Court Opinion

ID: 7374842
Source: CourtListenerOpinion
Date Created: 2022-07-28 17:07:43.982904+00
Date Added: 2024-06-11T16:21:03.503194
License: Public Domain

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

                 AARON LEIGH-PINK; AND TANA                           No. 82572
                 EMERSON,
                 Appellants,
                 vs.                                                       LEt
                 RIO PROPERTIES, LLC,
                 Respondent.

                            Certified question under NRAP 5 concerning the scope of
                damages under common-law fraudulent concealment and statutory
                consumer fraud claims.       United States Court of Appeals for the Ninth
                Circuit; Ronald M. Gould and Ryan D. Nelson, Circuit Judges, and Brian
                M. Cogan, District Judge.'
                            Question answered.

                Law Office of Robert A. Waller, Jr., and Robert A. Waller, Jr., Cardiff-by-
                the-Sea, California,
                for Appellants.

                Cozen O'Connor and Richard Faina, New York, New York; Cozen O'Connor
                and F. Brenden Coller, Philadelphia, Pennsylvania; Cozen O'Connor and
                Karl O. Riley, Las Vegas; Lemons, Grundy & Eisenberg and Robert L.
                Eisenberg, Reno,
                for Respondent.

                Gesund & Pailet, LLC, and Keren E. Gesund, Las Vegas,
                for Amici Curiae Public Citizen, National Association of Consumer
                Advocates, National Consumer Law Center, and Public Justice.

                     'The Honorable Brian M. Cogan, United States District Judge for the
                Eastern District of New York, sitting by designation.
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                       ;Jones Lovelock and Stephen A. Davis and Marta D. Kurshumova, Las
                       Vegas,
                       for Amicus Curiae Legal Aid Center of Southern Nevada, Inc.

                       BEFORE THE SUPREME COURT, EN BANC.

                                                         OPINION

                       By the Court, STIGL1CH, J.:
                                   This case comes to us as a certified question under NRAP 5 from
                       the United States Court of Appeals for the Ninth Circuit. The Ninth Circuit
                       asks us to determine whether a plaintiff has suffered damages for purposes
                       of common-law fraudulent concealment and NRS 41.600 consumer fraud
                       claims if the defendant's actions caused the plaintiff to purchase a product
                       or service the plaintiff would otherwise not have purchased; even if that
                       product or service's value was at least equal to what the plainti.ff paid.
                                   In this opinion, we conclude that a plaintiff who receives the
                       true value of' the goods or services purchased has not suffered d.arnages
                       under theories of common-law fraudulent concealment .or NRS 41.600.
                                                     BACKGROUND
                                   We accept the facts of the underlying case as stated in th.e
                       certification order_ See In re Fontainebleau Las Vegas Holdings, LLC 127
                       Nev. 941, 956, 267 P.3d 786, 795 (2011). Appellants Aaron Leigh-Pink and
                       Tana Emerson stayed at respondent Rio Properties, LLC's Rio All-Suite
                       Hotel & Casino in 2017. The Rio comped appellants' room costs but charged
                       appellants a daily $34 resort fee to access telephones, computers, and the

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                           fitness room.2 Although the Rio had previously received a letter from the
                           Southern Nevada Health District informing it that two guests had
                           contracted Legionnaires' disease and informed past guests of the
                           contamination, the Rio did not share this information with incoming guests,
                           including appellants.
                                       Asserting that they should have been informed of the potential
                           for exposure, appellants brought a class action lawsuit in Clark County
                           District Court, alleging, as relevant here, fraudulent concealment and
                           consumer fraud claims under NRS 41.600. Appellants did not contract
                           Legionnaires' disease, nor did the legionella bacteria impede their access to
                           the phones, computers, or fitness room included in the resort fees; instead,
                           they based their claims on the Rio's failure to disclose the presence of the
                           legionella bacteria and sought to recover their resort fees. The matter was
                           removed to federal court. The federal district court disrnissed the action,
                           determining that the appellants suffered no damages. It concluded that the
                           resort fees did not amount to damages because appellants received access
                           to the amenities the fees covered and thus had received the "benefit of their
                           bargain." Ames v. Caesars Entm't Corp., No.: 2:17-cv-02910-GMN-VCF,
                           2019 WL 11794277, at *2 (D. Nev. Nov. 26, 2019) (internal quotation marks
                           omitted).
                                       Appellants thereafter appealed to the Ninth Circuit, contending
                           inter alia that they would not have stayed at the Rio and would not have
                           paid the resort fee—had the Rio disciosed the legionella outbreak.. The
                           Ninth Circuit reversed in part and affirmed in part the district court's
                           dismissal of claims. See Leigh-Pink v. Rio Props., LLC, 849 Fed, App'x• 628

