Consolidation and Severance in Nevada Civil Litigation

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CONSOLIDATION AND SEVERANCE

Author: G. Mark Albright esq.

1. Introduction and Scope

This guide covers the types of consolidation that may occur, and the procedures and effects of consolidation. It considers NRCP 42(a) and EDCR 2.50, discusses the various forms of severance, and notes the distinctive features of NRCP 13(i), NRCP 14(a), NRCP 21, and NRCP 42(b).

2. Consolidation: In General

The Nevada rule concerning consolidation is stated in NRCP 42(a):

(a) Consolidation. When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.

Federal Rule of Civil Procedure 42 was amended in 2007 for ease of understanding and style. FRCP 42, Commentary (2010). Based thereon, application of the rule should be the same despite the revisions. Because no Nevada decisions have distinguished between the federal and state court applications of the rule, the Nevada Supreme Court’s reliance on federal case law when interpreting NRCP 42(a) should remain consistent. Indeed, the Nevada Supreme Court has relied on federal case law when interpreting NRCP 42(a). See, e.g., Mikulich v. Carner, 68 Nev. 161, 228 P.2d 257, 231 P.2d 603 (1957).

3. History, Purpose, and Basis of Rule 42(a)

In Nevada, as in the federal system, consolidation is permitted as a matter of discretion, to avoid unnecessary costs or delays, or as a matter of convenience and economy in administration. NRCP 42(a); FRCP 42(a); Mikulich, 68 Nev. 161, 228 P.2d 257, 231 P.2d 603 (1957). The court is given broad discretion to determine when consolidation is proper. Id.

In ordering consolidation, usually the affected actions are of a “like nature” as where negligence actions arise out of the same collision, or actions filed by different plaintiffs arise out of the same tort. However, different types of actions may also be consolidated. For example, an action by an insurer to cancel a policy may be consolidated with the action of the insured to recover upon such policy; an action of a landlord for eviction or to forfeit rent may be consolidated with the tenant’s action involving deposits and rent; or an action for personal injury may be consolidated with a claim for indemnification.

4. Types of Consolidation

In Nevada, the term “consolidation” is used in different contexts. One use is where several actions are combined into one, thus losing their separate identities and becoming a single action. See Randall v. Salvation Army, 100 Nev. 466, 470, 686 P.2d 241, 243 (1984). Another use is where several actions are tried together but each retains its separate character. Id.

In Mikulich, the Nevada Supreme Court relied on federal cases, which have consistently construed FRCP 42(a) consolidation orders providing for the combined trial of two or more cases as “not having the effect of merging the several causes into a single cause.” Mikulich, 68 Nev. at 170, 228 P.2d at 261. In such a case, the trial court simply entered two separate judgments. Consequently, the Nevada Supreme Court held that full payment and satisfaction of one judgment by the defendant did not bar the defendant from appealing a judgment entered for the prevailing plaintiff in the other action. Id. at 169, 228 P.2d at 261.

In Ward v. Sheeline Banking & Trust Co., 54 Nev. 442, 22 P.2d 358 (1933), the Nevada Supreme Court indicated that failure to timely oppose a consolidation order can result in a waiver of such an objection. Id. at 451, 22 P.2d at 360. The Court also indicated that where consolidation is not a matter of right, the trial court is vested with discretion to grant or refuse consolidation, subject to reversal only in case of abuse of that discretion. Id. at 452, 22 P.2d at 361.

When determining whether to order consolidation, the trial court should consider if


Page 19-3 (Rel. 15) the cases are at different stages of pretrial preparation. Even when two actions involve common questions of law and fact, consolidation may be improper if only one action is ready for trial and the other is in an early discovery phase. Prudential Ins. Co. of Am. v. Marine Nat’l Exch. Bank, 55 F.R.D. 436 (E.D. Wis. 1972). In essence, the court must weigh the time, effort, and expense consolidation would save against any inconvenience, delay, or expense that it would cause. Huene v. United States, 743 F.2d 703, 704 (9th Cir. 1984). Also, consolidation may be improper if it results in aligning parties who have conflicting interests, Dupont v. S. Pac. Co., 366 F.2d 193, 195-96 (5th Cir. 1966), or if the common issue is not central or material. Shump v. Balka, 574 F.2d 1341, 1344-45 (10th Cir. 1978).

