No. 66860 

FILED 

FEB 0 4 2016 

kli 

K. LTEMAN 

is 

EF DEP A ERK 

CL 

BY 

No. 67329 

132 Nev., Advance Opinion el 

IN THE SUPREME COURT OF THE STATE OF NEVADA 

MB AMERICA, INC., A NEVADA 

CORPORATION, 

Appellant, 

vs. 

ALASKA PACIFIC LEASING 

COMPANY, AN ALASKA BUSINESS 

CORPORATION, 

Respondent. 

MB AMERICA, INC., A NEVADA 

CORPORATION, 

Appellant, 

vs. 

ALASKA PACIFIC LEASING 

COMPANY, AN ALASKA BUSINESS 

CORPORATION, 

Respondent. 

Consolidated appeals from district court orders granting a 

motion for summary judgment and awarding attorney fees in a 

contractual dispute action. Second Judicial District Court, Washoe 

County; Lidia Stiglich, Judge. 

Affirmed. 

Robison Belaustegui Sharp & Low and Michael E. Sullivan, Reno, 

for Appellant. 

Laxalt & Nomura, Ltd., and Marilee Breternitz and Holly S. Parker, Reno, 

for Respondent. 

BEFORE SAITTA, GIBBONS and PICKERING, JJ. 

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OPINION 

By the Court, SAITTA, J.: 

This opinion addresses the issue of whether a prelitigation 

mediation provision in the parties' contract constitutes an enforceable 

condition precedent to litigation. We hold that it does and that because 

MB America, Inc. (MBA) did not initiate mediation as required under its 

agreement with Alaska Pacific Leasing Company, the district court 

correctly granted Alaska Pacific's motion for summary judgment. 

Furthermore, because Alaska Pacific was the prevailing party under NRS 

18.010, we hold that the district court did not abuse its discretion by 

awarding Alaska Pacific attorney fees. 

FACTUAL AND PROCEDURAL HISTORY 

MBA is a Nevada corporation headquartered in Reno, Nevada, 

selling rock-crushing machines, primarily for commercial purposes. 

Alaska Pacific is an Alaska business based out of Anchorage, Alaska. 

MBA and Alaska Pacific entered into an agreement (the Agreement), 

whereby Alaska Pacific agreed to become a dealer for MBA's line of 

products. 

After termination of the Agreement, a dispute arose regarding 

more than $100,000 in equipment purchases made by Alaska Pacific, 

while acting as a dealer under the terms of the Agreement. MBA filed a 

complaint in the district court seeking (1) declaratory relief that the 

Agreement was valid and binding on the parties and that MBA had not 

breached the Agreement, and (2) specific performance of the mediation 

provision of the Agreement. Subsequently, Alaska Pacific filed a motion 

for summary judgment, alleging that MBA had prematurely filed its 

complaint because it had not complied with the mediation provision in the 

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Agreement. The district court granted Alaska Pacific's motion. 

Subsequently, the district court awarded Alaska Pacific attorney fees as a 

prevailing party. 

DISCUSSION 

MBA argues that the district court erred in granting summary 

judgment in favor of Alaska Pacific on MBA's complaint for declaratory 

relief and specific performance because: (1) genuine issues of material fact 

remain as to whether Alaska Pacific refused to participate in mediation as 

required by the Agreement and whether Alaska Pacific's prior refusal to 

mediate rendered any further attempt by MBA to mediate the dispute 

futile, (2) the district court ignored the purpose and scope of declaratory 

relief claims in Nevada, (3) the district court erred by dismissing the 

complaint instead of staying the proceedings and ordering the parties to 

mediate, and (4) the district court abused its discretion by awarding 

attorney fees to Alaska Pacific. 

The district court did not err in granting summary judgment in favor of 

Alaska Pacific 

"This court reviews a district court's order granting summary 

judgment de novo." Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 

1026, 1029 (2005). Summary judgment is proper if the pleadings and all 

other evidence on file demonstrate that no genuine issue of material fact 

exists and that the moving party is entitled to judgment as a matter of 

law. Id. 

The prelitigation provision in the parties' contract is a condition 

precedent to litigation 

Although this court has not addressed the issue of whether 

prelitigation mediation provisions in a contract can constitute a condition 

precedent to litigation, other jurisdictions have and held that they can. In 

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DeValk Lincoln Mercury, Inc. v. Ford Motor Co., the United States Court 

of Appeals for the Seventh Circuit enforced a prelitigation mediation 

provision by way of summary judgment, stating that the mediation 

provision was a condition precedent to litigation. 811 F.2d 326, 336 (7th 

Cir. 1987). The court reasoned that the mediation clause was 

straightforward in stating that it was a condition precedent to any 

litigation. Id. at 335-36. This required strict compliance with the 

provision. Id. at 336. Although the court entertained the argument that 

the defendant's conduct constituted a waiver of the mediation right, the 

court determined that a nonwaiver provision in the parties' agreement 

precluded such an argument. Id. at 336-37. 