                                2The precise amount appellants paid per day in resort fees was
                           $34.01.
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                (9th Cir. 2021). However, it left one issue unaddressed: whether appellants
                suffered damages for purposes of their claims . for fraudulent concealment
                and consumer fraud under NRS 41.600. The Ninth Circuit conclu.ded that
                this court's caselaw was unclear on this issue and certified the question for
                this court's consideration. The question presented is this:
                                For purposes of a . fraudulent concealment claim,
                                and for purposes of a consumer fraud claim under
                                NRS 41.600, has a plaintiff suffered damages. if the
                                defendant's fraudulent actions -cauSed the plaintiff
                                to purchase a prod.uct or service that the plaintiff
                                would not otherwise have purchased, even if the
                                product or service was not worth less than what the•
                                plaintiff paid?
                Leigh-Pink v Rio Props., LW, 989.17.3d 735, 738 (9th Cir. 2021)
                                                   DISCUSSION
                We decline to rephrase.the certified question       .
                                As a factual matter, the Ninth Circuit . determined that

                ;A   ppellants received the true value of their resort fees. .Appell3..nts challenge
                this determination, arguing that the certified question should. be rephrasecl.
                to take into account their position that they did not i.n fact receive the true
                value of their fees, i.e.., that the value of the amenities covered hy their daily
                resort fee in. a hotel containing legionella bacteria was less than $34. The
                Rio contends that the scope of the certified question is limi.ted to those
                scenarios in Which the product or service received "was not worth leSs than
                what the plaintiff paid."
                                This court "is limited to a.nswering;the questions of law posecr
                by the certifying court. ProgresSii)e Gulfins. Co. v. Faehnrich; 130 Nev. 167,
                170, 327 P.3d 1061, 1063 (2014) (irite. rnal. quotation inarkS omitted). A
                certified question perthits. this court to answer "questions of law of this state

                which may be determinative of the cause then pending in the certifying

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                court." NRAP 5(a); SFR in,us. .Pool i, LLC u. Bank of N.Y. Mellon; 134 Nev.
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                483, 489 n.5. 422 P.3d 1248, 1.253 n.5 (2018). This court has the discretion
                to rephrase a certified question. Echeverria v. State, 1.37 Nev., Adv. Op. 49,
                495 P.3d 471, 474 (2021).
                            In Echeverria, the federal district court certified a question to
                this court to consider whether Nevada had waived its sovereign iminunity
                from damages liability under federal or state law in a minimum wage action
                by enacting NRS 41.031(1). id. This court elected to rephrase the certified
                question to remove the consideration of waiver -as it related to state law
                because the plaintiffs' state-law claims had already been dismissed by the
                certifying court. Id. at 475. Neglecting to do so, this court concluded, would
                have violated the prohibition against issuing advisory opinions. See id.; see
                also Capanna v. Orth, 134 Nev. 888, 897, 432 P.3d 726, 735 (2018) (noting
                that this court does not have the power to render advisory opinions).
                   •        We decline to restate the certified question as appellants
                request because doing so would improperly go beyond "answering the
                questions of law posed" by the Ninth Circuit. See Progressive Gulf, 130 Nev.
                at 170, 327 P.3d at 1063.3 Appellants challenge the Ninth Circuit's factual
                determination, which we are bound to accept. See In re Fontainebleau, 127
                Nev. at 956, 267 P.3d at 795. Furthermore, appellants have not established
                that our consideration of the certified question as framed by the Ninth
                Circuit poses any risk of rendering an. advisory opinion. See Echeverria, 137
                Nev., Adv. Op. 49, 495 P.3d at 475. We thus move on to addressing the
                certified question as posed by the Ninth Circuit.

                       3Appellants also argue that they should receive relief for unjust
                enrichment. We do not consider this claim, as it is beyond the scope of the
                certified question.
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                A plaintiff has not been, damaged for purposes of common-law fraudulent
                concealment or consumer fraud under NHS 41. 600 when they received the
                true value of the goods or services they purchased
                      Common-law fraudulent concealment
                               We first consider the common-law portion of the certified
                question: whether a fraudulent concealment claim can be sustained where

