with Deeter within a 100-mile radius of Reno/Sparks for five years after leaving Deeter’s employ. After careful consideration of all the relevant factors, we conclude that the covenant is not reasonable. Although it appears that developing a customer base for the lighting retrofitting business is difficult, we nevertheless believe that a five-year duration is not reasonably necessary to protect Deeter’s business and places too great a hardship on Jones.” Jones v. Deeter, 112 Nev. 291, 296, 913 P.2d 1272, 1275 (1996).

The Nevada Supreme Court in Hansen v. Edwards, 83 Nev. 189, 192, 426 P.2d 792, 793 (1967), cited the following cases with approval, finding the following strictures reasonable in regards to a covenant not to compete:

area of 100 miles for a period of ten years–Foltz v. Struxness, 215 P.2d 133 (Kan.1950);
25 mile radius for three years–Cogley Clinic v. Martini, 253 Iowa 541, 112 N.W.2d 678 (1962); and
county limits and three years–Lovelace Clinic v. Murphy, 76 N.M. 645, 471 P.2d 450 (1966).

  • Failure to read the contract

Courts have consistently held that one is bound by any document one signs in spite of any ignorance of the document’s content, providing there has been no misrepresentation. See, e.g., John Call Engineering v. Manti City Corp., 743 P.2d 1205 (Utah 1987); Skagit State Bank v. Rasmussen, 109 Wash. 2d 377, 745 P.2d 37 (Wash. 1987). In addition, the RESTATEMENT (SECOND) OF CONTRACTS § 211 (1981) provides:

recipient’s fault in not knowing or discovering the facts before making the contract does not make his reliance unjustified unless it amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing. The comments to § 211 note that if the recipient should have discovered the falsity by making a cursory examination, his reliance is clearly not justified and he is not entitled to relief; he is expected to use his senses and not rely blindly on the maker’s assertions. Id. at cmt. b.

Yee v. Weiss, 110 Nev. 657, 662 (Nev. 1994).

Battery

Battery

Elements

An actor is subject to liability to another for battery if

(a) he acts intending to cause a harmful or offensive contact with the person of the other or a third person, or an imminent apprehension of such a contact, and

(b) a harmful contact with the person of the other directly or indirectly results.

REST 2d TORTS § 13

Example Cases

Proof

Damages

The liability of one who commits an assault and battery or other unlawful violence to the person of another is not to be measured by the physical strength of the party injured, or his capacity to endure suffering. One of weak physical structure, or small vitality, or in ill health has as much right to protection from violence as a robust athlete; and in either case the physical injury, the bodily harm, which is actually caused by the violence, whether he be strong or weak, healthy or sickly, is the natural consequence of the wrong, and need not be specially averred. The law on this subject is correctly stated in Sedg. Dam. (8th Ed.) 111, as follows: ‘For instance, an assault and battery may directly result in pain and bruises, and in the aggravation of a pre-existing disease. These are the direct results of the battery. It may also result in the loss of time, expense of medical attendance, and loss of a business situation. These are perhaps direct results of the illness caused by the battery, but they are the indirect results of the battery itself.”’Murphy v. Southern Pac. Co., 31 Nev. 120, 101 P. 322, 334 (1909).

Defenses


As this court has held, consent is not effective as a defense to battery “where the beating is excessively disproportionate to the consent, given or implied, or where the party injured is exposed to loss of life or great bodily harm.”
Davies v. Butler, 95 Nev. 763, 602 P.2d 605 (1979), quoting right v. Starr, 42 Nev. 441, 446, 179 P. 877 (1919).

Misc

Assault

 

Assault

Elements

  • The tort of “assault” occurs if a person acts with intent to cause another harmful or offensive contact, or another person apprehends imminent contact.
    In re Bradshaw, 315 B.R. 875 (Bkrtcy.D.Nev., 2004).
  • In tort law, an assault is defined as “the threat or use of force on another that causes the person to have a reasonable apprehension of imminent harmful or offensive contact; the act of putting another person in reasonable fear or apprehension of an immediate battery by means of an act amounting to an attempt or threat to commit battery.”
    Black’s Law Dictionary, 122 (8th ed.2004).
  • An assault occurs when a plaintiff causes a defendant to feel apprehension of harmful or offensive contact.
    Prosser and Keeton on Torts, §10 at 43 (5th ed. 1984).

