687B.260. This declaratory relief action was separate from the action
regarding Mitchell's prior confession of judgment, was assigned to a
different department, and named many defendants including Mitchell.
Mitchell failed to appear in the declaratory relief action, and the district
court entered a default judgment against Mitchell. The district court
denied Mitchell's subsequent motions to set the judgment aside. Mitchell
now appeals, challenging the denial of those motions.
Thefl district court properly exercised its discretion by denying Mitchell's
motion to set aside the judgment pursuant to NRCP 60(c)
The district court properly exercised its discretion by denying
Mitchell's NRCP 60(c) motion to set aside the judgment for lack of
personal service. We review a district court's order denying a motion to
set aside a default judgment for an abuse of discretion. Price v. Dunn, 106
Nev. 100, 103, 787 P.2d 785, 787 (1990), overruled on other grounds by
NC-DSH, Inc. v. Garner, 125 Nev. 647, 651 n.3, 218 P.3d 853, 857 n.3
(2009). In doing so, we will not disturb factual findings that are supported
by substantial evidence. Ogawa v. Ogawa, 125 Nev. 660, 668, 221 P.3d
699, 704 (2009).
NRCP 60(c) provides:
When a default judgment shall have been taken
against any party who was not personally served
with summons and complaint. . . and who has not
entered a general appearance in the action, the
court, after notice to the adverse party, upon
motion made within 6 months after the date of
service of written notice of entry of such judgment,
may vacate such judgment. . . .
Therefore, an NRCP 60(c) movant must demonstrate that (1) the motion
was filed within six months after service of notice of entry of the default
judgment, and (2) the movant was not personally served with a summons
SUPREME COURT
OF
NEVADA
2
(0) 1947A 4tri,
and complaint. See Basf Corp., Inmont Div. v. Jafbros, Inc., 105 Nev. 142,
144, 771 P.2d 161, 162 (1989); see also Epstein v. Epstein, 113 Nev. 1401,
1405, 950 P.2d 771, 773 (1997) (overruling cases that required an NRCP
60(c) movant to also show that it had a meritorious defense). Once a
movant makes this showing, "the burden shifts to the opposing party to
show circumstances which would make granting the motion inequitable."
Basf, 105 Nev. at 144, 771 P.2d at 162.
The district court properly concluded—and Powercom and
Reynolds do not dispute—that Mitchell made the requisite showing to
shift the burden to Powercom and Reynolds according to Basf. See id. We
therefore review the district court's conclusion that Powercom and
Reynolds met their burden to show granting Mitchell's motion would have
been inequitable under a theory of laches. We hold that the district court
did not abuse its discretion.
"Laches is more than mere delay in seeking to enforce one's
rights, it is delay that works a disadvantage to another." Home Savings
Ass'n v. Bigelow, 105 Nev. 494, 496, 779 P.2d 85, 86 (1989). "The condition
of the party asserting laches must become so changed that he cannot be
restored to his former state." Id.
Powercom and Reynolds first attempted to serve Mitchell
through Ms. Gottschalk, Mitchell's attorney at the time. Ms. Gottschalk
initially promised to ask Mitchell whether she could accept service, but
later indicated she no longer represented Mitchell. This suggests Mitchell
was aware of the action and terminated the representation to avoid
service. Powercom and Reynolds next attempted to serve Mitchell at the
address of its registered agent, but the person at the front desk turned the
process server away, indicating Mitchell had not been there for several
SUPREME COURT
OF
NEVADA
3
(0) 1947A (Or,
years. In combination, this evidence supports the district court's finding
that Mitchell knew of the declaratory relief action but delayed asserting
its right to appear. See Ogawa, 125 Nev. at 668, 221 P.3d at 704.