                a plaintiff has received the true value of the goods or services purchased.
                Appellants present no argument in support of answering this portion in the
                affirmative.     The Rio maintains that this court should respond in the
                negative because the act of concealment and a showing of damages are
                separate elements of a fraudulent concealment claim under the common
                law. Therefore, the Rio contends that a plaintiff seeking:to recover under a
                theory of common-law fraudulent concealment must show not only that a
                defendant concealed a material fact but also that this a.ct caused the
                plaintiff cognizable damages.
                               A plaintiff must demonstrate five elements to establish a prima
                facie case of fraudulent concealment under Nevada law:
                            (1) the defendant concealed or suppressed a
                            material fact; (2) the defendant was under a duty to
                            disclose the fact to the plaintiff; (3) the defendant
                            intentionally concealed or suppressed the fact with
                            the intent to defraud the plaintiff; that is, the
                            defendant concealed or suppressed the fact for the
                            purpose of inducing the plaintiff to act differently
                            than she would have if she had known the fact;
                            (4) the plaintiff was unaware of the fact and would
                            have acted differently if she had known of .the
                            concealed or suppressed fact; (5) and, as a result of
                            the concealment or suppression of the fact, the
                            plaintiff sustained damages.
                Dow Chem. Co. v. Mahlum, 114 Nev. 1468, 1485, 970 P.2d. 98, 110 (1998),
                overruled in part on other grounds by GES, Inc. v. Corbitt, 117 Nev. 265, 21
                P.3d 11 (2001). This court has explained that
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                                        The measure of damages for fraudulent
                                 misrepr&ientation can be determined in one of two
                                 ways. The first allows the d.efrauded party to
                                 recover the henefit-of-his-bargain, that is, the value
                                 of what he would. have if the representations. were
                                 true, less what he had received. The second allows
                                 the defrauded party to recover only what he has lost
                                 out-of-pocket, that is, the difference between what
                                 he gave and what he actually received.
                      Randono u. Turk, 86 Nev. 123 130, 466 P.2d 218, 222.-23 (Í970) (internal
                      quotation marks ornitt0); (Wcord Collins v: Burns,. 103 Nev. 394, .398-99,
                      741 P.2d 819, 822 (1987). 4
                                  In Collins. 'a family-owned business misrepresented its
                      profitability to prospective purchasers. 103 Nev. at 396-97, 741 P.2d at 820-
                      21. The purchasers, relying on the information provided by the family,
                      bought. the business .only to find. out that the figures they reviewed were
                      grossly inflated. Id. at 396, 741 P.2d at 820. The purchasers allegédAhat
                      the family had fraudulently misrepresented the business's financeS.• Id.
                      This court determin.ed •that the purchasers were entitled to damages
                      equaling their out-of-pocket exPenses: "the differenee between •the .ainount
                                                                              . .
                      they paid to the respondents and the actual value of the business at• the
                      time of the sale."••Id..at399, 741. P.2d at 822.   •
                                 • This court also. conSidered a fraudulent coricealment claim: in
                      Hannernan t:: 'Downer, 110 Nev. "167, 871 P.2d • 279. (1994), .There, the
                      defendant sold her home to the plaintiffs,. who later discovered that over
                      four acres of the property belonged-to the federal government. I& at 1'71,

                            4Nevada laW treats fra.udulent concealment cla.ims similarly -to
                      fraudulent misrepresentation:claims, See Poole v. Nev. Auto Dealership
                             LLC, 135 Nev. 280, 288 rt.3, 449 P.3d 479, 485 n.3 (Ct. App. 2019)
                      (holding "that failure 'CO disclose Ei fact- is equivalent to 'affirmative
                      representation of that fact's nonexistence"). "
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                871 P.2d at 281. The plaintiffs sued the defen.dant for, among other claims,
                fraudulent misrepresentation. Id. at 1.71, 871 P.2d at 282. This court
                determined that the plaintiffs were entitled to out-of-pocket damages that
                reflected the difference in the value• of the property •that the plaintiffs
                received (i.e., the relative worth of the portion of the land not owned by the
                federal government) when subtracted frorn the value of the property as it
                was represented to them. Id. at 172-73, 871 P.2d at 283.
                              Other state high courts have held that a plaintiff bringing a
                fraudulent concealment clahn must demonstrate cognizable damages. In
                Small v. Lorillard Tohacco•.Co., 720 N.E.2d 892 (N.Y. 1999), New York's
                highest court held that "an act of deception, entirely independent or
                separate from any injury, is not sufficient to state a cause of action under a
                theory of fraudulent concealment."5       Id. at 898. The consumers in Small
                alleged they would not have•bought cigarettes had they known that nicotine
                was highly addictive. Id. However, they did not attempt to recover damages
                for health issues that they may have incurred as a result of their addiction
                to cigarettes. Id. They only sought to recover the price they paid for the
                cigarettes, which the court rejected as an unavailing "deception as injury"
                theory. Id.
                              Brzoska v. Olson stands for a similar proposition as Small.
                Brzoska involved dental patients who asserted claims of fraudulent
                misrepresentation against the estate of their former dentiSt who concealed
                his HIV-positive status. 668 .A.2d 1355 (Del. 1995). These patients sou.ght
                damages for, inter alia, reirnbursement of the fees they paid to the dentist.