Example Cases

Proof

Damages

Defenses

  • CONSENT: By seeking chiropractic treatment, Bronneke’s consent to the particular technique may be implied because “[a]s a practical matter, health professionals cannot be required to obtain express consent before each touch or test they perform on a patient.”
    Bronneke v. Rutherford, 120 Nev. 230, 234, 89 P.3d 40, 43 (2004).
  • DEFENSE OF PROPERTY: NRS 651.020 provides: “Every owner or keeper of any hotel … in this state shall have the right to evict from such premises anyone who acts in a disorderly manner … or who causes a public disturbance in or upon such premises.” A proprietor is permitted to use reasonable force to eject a trespasser.
    Billingsley v. Stockmen’s Hotel, Inc., 111 Nev. 1033, 901 P.2d 141 (1995) (citing Walker v. Burkham, 67 Nev. 541, 570-74, 222 P.2d 205, 220-21 (1950)).

Misc

 

Alter Ego

 

Alter Ego

Elements

  • The corporation must be influenced and governed by the person asserted to be its alter ego[;]
  • There must be such unity of interest and ownership that one is inseparable from the other; and
  • The facts must be such that adherence to the fiction of separate entity would, under the circumstances, sanction a fraud or promote injustice.

Truck Insurance Exchange v. Palmer J. Swanson, Inc., 124 Nev. 59, 189 P.3d 656, 660 (2008) (quoting Ecklund v. Nevada Wholesale Lumber Co., 93 Nev. 196, 197, 562 P.2d 479, 479-80 (1977)).

In determining whether a unity of interest exists between the individual and the corporation, courts have looked to factors like

  • commingling of funds;
  • undercapitalization;
  • unauthorized diversion of funds;
  • treatment of corporate assets as the individual’s own; and
  • failure to observe corporate formalities.

These factors may indicate the existence of an alter ego relationship, but are notconclusive. There is no litmus test for determining when the corporate fiction should be disregarded; the result depends on the circumstances of each case.

Polaris Indus. Corp. v. Kaplan, 103 Nev. 598, 601-02, 747 P.2d 884, 887 (1987).

 

Example Cases

Proof

  • Preponderance
The elements for finding an alter ego, which must be established by a preponderance of the evidence
LFC Mktg. Group, Inc. v. Loomis, 116 Nev. 896, 904, 8 P.3d 841, 846 (2000)

Undercapitalization, where it is clearly shown, is an important factor in determining whether doctrine of alterego should be applied, but, in absence of fraud or injustice to aggrieved party, it is not absolute ground for disregarding corporate entity, and it is incumbent upon the one seeking to pierce the corporate veil to show by preponderance of the evidence that the financial setup of the corporation is only a sham and caused injustice.

N. Arlington Med. Bldg., Inc. v. Sanchez Const. Co., 86 Nev. 515, 471 P.2d 240 (1970)

[Note from TruCounsel editor:  Although the Nevada Supreme Court stated in N. Arlington that “sham” and “injustice” must be proven by a proponderance of the evidence and LFC Mktg. Group seems to blanketly expanded that ruling, we have serious doubts as to how that standard should be extended in the “fraud” context.]

  • No specific test

There is no litmus test for determining when the corporate fiction should be disregarded; the result depends on the circumstances of each case.
Polaris Industrial Corp. v. Kaplan, 103 Nev. 598, 601, 747 P.2d 884, 886 (1987).

  • Determined on a case-by-case basis

Although ownership of corporate shares is a strong factor favoring unity of ownership and interest, the absence of corporate ownership is not automatically a controlling event. Instead, the “circumstances of each case” and the interests of justice should control. This is especially true when considering the ease with which corporations may be formed and shares issued in names other than the controlling individual.
LFC Marketing Group, Inc. v. Loomis, 116 Nev. 896, 8 P.3d 841, 847 (2000)(citations omitted).

Damages

Defenses

Misc

  • Governed or Influenced

  • Examples:

Here, while at all times relevant Chianti Café was a separate entity, there is no question that Mr. Giampietro “influenced and governed” the activities and actions of Chianti Café. Chianti Café was a one-person limited liability company, formed to acquire the Portabello restaurant. It did whatever James Giampietro wanted, because he was the sole flesh-and-blood person who was connected with it. See Lorenz v. Beltio, Ltd., 114 Nev. 795, 808, 963 P.2d 488, 496 (Nev.1998) (clear that two shareholders, being the only individuals involved with the corporations, had requisite control and influence); Mosa v. Wilson–Bates Furniture Co., 94 Nev. 521, 523, 583 P.2d 453, 454 (Nev.1978); Caple v. Raynel Campers, Inc., 90 Nev. 341, 344, 526 P.2d 334, 336 (Nev.1974). Cf. Carson Meadows Inc. v. Pease, 91 Nev. 187, 191, 533 P.2d 458, 461 (Nev.1975) (although *852 wife of corporate president was vice president, secretary and stockholder in corporate entity, she essentially acted as a “office manager and secretary” despite titles, and thus did not exert required influence and control); Plotkin v. National Lead Co., 87 Nev. 51, 52, 482 P.2d 323, 324 (Nev.1971) (writing letter requesting extension of time to pay “debt we owe you through American Paint” insufficient to show control and influence of writer over American Paint).