Similarly, in Tattoo Art, Inc. v. TAT International, LLC, the 

court noted that "[a] number of courts have found that when parties to a 

lawsuit have elected not to be subject to a court's jurisdiction until some 

condition precedent is satisfied, such as mediation, the appropriate 

remedy is to dismiss the action." 711 F. Supp. 2d 645, 651 (E.D. Va. 2010). 

The court began with the proposition that "failure to mediate a dispute 

pursuant to a contract that makes mediation a condition precedent to 

filing a lawsuit warrants dismissal." Id. (internal quotations omitted). In 

analyzing whether a condition precedent existed, the court stated that the 

agreement entered into by the parties "unambiguously provide[d] that the 

parties must, at minimum, request mediation of any dispute arising from 

the [a]greement prior to initiating litigation." Id. The Tattoo Art court 

further stated that, "[a's with any other contract, this [c] ourt cannot 

simply ignore the clear intent of the parties." Id. at 652. As such, the 

court held "that [p]laintiff [had] failed to satisfy the condition precedent 

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necessary to trigger the right to initiate litigation" and, absent defendant's 

waiver of rights to mediation, dismissal was proper. Id. 

In this opinion, we adopt the positions taken in DeValk and 

Tattoo Art and hold that the mediation provision in the parties' contract is 

an enforceable condition precedent to litigation. 

MBA did not comply with the prelitigation mediation provision in 

the Agreement 

Here, as the provision at issue unambiguously addresses 

mediation as a condition precedent to litigation, the terms are given their 

"usual and ordinary signification." Traffic Control Servs., Inc. v. United 

Rentals Nw., Inc., 120 Nev. 168, 174, 87 P.3d 1054, 1058 (2004) (internal 

quotations omitted). Paragraph 13 of the Agreement, titled "Disputes and 

Mediation," states: 

The parties agree that any disputes or questions 

arising hereunder, including the construction or 

application of [the] Agreement shall be submitted 

to mediation between [MBA] and [Alaska Pacific] 

with the rules of the American Arbitration 

Association, of which any hearing or meeting 

should be conducted in Reno, NV. Any mediation 

settlement by the parties shall be documented in 

writing. If such mediation settlement modifies the 

language of this Agreement, the modification shall 

be put in writing, signed by both parties and 

added to the Agreement as an attachment. 

If mediation between the parties does not result in 

a mutual satisfying settlement within 180 days 

after submission to mediation, then each party 

will have the right to enforce the obligations of 

this Agreement in the court of law of Reno, 

Nevada with all reasonable attorney fees, court 

costs and expenses incurred by the prevailing 

party in such litigation to be paid by the other 

party. 

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1:411,`M-1' 
The commercial mediation procedures under paragraph M-2 of 

the American Arbitration Association's (AAA) "Commercial Arbitration 

Rules and Mediation Procedures," titled "Initiation of Mediation," states: 

Any party or parties to a dispute may initiate 

mediation under the AAA's auspices by making a 

request for mediation to any of the AAA's regional 

offices or case management centers via telephone, 

email, regular mail or fax. Requests for mediation 

may also be filed online via WebFile at 

www.adr.org. 

The party initiating the mediation shall 

simultaneously notify the other party or parties of 

the request. The initiating party shall provide the 

following information to the AAA and the other 

party or parties as applicable: 

(i) A copy of the mediation provision of 

the parties' contract or the parties' 

stipulation to mediate. 

(ii) The names, regular mail addresses, 

email addresses, and telephone 

numbers of all parties to the dispute 

and representatives, if any, in the 

mediation. 

(iii) A brief statement of the nature of the 

dispute and the relief requested. 

(iv) Any specific qualifications the 

mediator should possess. 

(Emphases added.) 

Paragraph 13 of the Agreement and paragraph M-2 of the 

commercial mediation procedures, when read together, indicate that MBA 

had a duty to follow the AAA rules regarding mediation procedures and 

that those rules require MBA to submit a request for mediation to "any of 

the AAA's regional offices or case management centers" in order to initiate 

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mediation. MBA is also required to notify Alaska Pacific of any formal 

request. 

