Court Opinion

ID: 3005968
Source: CourtListenerOpinion
Date Created: 2015-09-30 15:08:52.153817+00
Date Added: 2024-06-11T11:46:02.806732
License: Public Domain

We are asked to determine whether (1) ICS waived its claims
                against Sal, (2) NRS 624.626 entitles ICS to damages beyond the district
                court's award, (3) ICS proved damages beyond the district court's award,
                (4) the district court awarded ICS damages for costs that 5311 already
                paid, (5) ICS's mechanic's lien and unjust enrichment claims fail as a
                matter of law, and (6) the district court erred in awarding either party
                attorney fees. We reverse in part and remand the issue of attorney fees
                because the district court did not adequately explain its bases for those
                awards. We affirm in all other respects.
                ICS Did Not Waive Its Claims Against 5311
                            S3H contends ICS waived all material claims by signing an
                unconditional waiver and accepting payment for that waiver. The district
                court held ICS's unconditional waiver ineffective because S3H only
                tendered $440,546.64 to ICS, and the full amount agreed upon for ICS's
                waiver was $601,001. In light of the district court's findings, it properly
                declined to enforce that waiver.
                            First, S3H argues unconditional waivers are enforceable even
                without payment. NRS 108.2457(5)(d) sets forth a statutorily mandated
                form for unconditional waivers, and that form requires the following
                language. "[t]his document is enforceable against you if you sign it, even if
                you have not been paid. If you have not been paid, use a conditional
                release form." However, NRS 108.2457(2)(b) declares all lien waivers
                unenforceable unless "[t]he lien claimant receive[s] payment for the lien."
                Conflict between statutory provisions can make unambiguous language
                ambiguous. Orion Portfolio Servs. 2, LLC v. Cnty. of Clark, 126 Nev. 397,
                402, 245 P.3d 527, 531 (2010). If such an ambiguity arises, the court must
                look to the Legislature's intent.   Id. at 403, 245 P.3d 531. Additionally,

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                 "this court considers the statute's multiple legislative provisions as a
                 whole." Leven v. Frey, 123 Nev. 399, 405, 168 P.3d 712, 716 (2007).
                             NRS 108.2457(2)(b) governs here, so lien waivers cannot be
                 enforced unless the waiving party is paid in full. The legislative history
                 shows the statutory forms contained at NRS 108.2457(5)(d) were merely
                 meant to standardize waiver forms, not alter any rights or obligations
                 contained elsewhere in the statute. Conversely, NRS 108.2457(1) and (2)
                 made important, substantive changes to Nevada law, such that waiving
                 lien claims became substantially more difficult.    See In re Fontainebleau
                 Las Vegas Holdings, LLC, 128 Nev., Adv. Op. 53, 289 P.3d 1199, 1213-14
                 (2012); Lehrer McGovern Bovis, Inc. v. Bullock Insulation, Inc., 124 Nev.
                 1102, 1115 n.39, 197 P.3d 1032, 1041 n.39 (2008). The conflicting
                 provisions are easily resolved by reading NRS 108.2457(5)(d)'s disclosure
                 as a warning about the worst possible outcome for a lien claimant, rather
                 than a statement of law. This is a natural reading of the provisions, and it
                 is consistent with NRS 108.2457's legislative history and structure.
                             S3H also contends that the district court erred in allowing
                 evidence that undermined the unconditional waiver. We disagree.
                 Nevada applies the parol evidence rule to waivers. Tallman v. First Nat'l
                 Bank of Nev., 66 Nev. 248, 257, 208 P.2d 302, 306 (1949). It also applies
                 traditional exceptions to the parol evidence rule, like fraud and mistake.
                 Russ v. General Motors Corp., 111 Nev. 1431, 1438-39, 906 P.2d 718, 723
                 (1995). Here, the district court found that S3H made a mistake that led
                 the parties to agree $601,001 would settle all claims, not $440,546.64 as
                 listed on the unconditional waiver form. Therefore, the district court did
                 not abuse its discretion in allowing extrinsic evidence of a mistake to
                 contradict the terms of the unconditional waiver.    See M.C. Multi-Family