                      5TheSmall court also rejected the consumers' decepti.ve trade practice
                claim under New York's analog to the Nevada Deceptive Trade Practices
                Act (NDTPA) because they were not able to demonstrate actual or pecuniary
                harm. Id.
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                ld. at 1359. None of the patients contracted the HIV virus. Id. at 1367.
                Th.e Delaware Supreme Court          noted. that   recovery for fraudulent

                misrepresentation is limited to "those damages which are th.e direct and
                proximate result of the false representation consisting of the loss of bargain
                or actual out of pocket losses."      Id.   Since the plaintiffs could not

                demonstrate they were injured by the dentist's health status and because
                there was no showing that the dentist performed dental services on the
                plaintiffs in a deficient manner, the Brzoska court 'determined that the
                plaintiffs did not suffer any compensable damages. id.
                •            This survey of caselaw is clear: a common-law fraudulent
                concealment claim requires a plaintiff to demonstrate that they either did
                not receive the benefit of the bargain or show out-of-pocket losses caused by
                the defendant's alleged misrepresentation. See id.; Hanneman, 110 Nev. at
                172-73, 871 P.2d at 283; Collins, 103 Nev. at 399, 741 P.2d at 822; Small,
                720 N.E.2d at 898. An act of concealment does not, in and of itself, lead to
                a cognizable injury under the common law; instead, a corresponding
                showing that such concealment caused the plaintiff cognizable damages is
                required. See Dow Chem., 114 Nev. at 1485, 970 P.2d at 110 (establishing
                that the plaintiff must demonstrate that they sustained damages "as a
                result of the concealment or suppression" (emphasis added)); see also Srnall,
                720 N.E.2d at 898 (similar). Where a plaintiff received the value of their
                purchase, we conclude that they cannot denionstrate that they did not
                receive the benefit of their bargain or show any out-of-pocket losses, because
                the value of the goods or services th.ey received is equal to the value that
                they paid.   See Randono, 86 Nev. at 130, 466 P.2d at 222-23; see also
                Brzoska, 668 A.2d at 1367 (determining that the plaintiffs' Claim failed

                because they could not demonstrate that the defendant performed. deficient
                services). Here, because appellants received the full value of the arnenities
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                     co-v.ered by their resort fee, they did not suffer any damages. We therefore
                     answer this part of the certified question in,the negative.
                             Consumer fraud under NRS 41.600
                                  Having answered the common-law portion of the certified
                     question, we now consider whether a consumer fraud claim under NRS
                     41.600 may be sustained where a party h.as received the tru.e value of the
                     goods they purchased. We conclude that the party may not, for the reasons
                     that follow.      •
                                    This -court first locks to the plain -language of a statute when
                     interpreting a statutory provision. Clay v. Eighth Judicial Dist. Court, 129
                     Nev. 445, 451, .305 P.3d 898, 902 (2013). "When presented with a qUeStion
                     of statutory interpretation, the intent of the legislature is the controlling
                     factor . . .   .Robert E. v. Justice Court, 99 Nev. 443, 445, 664 P.2d. 957., 959
                     (1983).• Where .a sta.t.ute is unambiguoUS, the court does not go beyond its
                     plain language to divine legislative intent. id.
                                    NRS 41.600(1) provides a cause of action to victiniS of-consumer
                     fraud     it defines a deceptive trade practice as outlined in the NDTPA,
                     'codified in NRS Chapter 598, as one type of Consumer. fraud.              NRS
                     41:600(2)(e). A person who knowingly fails to diSclose -a material fact
                     related to the sale of a good or service has engaged in a deCeptive trade
                     practice. NRS 598.0923(1)(b). In a consumer fraud action, "filf the clairnant
                     is the prevailing party, the court shall award the claimant... [a]ny
                     damages that the claimant has sustained." NRS 41.600(3)(a):
                                    The plain. language of NRS 41.600(3)(a) cou:nsels this-court. to
                     conclude that' a Plaintiff who has suffered no injury has not' been damaged
                     under the statute. -G./ Clay,' 129 Nev. at• 451, 305 P.3d at 902.. NRS
                     41.600(3)(a) permits a plaintiff to recover anY - darnageS they havEj
                     „sustained." To "stistain," as in a harm, is 'No undergo; suffer." Sustain.;
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                Black's Law Dictionary (11th ed. 2019). The United States Supreme Court
                has defined damages as "the compensation which the law will award for an
                injury done." Scott v. Donald, 165 U.S. 58, 86 (1897). Combining these
                definitions, NRS 41.600(3)(a) permits the plaintiff to recover. compensation
                for the injuries they have suffered as a result of the defenda.nt's conduct.
                Where, as here, the plaintiffs assert only economic injury but have received
                the true value of their goods or services, we determine that the plaintiffs
                have not been injured and thus have not "sustained" anY damages by the
                defendant's conduct under NRS 41.600(3)(a).
                            Our reading of NRS 41.600(3)(a) also has the salutary purpose
                of coupling the statutory consumer fraud understanding of damages with
                this court's determination of damages at comnion law. See Samantar v.
                Yousuf, 560 U.S. 305, 320 (2010) ("The canon of construction that statutes
                should be interpreted consistently with the common law helps us interpret
                a statute that clearly covers a field formerly governed by the common law.")
                To be sure, "[s]tatutory offenses that sound in fraud are separate and
                distinct from common law 'fraud." Betsinger v. D.R. Horton, inc., 126 Nev.
                162, 166, 232 P.3d 433, 436 (2010). And "the NDTPA is a remedial statutory
                scheme" that should be afforded a liberal construction. See Poole, 135 Nev.
                at 286-87, 449 P.3d at 485; Welfare Div. of State Dep't of Health, Welfare &
                Rehab. v. Washoe Cty. Welfare Dep't, 88 Nev. 635, 637, 503 P.2d 457, 458
                (1972).   But such a liberal *constructiOn must be faithful tö the first
                principles of statutory interpretation. And so where, as here, the plain
                language' of a statutory term is in accord with the term's definition at
                common law, we elect to interpret them similarly.