5. Consolidation: Procedure

The local rules of each district should be consulted for the appropriate procedures to implement when filing consolidation motions. In the Eighth Judicial District, EDCR 2.50 was amended, providing for separate procedures involving fully “consolidated” cases, and those cases which are “coordinated” for less than all issues. This rule provides that motions for consolidation of two or more cases must be heard by the judge who was assigned to the case which was first filed. EDCR 2.50(a). If total consolidation of the cases is granted, the consolidated case will be heard before the judge who ordered consolidation. Id. Documents filed after the consolidation order must list only the caption and case number of the lowest-numbered case. EDCR 2.50(a)(2). However, each document must list on the certificate of service the following additional information: “This document applies to Case No. __” and must list all applicable case numbers and parties. EDCR 2.50(a)(3). The clerk files the documents only in the lowest case number so listed. EDCR 2.50(a)(4). The foregoing procedure is to be distinguished from “coordinated cases,” where cases are handled in a coordinated fashion or consolidated for less than all purposes. Motions for consolidation in these latter instances are also heard by the judge assigned to the case first commenced, and, if coordination is granted, the coordinated case will be heard before the judge ordering coordination. EDCR 2.50(b)(1). Documents filed subsequent to an order coordinating actions shall list all of the case numbers and captions, with the lowest number appearing first, and the clerk must be provided with sufficient copies of pleadings and motions, etc., for each case number listed. EDCR 2.50(b)(2). Finally, the chief judge has authority to order the consolidation or coordination of any cases pending in the district. EDCR 2.50(c).

6. Lead Counsel and Peremptory Challenges of Jurors or Judges

After ordering consolidation, the court may “make such order concerning proceedings therein as may tend to avoid unnecessary costs or delay.” NRCP 42(a). Under compelling circumstances and when no conflict of interest exists, the court may appoint one attorney to act as lead counsel or general counsel to supervise and coordinate the consolidated cases (e.g., schedule pretrial discovery). See, e.g., Feldman v. Hanley, 49 F.R.D. 48, 50 (S.D.N.Y. 1969).

If there are two or more parties on any side and their interests are diverse, the court may allow additional peremptory juror challenges, but not more than four, to the side with multiple parties. NRS 16.040(2). If the multiple parties on a side cannot agree on the allocation of the additional challenges, the court will make the allocation. Id.

Additionally, each side is entitled to one change of judge by peremptory challenge. SCR 48.1. However, consolidated proceedings under this rule “shall be treated as having only two sides.” SCR 48.1(1). Consequently, if one of two or more parties on one side files a peremptory challenge, “no other party on that side may file a separate challenge.” Id.

Even after consolidation, the actions retain their separate identities, and the parties and pleadings in one action do not automatically become parties and pleadings in the other action. Mikulich, 68 Nev. at 170, 228 P.2d at. 261. Thus, consolidated litigants may be excluded from the courtroom as non-party witnesses during certain portions of the joint trial. Randall, 100 Nev. at 470, 686 P.2d at 244.

7. Consolidation: Real and Personal Property Taxes

Two other statutory provisions concerning consolidation are found at NRS 361.435 and NRS 361.560. NRS 361.435 provides that a property owner seeking to recover real property taxes paid under protest, when the property is located in more than one county, may “consolidate any of the suits in one action and bring the action in any court of competent jurisdiction in Carson City, the county of this state where the proper owner resides or maintains his or her principal place of business or a county in which any relevant proceedings were conducted by the Department.” NRS 361.560 provides that where an owner of personal property appears to have been delinquent in paying taxes on property that is used and operated in more than one county of the state, “the district attorneys of each of such counties or the Attorney General may consolidate all civil actions brought against the owner for the recovery of all or any portion of the delinquent taxes in one civil action brought in a court of competent jurisdiction in Carson City, State of Nevada.”

