Court Opinion

ID: 9948595
Source: CourtListenerOpinion
Date Created: 2024-03-07 17:09:20.134728+00
Date Added: 2024-06-11T14:31:00.597809
License: Public Domain

140 Nev., Advance Opinion ||
IN THE SUPREME COURT OF THE STATE OF NEVADA

LAMONT’S WILD WEST BUFFALO, No. 85056
LLC,

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NATHANIAL TERRY,
Respondent. MAR 0 swash

ELIZ fie oe BRO’
| F

a “SPiEF DEPUTY CLERK

Appeal from a district court order denying a motion for attorney
fees as sanctions. Eighth Judicial District Court, Clark County; Nadia
Krall, Judge.

Affirmed in part, reversed in part, and remanded with
instructions.

McDonald Carano LLP and Ryan J. Works, John A. Fortin, and Karyna M.
Armstrong, Las Vegas,
for Appellant.

Hutchings Law Group and Mark H. Hutchings, Las Vegas,
for Respondent.

BEFORE THE SUPREME COURT, HERNDON, LEE, and
PARRAGUIRRE, JJ.

OPINION

By the Court, HERNDON, J.:
LaMont’s Wild West Buffalo, LLC, appeals from a district court

order denying its motion for attorney fees as sanctions under NRCP 11, NRS

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18.010(2)(b), and NRS 7.085. The district court found that Nathanial Terry
filed frivolous counterclaims against LaMont’s for breach of contract, breach
of the covenant of good faith, intentional interference with prospective
economic advantage, trespass to chattels, and negligence. However, the
district court denied LaMont’s motion for its failure to comply with NRCP
11’s safe harbor provision.

We conclude that the district court properly denied LaMont’s
motion for sanctions under NRCP 11 for failure to comply with that rule’s
procedural requirements. However, the district court erred by denying
attorney fees under NRS 18.010(2)(b) and NRS 7.085 for the same perceived
procedural flaw, as the NRCP 11 procedural requirements do not apply to

awards under those statutes.

FACTS AND PROCEDURAL HISTORY
Appellant LaMont’s Wild West Buffalo and respondent

Nathanial Terry entered into an oral agreement under which LaMont’s
acted as an order-buyer to procure 517 bison for Terry's Montana ranch.
After the last of the bison were delivered to Terry's ranch, Terry ceased
communication with LaMont’s. LaMont’s sent Terry an invoice for its
finder’s fee but received no response.

LaMont’s made several attempts to collect payment but
ultimately filed suit for breach of contract and related claims. Terry filed
an answer and counterclaimed, alleging breach of contract, breach of the
covenant of good faith, intentional interference with prospective economic
advantage, trespass to chattels, and negligence. LaMont’s moved for
summary judgment on all of Terry's counterclaims, and the district court
granted the motion. The parties proceeded to trial on LaMont’s claims,

resulting in a $88,083.28 judgment for LaMont’s.

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The district court found that Terry’s counterclaims were
frivolous and brought only to dissuade LaMont’s legitimate claims or to
confuse the issues. After trial, LaMont’s moved for attorney fees as
sanctions under NRCP 11 and NRS 18.010(2)(b). The court issued its
findings of fact and conclusions of law denying LaMont’s motion for fees
based on its finding that LaMont’s did not comply with the procedural
requirements set forth in NRCP 11(c)(2). LaMont’s moved for
reconsideration, citing NRS 7.085 as another statute permitting it to collect
attorney fees. The district court, for “good cause,” denied LaMont’s motion

for reconsideration.

DISCUSSION

We generally review the district court’s decision regarding
attorney fees for an abuse of discretion. Gunderson v. D.R. Horton, Inc., 130
Nev. 67, 74, 319 P.3d 606, 615 (2014); Berkson v. LePome, 126 Nev. 492,
504, 245 P.3d 560, 568 (2010) (“This court reviews a district court’s award
of attorney fees and costs, as a sanction, for an abuse of discretion.”). “An
abuse of discretion occurs if the district court’s decision is arbitrary or
capricious or if it exceeds the bounds of law or reason.” Skender v.
Brunsonbutlt Constr. & Dev. Co., 122 Nev. 1430, 1435, 148 P.3d 710, 714
(2006). A court may also abuse its discretion if its decision is “in clear
disregard of the guiding legal principles.” Gunderson, 130 Nev. at 80, 319
P.3d at 615 Gnternal quotation marks omitted).