It is undisputed that MBA did not take the required actions to 

initiate mediation. Thus, MBA failed to comply with a prelitigation 

mediation provision in the Agreement before filing its action in the district 

court. Nevertheless, MBA argues that it was not required to comply with 

the prelitigation mediation provision. 

MBA's failure to comply with the prelitigation mediation provisions 

in the Agreement preclude initiation of litigation 

MBA contends that it was not required to first exhaust 

mediation with the AAA, given Alaska Pacific's prior rejections of MBA's 

informal mediation requests. MBA disagrees with the district court's 

characterization of a mediation provision as an "administrative remedy," 

but contends that even if it were, "it is well established that the 

exhaustion doctrine only applies to available administrative remedies." 

MBA relies on Malecon Tobacco, LLC v. State, Department of Taxation, 

118 Nev. 837, 839, 59 P.3d 474, 476 (2002), as support for the proposition 

that "exhaustion is not required when a resort to administrative remedies 

would be futile." MBA states that it did not file a formal request with the 

AAA because it would have been futile to do so, and therefore, it did not 

have to exhaust the mediation remedy prior to filing its complaint. 

We agree with MBA that the district court erred in 

characterizing mediation as an administrative remedy. The district court 

cited no authority to support that characterization, and indeed, this court 

has distinguished between mediation and administrative adjudication. 

Holt v. Reg'l Tr. Servs. Corp., 127 Nev. 886, 891 n.2, 266 P.3d 602, 605 n.2 

(2011) ("[T]he purpose of mediation. . . is not to adjudicate or issue 

findings, instead it is a process meant to define, evaluate, make 

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recommendations on issues, and try to settle issues." (citing Guzman v. 

Laguna Dev. Corp., 219 P.3d 12, 16 (N.M. Ct. App. 2009))). 

Although the district court incorrectly based its findings on a 

mistaken assumption that a mediation provision is an administrative 

remedy, it nevertheless reached the correct result. As the prelitigation 

mediation provision constituted a condition precedent to litigation, and 

MBA initiated litigation without complying with the prelitigation 

mediation provision in the Agreement, the district court's order granting 

summary judgment was proper. Saavedra-Sandoval v. Wal-Mart Stores, 

Inc., 126 Nev. 592, 598-99, 245 P.3d 1198, 1202 (2010) (holding that a 

district court's order will be affirmed "if the district court reached the 

correct result, even if for the wrong reason"). 

To the extent that MBA argues that Alaska Pacific's alleged 

conduct was a waiver of Alaska Pacific's right to mediation as a condition 

precedent to litigation, see DeValk, 811 F.2d at 336-37, this argument also 

fails. MBA provides several examples of what it claims are Alaska 

Pacific's rejections of MBA's efforts to pursue mediation prior to MBA's 

initiation of litigation. First, MBA proffers a letter dated February 27, 

2014, in which MBA claims it informed Alaska Pacific that any disputes 

arising under the Agreement needed to be sent to mediation in Reno, 

Nevada. The relevant portion of the letter states: 

Lastly, under paragraphs 12 and 13 of the 

Agreement, any disputes or questions arising 

under the application of the Agreement shall be 

submitted to mediation pursuant to the rules of 

the [AAA] and the hearing shall be conducted in 

Reno, Nevada pursuant to Nevada law. Hopefully 

this will not be necessary. 

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(Emphasis added.) However, nothing in this letter indicates that MBA 

requested mediation. In fact, MBA's statement that "fhlopefully this will 

not be necessary" actually works against MBA's assertion because it 

implies that this letter does not constitute a request for mediation. 

MBA next relies on a letter that it received from Alaska 

Pacific in reply to MBA's February 27, 2014, letter threatening litigation. 

In relevant part, the letter states: 

Please note that Paragraph 13 ("Disputes and 

Mediation") of the Agreement does not apply in 

this matter as we do not contest [MBA's] right to 

cancel the agreement, but rather take issue with 

the fact that [MBA] acted in bad faith by accepting 

our payment for units which we were not obligated 

to purchase and then cancelling the Agreement 

less than eleven (11) months later. 

Although this letter may demonstrate a belief by Alaska Pacific that 

mediation did not apply, it does not demonstrate a rejection by Alaska 

Pacific of a mediation request by MBA. 

MBA also relies on a declaration by Miriano Ravazzolo, Chief 

Executive Officer of MBA, and an affidavit of Michael E. Sullivan, 

attorney of record for MBA, for its contention that Alaska Pacific rejected 

MBA's requests for mediation. Ravazzolo's declaration states that 

"[c]ounsel for [MBA] requested mediation in his February 27, 2014 letter 

to [Alaska Pacific's] Vice President David Faulk. Unfortunately, [Alaska 

Pacific] rejected that invitation for mediation . . . ." As discussed above, 

contrary to Ravazzolo's declaration, the letter does not request mediation. 