In re Giampietro, 317 B.R. 841, 851-52 (Bankr. D. Nev. 2004).

  • Ownership Not Needed

Although ownership of corporate shares is a strong factor favoring unity of ownership and interest, the absence of corporate ownership is not automatically a controlling event. Instead, the “circumstances of each case” and the interests of justice should control. Id. This is especially true when considering the ease with which corporations may be formed and shares issued in names other than the controlling individual.

LFC Mktg. Group, Inc. v. Loomis, 116 Nev. 896, 905, 8 P.3d 841, 847 (2000)

 

  • Unity of Interest [Actual Alter Ego Activity]


  • While the classic alter ego situation involves a creditor reaching the personal assets of a controlling individual to satisfy a corporation’s debt, the “reverse” piercing situation involves a creditor reaching the assets of a corporation to satisfy the debt of a corporate insider based on a showing that the corporate entity is really the alter ego of the individual.
    LFC Marketing Group, Inc. v. Loomis, 116 Nev. 896, 903, 8 P.3d 841, 845-46 (2000).

Nevada cases decided after Twin Lakes confirm Judge George’s reading. In Rowland v. Lepire, 99 Nev. 308, 318, 662 P.2d 1332, 1338 (Nev.1983), for example, the Lepires had contracted with the Rowland Corporation to build a house. Rowland’s stock was owned by Glen and Martin Rowland; all dealings with respect to the construction contract were with one of these two individuals. When dealings on the construction went sour, the parties sued each other and, after trial, the court not only found Rowland Corporation liable for $65,000, but also found that Glen and Martin were personally liable for that amount as alter egos of Rowland Corporation.

The Nevada Supreme Court disagreed. After finding that Glen and Martin (and some miscellaneous family members) were the only stockholders, it reviewed the trial court’s findings that total capitalization in the four years Rowland had been in existence was only $1,100. It also reviewed the findings that while Rowland Corporation had a corporate checking account, it had a negative net worth at trial, and apparently never followed any corporate formalities. Despite affirming that Rowland Corporation was undercapitalized “and that there was little existence separate and apart from Martin and Glen,” Rowland, 99 Nev. at 318, 662 P.2d at 1338, the court did not find that Lepire had proved its alter ego case, supporting its reasoning by citing to North Arlington Med. Bldg., Inc. v. Sanchez Const. Co., 86 Nev. 515, 471 P.2d 240 (Nev.1970). In that case, the Nevada Supreme Court had also found inadequate capitalization, but had found that the aggrieved party had “failed to show any causal connection between the [lack of] financing and the inability to pay [the aggrieved party], or how it sanctioned a fraud or promoted an injustice.” This statement was based in part on the fact that the aggrieved party had never relied on the interchangeability between the corporation involved and its owners.

Similarly, in Polaris Indus. Corp. v. Kaplan, 103 Nev. 598, 602, 747 P.2d 884, 887 (Nev.1987), the court affirmed a finding that a salesman was not the alter ego of a corporate defendant, even though the salesman had demonstrated a “unity of interest” with the corporation by regularly withdrawing funds from the corporation without following corporate formalities. More was required, however. As the trial court found, and the Supreme Court affirmed, the withdrawals were not the cause of the nonpayment of the aggrieved party’s damage, and were not fraudulent or unjust on their face; indeed, the court accepted testimony that such withdrawals were “in lieu of salary.” Polaris, 103 Nev. at 602, 747 P.2d at 887.

In re Giampietro, 317 B.R. 841, 854 (Bankr. D. Nev. 2004)

Accounting

 

 Accounting


Elements


Example Cases


Proof

Damages

Defenses

  • Not an independant action

Plaintiff also makes a claim for an inspection and accounting, but he fails to establish any legal basis for such a claim. As one court has noted, a claim for accounting must be “tethered to relevant actionable claims.” Hafiz v. GreenPoint Mortgage Funding, Inc., 652 F.Supp.2d 1039, 1043-44 (N.D.Cal.2009).
Simon v. Bank of America, N.A., Case No. 10-cv-00300-GMN-LRL, 2010 WL 2609436, *11 (D. Nev. 2010).

