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I have only played in a couple of games since the launch of 8th ed and was playing in a game this past weekend where it was me playing DW with another guy playing DA against a couple of guys playing Necrons. I was moving my Dreadnaught down a street on the board using buildings as cover so I could get closer to for a charge into my opponents warriors. One of the Necron players moved his Destroyer Lord out into the street straight ahead of me with the intent to engage my Dreadnaught, he did not have range this turn so he did not shoot. My next turn I moved my Dreadnaught up as he was still in cover and could not be seen by the warriors, but by moving up the Destroyer Lord was in range of my lascannons so during my shooting phase I declared my shots. He immediatly argued that I could not engage his Lord as the warriors were by the rules closer to my Dreadnaught and thus I had to target them even tho I could not see them as there was a building blocking my LOS. He said that since I did not have LOS, but because the warriors were closer than his Lord I could not engage thus ending that portion of my shooting phase. I argued that was not the case and that I felt that the rule was intended for if you had LOS and the nearest you had to shoot at the nearest model to you, but that if you didn't have LOS on the nearest model then LOS to the model in range was the target even if it was a character. After much discussion we mullinganged his previouse move of his Lord stating that his Lord would not have moved into the open against my Dreadnaught knowing I had range and superior firepower. In the case of LOS and nearest model was I correct in my understanding of the rule??

8th edition may have many wording problems, but this rule is not one of them.
Don't know how this could not be settled with one look in the rules?

Page 5 under Characters

A Character can only be chosen as a target in the Shooting phase if they are the closest visible enemy unit to the model that is shooting.

Thank You. I don't have the new big rule book so this helps.

The core rules are free on the GW homepage:
https://www.games-workshop.com/resources/PDF/40k/warhammer_40000_en.pdf