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                 Dev., L.L.C. v. Crestdale Assocs., Ltd.,   124 Nev. 901, 913, 193 P.3d 536,
                 544 (2008).
                               Finally, 5311 argues that it paid in full for ICS's waiver by
                 paying $440,546.64. The district court disagreed, as it concluded by
                 necessary implication that 5311 owed ICS $601,001 for its unconditional
                 waiver.' The district court did not err. Settlement agreements require a
                 meeting of the minds. May v. Anderson, 121 Nev. 668, 672, 119 P.3d 1254,
                 1257 (2005). Whether a meeting of the minds occurred is a factual finding
                 reviewed for substantial evidence.    Lawry v. Devine, 82 Nev. 65, 67, 410
                 P.2d 761, 762 (1966). "Substantial evidence is evidence that a reasonable
                 mind might accept as adequate to support a conclusion."        Whitemaine v.
                 Aniskovich, 124 Nev. 302, 308, 183 P.3d 137, 141 (2008).
                               Although evidence about the parties' settlement expectations
                 is conflicting, substantial evidence supports the district court's conclusion
                 that the parties agreed to a $601,001 settlement. Sal agrees that the
                 parties initially believed the final payment to ICS would be $601,001.
                 However, S3E1 characterizes the agreement as Sal paying (1) approved
                 change orders, plus (2) withheld retention, plus (3) $229,440 for ICS's $1.2
                 million claim. S3H claims, and the district court found, that a math error
                 led S311 to incorrectly believe the total amount was $601,001. Therefore,

                       "The district court found that the parties agreed to a payment of
                 $601,001 to settle ICS's claims. However, ICS signed an unconditional
                 waiver stating that S3H paid ICS $440,546.64 to waive all material
                 claims. The district court necessarily found that S311 agreed to pay
                 $601,001 because it found that "S311 did not comply with agreed terms of
                 the settlement," even though it also concluded that 5311 paid ICS
                 $440,546.64.

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                S3H's position is entirely consistent with the proposition that, at one
                point, the parties reached a global settlement agreement for $601,001.
                            Documentary evidence also supports the district court's
                finding that the parties initially agreed to a total payment of $601,001.
                An email from an S311 employee shows the "[n]egotiated final payment for
                both jobs" is $601,001. The email further directed ICS to complete an
                additional payment application to make up the difference between the
                amount tendered and the agreed $601,001. This evidence is adequate for
                a reasonable mind to reach the conclusion that the parties had a meeting
                of the minds and that meeting required S3H to pay ICS $601,001 for the
                unconditional waiver.
                ICS Is Not Entitled to Additional Damages Under NRS 624.626
                            ICS argues that S311 failed to adequately respond to ICS's
                change order requests pursuant to NRS 624.626. We disagree. NRS
                624.626 requires higher-tiered contractors to reply to change order
                requests within 30 days by either (1) issuing the requested change order,
                or (2) "[if the request for a change order is unreasonable, giv[ing] written
                notice to the lower-tiered subcontractor of the reasons why the change
                order is unreasonable." NRS 624.626(1)(e)(2). If the higher-tiered
                contractor fails to do so, "[t]he agreement price must be increased by the
                amount sought in the request for a change order." NRS 624.626(3)(a).
                            Sal responded, in writing, to ICS's request for $1,236,540
                within the allotted 30 days, as follows:
                            [a]s you are aware, our obligation to approve a
                            given [change order request] is contingent on our
                            receipt of approval and payment for such from
                            [Tishman]. As a result, until such time as
                            [Tishman] performs a comprehensive review and
                            responds to the propriety of the [change order

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                             request], we must assume and conclude that the
                             [change order request] is unreasonable under the
                             circumstances.
                 S3H's response was adequate here. ICS requested a huge sum of money
                 (indeed, $1,236,5400 substantially exceeds the $805,000 the parties
                 initially agreed to for ICS's work), and 5311 had only 30 days to respond.
                 Under such circumstances, S3EI was entitled to claim that the request was
                 unreasonable. As such, ICS cannot rely on NRS 624.626 to recover
                 damages against Sal.
                 The District Court Properly Concluded ICS Could Not Prove Most of Its
                 Claimed Damages
                             ICS contends that the district court erred in finding that it
                 proffered insufficient proof of its damages related to premium time and
                 shift work. We disagree. Generally, this court reviews a fact-finder's
                 damages decision for substantial evidence.   Wyeth v. Rowatt, 126 Nev. 446,
                 470, 244 P.3d 765, 782 (2010). "[T]he burden of establishing damages lies
                 on the injured party." Cent. Bit Supply, Inc. v. Waldrop Drilling & Pump,
                 Inc., 102 Nev. 139, 142, 717 P.2d 35, 37 (1986).
                             Here, the district court's decision to deny damages for
                 premium time and shift work is supported by substantial evidence. The
                 record does not show the number of premium hours worked, much less the
                 number worked because of 53II. The same is true for added manpower.
                 ICS relies on a payroll printout that merely shows the amounts paid to
                 workers over certain months without an itemization of regular time versus
                 premium time. The printout does not indicate which workers were added
                 to the project because of S3H's directive to add manpower. Therefore, the
                 district court properly concluded ICS's evidence did not support its claim
                 for damages.

