*1
рroscription against involuntary
violate the constitutional
ser-
employees
all
vitude because
deem
subcontractors
independent
employees
principal
contractors to be
con-
appellant’s argument
tractor.1 The thrust of
utes,
is that these stat-
definition,
by
“compel every employee in Nevada to work
only
employer,
any
not
his chosen
but also for
other
employer” employed by
principal
the same
contractor. We are
persuaded
logic.
this
labor,
compel
employee
against
an
The statutes neither
his
another,
will,
prohibit
any
for the benefit of
nor
or restrict
leaving
thus,
employee
employer,
the service of the
involuntary
provisions
servitude
do not violate
of either the
constitution.
v.
federal or state
Lancaster
C.F.&I. Steel
Cf.
(Colo. 1976).
Corporation,
and NEVADA REAL ESTATE
DEPART-
COMMERCE,
MENT
HANSEN,
OF
ex rel. R. E.
Real
Respondents.
Administrator,
Estate
No. 9053
July
Deputy Carson *3 OPINION Court, J.: Manoukian,
By misleading advertis- 1974, acting 2, under Nevada’s May On 207.171, seq., Rules and Nevada et ing legislation, NRS injunctions, Procedure, governing seq., and et Rule Civil regulation licensing incidentally pursuant NRS our and to laws, respondents in dis- commenced this action of land sales Landex, Inc., appellant (hereinafter against court trict Glindmеier, individually, president and “Landex”), Frank and complaint alleged three causes manager Landex. The sales requested monetary civil of action The first cause of action. Glindmeier, pursuant to NRS against and penalties Landex misleading advertising requested and and for false 207.174 enjoining injunction pursuant to NRS 207.176 of an issuance practices. continuing deceptive The its appellant from Landex enjoin using sought from to Landex of action cause secоnd which had not advertising land sales business material its Department approval of Com- prior of the Nevada received merce, through (hereinafter “Divi- Real Estate Division its 119.180(7). 119.120(l)(c) NRS sion”), with in accordance action, enjoin sought to Landex the State cause of In its third “registered representatives,” through selling real estate through 119.180), practice NRS rather than proscribed {see brokers, required by or NRS salesmen real estate licensed 645.230. 645.210 litigation, successfully sought, through Prior to this Landex Division, exemption Chapter an from all effects of Statutes, legislation, of the Nevada Revised our land sales exception that all used in the sale of Mountain (hereinafter “MMR”) Meadow Ranches must be submitted to approved by 119.120(l)(c). the Division under NRS precise authority proceeding of this is contained in NRS 207.171, 207.174, and 207.176.1 action, Incident to the first cause of the trial court found that 26, 1974, appellants, through agents, on March their various part provide: in relevant 1 Thesestatutes firm, 207.171, any person, corporation or associ- unlawful for “It is use, by any employee publish any agent ... or other thereof or or ation manner means, including not limited to solicitation or . . . door-to-door but or through contacts, any known or the exercise of reasonable which is statement false, deceptive misleading in order property induce be known to be care should any any any person purchase . . ... or . . title or interest in real. . relating any obligation thereto. . . .” or transaction into *4 to enter firm, any 207.174, corporation “Any person, or or other association NRS any provision organization of NRS 207.171 ... is liable for a which violates violation, $2,500 penalty be recovered each which shall to exceed for civil in a civil by attorney brought of Nevada the in the name of the State action section, jurisdiction. competent general As used in this the in court of ... a includes, violаtion, repeti- single term, or as a a continuous violation” “each arising of the same act.” out tive violation bring any 207.176, attorney general. may . an action in court . “The NRS jurisdiction competent own com- or asso- in the name of the State of Nevada on his of plaint ciation to board, officer, any person, corporation complaint, the or on provisions enjoin proposed any of NRS violation or violation of 207.177, inclusive.” 207.171 representations which decep- had made “were and are false or misleading, meaning tive or tended to mislead within the <?r etseg.” false, NRS 207.170 misleading, The court further found that “said deceptive twenty pros-
or statements were made to pective purchasers,” and that directly Glindmeier “was responsible false, for the form and misleading, use of such deceptive findings, statements.” Incidental to these Landex $25,000 pay twenty was ordered to a sum of for violations of 207.170, apрellant NRS and pay Glindmeier was ordered to $2,500 twenty Additionally, appellants for the same violations. enjoined permanently making any represen- from were further misleading of the nature determined to tations be and were persons purchased to oflferrestitution to all ordered those who 26, parcel of the MMR subdivition after March 1974. respect action, appel- With second third causes of enjoined permanently utilizing any unap- lants were from utilizing proved registered representatives and from selling purposes property. for subdivision’s appeal only portions judg- is taken from This those relating to the first cause of ment action. contend (1) finding in trial court erred its that Glindmeier violated 207.170, claiming insufficient; (2) the evidence is in con- judicata cluding estoppel that the doctrines of res and collateral relief; apply preclude respondents’ (3) ordering did not in purchasers Landex to make restitution to аll of “MMR” after 26, 1974; (4) holding appellants that March had com- twenty violations of NRS mitted 207.170. Evidence. 1. Substantial he, president contends
