Court Opinion

ID: 6328521
Source: CourtListenerOpinion
Date Created: 2022-03-31 10:06:20.4485+00
Date Added: 2024-06-11T09:22:41.881092
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF NEVADA

 JSJBD CORP, D/B/A BLUE DOG'S PUB,                       No. 80849
 A NEVADA CORPORATION; STUART
 VINCENT, AN INDIVIDUAL; JEFFREY
 B. VINCENT, AN INDIWDUAL; AND
 JEFF WHITE, AN INDIVIDUAL,                                  FILED
 Appellants/Cross-Respondents,
 vs.                                                         MAR 3 O 2022
 TROPICANA INVESTMENTS, LLC, A                            ELIZABETH A. BROWN
 CALIFORNIA LIMITED LIABILITY                           CLERK OF SUPREME COURT
                                                        BY
 COMPANY,                                                     DEPUTY CLERK
 Respondent/Cross-A* o

      ORDER AFFIRMING IN PART, REVERSING IN PART, AND
                       REMANDING

            This is an appeal and cross-appeal from a final judgment and
an order awarding attorney fees and costs in a contract action. Eighth
Judicial District Court, Clark County; Elizabeth Goff Gonzalez, Judge.
            Appellants entered into a lease agreement for a tavern with
respondent Tropicana Investments, LLC (Tropicana), which included
options to extend the lease, without stating the amount of rent for the option
period. Appellants sought to exercise their second option to extend and
remained on the property while negotiating terms and paying rent
consistent with earlier negotiations. Twenty-seven months later, Tropicana
served a thirty-day notice to quit on the basis that appellants had no
enforceable option to extend and both parties filed actions. Following a
bench trial, the district court found that the parties had reached an
agreement and that the agreed-upon rent schedule was reasonable. The
district court determined that appellants prevailed on each of their claims

      'We recount the facts only as necessary for our disposition.
                     and awarded attorney fees and costs. The district court also determined
                     that Tropicana prevailed on its counterclaim regarding damages for
                     underpayments of rent and was similarly awarded its fees and costs both
                     as a prevailing party and under the lease agreement.2 These appeals
                     followed.
                                 Appellants first argue that the district court erred when it
                     determined the parties previously reached an agreement regarding rent.3
                     We disagree. "Whether a contract exists is [a question] of fact, requiring
                     this court to defer to the district court's findings unless they are clearly
                     erroneous or not based on substantial evidence." May v. Anderson, 121 Nev.
                     668, 672-73, 119 P.3d 1254, 1257 (2005). Having reviewed the parties briefs
                     and the record on appeal, we conclude that appellants' subsequent conduct
                     belies their position. See Certified Fire Prot., Inc. v. Precision Constr., 128
                     Nev. 371, 378, 283 P.3d 250, 255 (2012) (providing that the terms which are
                     material for a given situation "depends on the agreement and its context
                     and also on the subsequent conduct of the parties, including the dispute
                     which arises and the remedy sought') (quoting Restatement (Second) of
                     Contracts § 131 cmt. g (1981)). There is uncontroverted evidence that the
                     parties' counsel discussed lease terms and confirmed a rent schedule that

                           2Section 24 of the lease provided for attorney fees: "[i]n the event the
                     Landlord finds it necessary to retain an attorney in connection with the
                     default by the Tenant in any of the agreements or covenants contained in
                     this Lease, Tenant shall pay reasonable attorney's [sic] fees to said
                     attorney."

                           31nlight of our conclusion that the district court properly determined
                     a reasonable rental rate based on documentary evidence of the parties'
                     intent, we need not reach appellants' argument that the district court
                     should have determined the rent based on ascertainable market conditions.
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                        appellants counsel proposed in August 2016.4 Appellants' rent payments
                        are consistent with this schedule, and appellants provided no indication of
                        protest for nearly three years. Thus, there was substantial evidence
                        supporting the district court's determination that the parties previously
                        agreed to the amount of rent and the district court did not err when it
                        determined that an enforceable agreement existed. Accordingly, we affirm
                        the district court's order in this regard.
                                    Next, Tropicana asserts that the district court abused its
                        discretion in calculating the award of damages because it incorrectly
                        calculated the amount appellant owed. We agree. "A district court is given
                        wide discretion in calculating an award of damages and an award will not
                        be disturbed on appeal absent an abuse of discretion." Asphalt Products
                        Corp. v. All Star Ready Mix, Inc., 111 Nev. 799, 802, 898 P.2d 699, 701
                        (1995). However, we will reverse an award of damages not supported by
                        substantial evidence. Id. at 801-03, 898 P.2d at 700-02. Here, the district
                        court stated that appellants only accrued a monthly deficiency of $3,250 for
                        four months, yielding a total amount of $13,000. However, substantial
                        evidence in the record indicates that appellants underpaid rent and
                        deviated from the parties' agreed-upon rent schedule from September 1,
                        2018, through November 2019, a period of 15 months, and that the parties
                        agreed that rent would increase by $210 annually. The parties' agreed-upon
                        schedule indicates that appellants accrued a monthly deficiency of $210 for