Misc

RICO

Elements

  • It is unlawful for a person:
    • Who has with criminal intent received any proceeds derived, directly or indirectly, from racketeering activity to use or invest, whether directly or indirectly, any part of the proceeds, or the proceeds derived from the investment or use thereof, in the acquisition of:
      • Any title to or any right, interest or equity in real property; or
      • Any interest in or the establishment or operation of any enterprise.
    • Through racketeering activity to acquire or maintain, directly or indirectly, any interest in or control of any enterprise.
    • Who is employed by or associated with any enterprise to conduct or participate, directly or indirectly, in:
      • The affairs of the enterprise through racketeering activity; or
      • Racketeering activity through the affairs of the enterprise.
    • Intentionally to organize, manage, direct, supervise or finance a criminal syndicate.
    • Knowingly to incite or induce others to engage in violence or intimidation to promote or further the criminal objectives of the criminal syndicate.
    • To furnish advice, assistance or direction in the conduct, financing or management of the affairs of the criminal syndicate with the intent to promote or further the criminal objectives of the syndicate.
    • Intentionally to promote or further the criminal objectives of a criminal syndicate by inducing the commission of an act or the omission of an act by a public officer or employee which violates his official duty.
    • To conspire to violate any of the provisions of this section.

NRS 207.400

Important Definitions

  • “Criminal syndicate” means any combination of persons, so structured that the organization will continue its operation even if individual members enter or leave the organization, which engages in or has the purpose of engaging in racketeering activity.

NRS 207.370

  • “Racketeering activity” means engaging in at least two crimes related to racketeering that have the same or similar pattern, intents, results, accomplices, victims or methods of commission, or are otherwise interrelated by distinguishing characteristics and are not isolated incidents, if at least one of the incidents occurred after July 1, 1983, and the last of the incidents occurred within 5 years after a prior commission of a crime related to racketeering.

NRS 207.390

  • “Crime related to racketeering” defined. “Crime related to racketeering” means the commission of, attempt to commit or conspiracy to commit any of the following crimes:
    • Murder;
    • Manslaughter, except vehicular manslaughter as described in NRS 484.3775
    • Mayhem;
    • Battery which is punished as a felony;
    • Kidnapping;
    • Sexual assault;
    • Arson;
    • Robbery;
    • Taking property from another under circumstances not amounting to robbery;
    • Extortion;
    • Statutory sexual seduction;
    • Extortionate collection of debt in violation of NRS 205.322
    • Forgery;
    • [Resisting public officer]Any violation of NRS 199.280 which is punished as a felony;
    • Burglary;
    • Grand larceny;
    • Bribery or asking for or receiving a bribe in violation of chapter 197 or 199 of NRS which is punished as a felony;
    • Battery with intent to commit a crime in violation of NRS 200.400
    • Assault with a deadly weapon;
    • [Controlled substances]Any violation of NRS 453.232, 453.316 to 453.3395, inclusive, or 453.375 to 453.401, inclusive;
    • Receiving or transferring a stolen vehicle;
    • [Firearms and weapons] Any violation of NRS 202.260 [Unlawful possession, manufacture or disposition of explosive or incendiary device], 202.275 [Possession, manufacture or disposition of short-barreled rifle or short-barreled shotgun] or 202.350 [Manufacture, importation, possession or use of dangerous weapon or silencer; carrying concealed weapon without permit]which is punished as a felony;
    • [Gaming] Any violation of subsection 2 or 3 of NRS 463.360 [related to gaming] or chapter 465 of NRS [crimes and liabilities concerning gaming];
    • Receiving, possessing or withholding stolen goods valued at $250 or more;
    • Embezzlement of money or property valued at $250 or more;
    • Obtaining possession of money or property valued at $250 or more, or obtaining a signature by means of false pretenses;
    • Perjury or subornation of perjury;
    • Offering false evidence;
    • [Prostitution] Any violation of NRS 201.300 [Pandering in relation to prostitution] or 201.360 [Placing person in house of prostitution];
    • [Specific Fraudulent Acts] Any violation of NRS 90.570 [fraudulent practices in relation to the sale of securites], 91.230 [Fraudulent conduct in relation to commodities] or 686A.290 [insurance fraud], or insurance fraud pursuant to NRS 686A.291

Example Cases

Allum v. Valley Bank, 109 Nev. 280, 849 P.2d 297, 299 (1993)

Hale v. Burkhardt, 104 Nev. 632, 642, 764 P.2d 866, 872 (1988).

Siragusa v. Brown, 114 Nev. 1384, 1393-94, 971 P.2d 801, 810 (1998).