LaMont’s contends that the district court abused its discretion
when it denied LaMont’s motions for fees under NRCP 11, NRS 18.010, and
NRS 7.085 because the district court rigidly applied the safe harbor
procedural requirements of NRCP 11 and improperly applied NRCP 11’s
safe harbor procedural requirements to NRS 18.010 and NRS 7.085.

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We first address whether the district court abused its discretion
in denying LaMont’s motion for fees under NRCP 11 for failing to comply
with Rule 11’s safe harbor provision. Next, we address whether Rule 11’s
procedural requirements apply to NRS 18.010 and NRS 7.085.

The district court did not abuse its discretion in denying LaMont’s request
for sanctions under NRCP 11

Under the Nevada Rules of Civil Procedure, parties certify
through their signature that papers presented to the court are, to the best
of the party’s belief and knowledge, not presented for an improper purpose
and not unwarranted or frivolous, and that factual assertions and denials
are supported and warranted by evidence. NRCP 11(a)-(b). Ifa party files
papers for an improper purpose or frivolously engages in litigation, that
party may be sanctioned under NRCP 11(c).

The movant seeking sanctions under NRCP 11(c) must comply
with the rule’s procedural requirements, commonly referred to as the safe
harbor provision. NRCP 11(c)(2); see Watson Rounds, P.C. v. HKighth Jud.
Dist. Ct., 131 Nev. 783, 787, 358 P.3d 228, 231 (2015) (“NRCP 11's safe
harbor provisions prevent attorneys from being sanctioned until they have
the opportunity to cure the sanctionable conduct or appear at an order to
show cause hearing.”). The safe harbor provision requires the movant to
file its motion for sanctions “separate from any other motion” and that the
motion “must not be filed...if the challenged paper ...is withdrawn or
appropriately corrected within 21 days after service.” NRCP 11(c)(2). The
prevailing party may then, at the court’s discretion, be awarded “reasonable
expenses, including attorney fees, incurred for presenting or opposing the
motion.” Id.

In this case, the district court denied LaMont’s motion for

attorney fees as sanctions for failure to comply with NRCP 11(c)(2).

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LaMont’s motion was not “separate from any other motion,” as it combined
the Rule 11 motion with a motion for attorney fees under NRS 18.010, and
the motion was not served upon Terry 21 days prior to its filing.

We conclude that the district court’s order denying the motion
for failure to procedurally comply with NRCP 11(c)(2) was not an abuse of
discretion, at least as to LaMont’s request for Rule 11 sanctions. Rule 11 is
clear: a request for sanctions must be made separate from any other motion
and must be served 21 days prior to filing. The district court enforced
comphance with the procedure explicitly mandated by the Nevada Rules of
Civil Procedure.!

The district court improperly denied LaMont’s request for attorney fees under
NRS 18.010 and NRS 7.085

Terry contends that LaMont’s waived any argument based on
NRS 7.085 on appeal because it was not raised in LaMont’s original motion
for attorney fees; however, the statutory grounds for recovery were raised
in LaMont’s motion for reconsideration, which the district court denied for
“good cause.” We may consider an argument newly raised in a motion for
reconsideration so long as (1) the reconsideration motion and order are part
of the record on appeal and (2) the district court entertained the motion on
its merits. A.J. Reynolds Tobacco Co. v. Kighth Jud. Dist. Ct., 1388 Nev.,
Adv. Op. 55, 514 P.3d 425, 432 (2022). As both of these prerequisites have
been satisfied, we address LaMont’s arguments related to both NRS 18.010
and NRS 7.085.

The district court denied LaMont’s motion for attorney fees as

sanctions entirely for failing to follow the procedures outlined under NRCP

1We decline to adopt LaMont’s position that substantial compliance is
sufficient to satisfy the procedural requirements under NRCP 11(c)(2).