                              4We further conclude that appellant's argument that a letter it
                        received from Tropicana amounted to a counteroffer is unpersuasive
                        because Tropicana gave no indication that it disagreed or intended to
                        continue discussions as to rent, the only remaining material term. See Reno
                        Club, Inc. v. Young Inv. Co., 64 Nev. 312, 330, 182 P.2d 1011, 1019 (1947)
                        (determining that "until all the terms of [a] proposed lease had been
                        negotiated, developed and agreed upon, there was no completed contract.").
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                     a period of 11 months, followed by a $3,460 deficiency for August 2019, and
                     then a monthly deficit of $3,670 for a subsequent period of three months,
                     for a total deficiency of $16,780. Thus, we conclude that the district court
                     erroneously calculated the amount of underpaid rent and abused its
                     discretion by improperly awarding damages of $13,000. Accordingly, we
                     reverse the portion of the judgment awarding Tropicana damages for
                     $13,000 and remand this matter to the district court with instructions to
                     enter judgment in Tropicana's favor for $16,780.
                                 Finally, we turn to the awards of attorney fees and costs.
                     Absent an abuse of discretion, a district court's award of attorney fees and
                     costs will not be disturbed upon appeal. Nelson u. Peckharn Plaza Pships,
                     110 Nev. 23, 26, 866 P.2d 1138, 1139-40 (1994). Having reviewed the
                     parties arguments and the record on appeal, we conclude that the district
                     court erred in determining that appellants were a prevailing party for
                     purposes of NRS 18.010(2)(a) and NRS 18.020. Here, the district court
                     declared judgment in Tropicana's favor on its breach of lease claim for
                     $13,000, and ordered reimbursement of $4,578 to appellants. The district
                     court, however, did not offset the awards to determine the prevailing party.
                     Parodi v. Budetti, 115 Nev. 236, 241, 984 P.2d 172, 175 (1999) (in cases
                     where separate and distinct suits have been consolidated into one action,
                     the trial court must offset all awards of monetary damages to determine
                     which side is the prevailing party"). Because Tropicana received the greater
                     net damage award of $8,422 (now $12,202), it was the prevailing party.
                     Thus, the district court abused its discretion in awarding appellants
                     attorney fees and costs as a prevailing party.5 However, we conclude that

                           5We  decline to consider whether attorney fees may be awarded to
                     appellants as special damages related to the common area maintenance
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the district court properly determined that Tropicana was entitled to
recover an award of reasonable attorney fees under NRS 18.0] 0(2)(a) and
under Section 24 of the lease because appellants had breached the lease by
not making timely rent payments. See Davis v. Beling, 128 Nev. 301, 321,
278 P.3d 501, 515 (2012) (providing that "Marties are free to provide for
attorney fees by express contractual provisione). Accordingly, we conclude
that the district court abused its discretion in awarding appellants attorney
fees and costs, but the district court did not abuse its discretion in awarding
Tropicana attorney fees and costs. Therefore, we reverse the portion of the
judgment awarding appellants attorney fees and costs but affirm the
portion of the judgment awarding Tropicana attorney fees and costs.
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.6

                                                     •

                                                                   j.
                                    Cadish

                                    Herndon

(CAM) expense portion of the litigation because the district court did not
award appellants attorney fees as special damages and appellants did not
challenge the district court's failure to do so on appeal. See In re Arnerco
Derivative Litig., 127 Nev. 196, 227 n.12, 252 P.3d 681, 703 n.12 (2011)
(explaining that arguments not addressed in appellate briefmg, are not
properly before this court).

      6In
        light of our decision, we do not address the parties remaining
arguments.