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                             ICS also contends that the district court should have employed
                 a "total cost method" to calculate ICS's damages. "Use of this method is
                 highly disfavored by the courts, because it blandly assumes—that every
                 penney [sic] of the plaintiffs costs are prima facie reasonable, that the bid
                 was accurately and reasonably computed, and that the plaintiff is not
                 responsible for any increases in cost."    Youngdale & Sons Const. Co., Inc.
                 v. United States, 27 Fed. Cl. 516, 541 (1993). Most jurisdictions allowing
                 the total cost method have adopted a four-part test to offset the
                 methodology's deficiencies. "[T]he contractor must show: (1) the
                 impracticability of proving actual losses directly; (2) the reasonableness of
                 its bid; (3) the reasonableness of its actual costs; and (4) lack of
                 responsibility for the added costs."       Seruidone Const. Corp. v. United
                 States, 931 F.2d 860, 861 (Fed. Cir. 1991).
                             Here, the district court "decline[d] in this case to adopt [the
                 total cost] approach given the documentary information which was
                 available to the parties. . . to establish the amount as sought by ICS."
                 Therefore, the district court found that ICS failed to show "the
                 impracticability of proving actual losses directly." Servidone Const. Corp.,
                 931 F.2d at 861. Substantial evidence supports the district court's finding.
                 See Weddell v. 1120, Inc., 128 Nev., Adv. Op. 9, 271 P.3d 743, 748 (2012)
                 (stating this court reviews factual findings for clear error and substantial
                 evidence); see also Wyeth, 126 Nev. at 470, 244 P.3d at 782. Our review of
                 the record supports the district court's conclusion that it was not
                 impracticable for ICS to prove its damages directly. ICS required its
                 workers to fill out detailed and itemized time cards for payroll, but these
                 documents were apparently never submitted to the district court. The
                 payroll information admitted into evidence does not show premium time or