Appellant Glindmeier responsible unauthorized state- Landex, not be held could representatives that even if by sales individual made ments directly responsible for the Glindmeier were shown it alleged Court was District the Washoe misrepresentations, estoppel judicata and collateral by of res the doctrines barred personnеl by the Landex made finding the statements questions will misleading. be dis- The latter deceiving and cussed infra. claim, appellant Glindmeier’s first this Court’s review As to questions of factual court’s determinations is limited. a trial Beverly Enterprises Corp., v. Globe Land 90 Nev. In (1974), stated: we P.2d question of fact has been determined the trial Where court, judgment will not this court reverse unless is clearly and not based on substantial erroneous evidence. Nevada, 52(a); Kockos v. Bank of 90 Nev. NRCP
474 540, Fletcher, 516 (1974); 89 Nev. Fletcher v.
P.2d 1359 (1973). P.2d 103 365, at 1179. at 526 P.2d
Id. appellant rеcord shows that Glindmeier exercised direct personnel promotional pres- supervision of the sales and their not, therefore, may escape culpability by He con- entations. tending See, Landex alone is liable. 207.171 also, Jory employee liability; agent see v. Ben- regarding 763, (1975). 1400 In addition to the night, 542 P.2d Nev. 91 evidence, persuasive find the fact of Glind- we other substantial person- testimony personally that he instructed his sales meier’s comprise presentаtions and also their sales what would nel as to given during speeches podium which were the sales drafted presentations. personnel that the sales contend pre- which were not contained in the statements “volunteered” support speeches materials. The record does this pared contention. pur- representations prospective specific made to the Several 26, 1974, misrepre- May which were found to be on chasers that: than actual subdivision are less one sentative in Nevada is available for sale to the percent the total land hills; rolling of flat land with a few consists public; “MMR” subdivision; throughout springs wells all there were water; good trips costs of found in the subdivision water purchase purchasers’ homes to as well as on a sub- from the they property trip if to retain the sequent to determine desired deduction; purchaser to a federal income tax would entitle registered representatives in the Landex sales room on all of 1974, selling approved for their activities and were March investment; and, phases par- highly qualified in all were purchasers. could be resubdivided subdivision cels in the violations of NRS 207.171 is not that to establish Evidence necessary prove a claim of fraud. To quantum victim’s statute, only advertising under our the State need prove false made statements knew or that the defendants establish misleading untrue or in order to effeсt have known should unnecessary liability deception is to create Actual the sale. Barba, Nev. 540 Lubbe v. 91 NRS 207.173. under Cf. misleading for untrue or state- (1975). The standard P.2d See, public will be that the misled. the likelihood ments is Lubricants, F.T.C., Incorporated F.2d Eagle v. Double 1965). of the record reveals substan- (10th Our review Cir. supportive of the trial court’s determinations tial evidence respecting indi- 207.171 and further Glindmeier’s under NRS justified Additionally, liability. the trial court was vidual injunction enjoining entering permanent Landex frоm fur- prohibited activities. pursuit of such ther Estoppel. Collateral 2. Res Judicata Appellants’ claim stems from a decision of the second *6 Nevada, Court of the State of in and District Fourth Judicial Elko, County prior litigation rendered the within of to for the action, attorney the district of Elko 1974. In that on March County enjoin sought the sale of in “MMR” incident land Statutes, opposing Chapter 278 of the Nevada Revised exemption Chapter’s application. from claim thаt Landex’s claims, attorney primary alleged the to the district Incidental 207.171, by in virtue of an Landex was violation that by corporate agent alleged representation a to the that effect “open space” land had a reservation of water the marketed rights part Elko trial court in a relevant in Landex. The its concluded: decision promotional The court has observed from the
5: by speeches filed with the Real Estate Commission the Defendаnt, becoming Pitch” that “Sales is that land is the investment, scarce; prudent many and that land is in past huge profits in for in the has resulted the land cases Vegas example, Strip. land on the Las As owner. purchase speculative buyers as a are invited to investment. nothing approach long about this is as There unlawful (Emphasis added.) is a disclosure. there full County argues a result of Elko Appellant that as the District determinations, County Washoe District the Court was Court’s judicata by estop- precluded of res the doctrines collateral by finding representations rep- pel made the the sales from misleading. false or of Landex were resentatives Homes, In Paradise Palms v. Paradise 89 Nev. 505 P.2d Court, quoting (1973), from the landmark this case of America, Ass’n, Nat. v. Bank of Trust & Sav. Bernhard stated, 1942), (Cal. P.2d 892 judicata precludes parties ‘The doctrine res or their relitigating privies from a cause of action that has been jurisdiction. competent finally a court оf determined necessarily litigation Any in decided such is issue conclu- parties privies sively to the or their if determined as it is subsequent in a a different involved lawsuit on cause of . . . action’ judicata validity plea determining of a
‘In
of res
pertinent:
questions
Was the
three
prior
are
issue decided in the
adjudication
presented
identical with the one
in
judgment
question?