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11. The order specified that because LaMont’s failed to comply with the
procedural requirements under NRCP 11(c)(2), it was not entitled to an
award of attorney fees under either NRCP 11 or NRS 18.010. LaMont’s
moved for reconsideration, citing NRS 7.085 as another statutory basis for
recovery, and the district court denied the motion for “good cause.”
Therefore, we must determine whether the procedural requirements of
NRCP 11(c)(2) apply to NRS 18.010 and NRS 7.085.

“Although a district court’s decision regarding an award of
attorney fees is generally reviewed for an abuse of discretion, where .. . the
decision implicates a question of law, the appropriate standard of review is
de novo.” Gunderson, 130 Nev. at 82, 319 P.3d at 616. NRS 18.010(2)(b)
provides for the recovery of attorney fees “when the court finds that the
claim, counterclaim, or third-party complaint or defense of the opposing
party was brought or maintained without reasonable ground or to harass
the prevailing party.” NRS 7.085 provides for the recovery of attorney fees,
from the offending attorney personally, when “an attorney has filed,
maintained, or defended a civil action ... not well-grounded in fact... or
unreasonably and vexatiously extended a civil action.” Both statutes state
that “i]t is the intent of the legislature that the court award costs, expenses,
and attorney's fees pursuant to this [statute] and impose sanctions
pursuant to Rule 11 of the Nevada Rules of Civil Procedure in all
appropriate situations.” NRS 18.010(2)(b); NRS 7.085 (emphasis added).

We have previously determined that NRCP 11 does not
supersede NRS 7.085. Watson Rounds, 131 Nev. at 784-85, 358 P.3d at 230.
In Watson Rounds, we determined that NRCP 11 and NRS 7.085 were
“distinct, independent mechanism|s] for sanctioning attorney misconduct”

because they apply to different types of misconduct. 131 Nev. at 784, 788-

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89, 358 P.3d at 230, 232. LaMont’s argument regarding NRS 18.010 relies
heavily on this premise. We agree that the same proposition is true of
NRCP 11 and NRS 18.010(2)(b); each provision is a distinct mechanism for
sanctions. The plain language of NRS 18.010(2)(b)—‘“and impose sanctions
pursuant to Rule 11” (emphasis added)—indicates that the statute may be
applied in addition to NRCP 11, further supporting the notion that it is an
independent mechanism for sanctioning misconduct. The Legislature also
chose not to incorporate a safe harbor provision similar to the one in NRCP
11 in the statutory text of NRS 18.010(2)(b) or NRS 7.085. Further, no
section in NRS 18.010 provides a procedural constraint to the movant
seeking attorney fees. Rather, NRS 18.010 instructs the court to “liberally
construe the provisions” of paragraph (2)(b), and paragraph (3) indicates the
court may impose such attorney fees even without a written motion.

Given that NRCP 11 and NRS 18.010(2)(b) are independent
bases for sanctions and NRS 18.010(2)(b) does not contain a safe harbor
provision, the district court’s order denying attorney fees on the basis that
LaMont’s did not comply with the procedural requirements of NRCP 11 is
inconsistent with the statute. Further, NRS 7.085 is an additional
independent sanctioning mechanism under which Lamont’s may potentially
recover. Thus, the district court erred in applying the procedural bar set
forth in NRCP 11(c)(2) to NRS 18.010 and, in turn, NRS 7.085.

CONCLUSION
While a movant must comply with the procedural requirements of
NRCP 11(c)(2) for the district court to impose sanctions under Rule 11, those
procedural requirements do not apply to independent sanctioning
mechanisms such as NRS 18.010(2)(b) and NRS 7.085. Thus, the district
court’s order denying LaMont’s request for fees was proper in part and

erroneous in part. The district court properly applied NRCP 11(c)(2)’s
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procedural bar to LaMont’s request for sanctions under Rule 11 but erred
by applying the same procedural requirements to NRS 18.010(2)(b) and
NRS 7.085. Accordingly, we affirm the district court’s order in part as to
NRCP 11, and we reverse in part and remand for the district court to
determine whether LaMont’s is entitled to attorney fees under NRS 18.010
and NRS 7.085.
LA ~ od.
Herndon
We concur:
(Px J
Liee LW]
{ Grol = J.
Parraguirre
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