Substantial evidence also supports the district court's finding
that this delay severely prejudiced Powercom and Reynolds. Powercom
and Reynolds filed the declaratory action for the express purpose of
determining what they could and could not do with the insurance
proceeds. By failing to appear in a timely manner, Mitchell prevented the
district court from adjudicating the merits of Mitchell's claim to the
insurance proceeds. As a result, and pursuant to the default judgment,
Powercom and Reynolds did not reserve any of the insurance proceeds for
Mitchell. Where, as here, other creditors who appeared in the action
claimed portions of the insurance proceeds, we cannot conclude the district
court abused its discretion by finding substantial prejudice would result
from forcing Powercom and Reynolds to return the insurance proceeds to
satisfy Mitchell's claim. See Home Savings Ass'n, 105 Nev. at 496, 779
P.2d at 86. Nor are we persuaded that disbursing the insurance proceeds
to Reynolds changes this result. Indeed, Reynolds was a party to the
declaratory relief action in order to have both Powercom's and her own
rights to the insurance proceeds adjudicated.
We therefore conclude the district court did not abuse its
discretion by finding that vacating the default judgment would be
inequitable, and we affirm the district court's denial of Mitchell's NRCP
60(c) motion to set aside the default judgment.
The district court properly denied Mitchell's motion to set aside the
judgment as void for lack of personal jurisdiction
Mitchell further argues the district court abused its discretion
by denying Mitchell's NRCP 60(b) motion to set aside the judgment as void
SUPREME COURT
OF
NEVADA
4
(0) 1947A
for lack of personal jurisdiction. We disagree. When a defendant "by
concealment seeks to avoid the service of summons," a district court may
allow service of process by publication. NRCP 4(e)(1)(i). As discussed
above, substantial evidence supports the district court's finding that
Mitchell knew of the action. Moreover, the same evidence suggests
Mitchell concealed itself to avoid service. Accordingly, substantial
evidence supports the district court's conclusion that service by
publication was proper and that it had personal jurisdiction over Mitchell,
see id., and the district court therefore did not abuse its discretion by
denying Mitchell's NRCP 60(b) motion even if Mitchell did not waive this
argument. See Saavedra-Sandoval v. Wal-Mart Stores, Inc., 126 Nev. 592,
599, 245 P.3d 1198, 1202 (2010) ("This court will affirm a district court's
order if the district court reached the correct result, even if for the wrong
re ason."). 2
Because Powercom and Reynolds clearly sought an interpretation of
2
NRS 687B.260, not Mitchell's judgment, we reject Mitchell's argument
that declaratory relief was unavailable. See NRS 30.040(1) (stating a
party may seek an interpretation of a statute in a declaratory relief
action). We also summarily reject Mitchell's claim that a corporation
cannot claim an exemption for life insurance proceeds because
"exemptions are to be liberally construed in favor of the debtor," In re Fox,
129 Nev., Adv. Op. 39, 302 P.3d 1137, 1140 (2013) (internal quotation
marks omitted), and beneficiaries are not expressly limited to natural
persons. See NRS 687B.260(1); see also NRS 0.039.
Finally, the declaratory relief action did not indirectly challenge the
legal basis for Mitchell's prior judgment, and thus was not an improper
collateral attack. See Sheriff, Clark Cnty. v. Hatch, 100 Nev. 664, 666, 691
P.2d 449, 450 (1984) (defining collateral attack). Similarly, because the
declaratory relief action involved many parties unrelated to Mitchell's
judgment, the district court did not err by exercising subject matter
jurisdiction over the action. See Pub. Serv. Comm'n of Nev. v. Eighth
continued on next page...
SUPREME COURT
OF
NEVADA
5
(0) 1947A ate.
For these reasons, we
ORDER the judgment of the district court AFFIRMED.
T cwt. 01----c2C J.
Parraguirre
J.
Douglas
cc: Hon. Mark R. Denton, District Judge
Robert F. Saint-Aubin, Settlement Judge
Wilson, Elser, Moskowitz, Edelman & Dicker, LLP/Las Vegas
Aldrich Law Firm, Ltd.
Eighth District Court Clerk
...continued
Judicial Dist. Court, 107 Nev. 680, 684, 818 P.2d 396, 399 (1991) (stating
that a court will not entertain a declaratory judgment action if there is
another action pending that involves the same parties and the same
issues).
SUPREME COURT
OF
NEVADA
6
(0) 1947A allt*,
Mitchell Capital, LLC v. Powercom, Inc.
Combined Opinion