in
a final
the action
Was there
on the
against
plea
party
whom
Was the
is asserted
merits?
’
party
privity
party
prior adjudication?
in
with a
to the
1, at 598-99.
Id. at
P.2d
30-3
adjudication;
finality
prior
Respondents
concede
they
however,
privity
not in
with
contend
County
attorney
Elko
litigated
district
and that the issues
in
County proceeding
this Washoe
were different from those liti-
gated
County
in
decided
the Elko
action. From the record
us,
agree
we are
before
respondents
constrained
proceeding
markedly
the issues tried
the Elko
are
dissimilar
now
those
before us. The Elko case invоlved a different
podium
form of
speeches
than the form of
personal
unnecessary
other
privity question.
contact. We find it
to discuss the
Furthermore,
County
tendency
the Elko
decision as to the
questioned
public
qualified by
statement to mislead the
*7
language
long
the
litigated
“as
there
as
is a full
The
disclosure.”
issue
was,
fact, enough
focused on whether
there
there
in
of
fully
prospective purchasers.
a disclosure so as to
over,
inform
More-
reprеsentations
nature,
type
the
were of a different
and
subsequent
decision,
were made
to the Elko
and were made in
Reno,
judicata proscribes
not Elko. The doctrine of res
the
hearing
by
competent juris-
of issues determined
a court of
prior proceeding
parties regard-
diction in a
between the same
ing the same cause of action.
v.
Markoff New York Life Ins.
Co.,
268,
(1976).
92 Nev.
lant’s contеntion that was restitution, allow on an to the facts this case award sufficient improper. agree. was We of restitution restitution, support of their claimed entitlement to In Superior rely heavily People respondents on v. Court Los
477
(Cal. 1973).
(“Jayhill”),
County
ALR3d
concede,
recognize,
and we
that a court has the
ancillary
jurisdiction,
power,
general equity
to its
inherent
see,
case,
appropriate
in an
restitution
Securities &
order
Exchange
Co.,
Mining
F.Supp.
v. Golconda
Com’n
however, they
1971);
(S.D.
contend
N.Y.
that the State must
actually
persons
injury
prove
defrauded and suffered
misrepresentations
Respondents
made.
con-
as a result
only prove
need
that violation of NRS 207.171
tend
*8
more,
occurred,
pro-
without
and cite NRS 207.173 which
has
part,
any
“it is sufficient. . . that
statement referred
vides in
to
tendency
public
to
in NRS 207.171 has a
deceive or mislead the
deceptive misleading
or
or
character even
its false
becаuse
public
actually
though no member of the
is
deceived or misled
agree
appellant
We are constrained to
with
such statement.”
People
argument.
Superior
In
v.