Proof

Damages

  • General damages rules

Having reviewed the Nevada statutory scheme as well as federal court interpretations of RICO, we conclude that for a plaintiff to recover under Nevada RICO, three conditions must be met:

  1. the plaintiff’s injury must flow from the defendant’s violation of a predicate Nevada RICO act;
  2. the injury must be proximately caused by the defendant’s violation of the predicate act; and
  3. the plaintiff must not have participated in the commission of the predicate act.

Allum v. Valley Bank, 109 Nev. 280, 283 849 P.2d 297, 299 (1993)

  • Treble damages

Nevada’s racketeering statutes provide a private right of action for treble damages to “[a]ny person who is injured in his business or property by reason of any violation of NRS 207.400.”
Stoddart v. Miller, Case Nos. 42133, 42234, 2008 WL 6070835, *5 (Nev. 2008).

  • accrual of damages, statute of limitations

In Massey v. Litton, 99 Nev. 723, 727, 669 P.2d 248, 251 (1983) we held that the term “injury” as used in a medical malpractice statute encompassed “legal injury.”—that is, “both the fact of damage suffered and the realization that the cause was the health care provider’s negligence.” Likewise, we conclude that the term “injury” as used in NRS 207.520 encompasses discovery of both an injury and the cause of that injury, in this case Brown’s alleged racketeering activity.See Penuel v. Titan/Value Equities Group, Inc., 127 Or.App. 195, 872 P.2d 28, 31 (Or.Ct.App.1994) (holding that a state RICO cause of action accrues under Oregon’s five year statute of limitations when the claimants discovered or in the exercise of reasonable diligence should have discovered that they had been damaged and the cause of their damages and concluding that such determinations were factual). We conclude that such factual determinations cannot be made as a matter of law. To the extent that the district court based its decision to dismiss Joanne’s Nevada RICO claims on the statute of limitations, it erred.

Concert of Action

Concert of Action

Elements

[L]iability attaches for concert of action if two persons commit a tort while acting in concert with one another or pursuant to a common design.
Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98, 111 (1998)

Example Cases

The tort of concert of action has traditionally been quite narrow in the scope of its application. The classic application of concert of action is drag racing, where one driver is the cause-in-fact of plaintiffs injury and the fellow racer is also held liable for the injury. Santiago v. Sherwin-Williams Co., 794 F.Supp. 29, 31 (D.Mass. 1992), aff’d, 23 F.3d 546 (1st Cir.1993).
Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98, 111 (1998).

Proof

  • Difference between civil conspiracy and Section 876 concert of action

Civil conspiracy in Nevada differs from concert of action as defined in Section 876 in that civil conspiracy requires that the defendants have an intent to accomplish an unlawful objective for the purpose of harming another, while concert of action merely requires that the defendants commit a tort while acting in concert.
Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98, 111 (1998).

Similarly, when section 876 refers to acting in concert with another tortfeasor or pursuant to a common design, it refers to this concept of agreement. Proof of an agreement alone is not sufficient, however, because it is essential that the conduct of each tortfeasor be in itself tortious.
Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98, 112 (1998) (citing Restatement (Second) Torts Section 876(a), cmts. a, b, c; Halberstam, 705 F.2d at 477).

Damages

Defenses

Misc

Similarly, one court remarked that application of the doctrine of concert of action “is largely confined to isolated acts of adolescents in rural society,” Halberstam, 705 F.2d at 489, and another court observed that this theory is meant to “deter antisocial or dangerous behavior.” Juhl v. Airington, 936 S.W.2d 640, 644 (Tex.1996).
Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98, 111 (1998).

To the extent that our holding in Mahlum suggests that concert of action requires no more than an agreement along with tortious conduct, it is disfavored. To be jointly and severally liable under NRS 41.141(5)(d)’s concert of action exception, the defendants must have agreed to engage in conduct that is inherently dangerous or poses a substantial risk of harm to others. Thus, this requirement is met when the defendants agree to engage in an inherently dangerous activity, with a known risk of harm, that could lead to the commission of a tort. Mere joint negligence, or an agreement to act jointly, does not suffice; such a construction of NRS 41.141(5)(d) would render meaningless the general rule of several liability.

GES, Inc. v. Corbitt, 117 Nev. 265, 268, 21 P.3d 11, 13 (2001).

Civil Conspiracy

Civil Conspiracy

Elements

An actionable civil conspiracy is:

  • a combination of two or more persons who,
  • by some concerted action,
  • intend to accomplish some unlawful objective for the purpose of harming another
  • which results in damage.

