Court Opinion

ID: 2743129
Source: CourtListenerOpinion
Date Created: 2014-10-16 18:04:25.886806+00
Date Added: 2024-06-11T09:55:38.165312
License: Public Domain

130 Nev., Advance Opinion
                       IN THE SUPREME COURT OF THE STATE OF NEVADA
                                                                                  84
                D.R. HORTON, INC., A NEVADA                          No. 59319
                CORPORATION; DHI MORTGAGE
                COMPANY, LTD., A TEXAS LIMITED
                PARTNERSHIP F/K/A CH MORTGAGE                             FILED
                COMPANY, LTD., A NEVADA LIMITED
                PARTNERSHIP,                                              OCT 1 6 2014
                Appellants/Cross-Respondents,                         CLE
                                                                         TaACiE K. UNDENIAN

                vs.                                                  BY

                STEVEN M. BETSINGER,
                Respondent/Cross-Appellant.

                           Appeal and cross-appeal from a final district court judgment
                entered on remand in a torts action. Eighth Judicial District Court, Clark
                County; Linda Marie Bell, Judge.
                           Affirmed in part, reversed in part, and remanded.

                McDonald Carano Wilson LLP and Pat Lundvall, Debbie A. Leonard, and
                Kerry St. Clair Doyle, Las Vegas,
                for Appellants/Cross-Respondents.

                Feldman Graf, P.C., and David J. Feldman and John C. Dorame, Las
                Vegas,
                for Respondent/Cross-Appellant.

                BEFORE THE COURT EN BANC.'

                      'The Honorable Ron D. Parraguirre, Justice, did not participate in
                the decision of these matters.

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                                                    OPINION
                   By the Court, CHERRY, J.:
                               This appeal arises from punitive damages proceedings on
                   remand after we issued our decision in Betsinger v. D.R. Horton, Inc.
                   (Betsinger I), 126 Nev. 162, 232 P.3d 433 (2010), a case that involved fraud
                   and deceptive trade practices in the context of a real estate purchase and
                   loan arrangement. On appeal, we consider whether the proceedings on
                   remand violated MRS 42.005(3), which requires any trier of fact who
                   determines that punitive damages are warranted to also determine the
                   amount of damages to award. Specifically, we consider whether MRS
                   42.005(3) applies in a remand situation so as to require the second jury on
                   remand to reassess whether punitive damages are warranted before that
                   jury may determine the amount of punitive damages to be awarded. We
                   conclude that NRS 42.005(3) is unambiguous in imposing this
                   requirement. Thus, when the fact-finder is limited to solely making a
                   determination regarding punitive damages, MRS 42.005(3) requires that
                   fact-finder to first determine whether punitive damages are justified—i.e.,
                   whether there is clear and convincing evidence of a defendant's
                   oppression, fraud, or malice—and then to determine the amount of
                   damages to award. Because the jury on remand in this case was
                   prevented from determining whether punitive damages were justified, we
                   reverse the district court's punitive damages award and remand for a new
                   trial. We also affirm the denial of attorney fees to D.R. Horton.
                                    FACTS AND PROCEDURAL HISTORY
                               This case arose from a failed attempt to purchase a home in
                   Las Vegas, the details of which are more fully set forth in Betsinger I, 126
                   Nev. 162, 232 P.3d 433 (2010). Briefly, respondent/cross-appellant Steven
                   Betsinger contracted to purchase a house from appellant/cross-respondent
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                 D.R. Horton, Inc., and applied for a loan to fund that purchase with D.R.
                 Horton's financing division, appellant/cross-respondent DHI Mortgage,
                 Ltd. Id. at 163, 232 P.3d at 434. After DHI Mortgage refused to fund the
                 loan at the interest rate originally offered, Betsinger canceled the
                 purchase contract. When D.R. Horton failed to return Betsinger's earnest-
                 money deposit, he sued, asserting claims for fraud and deceptive trade
                 practices based on allegations that D.R. Horton caused him to cancel the
                 purchase agreement with false assurances that his deposit would be
                 returned and that it and DHI Mortgage used a "bait and switch" tactic to
                 lure him into making the deposit in the first place. After a trial, the jury
                 found in favor of Betsinger and awarded him compensatory damages
                 against D.R. Horton and DHI Mortgage consisting of actual damages and
                 emotional distress damages, as well as punitive damages against DHI
                 Mortgage. 2 Id. at 164, 232 P.3d at 434-35.
                               All parties appealed, and we reversed the judgment as to
                 consequential damages because of Betsinger's failure to present evidence
                 of any physical manifestation of emotional distress. Id. at 166, 232 P.3d at
                 436. We accordingly reduced the compensatory damages award to the
                 amount of Betsinger's actual damages, $10,727 ($5,190 from D.R. Horton
                 and $5,537 from DHI Mortgage). Id. at 164, 167, 232 P.3d at 434, 436.
                 Because it was impossible to determine what the jury would have awarded
                 Betsinger in punitive damages against DHI Mortgage given the reduction