Therefore, there was no mediation request for Alaska Pacific to reject, and 

Ravazzolo's statement does not support MBA's argument that a formal 

request for mediation was futile. 

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Sullivan's affidavit states that he "attempted in good faith to 

obtain the consent of [Alaska Pacific] to participate in mediation." He 

then states: 

Additionally, after this letter was sent out I spoke 

with representatives in Alaska for [Alaska Pacific] 

and advised them that [MBA] would participate in 

mediation but it would need to be in Reno, 

Nevada. Unfortunately, [Alaska Pacific] and Mr. 

Faulk ignored those requests and instead sent 

threatening letters indicating that [Alaska Pacific] 

would be filing suit in Alaska. 

Sullivan's affidavit finally states that 

[a]t no time since the filing of this lawsuit has 

[Alaska Pacific] ever agreed to participate in 

mediation in Reno, Nevada even though the 

undersigned has requested both local Reno 

counsel. . . and [Alaska Pacific's] counsel to 

participate in mediation in Reno. 

However, when taken in the light most favorable to MBA—that is, when 

the allegations in the affidavits are taken at face value—this does not 

constitute evidence that Alaska Pacific refused to engage in mediation. 

Although Sullivan states that Alaska Pacific never agreed to participate in 

mediation, he does not state that Alaska Pacific categorically rejected a 

request for mediation. Therefore, Alaska Pacific's conduct cannot be seen 

as a waiver of its right to mediation. 

The complaint for declaratory relief was not ripe for judicial review 

MBA also contends that the district court erred in granting 

Alaska Pacific's motion for summary judgment by ignoring the purpose 

and scope of declaratory relief claims in Nevada. It contends that it 

appropriately sought judicial assistance to declare the obligations of the 

parties to conduct mediation in Reno, Nevada, pursuant to NRS 30.030 

and NRS 30.040. 

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In Kress v. Corey, this court stated that the Uniform 

Declaratory Judgment Act opened the door "to the adjudication of 

innumerable complaints and controversies not theretofore capable of 

judicial relief, and courts may now function to vindicate challenged rights, 

clarify and stabilize unsettled legal relations and remove legal clouds 

which create insecurity and fear." 65 Nev. 1, 25-26, 189 P.2d 352, 364 

(1948) (citation omitted) (internal quotations omitted). 

Kress also included the four elements that must be met before 

declaratory relief may be granted: 

(1) there must exist a justiciable controversy; that 

is to say, a controversy in which a claim of right is 

asserted against one who has an interest in 

contesting it; (2) the controversy must be between 

persons whose interests are adverse; (3) the party 

seeking declaratory relief must have a legal 

interest in the controversy, that is to say, a legally 

protectable interest; and (4) the issue involved in 

the controversy must be ripe for judicial 

determination. 

Id. at 26, 189 P.2d at 364 (internal quotations omitted); see also Doe v. 

Bryan, 102 Nev. 523, 525, 728 P.2d 443, 444 (1986) (holding that the four 

elements described in Kress constituted the requirements for a justiciable 

controversy in a declaratory relief action). 

Here, as discussed above, the issues are not ripe for judicial 

review because MBA failed to comply with the mediation terms of the 

agreement. Paragraph 13 of the Agreement states: 

The parties agree that any disputes or questions 

arising hereunder, including the construction or 

application of [the] Agreement shall be submitted 

to mediation between [MBA] and [Alaska Pacific] 

with the rules of the American Arbitration 

Association, of which any hearing or meeting 

should be conducted in Reno, NV. 

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(Emphases added.) There is no dispute that the Agreement provides the 

formal requirements for mediation. The language of the Agreement 

clearly establishes that disputes "shall be submitted to mediation." MBA 

failed to comply with the terms of the Agreement by neglecting formally to 

submit the dispute to mediation. 

Thus, the issue was not ripe for judicial review and the district 

court properly dismissed MBA's complaint for declaratory relief. Even 

assuming that the complaint for declaratory relief was ripe for judicial 

review, the issue is now moot because following the filing of the present 

appeal, the parties participated in a mediation/settlement conference 

process. 

The district court did not err by refusing to stay the proceedings 

MBA also contends that the district court erred by not staying 

the proceedings and ordering the parties to mediate. MBA relies on NRS 

38.221(6)-(7) and the unpublished order in AJS Construction, Inc. v. 