8. Recovery of Attorney’s Fees and Costs in Consolidated Actions

The court may treat consolidated actions as one action for the purpose of allowing attorney’s fees and witness fees. See 9 Wright & Miller, Federal Practice and Procedure § 2385 (1971). Parties to consolidated actions should be mindful that prevailing party status for purposes of awarding attorney’s fees and costs under NRS 18.010 and NRS 18.020 is determined by treating the claims as a whole, rather than treating each distinct claim individually. See Parodi v. Budetti, 115 Nev. 236, 241, 984 P.2d 172, 175 (1999). “[I]n cases where separate and distinct suits have been consolidated into one action, the trial court must offset all awards of monetary damages to determine which side is the prevailing party and whether or not the total net damages exceed the $20,000 threshold.” Parodi, 115 Nev. at 241, 984 P.2d at 175.

Additionally, in consolidated actions, unapportioned joint offers of judgment are invalid for purposes of determining prevailing party eligibility for recovery of attorney’s fees and costs, against a party rejecting the offer, under NRCP 68 and NRS 17.115. See Parodi, 115 Nev. at 240, 984 P.2d at 175. Thus, parties to consolidated actions should make offers of judgment separately to each offeree, or should clearly apportion the judgment amount being offered among the various offerees, identifying .


Page 19-5 (Rel. 15) which of the specific consolidated claims are being offered to be settled.

9. Consolidation of Arbitration Proceedings

The Nevada Supreme Court has approved the consolidation of arbitration proceedings by the trial court when the evidence, witnesses, and legal issues are the same, and there is no showing of prejudice. The Court found that consolidating such arbitration proceedings avoids the possibility of conflicting awards and avoids the duplication of time, effort, and expense separate proceedings would generate. Exber, Inc. v. Sletten Constr. Co., 92 Nev. 721, 732, 558 P.2d 517, 524 (1976). A stay of judicial proceedings may be warranted as to all pending claims in a single action when a question arises as to whether one or more of the claims should be subjected to binding arbitration. See Mikohn Gaming Corp. v. McCrea, 120 Nev. 248, 89 P.3d 36 (2004).

The United States Supreme Court has held that the determination of whether a claim is subject to arbitration, including consolidated arbitrations, is an issue of contract interpretation to be resolved by the arbitrator. Green Tree Financial Corp.v. Bazzle, 539 U.S. 444, 454, 123 S. Ct. 2402, 2408 (2003).

During the pendency of arbitration proceedings conducted pursuant to the Nevada Arbitration Rules, a motion to consolidate may be filed in the district court. However, the motion must be served at least 45 days before the arbitration hearing; otherwise the judge may foreclose the motion and may also impose sanctions. A copy of the motion to consolidate, and any order resulting therefrom, must also be served on the arbitrator. See NAR 4(E).

10. Class Actions and Consolidation

Consolidation is often closely related to class actions. NRCP 23 includes as one of the grounds for consolidation that “there are questions of law or fact common to the class.” This language is similar to the “common question of law or fact” required for consolidation under NRCP 42(a). Consequently, when the prerequisites for class certification are satisfied, several class actions may be consolidated together, Feldman v. Hanley, 49 F.R.D. 48 (S.D.N.Y. 1989), or separate actions may be consolidated together into a single class action. Goff v. Menke, 672 F.2d 702 (8th Cir. 1982).

11. Appellate Review

Orders granting or denying consolidation motions are interlocutory and therefore not appealable absent Rule 54(b) certification. In Mallin v. Farmers Insurance Exchange, 106 Nev. 606, 797 P.2d 978 (1990), the Nevada Supreme Court held that when cases are consolidated by the district court, “they become one case for all appellate purposes.” Id. at 609,797 P.2d at 980 Thus, an order which resolves less than all of the claims in a consolidated action “is not appealable as a final judgment absent NRCP 54(b) certification from the district court.” Id. The Court, in Mallin, explained that the certification need not contain specific findings of fact itemizing the factors which were relied upon by the Court in certifying its judgment as final. Id. 609–10, 981 Moreover, such certifications are presumed valid, and will be upheld unless there has been “a gross abuse of discretion.” Id. at 611, 797 P.2d at 982.