                       2 Thejury also awarded emotional distress damages and punitive
                 damages against another defendant, who was DHI Mortgage's branch
                 manager, for his role in the "bait and switch." Betsinger I, 126 Nev. at
                 164, 232 P.3d at 434-35. Given this court's resolution of the first appeal,
                 that defendant was not involved in the remanded proceedings

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                       in the compensatory damages award, we declined to arbitrarily reduce the
                       punitive damages amount. Instead, we concluded that "the punitive
                       damages award must be remanded for further proceedings because we
                       cannot be sure what the jury would have awarded in punitive damages as
                       a result of the substantially reduced compensatory award." Id. at 167, 232
                       P.3d at 437.
                                      On remand, questions arose as to the appropriate scope of the
                       trial in light of this court's remand instructions. Specifically, confusion
                       arose regarding whether the jury needed to first consider DHI Mortgage's
                       liability for punitive damages, or if the jury was simply to consider the
                       amount of punitive damages warranted. Ultimately, the district court
                       instructed the jury that it was to decide "what amount, if any, Mr.
                       Betsinger is entitled to for punitive damages." 3 Based on this instruction,
                       the jury returned a verdict against DHI Mortgage and in favor of
                       Betsinger with respect to punitive damages in the amount of $675,000.
                       The district court subsequently entered judgment against D.R. Horton in
                       the amount of $5,190 plus interest and denied D.R. Horton attorney fees.
                       Judgment was entered against DHI Mortgage in the amount of $5,537
                       plus interest and $300,000 in punitive damages, the total after NRS
                       42.005(1)(b)'s punitive damages cap was applied. Thereafter, D.R. Horton
                       and DHI Mortgage appealed, and Betsinger cross-appealed.

                             'We note that the requirements of NRS 42.007(1) did not need to be
                       met coming into the second trial because the first jury had previously
                       determined that DHI Mortgage had engaged in fraud and in deceptive
                       trade practices. Betsinger I, 126 Nev. at 164, 232 P.3d at 434.

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                                                    DISCUSSION
                                  Although the parties raise numerous arguments on appeal
                      and cross-appeal, this opinion need analyze only two of those arguments.
                      We first address DHI Mortgage's argument that the district court's jury
                      instruction regarding punitive damages violated NRS 42.005(3)'s "same
                      trier of fact" requirement. We then turn to whether the district court
                      should have awarded D.R. Horton attorney fees.
                      NRS 42.005(3) requires the same fact-finder to determine whether liability
                      exists for punitive damages and, if so, the amount of damages
                                  NRS 42.005 governs when punitive damages are authorized
                      and the process by which those damages are to be awarded. In particular,
                      subsection 1 authorizes punitive damages when "it is proven by clear and
                      convincing evidence that the defendant has been guilty of oppression,
                      fraud or malice." NRS 42.005(1). Subsection 3, in turn, sets forth the
                      process by which those damages are to be awarded:
                                         If punitive damages are claimed pursuant to
                                  this section, the trier of fact shall make a finding
                                  of whether such damages will be assessed. If such
                                  damages are to be assessed, a subsequent
                                  proceeding must be conducted before the same trier
                                  of fact to determine the amount of such damages to
                                  be assessed.
                      NRS 42.005(3) (emphases added). On appeal, DHI Mortgage asserts that
                      NRS 42.005(3) unambiguously provides that a single jury must determine
                      both a defendant's liability for punitive damages—i.e., whether clear and
                      convincing evidence demonstrates that the defendant is guilty of
                      oppression, fraud, or malice—and the amount of any award. Thus,
                      according to DHI Mortgage, the district court erred as a matter of law by
                      permitting the second jury to consider only the amount of damages to be
                      awarded. In response, Betsinger contends that NRS 42.005(3)'s "same
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                 trier of fact" requirement should not apply when a case has been
                 remanded. In particular, Betsinger contends that DHI Mortgage's reading
                 of NRS 42.005(3) is untenable, as it would essentially entitle DHI
                 Mortgage to a new trial on its underlying liability for fraud, since the jury
                 considering whether punitive damages are warranted would necessarily
                 need to find that DHI Mortgage was guilty of oppression, fraud, or malice. 4
                             In interpreting this statute de novo, we will not look beyond
                 the plain language when it is clear on its face. Pub. Agency Comp. Trust v.
                 Blake, 127 Nev. „ 265 P.3d 694, 696 (2011); Pankopf v. Peterson,
                 124 Nev. 43, 46, 175 P.3d 910, 912 (2008). Here, the plain language of
                 NRS 42.005(3), specifically the phrase "before the same trier of fact,"
                 indicates that a single judge or jury must determine both whether punitive
                 damages should be assessed and, in a subsequent proceeding, the amount
                 of such damages. NRS 42.005(3). Because this language is plain and
                 clear, we decline to delve into legislative history. Pankopf, 124 Nev. at 46,
                 175 P.3d at 912. As for Betsinger's contention that NRS 42.005(3)
                 necessarily leads to a retrial of the entire action, we disagree. In many
                 instances, such as in this case's first trial, the fact-finder who determines
                 whether compensatory damages are warranted will be the same one as
                 determines liability for and the extent to which punitive damages are

                       4Betsingeralso contends that DHI Mortgage should be barred by the
                 law-of-the-case doctrine from arguing that the trial on remand violated
                 NRS 42.005(3). "Th[is] doctrine only applies to issues previously
                 determined, not to matters left open by the appellate court." Wheeler
                 Springs Plaza, LLC v. Beemon, 119 Nev. 260, 266, 71 P.3d 1258, 1262
                 (2003). To the extent that Betsinger is contending that we determined in
                 Betsinger I that a new trial was warranted on the amount of punitive
                 damages only, we do not read Betsinger I as having made such a narrow
                 determination.

