Opinion ID: 221395
Heading Depth: 3
Heading Rank: 2

Heading: The Specific Prohibitions Against Misrepresentations

Text: During argument, Mojave clarified that it does not challenge the injunction's prohibition on representing that it is affiliated with Del Webb or its parent, Pulte. That portion of the injunction is affirmed.
Mojave does challenge the injunction against representing that it was properly licensed under Nevada law to conduct its inspections. The district court held that Chapter 645D of the Nevada Revised Statutes requires a license for the inspections Mojave conducted, and that NRS 41.600 gave Del Webb standing to challenge Mojave's practices. Nevada statutes are interpreted according to their plain meaning unless it clearly appears that the Legislature did not intend such a meaning. City of Reno v. Bldg. & Constr. Trades Council of N. Nev., ___ Nev. ____, 251 P.3d 718, 722 (2011). We must not interpret a statute to render words or phrases superfluous or make a provision nugatory. S. Nev. Home-builders Ass'n v. Clark Cnty., 121 Nev. 446, 117 P.3d 171, 173 (2005) (internal quotations omitted). The text of Chapter 645D makes its application to Mojave's inspections clear. Chapter 645D requires [a]ny person who... engages in the business of, acts in the capacity of, or advertises or assumes to act as an inspector to obtain a certificate from the State of Nevada. NRS 645D.160(1). An inspector is a person who examines any component of a structure and prepares or communicates an inspection report. NRS 645D.080. An inspection report is an analysis, opinion or conclusion, regarding the condition of a structure, that is ... [p]rovided after an inspection, in a written report, for or with the expectation of receiving compensation for the report; and ... [d]esigned to describe and identify the inspected systems or structural components of the structure, their physical condition, any material defect and any recommendation for evaluation by another person. NRS 645D.070. Mojave's argument that it did not provide inspection reports with the expectation of receiving compensation for the report, see NRS 645D.070(1), is unpersuasive. Mojave acknowledged that its business plan was to be paid for its inspection work through the proceeds that homeowners received from the Chapter 40 claims. Mojave's contracts required the homeowner to pay its fees and expenses out of the Chapter 40 payments received from the homebuilder. The contracts assigned the homeowners' right to those payments to Mojave if the homeowners were unable to collect the full cost of inspection. Mojave did, therefore, expect ultimately to receive compensation for its inspection reports. NRS 645D.100 contains eight express exceptions. Mojave relies on the exception for any person who provides an estimate of cost, repair or replacement of any improvements upon real estate. NRS 645D.100(6). Mojave argues that the [c]ost of repair or replacement estimates in construction defect claims were all Mojave's reports ultimately were used for, if they were used at all. Mojave's argument is not supported by the language of the exception, which focuses on the person who provided the inspection report and not on how the report was ultimately used. Nor is Mojave's argument supported by the record, which shows that the inspection reports identified structural deficiencies but did not provide cost estimates to repair or replace them. The exception under section 645D.100(6) does not apply. Mojave's remaining arguments have no basis in Chapter 645's text. Mojave first contends that Chapter 645D applies only to inspections conducted for real-estate sales. The statute explicitly excepts certain inspections unrelated to real estate sales, which would be unnecessary if the statute covered only sales-related inspections. [4] Mojave next argues that licensed general contractors' building-code inspections do not require a Chapter 645D license. Chapter 645D explicitly excepts from its licensing requirement individuals holding licenses under Chapters 645, 645C, and 684A. NRS 645D.100(4). There is no exception for general contractors licensed under Chapter 624. Cramer v. Nev. Dep't of Motor Vehicles, ___ Nev. ____, 240 P.3d 8, 11-12 (2010) (refusing to recognize an unenumerated exception when the statute contained enumerated exceptions). [5] Mojave's final argument is that Chapter 645D does not apply to inspections used in Chapter 40 actions because the Nevada legislature did not intend homeowners to pay fees out-of-pocket for inspections to use in Chapter 40 actions. But Chapter 645D does not regulate the fees that inspectors charge homeowners or how those fees are paid. NRS 645D.070, the only provision that mentions compensation, simply states that Chapter 645D's requirements apply only to those inspections for which compensation is expected. The district court correctly Nevada law required Mojave to obtain licenses under Chapter 645D to perform its inspections and that Mojave misrepresented that it had the required license.
Mojave's argument that Del Webb lacked standing to challenge its practices is also unpersuasive. NRS 41.600(1) provides that [a]n action may be brought by any person who is a victim of consumer fraud. Nev. Power Co. v. District Court, 120 Nev. 948, 102 P.3d 578, 583 n. 7 (2004) (per curiam). NRS 41.600(2)(e) includes in the definition of consumer fraud a deceptive trade practice as defined in NRS 598.0915 to 598.0925, inclusive. NRS 598.0923(1) makes it a deceptive practice knowingly to conduct one's business or occupation without all required state, county or city licenses. Mojave argues that Del Webb was not a victim of consumer fraud because Del Webb is neither a consumer of Mojave's services nor a business competitor. The statute does not support this argument. The statute allows any person who is a victim of consumer fraud to sue. NRS 41.600(1). The word consumer modifies fraud, but does not limit any person or victim. See W. Surety Co. v. ADCO Credit, Inc., ___ Nev. ____, 251 P.3d 714, 716-18 (2011) (declining to limit any person in another Nevada statutory private right of action for similar reasons). NRS 41.600(2) defines the kinds of actions that constitute consumer fraud not by referring to a certain type of victim, but by cross-referencing other NRS sections defining deceptive trade practices and other offenses. See NRS 41.600(2). Mojave acknowledges that a victim of consumer fraud need not be a consumer of the defendant's goods or services. See S. Serv. Corp. v. Excel Bldg. Servs., 617 F.Supp.2d 1097, 1100 (D.Nev.2007) (allowing a business competitor to sue under NRS 41.600). Mojave argues that Southern Service limits NRS 41.600 standing to consumers and business competitors. Southern Service holds that a business competitor has standing to sue under NRS 41.600 but does not state that only consumers of a good or service or competitors providing such a good or service have standing. There is no basis in the text of NRS 41.600 or in Southern Service to limit standing to a group broader than consumers but no broader than business competitors. The standing issue turns on whether Mojave's business practices directly harmed Del Webb. S. Serv. Corp., 617 F.Supp.2d at 1099-1100. The district court found that Mojave's illegal structural inspections and provision of reports based thereon and misrepresentations of authority to perform such services and of a relationship with Del Webb in dealing with the public has damaged Del Webb's relationship with consumers and threatens to continue to harm Del Webb's business, reputation and good will and to exposure to Chapter 40 litigation based on illegal inspections and inspection reports. Neither in its briefing nor at oral argument did Mojave challenge this finding or explain why it was insufficient to establish the direct injury needed to give Del Webb standing to sue. [6] Because Nevada law provides a basis for the specific prohibitions Mojave challenges, it is unnecessary to address whether the Lanham Act provides an additional and similar statutory basis for granting the same relief. [7] But the district court's reliance on Nevada's common law of champerty as a separate basis for the injunction does merit discussion.