However, in Hallicrafters Company v. Moore, 102 Nev. 526, 728 P.2d 441 (1986), the Nevada Supreme Court held that if separate claims asserted in one action are so closely related that the appellate court is forced to decide important issues pending below before deciding the issues appealed, a district court’s Rule 54(b) certification of an order which decided some—but not all—of those claims, as final, is an abuse of discretion.

12. Severance in General

The Nevada Rules of Civil Procedure concerning severance are NRCP 13(i), NRCP 14(a), NRCP 21, and NRCP 42(b). These rules provide in pertinent part as follows:

NRCP 13(i)

(i) Separate Trials: Separate Judgments. If the court orders separate trials as provided in Rule 42(b), judgment on a counterclaim or cross-claim may be rendered in accordance with the terms of Rule 54(b) when the court has jurisdiction so to do, even if the claims of the opposing party have been dismissed or otherwise disposed of.

NRCP 14(a)

Any party may move to strike the third-party claim, or for its severance or separate trial.

NRCP 21

Misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just. Any claim against a party may be severed and proceeded with separately.

NRCP 42(b)

(b) Separate Trials. The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or of any number of claims, cross-claims, counterclaims, third-party claims, or issues, always preserving inviolate the right of trial by jury.

13. History, Purpose, and Basis of Severance Rules

NRCP 42(b) allows separate trials of various claims and issues “in furtherance of convenience, or to avoid prejudice, or when separate trials will be conducive to expedition and economy.” The matter of ordering separate trials rests largely in the discretion of the trial judge. See California State Auto. Ass’n Inter-Insurance Bureau v. Eighth Judicial Dist. Court, 106 Nev. 197, 199, 788 P.2d 1367, 1368 (1990). In addition, the Nevada courts may order a separate trial for any issue or any number of claims, cross-claims, counterclaims, or third-party claims. Gojack v. Second Judicial Dist. Court, 95 Nev. 443, 445, 596 P.2d 237, 239 (1979); see also NRCP 42(b).

The factual questions of judicial convenience and prejudice should be resolved at the trial court level. Cal. State Auto. Ass’n Inter-Insurance Bureau, 106 Nev. at 199, 200, 788 P.2d at 1368-69. The trial court’s discretion must be applied in such a manner as to preserve inviolate the right of trial by jury. NRCP 42(b). The procedure under NRCP


Page 19-7 (Rel. 15) 42(b) for separate trials should be distinguished from severance of claims under NRCP 21. Separate trials under NRCP 42(b) usually result in a single judgment, whereas claims severed under NRCP 21 become independent actions to be tried and adjudicated separately. Essentially, NRCP 42(b) is a counterbalance to the broad joinder provisions contained in NRCP 13, NRCP 14, and NRCP 18 to NRCP 24, which place few restrictions on joinder during the pleadings stage.

14. Severance or Separate Trials: Procedure

Any party may move for separate trials or the court may so order on its own motion. Bifurcation of the trial on the issues of liability and damages may be ordered if the two issues are separate and distinct. If the nature of the injuries has an important bearing on the issue of liability, the Nevada Supreme Court has held bifurcation to be an abuse of discretion. See Verner v. Nev. Power Co., 101 Nev. 551, 554, 706 P.2d 147, 150 (1985) (separate trials under NRCP 42(b) held improper where “the issues of liability and damages were inextricably interrelated”).

The Nevada Supreme Court has also held bifurcation to be an abuse of discretion when separate proceedings required a departure from specific statutory mandates. See Gojack v. Second Judicial Dist. Ct., 95 Nev. 443, 446, 596 P.2d 237, 239 (1979) (order bifurcating divorce trial improper because, by statute, court may not enter final divorce decree without contemporaneously determining property and related rights and responsibilities of the parties). Even when bifurcation is proper, the district court must, when relevant, give at least a modified version of the contributory negligence instruction mandated by NRS 41.141. Verner, 101 Nev. at 555-56, 706 P.2d at 151.