Collins v. Union Federal Sav. & Loan Ass’n, 99 Nev. 284, 303, 662 P.2d 610, 622 (1983).

Example Cases

Collins v. Union Federal Sav. & Loan Ass’n, 99 Nev. 284, 303, 662 P.2d 610, 622 (1983).

Proof

  • Agreement necessary

To prevail in a civil conspiracy action, a plaintiff must prove an agreement between the tortfeasors, whether explicit or tacit.
GES, Inc. v. Corbitt, 17 Nev. 265, 270–71, 21 P.3d 11, 15 (2001).

 

  • Sine qua non

The sine qua non of a conspirational agreement is the knowledge on the part of the alleged conspirators of its unlawful objective and their intent to aid in achieving that objective. Schick v. Bach, 193 Cal.App.3d 1321, 1329, 238 Cal.Rptr. 902, 907 (1987). The alleged facts must show either expressly or by reasonable inference that Defendant had knowledge of the object and purpose of the conspiracy, that there was an agreement to injure the Plaintiff, that there was a meeting of the minds on the objective and course of action, and that as a result one of the defendants committed an act resulting in the injury. Id., 238 Cal.Rptr. at 907.
Ungaro v. Desert Palace, Inc., 732 F.Supp. 1522, 1533, n3 (D. Nev. 1989).

  • Purpose to harm

[t]he primary purpose of a conspiracy must be to cause injury to another…. So long as the object of the combination is to further its own fair interest or advantage, and not the injury of another, its members are not liable for any injury which is merely incidental. The purpose requirement is related to what is referred to as a “malice” requirement which “… does not mean merely ill will. It means the intentional doing of an injurious act without justification or excuse.” Bliss, 212 Or. 634, 321 P.2d at 328. An act may also be the basis for a civil conspiracy when, although done without a direct intention to injure another, it is “done to benefit the conspirators, [and] its natural and necessary consequences is the prejudice of the public or the oppression of individuals. Hotel Riviera, Inc. v. Short, 80 Nev. 505, 396 P.2d 855, 859-60 (1964).
Ungaro v. Desert Palace, Inc., 732 F.Supp. 1522, 1533, n3 (D. Nev. 1989).

  • Intent an issue of fact

Because intent is an element of a claim of conspiracy, such a claim often cannot be decided via a motion for summary judgment. Fonda v. Gray, 707 F.2d 435, 438 (9th Cir.1983). The mere fact that a conspiracy is alleged, however, will not defeat an adequately supported motion. Ibid.
Condos v. Conforte, 596 F.Supp. 197, 201 (D. Nev. 1984).

  • Agreement

Civil conspiracy in Nevada differs from concert of action as defined in Section 876 in that civil conspiracy requires that the defendants have an intent to accomplish an unlawful objective for the purpose of harming another, while concert of action merely requires that the defendants commit a tort while acting in concert.
Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98 (Nev. 1998).

  • Agreement

To prevail in a civil conspiracy action, a plaintiff must prove an agreement between the tortfeasors, whether explicit or tacit. See Eikelberger v. Tolotti, 96 Nev. 525, 528 n. 1, 611 P.2d 1086, 1088 n. 1 (1980).
Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98 (Nev. 1998).

Damages

  • Damages are from underlying tort

The damage for which recovery may be had in a civil action is not the conspiracy itself but the injury to the plaintiff produced by specific overt acts. The charge of conspiracy in a civil action is merely the string where by the plaintiff seeks to tie together those who, acting in concert, may be held responsible in damages for any act or acts….
Aldabe v. Adams, 81 Nev. 280, 402 P.2d 34, 35 (1965).

Defenses

  • Parent company can’t conspire with subsidiaries

A parent company and its subsidiaries have no separate legal existence; thus it appears “impossible for a civil conspiracy to have occurred.”
Nanopierce Technologies, Inc. v. Depository Trust and Clearing Corp., 168 P.3d 73, 85 (Nev. 2007)(quoting Laxalt v. McClatchy, 622 F.Supp. 737, 745-46 (D.Nev.1985))

  • Need underlying tort

“Thus, an underlying cause of action for fraud is a necessary predicate to a cause of action for conspiracy to defraud.”
Jordan v. State, 121 Nev. 44, 74-75 110 P.3d 30 (Nev. 2005) (overruled on other grounds by Buzz Stew, LLC v. City of North Las Vegas, 181 P.3d 670 (Nev. 2008)).