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                  shift work. Evidence that could have been synthesized into useful
                  information—like daily job reports—was left in raw form. Therefore, we
                  will not disturb the district court's finding that the total cost approach is
                  inappropriate here.
                  Substantial Evidence Supports the District Court's $51,415.48 Award to
                  ICS
                              S3H argues that the district court erred in awarding ICS a
                  substantial portion of its $51,415.48 in damages because S311 paid ICS
                  that money long before trial. Although the record shows conflicting
                  evidence, we ultimately conclude that the district court's award is
                  supported by substantial evidence.    See Wyeth, 126 Nev. at 740, 244 P.3d
                  at 782; see also Weddell, 128 Nev., Adv. Op. 9, 271 P.3d at 748.
                              ICS and 83H both rely on man-made spreadsheets purporting
                  to summarize amounts that either were or were not paid to ICS. The
                  district court was in a unique position to determine which document was
                  more credible and concluded that the documents supporting a $51,415.48
                  award were accurate. The district court's decision is supported by the fact
                  that the credited documents purported to be more recent. Additionally,
                  ICS's president testified that the credited spreadsheets summarized
                  unpaid, completed work that was beyond the scope of the parties' original
                  agreement. Despite conflicting evidence, S3H has failed to show that the
                  district court's finding was clearly erroneous or unsupported by
                  substantial evidence.
                  ICS's Mechanic's Lien Claim and Unjust Enrichment Claim Do Not Fail as
                  a Matter of Law
                              S3H claims that ICS's mechanic's lien claim fails because it
                  purported to secure expenses for premium time and shift work, and the
                  district court did not award ICS damages for those particular costs.
                  Again, we disagree. Lien claimants can seek compensation for work,
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                    material, or equipment provided to any improvement. NRS 108.222(1).
                    ICS's Notice of Mechanic's Lien and complaint state that it seeks payment
                    for unpaid work, materials, and equipment. Therefore, S3H's contention
                    is meritless.
                                    Sal also contends that it was not unjustly enriched by ICS's
                    work. This argument was not sufficiently developed during briefing and
                    oral argument; therefore, we decline to rule on it.           See Edwards v.
                    Emperor's Garden Rest., 122 Nev. 317, 330 n.38, 130 P.3d 1280, 1288 n.38
                    (2006) (stating this court need not consider claims that are not cogently
                    argued or supported by relevant authority).
                    The District Court's Attorney Fees Awards Lack Sufficient Detail
                                    ICS contends that there was no discernable legal basis for the
                    district court to award attorney fees to 5311. We agree. "The district court
                    may award attorney fees only if authorized by a rule, contract, or statute."
                    Barney v. Mt. Rose Heating & Air Conditioning, 124 Nev. 821, 825, 192
                    P.3d 730, 733 (2008). This court reviews the district court's award for
                    abuse of discretion.     Id. A district court may abuse its discretion when
                    awarding attorney fees without "sufficient reasoning and findings in
                    support of its ultimate determination."         Id. at 829, 192 P.3d at 736.
                    (quoting Shuette v. Beazer Homes Holdings Corp., 121 Nev. 837, 865, 124
                    P.3d 530, 549 (2005)). There is no apparent statutory or contractual basis
                    for S3H to recover attorney fees.      See NRS 108.2275(6), NRS 108.237(3).
                    Therefore, the district court abused its discretion and this court must
                    reverse and remand the issue of Sal's attorney fees award.
                                    Second, the parties dispute whether the district court properly
                    reduced ICS's attorney fees award. We find nothing in the record showing
                    that the district court reduced ICS's award, much less why. Therefore, the

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                 district court abused its discretion by failing to provide a sufficient
                 explanation of its ultimate attorney fees award to ICS. As such, we
                 reverse and remand ICS's attorney fees award for a more detailed
                 determination. 2
                             Accordingly, we
                             ORDER the judgment of the district court AFFIRMED IN
                 PART AND REVERSED IN PART AND REMAND this matter to the
                 district court for proceedings consistent with this order.

                                                         eUtA
                                                       Parraguirre

                 I concur:

                                                  J.
                 Douglas

                 cc: Hon. Elizabeth Goff Gonzalez, District Judge
                      Stephen E. Haberfeld, Settlement Judge
                      Gordon & Rees, LLP
                      Gordon Silver
                      Eighth District Court Clerk

                       2S3H also contends that NRS 17.115 and NRCP 68 bar ICS from
                 recovering attorney fees while also making S3H eligible to recover such
                 fees. Even if true, this court must reverse and remand the issue of
                 attorney fees because the district court's order contains insufficient detail
                 for meaningful review. Therefore, we do not reach this argument.

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                    CHERRY, J., dissenting:
                                I disagree with my colleagues in the majority wherein they
                    affirmed the district court order awarding Insulation Contracting Supply
                    (ICS) $51,415.48 after a bench trial.
                                I agree with S3H that• ICS waived all material claims by
                    signing an unconditional waiver and accepted payment and that it was
                    error for the district court to decline to enforce that waiver.
                                The real issue is whether ICS was paid in full when it
                    accepted $440,546.64 from S3H.
                                The district court necessarily found that 53H agreed to pay
                    ICS $601,001 by means of a settlement. However, it seems doubtful that
                    there was a meeting of the minds due to the fact that the parties'
                    settlement expectations were conflicting and the sum determined by the
                    district court was by "necessary implication" rather than by factual
                    analysis.
                                 There also appears to be a lack of credibility on the part of
                    ICS. ICS had requested $1,236,540 from S3H due to change orders. This
                    damage claim was denied by the district court. The district court held
                    that ICS proffered insufficient proof of its damages related to premium
                    time and shift work. There is no doubt that the district court did not give
                    any credence to ICS's extravagant damages claim for premium time and
                    shift work. This makes the damage owed to ICS of $51,415.48 suspect.
                    In an attempt to garner more damages from S3H, ICS was definitely not
                    candid with the district court and therefore should not be awarded any
                    further damages than the $440,546.64 already paid by 53H.
                                 For these reasons I respectfully dissent.

                                                            Ch24                      ,   J.
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