Although bifurcation of personal injury cases usually saves time, some federal studies indicate that separate trials of liability and damages issues should not be routinely ordered because bifurcation often reduces the instances in which personal injury plaintiffs are successful. The Advisory Committee to the 1966 amendment of FRCP 42(b) suggested that bifurcation should “be encouraged where experience has demonstrated its worth,” but that it is “not to be routinely ordered.”

A separate trial may also be ordered when evidence admissible only on a certain issue may prejudice a party on other issues, as where in a single trial the jury would learn that the defendant is insured, and the issues are unrelated. See Larsen v. Powell, 16 F.R.D. 322 (D. Colo. 1954). However, such prejudice does not come into play where the action is to be heard by the court rather than a jury. See Organic Chemicals, Inc. v. Carroll Products, Inc., 86 F.R.D. 468 (W.D. Mich. 1980). In determining whether one or two trials will best serve the convenience of the parties and the court, avoid prejudice, and minimize expense and delay, the major consideration should be which procedure is more likely to result in a just and final disposition of the litigation. See In re Innotron Diagnostics, 800 F.2d 1077, 1084 (Fed. Cir. 1986). In this regard, it should be noted that Nevada trial courts have other means aside from those found in NRCP 13(i), NRCP 14(a), NRCP 21, and NRCP 42(b), to control the course and conduct of proceedings before the court. Specifically, NRS 50.115 provides in relevant part:

1. The judge shall exercise reasonable control over the mode and order of interrogating witnesses and presenting evidence:

(a) To make the interrogation and presentation effective for the ascertainment of the truth;

(b) To avoid needless consumption of time; and

(c) To protect witnesses from undue harassment or embarrassment.

Nevada trial courts may order separate trials of any cross-claim or counterclaim pursuant to NRCP 13(i). An order separating such claims should be issued for the reasons provided in NRCP 42(b). Judgment on the separate claims may be certified as final in accordance with the terms of NRCP 54(b) if the judgment is final as to fewer than all of the claims or parties. Further, NRCP 14(a) provides that any party may move to strike a third-party claim, or for its severance or separate trial. Similarly, any claim against a party may be severed and proceeded upon separately pursuant to NRCP 21.

When separate trials are ordered, the court may stay or postpone discovery of the issues to be tried in the second trial pending completion of the first trial. For example, courts may defer discovery on damages issues until liability is first proven. See In re Master Key Antitrust Litigation, 70 F.R.D. 23 (D. Conn.), appeal dismissed, 528 F.2d 5 (2d Cir. 1975). Different juries may hear the bifurcated liability and damages issues if the issues to be tried are distinct and not interwoven, and no injustice would result. Id. However, some federal commentators believe the preferred practice is to use the same jury for all issues, even though the trials are conducted at different times. 9 Wright & Miller, Federal Practice and Procedure § 2391, at 512 (1994).

15. Appellate Review

An order granting or denying separate trials is ordinarily not appealable as a final judgment. See Gojack v. Second Judicial District Court, 95 Nev. 443, 596 P.2d 237 (1979). It is reviewable only on the entry of a final judgment or order resolving all of the issues against each of the parties unless the order is certified as final under the provisions of NRCP 54(b). Furthermore, any objection to the order must be asserted in the trial court and cannot be raised for the first time on appeal. See Cal. State Auto. Ass’n Inter-Insurance Bureau v. Eighth Judicial Dist. Ct., 106 Nev. 197, 199-200, 788 P.2d 1367, 1368-69 (1990). A writ of prohibition under NRS 34.320 may be available if the trial court exceeds its jurisdiction. See Gojack, 95 Nev. at 444, 596 P.2d at 238. A misjoinder of parties will not cause reversal in the absence of prejudice. See Gershenhorn v. Stutz, 72 Nev. 293, 304 P.2d 395 (1957), cert. denied, 354 U.S. 926 (1957).

About the Authors: The law firm of Albright, Stoddard, Warnick & Albright is an A-V Rated Nevada-based full-service law firm having attorneys licensed in Nevada, California and Utah. Our firm’s practice includes a strong emphasis on personal injury accidents. Call us at 702-384-7111.

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