                                      5
PICKERING, J., concurring in part and dissenting in part:

            I agree with the decision to affirm the district court's award of
damages for underpaid rent to Tropicana and against JSJBD and that,
when calculated correctly, this award works out to $16,780 before offsetting
JSJBD's compensatory damage award for overpaid common area
maintenance charges (CAMs). I also agree that the district court erred in
awarding both sides their full attorney fees. However, I disagree that this
court is in a position to redetermine fees in the first instance and would
instead vacate and remand for the district court to do so.
            Under Parodi v. Budetti, 115 Nev. 236, 241, 984 P.2d 172, 175
(1999), it was incumbent on the district court to first "offset all awards of
monetary damages to determine which side is the prevailing party," and
then to determine, as a matter of discretion, whether to award that side
reasonable attorney fees. Because Tropicana received the greater net
damage award of $8,422 (now $12,202), it was the prevailing party under
Parodi for purposes of deciding whether to award fees under NRS
18.010(2)(a). Thus, the district court abused its discretion in awarding
JSJBD attorney fees and costs as a prevailing party under NRS 18.010(2)(a)
and NRS 18.020. That said, the award of attorney fees under NRS
18.010(2)(a) is discretionary with the district court—it provides that "the
court may make an allowance of attorneyi] fees to a prevailing party.. . .
[w]hn the prevailing party has not recovered more than $20,000"
(emphasis added), not that it must.        With the fee award to JSJBD
eliminated, we do not know and are not in a position to decide in the first
instance whether, as a matter of discretion, the award of nearly full attorney
fees to Tropicana would stand.

                                      6
            There are other loose ends for the district court to tie up as to
attorney fees, too: In its decision, the district court separately determined
that JSJBD was entitled to recover fees and costs related to the CAM
expense portion of the litigation as "special damages," see Sandy Valley
Assocs. v. Sky Ranch Estates Owners Ass'n., 117 Nev. 948, 958, 35 P.3d 964,
970 (2001)(recognizing that "actions for declaratory or injunctive relief may
involve claims for attorney fees as damages when the actions were
necessitated by the opposing party's bad faith conduct', overruled on other
grounds by Horgan u. Felton, 123 Nev, 577, 586, 170 P.3d 982, 988 (2007),
and that Tropicana had a separate basis on which to recover fees under
section 24 of the lease agreement.1 But because the district court awarded
JSJBD the whole of its attorney fees under NRS 18.010(2)(a), it did not
address Tropicana's opposition to a partial award of fees as special damages
under Sandy Valley and its progeny. Nor did the court decide, if the fees
associated with the CAM claim were recoverable as special damages, what
their amount would be. Although the majority faults JSJBD for not
separately appealing this sub-issue, it had no need to do so—JSJBD won
the whole of its fees in district court and was entitled to defend Tropicana's
cross-appeal as to its fees both in whole and in part.
            The district court also gave short shrift to JSJBD's objection to
Tropicana claiming the whole of its attorney fees under paragraph 24 of the
lease. But see 1 Stuart M. Speiser, Attorneys' Fees § 9:11 (3d ed. Supp. 2021)
(noting that "fee-shifting provisions in contracts will be strictly construed,

      'Section 24 of the lease provided for attorney fees: "[i]n the event the
Landlord finds it necessary to retain an attorney in connection with the
default by the Tenant in any of the agreements or covenants contained in
this Lease, Tenant shall pay reasonable attorney's [sic] fees to said
attorney."

                                      7
                    and that a contract must expressly permit the recovery of attorneys fees in
                    the pertinent circumstance in order for such fees to be recovered. For
                    example, a stipulation for payment of attorneys' fees in an instrument has
                    been held to relate only to collection for default on the instrument, and will
                    not be implemented in other controversies between the parties.") (footnotes
                    omitted); cf. Pandelis Const. Co. v. Jones-Viking Assocs., 103 Nev. 129, 131
                    n.3, 734 P.2d 1236, 1238 n.3 (1987) (construing attorney fee clause in a
                    contract literally, not expansively). While I reject JBSJD's argument that
                    Tropicana had to prevail on all claims to recover under section 24 of the
                    lease, I am not convinced that section 24 authorized the award of all of the
                    fees Tropicana incurred in this case.
                                The district court's error in awarding full attorney fees to both
                    sides left these and related issues unanswered. Rather than undertake this
                    fact-intensive analysis in the first instance on appeal, I would vacate and
                    remand as to the fee and cost awards, and to that extent, I respectfully
                    dissent.

                                                                                      J.

                    cc:   Chief Judge, Eighth Judicial District Court
                          Jay Young, Settlement Judge
                          Lovato Law Firm, P.C.
                          Marquis Aurbach Coifing
                          Eighth District Court Clerk

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