Pleading

  • No heightened standard for defamation conspiracy

Because no Nevada authority suggests that a heightened pleading requirement applies to civil conspiracy, and because the states Nevada has relied upon in defining civil conspiracy do not have such a requirement, the Court finds there is no heightened pleading requirement for a civil conspiracy predicated upon defamation in Nevada.
Flowers v. Carville, 266 F.Supp 1245, 1250-51 (D. Nev. 2003).

  • Basic pleading requirements

To state a cause of action for conspiracy, the complaint must allege:
1) the formation and operation of the conspiracy;
2) the wrongful act or acts done pursuant thereto; and
3) the damage resulting from such act or acts.
Ungaro v. Desert Palace, Inc., 732 F.Supp 1522, 1534 n.3 (D. Nev. 1989).

  • Must plead facts to support conspiracy theory

However, conspiracy allegations must be more than mere conclusory statements. Mosher v. Saalfeld, 589 F.2d 438, 441 (9th Cir.1979); Lockary v. Kayfetz, 587 F.Supp. 631, 639 (N.D.Cal.1984). Plaintiff’s complaint states no facts in support of his allegations that the defendants conspired to deprive him of his civil rights. Plaintiff’s conspiracy allegations are thus conclusory and must fall along with his other claims under 42 U.S.C. § 1983.
Williams v. Sumner, 648 F.Supp. 510, 513 (D. Nev. 1986).

  • Conspiracy to commit fraud

Plaintiffs’ third claim for relief alleges that various Defendants engaged in a conspiracy to “deprive Plaintiffs of their property through fraud and misrepresentation that would result in Plaintiffs entering into loan agreements for which they were ultimately not qualified and which would eventually result in Plaintiffs’ inability to make payments and stay in their homes.” (Am. Compl. ¶ 168(# 47).) Under Nevada law, an actionable civil conspiracy-to-defraud claim exists when there is (1) a conspiracy agreement; (2) an overt act of fraud in furtherance of the conspiracy; and (3) resulting damages to the plaintiff. Jordan v. State ex rel. Dept. of Motor Vehicles and Public Safety, 121 Nev. 44, 110 P.3d 30, 51 (2005). “Thus, an underlying cause of action for fraud is a necessary predicate to a cause of action for conspiracy to defraud.” Id. A showing of fraud, in turn, requires (1) a false representation, (2) knowledge or belief that the representation was false, (3) intent to induce reliance on the representation, (4) that the reliance must be justifiable, and (5) damages. Lubbe v. Barba, 91 Nev. 596, 540 P.2d 115, 117 (1975).
Goodwin v. Executive Tr. Servs., LLC, 680 F.Supp.2d 1244, 1253-54 (D. Nev. 2010).

  • Conspiracy to commit fraud – particularity

A claim for conspiracy to commit fraud must be pled with the same particularly as the fraud itself. SeeWanetick v. Mel’s of Modesto, Inc., 811 F.Supp. 1402, 1406 n. 3 (N.D.Cal.1992) (so stating). Thus, under Rule 9(b), a party must state with particularity the circumstances constituting the conspiracy. See Fed.R.Civ.P. 9(b). Allegations of conspiracy must be accompanied by “the who, what, when, where, and how of the misconduct charged.” See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir.2003) (so stating, with respect to fraud) (internal quotation marks omitted). Thus, to state a claim for conspiracy “a plaintiff must allege with sufficient factual particularity that defendants reached some explicit or tacit understanding or agreement. It is not enough to show that defendants might have had a common goal unless there is a factually specific allegation that they directed themselves towards this wrongful goal by virtue of a mutual understanding or agreement.” S. Union Co. v. Sw. Gas Corp., 165 F.Supp.2d 1010, 1020-21 (D.Ariz.2001) (internal citations and quotation marks omitted).

Goodwin v. Executive Tr. Servs., LLC, 680 F. Supp. 2d 1244, 1254 (D. Nev. 2010)..

Misc

  • Accrual of action

an action for civil conspiracy accrues when the plaintiff discovers or should have discovered all of the necessary facts constituting a conspiracy claim.
Siragusa v. Brown, 114 Nev. 1384, 971 P.2d 801, 806 (1998).

  • Justification can be defeated

When an act done by an individual is not actionable because justified by his rights, though harmful to another, such act becomes actionable when done in pursuance of combination of persons actuated by malicious motives and not having same justification as the individual.
Short v. Hotel Riviera, Inc., 79 Nev. 94, 106, 378 P.2d 979, 986 (Nev. 1963).

  • Underlying tort must be an intentional tort

Civil conspiracy must be based on an intentional tort. See Dow Chemical Co. v. Mahlum, 99 Nev. 1468, 1488-89 (1998).
Robinson v. Ocwen Loan Servicing, LLC, Case No. 2:10-CV-321 JCM , 2010 WL 2834895 (D. Nev. 2010).