Pankopf, Docket No. 60729 (Order of Summary Reversal and Remand, 

September 25, 2013), 1for this proposition. Because the authorities cited 

by MBA address arbitration, as opposed to mediation, they are inapposite 

here. Indeed, the United States Court of Appeals for the Eleventh Circuit 

has stated that "the law of arbitration is in nearly every respect an 

illogical foundation for enforcement of mediation agreements." Advanced 

Bodycare Sols., LLC v. Thione Int'l, Inc., 524 F.3d 1235, 1240 (11th Cir. 

'MBA's reliance on this unpublished order is misplaced. Although 

amendments to the Nevada Rules of Appellate Procedure allow for citation 

to unpublished orders, the amendments apply only to orders entered on or 

after January 1, 2016. As the AJS Construction order was entered prior to 

January 1, 2016, it is not persuasive. 

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2008) (internal quotations omitted). The court also held that "because the 

mediation process does not purport to adjudicate or resolve a case in any 

way, it is not 'arbitration," and thus arbitration remedies, such as 

"mandatory stays and motions to compel, are not appropriately invoked to 

compel mediation." Id. 

Accordingly, the district court did not err by refusing to stay 

the proceedings. 

The district court properly awarded attorney fees to Alaska Pacific as a 

prevailing party 

MBA argues that the district court abused its discretion in 

granting Alaska Pacific's motion for attorney fees as Alaska Pacific was 

not a "prevailing party because it did not succeed on any significant issue 

of the case." 

An award of attorney fees is reviewed for an abuse of 

discretion. Albios v. Horizon Cmtys., Inc., 122 Nev. 409, 417, 132 P.3d 

1022, 1027-28 (2006) (reviewing an award of attorney fees for an abuse of 

discretion). An abuse of discretion can occur when the district court bases 

its decision on a clearly erroneous factual determination or it disregards 

controlling law. NOLM, LLC v. Cty. of Clark, 120 Nev. 736, 739, 100 P.3d 

658, 660-61 (2004) (holding that relying on factual findings that are 

"clearly erroneous or not supported by substantial evidence" can be an 

abuse of discretion (internal quotations omitted)); Bergmann v. Boyce, 109 

Nev. 670, 674, 856 P.2d 560, 563 (1993) (holding that a decision made "in 

clear disregard of the guiding legal principles [can be] an abuse of 

discretion"). 

Alaska Pacific was the prevailing party 

The district court awarded attorney fees to Alaska Pacific 

based on NRS 18.010(1), which provides that the "compensation of an 

13 
attorney and counselor for his or her services is governed by agreement, 

express or implied, which is not restrained by law." "A party. . . prevail[s] 

under NRS 18.010 if it succeeds on any significant issue in litigation 

which achieves some of the benefit it sought in bringing suit." Valley Elec. 

Ass'n v. Overfield, 121 Nev. 6, 10, 106 P.3d 1198, 1200 (2005) (internal 

quotations omitted). "To be a prevailing party, a party need not succeed 

on every issue," LVMPD v. Blackjack Bonding, Inc., 131 Nev., Adv. Op. 10, 

343 P.3d 608, 615 (2015), but the action must proceed to judgment, Works 

v. Kuhn, 103 Nev. 65, 68, 732 P.2d 1373, 1376 (1987) ("[A] party to an 

action cannot be considered a prevailing party within the contemplation of 

NRS 18.010, where the action has not 'proceeded to judgment."), 

disapproved of on other grounds by Sandy Valley Associates v. Sky Ranch 

Estates Owners Ass'n, 117 Nev. 948, 955 n.7, 35 P.3d 964, 969 n.7 (2001). 

An order dismissing a complaint is sufficient to find a prevailing party. 

See Semenza v. Caughlin Crafted Homes, 111 Nev. 1089, 1094, 1096, 901 

P.2d 684, 687, 688 (1995). 

Here, the district court did not abuse its discretion by granting 

attorney fees to Alaska Pacific, as a summary judgment in favor of Alaska 

Pacific and dismissal of MBA's complaint were sufficient to find Alaska 

Pacific a prevailing party, and as such, entitled to an award of attorney 

fees under NRS 18.010. See Semenza, 111 Nev. at 1094, 1096, 901 P.2d at 

687-88. 

CONCLUSION 

The district court did not err in granting summary judgment 

in favor of Alaska Pacific because MBA did not comply with a prelitigation 

condition precedent for mediation contained in the Agreement. 

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J. 

Furthermore, the district court did not abuse its discretion in awarding 

attorney fees to Alaska Pacific because it was the prevailing party. 

Accordingly, we affirm the district court order granting summary 

judgment and its award of attorney fees. 

J. 

We concur: 

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