Opinion ID: 1211307
Heading Depth: 1
Heading Rank: 6

Heading: the remaining $80,000 retained by durable as proceeds due marchini

Text: As previously discussed, after the payments to the law firm, Van's, and Las Vegas Plywood, Durable still retained $80,000 in proceeds due Marchini under the subcontracts. The district court awarded this $80,000 to the Trustees pursuant to the writ of garnishment. On appeal, Durable contends the district court erred in refusing to allow it to retain this sum to indemnify it against possible liabilities arising out of related claims filed by the Trustees and threatened by the SIIS. At the time the writ of garnishment was served, Durable was potentially liable to the Trustees and to the SIIS for payments which Marchini had failed to make. As noted above, the first potential claim was the result of a second independent action against Durable filed by the Trustees based on Marchini's failure to pay employee fringe benefits in conjunction with work done by Marchini for Durable from 1976 through 1978 (District Court Case No. A201547). The Trustees alleged that Durable was liable for Marchini's failure to pay fringe benefits to the Trustees in the amount of $23,000. The second potential claim was a threatened lawsuit against Durable by the SIIS. The SIIS had notified Durable that Marchini had failed to pay insurance premiums required by the industrial insurance statutes. As the general contractor, Durable was potentially liable for these unpaid insurance premiums. See NRS 608.150. The SIIS eventually did file suit against Durable. The district court refused to allow Durable to retain the $80,000 to indemnify it against these potential claims because the amounts owed were then unliquidated. See NRS 31.360 (garnishee may not retain amounts that represent unliquidated damages for wrongs and injuries). Durable moved the district court to consolidate the present action with the other action filed by the Trustees (Case No. A201547). The district court refused to do so. Pursuant to NRS 31.294, the district court should then have stayed this action pending the final judgment in the other action. NRS 31.294 (emphasis added) provides: Money, property, demands, debts, claims, choses in action and any other property which is subject to garnishment may be reached and subjected even though another action is pending thereon. If the other action is not pending in the court from which the garnishment issues, the court, on proof by the garnishee of the pendency of the other action, must stay such proceedings against such garnishee until notified that a final judgment has been rendered. Upon such notification the court shall make an appropriate order, according to the judgment, in favor of the defendant for the use of the plaintiff or in favor of the garnishee defendant. The judgment, if rendered against the garnishee, acquits him from all demands by the defendant for all money, property, goods, effects and credits paid, delivered and accounted for by the garnishee by force of such judgment. Although none of the parties brought this statute to the attention of the district court, if the district court had stayed the garnishment proceedings below, the problem now raised by Durable would have been avoided. Durable is entitled to assert any defense against the Trustees that Durable would have had against Marchini. See NRS 31.360. Had Marchini sued Durable on the subcontracts involved in the present case, Durable would undoubtedly have been able to offset the debts Marchini owed Durable from any recovery awarded to Marchini. Although the amounts for which Durable would become liable as a result of Marchini's failure to pay insurance premiums and fringe benefits were uncertain at the time of the trial of this matter, those amounts have, at least partially if not totally, become liquidated during the pendency of this appeal. For example, the SIIS action has been resolved and Durable was required to pay insurance premiums on behalf of Marchini in the amount of $39,573.28. See SIIS v. Durable Developers, 102 Nev. ___, 724 P.2d 199 (1986). Because Durable has been required to expend monies on behalf of Marchini, under NRS 31.360, Durable is entitled to an offset against the $80,000 still in its possession. The record does not disclose the disposition of the second independent action filed by the Trustees. If Durable is required to pay any amount as a result of that action, Durable is also entitled to an offset for that amount. Accordingly, we reverse that portion of the district court's judgment awarding the Trustees the $80,000 still in Durable's possession. We remand this portion of the case to the district court with instructions that it: (1) allow Durable an offset in the amount of $39,573.38, as discussed above; (2) determine the amount of any offset owed Durable as a result of the Trustees' second independent action; and (3) determine whether Durable is entitled to an offset against the remaining funds retained by Durable as a result of our remand discussed previously concerning the assignment of the single account to the law firm.