Court of
Landex’s
Ventura
(Cal. 1976),
Supreme
County,
478 . The . . the investors. to restitution complaints seek
Both People is prove restitution required that to still . . are . appro- may penalties be also though civil even appropriate omitted; (Citations proof. such absence the priate in added.) emphasis Romain, (N.J. also, A.2d 640 Kugler 279 v. See at 763. Id. 1971). required false proof to establish comparatively limited necessary sharply with that contrasts deceptive or must be fraud there To establish fraud. prove actionable to proven:
basis the representation knowledge action or iff, resulting the upon A[1] plaintiff to representation the information false refraining from and [5] misrepresentation, from such representation belief on is act or to false— on the to make the reliance. or, it, refrain from part of the part made [4] it, [3] justifiable reliance . . . he has not the defendant by the an intention damage to the plaintiff in acting in reliance defendant, a sufficient to induce that the plaint- taking upon [2] accord, 117; v. Finkel- Ach Lubbe, P.2d at supra, at Viewing question most (1968). Cal.Rptr. stein, have been first three elements favorably respondents, the to four and however, on elements no evidence we find proven; pur- advertising, no today, as to false our decision Under five. However, relative exist. produced, or even be need chaser fraud, not does reveal the record proposition of actionable the who, recipi- purchasers were hundred nine any, of the some if single purchaser of a advertising. a deceptive Not ents trial, not a shred and there is produced at parcel was “MMR” false, deceptive, or upon mis- showing reliance evidence proffered Similarly, was evidence no leading presentations. and, therefore, situated, similarly buyers were showing all evidentiary of like to each. Because are owed amounts what purchasers by the is whether reliance know we do voids provable, known, may aas result of have purchasers some as representations expеrience, knowledge and their fundamentally, purchaser or misleading. more no Even false or representative proceed- joined party was class of a not an was available alone restitution reason ing, this and for power without the court precisely, remedy. More or, ordering an of restitution corre- offer judgment enter spondingly, reconveyances. Compare, United v. Park- states also, supra(by 1956); Kugler, (9th inson, Cir. see 240 F.2d *9 price unconscionability a reason of common to all transac- tions, all of the sales contracts were held invalid and unenfor- ceable); Jayhill, supra (holding ancillary that as a form of relief suit, attorney general may a court to the purchasers award restitution to all defrauded). to have shown been state,
Although pleading” practice Nevada ais “notice our permit recovery is not so liberal as to in these circumstances. ordering The court below еrred in restitution. Twenty
4. Violations NRS 207.170. challenge penalties, next the award of civil con- tending wording “clearly that the NRS 207.170 establishes publication it act is the and not the extent of that adver- violation, tising which determines whether one or a number of violations, advertising They of false has been committed.” argue only occurred, that here one violation of NRS 207.171 referring part: to NRS 207.174 which states in “As used in this section, includes, violation, single the term ‘each violation’ as a repetitive arising a continuous or violation out of the same language requires separate The “same act” act.” there be person charged involved before a can be acts more than of NRS one violation 207.171. case, In the instant the court found that the statements com- made, plained initially, by person giving podium of were a group approximately twenty persons speech to a in a Reno “hospitality It room.” was further established thаt immedi- ately representatives various sales thereafter of Landex approached potential individually each investor and made cer- misrepresentations partial complaint. used tain basis of the essentially appellants’ alleged It is misrepresentations contention that since the group, only
were made to the there is one agree. violation. We do interpreted Jayhill, supra, statutory the court similar In lan-
guage and detеrmined the number of violations the number There, twenty-five separate the defendant made of victims. misrepresentations to each customer their door-to-door sales encyclopedias. Jayhill imposed pen- The court the maximum of alty $2,500 rejected violation and for each the contention misrepresentation, irrespec- with each a violation occurs Compare, Ralph of victims. of the number State v. Wil- tive Plymouth, Chrysler (Wash. 1976) 553 P.2d liams’ N.W. per misrеpresentation rule). (adopting the one violation each Jayhill, purpose court described the behind In Califor- advertising provisions false as follows: nia’s injunction remedy was added because the
‘The new civil provisions of the old law were not ade- and misdemeanor quate injunction stop false rackets. is guilty party and desist order. The little more than a cease merely gains keeps and is ordered not to defraud his way again. prosecutions people Criminal are in the same *10 juries because tend to be reluctant to undertaken seldom in apply sanctions white-collar crimes and criminal responsibility difficult for outsiders to fix in because it is corporate modern structure.’ 1404, n. 3. 507 P.2d at argued that should we follow the Jayhill ration- ale, alleged misrepresentations printed and if the had been in a newspaper, numbering would be liable for violations with, and, the thousands. The court, court was faced Jayhill like this possibility. probable impact not concerned with that The podium presentations, followed of frontations, the one-to-one con- greater
is much than would be similar statements magazine. record, newspaper contained in a On this we do adopt one-violation-per-customer rule announced in Jay- hill. affirmed, appealed wholly judgments are ordering portion exception Landex to offer restitution of that restitutionary purchasers, which order is reversed. to its
Mowbray Thompson, JJ., concur. J., J., Gunderson, concurring:
Batjer, C. concur in the result. We Appel- UBRIACO, P. UBRIACO
JOHN ELEANOR N. lants, v. AMERICAN RELIABLE INSURANCE COM- Respondent. PANY, Corporation,
No. 9183
July