 

Aiding and abetting

  AIDING AND ABETTING


Elements


[L]iability attaches for civil aiding and abetting if the defendant substantially assists or encourages another’s conduct in breaching a duty to a third person.

Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98, 113 (1998). [Paraphrased]

Plaintiffs must prove three elements to show Defendant A aided and abetted Defendant B: That Defendant B breached a duty to Plainitff, the result of which injured Plaintiff; That Defendant A knowingly and substantially assisted Defendant B in breaching the duty; and That Defendant A aware of its role in promoting the breach of duty at the time it provided assistance.

Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98, 113 (1998) (citing TMJ Implants, 113 F.3d at 1495; Halberstam, 705 F.2d at 477).

Example Cases


Examples of what is abuse of process:

The Nevada Supreme Court upheld a jury award for abuse of process where the respondent’s attorney, with knowledge that there was no basis for the claim, brought suit against a physician for medical malpractice with the ulterior purpose of coercing a nuisance claim settlement.Bull v. McCuskey, 96 Nev. 706, 709, 615 P.2d 957, 960 (1980), overruled in part on other grounds by Ace Truck v. Kahn, 103 Nev. 503, 746 P.2d 132 (1987) Here the trial judge found that attempting to force payment of the claim rather than obtaining security for the debt was the ulterior purpose and that attaching all of the respondent’s equipment and refusing to release any of it was the willful act not proper in the regular conduct of the proceeding. Nevada Credit Rating Bureau, Inc. v. Williams, 88 Nev. 601, 503 P.2d 9 (1972). The Plaintiff’s claim for abuse of process rested on his assertion that the City wrongfully charged him with a criminal violation and then attempted to use the prosecution as a bargaining tool in obtaining a resignation from him. The Nevada Supreme Court held that was sufficient to sustain an abuse of process claim.Posadas v. City of Reno, 109 Nev. 448, 452, 851 P.2d 438, 441-42 (1993).

Examples of what is not abuse of process

Here, the Supreme Court rejected a claim for abuse of process because the plaintiff could not present “specific facts that Redisi had an ulterior purpose in the underlying lawsuit, other than resolving Teleview’s legal dispute with LaMantia, and that Redisi willfully and improperly used the legal process to accomplish that purpose”. LaMantia v. Redisi, 118 Nev. 27, 30, 38 P.3d 877, 897 (2002). The suit was filed simply because they could not get along with the Acostas and therefore did not want to be tenants in common with them. Secondly, the appellants’ failure to dismiss the partition suit after they sold the property involved in the partition action does not constitute willful misuse of legal process. Kovacs v. Acosta, 106 Nev. 57, 787 P.2d 368 (1990) A desire to avoid paying fees for what are, at the time, perceived to be negligent medical services is not an improper motive. There was insufficient evidence to support a finding that appellant filed the malpractice action to coerce a nuisance settlement. Dutt v. Kremp, 844 P.2d 786 (Nev.1992).

Proof


The second and third elements should be weighed together, that is, greater evidence supporting the second element requires less evidence of the third element, and vice versa. Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98, 113 (1998) (citing TMJ Implants, 113 F.3d at 1495).

Damages


 

Defenses


 

Misc


 

The Mahlums argue that if Lepetit had refused to market breast implants without warnings, then Dow Corning would not have been emboldened to continue its supposedly false and misleading representations in the United States. The Mahlums’ assertion that Lepetit’s lack of protest somehow emboldened Dow Corning, thus providing it with substantial assistance, lacks support in the law. To amount to substantial assistance, such encouragement must take the form of a direct communication, or conduct in close proximity, to the tortfeasor.

See Halberstam, 705 F.2d at 481-82 (suggestive words may be enough to create joint liability when they plant the seeds of action and are spoken by a person in an apparent position of authority). Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98, 113 (1998).

 

Malicious Prosecution

Elements

“The elements of a malicious prosecution claim are:

  1. Want of probable cause to initiate the prior criminal proceeding;
  2. Malice;
  3. Termination of the prior criminal proceedings; and
  4. Damage.”

LaMantia v. Redisi, 118 Nev. 27, 30, 38 P.3d 877, 879 (Nev., 2002).

Example Cases

Proof

Damages

Defenses

Misc

A malicious prosecution claim requires that the defendant initiated, procured the institution of, or actively participated in the continuation of a criminal proceeding against the plaintiff.
LaMantia v. Redisi, 118 Nev. 27, 38 P.3d 877, 879-80 (2002).

 

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