This case, involving alleged negligence, fraud, and breach of contract stemming from a troubled property sale, presents two questions for our review: (1) whether NRS 80.210 requires dismissal of a foreign corporation's action when the corporation has failed to comply with the qualification requirements of NRS 80.010 through 80.040; and (2) whether the right to trial by jury is revived following an appeal and remand when the right previously had been waived.
This case was appealed to this court before, resulting in remand to the district court. A detailed factual statement regarding Executive's claims and the history of this case before the first appeal is found in our previous opinion, Executive Management v. Ticor Title Insurance Co.
Before the first appeal, the parties consented to withdrawing Executive's previous jury trial request. Following appeal and remand from this court, however, Executive changed its mind and filed another demand for trial by jury. The district court rejected Executive's demand.
Thereafter, with respondent Ticor Title Insurance Company leading the way, the respondents filed motions for summary judgment based on Executive's failure to "qualify" to conduct business in Nevada by complying with the foreign corporation qualification requirements of NRS 80.010 through 80.040. Based on our case law interpreting NRS 80.210, which sets forth penalties for a foreign corporation failing to qualify, Ticor asserted that Executive's action should be dismissed.
When Executive filed this action in May of 1999, it had not complied with the foreign corporation qualification requirements. Although Executive now argues that it was not obligated to do so, in March of 1993 Executive qualified by filing the required documents and paying the fees. Its certificate to do business, however, expired in December
The trial court granted the respondents' motions for summary judgment, finding that Executive had been doing business in Nevada, had failed to comply with the filing requirements of NRS 80.015, and therefore could not maintain the action. Accordingly, the district court dismissed Executive's action. The dismissal was with prejudice because the statute of limitations had passed on all of Executive's claims. Executive appealed.
NRS 80.210 does not require dismissal of a foreign corporation's action
We review summary judgment orders de novo.
Before conducting business in Nevada, foreign corporations are required to "qualify" by complying with the foreign corporation requirements of NRS 80.010 through 80.040. The question of whether a foreign corporation is "doing business" and required to qualify, although guided somewhat by NRS 80.015, is often a laborious, fact-intensive inquiry resolved on a case-by-case basis.
The parties argue at great length regarding whether Executive was "doing business" under either the current or the former versions of NRS 80.015 during the relevant time periods that would require Executive to comply with the foreign corporation qualification statutes. But for purposes of our analysis, we simply assume that Executive was doing business and therefore required to qualify.
This assumed, our holding in League to Save Lake Tahoe v. Tahoe Regional Planning Agency
We followed this rule in later cases.
Our objective in construing NRS 80.210 is to give effect to the legislature's intent.
NRS 80.210 is susceptible to a different construction than the construction that League to Save Lake Tahoe relied on. Construing the statutory term "maintained," the League to Save Lake Tahoe court concluded that an unqualified foreign corporation could only maintain a previously commenced cause of action if the corporation had been qualified at the time it filed the action but "subsequently became unqualified because of failure to comply with continuing statutory requirements."
The majority of states follow this more forgiving approach—rather than dismiss an action filed by an unqualified foreign corporation outright, most states with statutes similar to Nevada's simply stay the action until the corporation qualifies.
Ticor is concerned that without the penalty of dismissal propounded by League to Save Lake Tahoe, there would be no incentive for unqualified foreign corporations to qualify, and fraud on Nevada citizens could result. Although we too expressed this concern in Bader Enterprises Inc. v. Olsen,
Thus, we overrule League to Save Lake Tahoe's construction of NRS 80.210. Henceforth, the district court should stay an unqualified foreign corporation's action until the foreign corporation qualifies. Failure to promptly qualify, however, could result in dismissal.
Following appeal and remand, a party may seek relief from its initial waiver of its right to jury trial under NRCP 39(b)
We next consider Executive's right to a trial by jury. As noted above, the district court refused to grant Executive's demand for a jury trial because Executive had waived its right before the first appeal. Urging us to uphold the district court's decision, Ticor points to NRCP 38(b), which requires that a party demand a trial by jury "at any time after the commencement of the action and not later than the time of the entry of the order first setting the case for trial," before November 1, 1994, in this case. We have not addressed this precise issue before. Courts addressing this issue have rendered decisions running a full spectrum. At one extreme, the Rhode Island Supreme Court has held "that a waiver of a trial by jury is a waiver for all time."
We prefer the more moderate approach taken by the federal courts. Federal cases interpreting the Federal Rules of Civil Procedure "are strong persuasive authority, because the Nevada Rules of Civil Procedure are based in large part upon their federal counterparts."
Thus, federal courts allow a motion for relief from the initial waiver based on FRCP 39(b), which states, "notwithstanding the failure of a party to demand a jury in an action in which such a demand might have been made of right, the court in its discretion upon motion may order a trial by a jury of any or all issues." NRCP 39(b) mirrors the federal rule. Also, although no case speaks to this precise issue, earlier Nevada cases suggest this approach is preferable.
In this case, it is unclear from the record whether the district court, in denying Executive's demand, exercised its discretion and considered the circumstances that Executive claims justify relief from the waiver or whether the district court simply denied the motion on the assumption that Executive was absolutely bound by its first waiver. Thus, on remand the district court should allow Executive to make the proper motion and determine whether Executive has shown circumstances warranting relief from its initial waiver.
In conclusion, we hold that NRS 80.210 does not contemplate automatic dismissal of an unqualified foreign corporation's action. Thus, because Executive had complied retroactively with the foreign corporation qualification requirements, the district court should have allowed the action to proceed. Accordingly, we reverse the district court's summary judgment and remand for proceedings consistent with this opinion. Additionally, we conclude that NRCP 39(b) allows Executive to seek relief from its initial waiver of its right to trial by jury.