Opinion ID: 2639670
Heading Depth: 2
Heading Rank: 6

Heading: The district court abused its discretion by awarding Harrah's attorney fees and costs

Text: The district court awarded Harrah's a portion of its attorney fees under NRS 18.010(2)(b) because appellants unreasonably maintained their lawsuit. It also awarded Harrah's a portion of its costs under NRS 18.020 as the prevailing party. Appellants argue that the district court abused its discretion by awarding Harrah's attorney fees and costs. Harrah's argues that the district court properly awarded it attorney fees under NRS 18.010(2)(b) because appellants' claims were groundless, and the district court properly awarded it costs as the prevailing party under NRS 18.020. We agree with the appellants' argument regarding attorney fees because we conclude that they did not unreasonably maintain their claims, and therefore, the district court abused its discretion in awarding Harrah's attorney fees. Also, given our decision in this appeal, Harrah's only prevailed against Garcia and Lewis, and therefore, it is only entitled to costs for prevailing against Garcia and Lewis.
This court reviews a district court's award of attorney fees for abuse of discretion. Barozzi v. Benna, 112 Nev. 635, 638, 918 P.2d 301, 303 (1996). Under NRS 18.010(2)(b), a district court can award attorney fees if a claim or defense is brought or maintained without reasonable ground or to harass the prevailing party. Although a district court has discretion to award attorney fees under NRS 18.010(2)(b), there must be evidence supporting the district court's finding that the claim or defense was unreasonable or brought to harass. Semenza v. Caughlin Crafted Homes, 111 Nev. 1089, 1095, 901 P.2d 684, 687 (1995). The case of Kahn v. Morse & Mowbray, 121 Nev. 464, 117 P.3d 227 (2005), is instructive here. In Kahn, the appellants sued their prior attorney and his firm for legal malpractice. Id. at 467, 117 P.3d at 230. The district court granted the respondent's summary judgment motion based on claim preclusion and later awarded them attorney fees under NRS 18.010(2)(b). Id. On appeal, this court affirmed in part, reversed in part, and remanded. Id. at 479-80, 117 P.3d at 238. This court concluded that claim preclusion did not bar some of the claims and reversed the district court's grant of summary judgment. Id. at 474, 117 P.3d at 234. Therefore, we held that the district court's decision to award respondents their attorney fees was premature and an abuse of discretion. Id. at 479, 117 P.3d at 238. In this case, the district court awarded Harrah's attorney fees because it found that it was unreasonable for appellants to maintain their claims after other factually similar cases were decided in favor of Harrah's. The district court found that the March 2005 Yvette Barreras decision in favor of Harrah's made appellants' claims unreasonable. It determined that appellants should have had notice of the Yvette Barreras decision by May 1, 2005, and it was unreasonable for them to maintain their claims after that. Therefore, it awarded Harrah's a portion of its attorney fees from May 1, 2005, forward, totaling $317,621.98. Like in Kahn, we conclude that the district court's award of attorney fees was premature and an abuse of discretion. As discussed above, a decision in a factually similar case with different plaintiffs does not necessarily support issue preclusion. Therefore, appellants had no reason to think that their claims were unreasonable because a jury found in favor of Harrah's in the Yvette Barreras case. Further, Judge Denton's denial of Harrah's summary judgment motion against Bower based on issue preclusion supports our conclusion that reasonable minds could disagree as to whether issue preclusion barred appellants' claims. Also, although Garcia and Lewis' claims do not survive summary judgment based on the merits, no evidence suggests that their claims were unreasonable or brought to harass. In conclusion, the decision in the Yvette Barreras case had no effect on the reasonableness of appellants' claims. They were reasonable when appellants brought them and remained so despite decisions in favor of Harrah's in factually similar cases with different plaintiffs. Therefore, the district court abused its discretion in awarding Harrah's attorney fees under NRS 18.010(2)(b).
The district court awarded Harrah's costs under NRS 18.020(3) because Harrah's was the prevailing party. We conclude that the district court abused its discretion in awarding Harrah's its costs as to all appellants except Garcia and Lewis because the award was based on the erroneous conclusion that Harrah's was the prevailing party. This court reviews the district court's determination of allowable costs for abuse of discretion. Sheehan & Sheehan v. Nelson Malley & Co., 121 Nev. 481, 493, 117 P.3d 219, 227 (2005). Notably, if we reverse the underlying decision of the district court that made the recipient of the costs the prevailing party, we will also reverse the costs award. Doud, 109 Nev. at 1106, 864 P.2d at 802. Because we determine that issue preclusion does not bar appellants' claims, Harrah's is no longer the prevailing party under NRS 18.020(3) as to all appellants except Garcia and Lewis. We are affirming the district court's grant of summary judgment for Harrah's against Garcia and Lewis based on the merits of their claims, and therefore, Harrah's remains the prevailing party against Garcia and Lewis. We therefore vacate the district court's award of costs to Harrah's as to all appellants except Garcia and Lewis.