Court Opinion

ID: 9948840
Source: CourtListenerOpinion
Date Created: 2024-03-08 00:08:45.203269+00
Date Added: 2024-06-11T14:26:05.565392
License: Public Domain

140 Nev., Advance Opinion 11
                        IN THE SUPREME COURT OF THE STATE OF NEVADA

                 LAMONT'S WILD WEST BUFFALO,                              No. 85056
                 LLC,
                 Appellant,
                 vs.                                                           LE
                 NATHAMAL TERRY,
                 Respondent.
                                                                        Eal
                                                                      CLEM'
                                                                     By
                                                                          C'   I.;EPUTY 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. LePonie, 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.
                Brunsonbuilt 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 (internal 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). If a 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. Eighth 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
                compliance with the procedure explicitly mandated by the Nevada Rules of
                Civil Procedure.'
                The district court improperly denied LaMont's request for attorney fees u,nder
                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. R.J. Reynolds Tobacco Co. v. Eighth Jud. Dist. Ct., 138 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

                      1 We 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 rnechanism 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 rnay 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.

                                                                         •     J.
                                                   Herndon

                We concur:

                                              J.
                Lee

                Parraguirre

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