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                warranted. Nevertheless, "Nile issue of exemplary damages is separate
                and distinct from that of actual damages, for they are assessed to punish
                the defendant and not to compensate for any loss suffered by the plaintiff,"
                Brewer v. Second Baptist Church of L.A.,     197 P.2d 713, 720 (Cal. 1948),
                and thus, we think, they may be tried separately on remand. Nothing in
                the statute purports to govern the procedure on remand, and there is no
                reason why issues concerning compensatory damages, already affirmed by
                this court in Betsinger I, must be relitigated to determine issues
                concerning the punitive damages sought. 5 See Wickliffe v. Fletcher Jones
                of Las Vegas, Inc., 99 Nev. 353, 357, 661 P.2d 1295, 1297 (1983)
                (recognizing, without discussing any statutory language, that in a retrial
                on remand based on failure to give a punitive damages instruction, a
                litigant should not have to readdress issues concerning liability and
                amount of compensatory damages when those issues were not challenged
                on appeal), superseded by statute on other grounds as stated in
                Countrywide Home Loans, Inc. v. Thitchener, 124 Nev. 725, 741 n.39, 742-
                43, 192 P.3d 243, 253 n.39, 254-55 (2008).
                            But where, as in this case's second trial, the fact-finder is
                tasked only with making a determination regarding punitive damages,
                NRS 42.005(3) unambiguously requires that fact-finder to first determine
                whether punitive damages are warranted—i.e., whether there is clear and
                convincing evidence of a defendant's oppression, fraud, or malice—before
                determining the amount of punitive damages to award. Thus, we agree

                      5VVhile we agree with Betsinger that, in some instances, there will
                be an overlap of evidence presented in an initial trial and in a second trial
                ordered on remand for punitive damages only, we believe that this is the
                only reasonable application of NRS 42.005(3)'s unambiguous requirement.

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                with DHI Mortgage that the district court's interpretation and application
                of our remand instruction in Betsinger I deprived it of its right under NRS
                42.005(3) to have the jury determine whether punitive damages were
                warranted. Even if the district court's instruction that the jury was to
                determine "what amount, if any, Mr. Betsinger is entitled to for punitive
                damages" may have permitted the jury to determine that $0 was an
                appropriate award, this instruction did not require the jury to make the
                threshold determination of whether punitive damages could be awarded.
                We emphasize that, under NRS 42.005(3), the trier of fact who determines
                the amount of punitive damages to be awarded must also make the initial
                determination of whether punitive damages are warranted.
                Attorney fees
                                Finally, we consider D.R. Horton's separate appeal of the
                district court's order denying its post-remittitur motion for attorney fees
                as untimely. We conclude that the district court did not abuse its
                discretion in declining to award attorney fees under the offer of judgment
                rule. Certified Fire Prot., Inc. v. Precision Constr., Inc., 128 Nev. ,
                283 P.3d 250, 258 (2012); Farmers Ins. Exch. v. Pickering, 104 Nev. 660,
                662, 765 P.2d 181, 182 (1988). In addition to reversing and remanding for
                determination of punitive damages as to DHI Mortgage, Betsinger I
                reduced the compensatory damages award against D.R. Horton to an
                amount less than its pretrial offer of judgment to Betsinger. 126 Nev. at
                167, 232 P.3d at 436. However, after this reduction triggered D.R.
                Horton's ability to seek attorney fees, D.R. Horton waited nine months to
                file a motion for attorney fees, and did so the night before the second trial
                was to commence against DHI Mortgage. Thus, we cannot conclude that
                the district court abused its discretion in determining that D.R. Horton's

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                nine-month delay was unreasonable, and we affirm the district court's
                decision denying attorney fees to D.R. Horton,
                                               CONCLUSION
                              Under NRS 42.005(3), a defendant is entitled to have the same
                finder of fact who determines the amount of punitive damages to be
                awarded also make the threshold determination of whether punitive
                damages are warranted. Because that did not happen here, we reverse
                and remand for a new trial on punitive damages.°

                                                                                  J.

                                             , C.J.
                Gibbons

                ricm
                Pickering

                 At-1,44-A Ant2                 J.
                Hardesty

                Dougtas ./,

                                                J.
                Saitta

                      °Having considered all of the other issues raised by the parties, we
                conclude that they either lack merit or need not be addressed given our
                disposition of this appeal.

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