## Facts

- A group of condominium purchasers bought units associated with the Las Vegas Cay Club project and entered related arrangements with Flamingo Palm Villas, LLC, an entity alleged to be part of the Cay Clubs enterprise.
- The purchasers alleged the project was marketed as a planned luxury resort and that the development plan was later abandoned, leaving them with devalued property.
- Marketing materials, including a website, described Cay Clubs as a “partnership of professionals,” referenced a “partnership in excellence,” and identified JDI Loans, LLC and JDI Realty, LLC as “strategic partner[s]” on the development team, displaying a JDI logo alongside Cay Clubs’ logo.
- The purchasers submitted affidavits stating they reviewed these materials and relied on the portrayed JDI–Cay Clubs partnership, believing it provided financial strength and experience necessary to complete the promised improvements.
- The purchasers sought to hold the JDI entities and the developer affiliated with them liable under Nevada’s partnership-by-estoppel statute, NRS 87.160(1), contending the JDI entities allowed themselves to be held out as partners.

## Issues

1. Whether NRS 87.160(1) requires that partnership-by-estoppel liability be tied to a transaction in which the plaintiff acted “on the faith of” the alleged partnership representation.
2. Whether evidence of public “holding out,” alleged knowledge/consent by the purported partner, and purchaser reliance created genuine issues of material fact precluding summary judgment for the JDI entities and the developer.
3. Whether the purchasers’ dealings through an affiliated LLC (rather than a formally identified “partnership”) defeated the partnership-by-estoppel claim as a matter of law at the summary-judgment stage.

## Decision

- The Supreme Court of Nevada (en banc) affirmed in part, reversed in part, and remanded.
- The court held that NRS 87.160(1) imposes liability only for obligations arising from transactions in which the claimant acted in reliance on a representation of partnership.
- The court concluded the record contained sufficient evidence to create triable fact disputes on “holding out,” knowledge/consent, and reliance, making summary judgment improper as to the partnership-by-estoppel theory under the clarified standard.
- The court rejected the view that contracting through an associated LLC necessarily barred the claim at summary judgment where evidence supported treating the LLC as part of the Cay Clubs enterprise for reliance purposes.

## Legal Principles

- Partnership-by-estoppel under NRS 87.160(1) is transaction-based: the claimant must show detrimental action in a specific transaction taken “on the faith of” a representation that the defendant was a partner.
- A representation of partnership may be shown through public marketing statements and branding that present an entity as a partner or co-venturer.
- Knowledge and consent to being held out as a partner may be inferred from circumstances and commonly present fact questions inappropriate for resolution on summary judgment when the record supports competing inferences.
- Reliance may be supported by sworn purchaser testimony linking the partnership representation to the decision to enter the relevant transactions and the claimed losses.
- On summary judgment, courts must view evidence and reasonable inferences in the light most favorable to the nonmoving party and may not resolve credibility or disputed factual questions.

## Conclusion

The Nevada Supreme Court clarified that partnership-by-estoppel liability under NRS 87.160(1) depends on a claimant’s transaction-based reliance on a partnership representation and held that, given evidence of public “holding out” and purchaser reliance, disputed facts required reversal of summary judgment and remand for further proceedings on that theory.


In re Cay Clubs, 340 P.3d 563 (Nev. 2014)