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                            The Ninth Circuit draws our attention to the United States
                District Court for the District of Nevada's decision in Cruz v. Kate Spade &
                Co., that reached a contrary result. No.: 2:19-cv-00952-APG-BNW, 2020
                WL 5848095 (D. Nev. Sept. 30, 2020). While Cruz is merely persuasive,
                rather than binding authority, we take this opportunity to consider it here.
                Cf. Lagares v. Camdenton R-III Sch. Di,st., 68 S.W.3d 518, 528 (Mo. Ct. App.
                2001) (determining that federal cases interpreting Missouri law are
                persuasive); Stanley v. Reef Sec., Inc., 314 S.W.3d 659, 667 n.4 (Tex. App.
                2010) (affirniing the same proposition under Texas law).
                            Cruz held that a plaintiffs claim under NRS 41.600 may
                survive a motion to dismiss even when they received the true value of the
                goods they purchased. 2020 WL 5848095, at *5. The plaintiff in Cruz
                alleged that Kate Spade listed items on sale, when in actuality the items
                were never sold for the reference price listed on the clothing tags. Id. The
                plaintiff contended "that she did not get the deal she thought she was
                getting" and that she would not have purcha.sed the items if she had "known
                their true market value." Id. at *1. However, the plaintiff did not allege
                that the items she purchased were worth less than what she paid. Id. at *5.
                The district. court determined that the plaintiff had sufficiently alleged
                harm to survive a motion to dismiss because the plaintiff "alleged she would
                not have purchased the items but for the reference pricing." Id. It further
                noted that a consumer does not have to allege that "her items are worth less
                than what she paid for them . . . to survive a motion to dismiss." Id.
                            Cruz is not on point. It did not analyze NRS 41.600(3)(a) and
                merely relied on NRS 41.6'00M's classification of a "victim'? to reach its
                holding. See Cruz, 2020 WL 5848095, at *5. Cruz therefore did not consider
                the meaning of "sustained" and "damages" as used in NRS 41.600(3)(a), and

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                so its applicability in assisting this court to interpret these terms is limited.
                To the extent Cruz would counsel a different result here, we reject it for the
                reasons stated above.     As a result, our analysis is unchanged, and we
                respond to the certified question's second inquiry in the negative.6
                                                   CONCLUSION
                      We answer this certified question as follows: a plaintiff is not
                damaged for purposes of a common-law fraudulent concealment claim or an
                NRS 41.600 consumer fraud claim when they receive the true value of the
                good or service purchased.
                                                                 6.-LS2               J.
                                                      Stiglich

                     oncur:

                                                                                           , J.
                Parraguirre                                  Hardesty
                              o                                           o

                                                                                           , J.
                                                             Silver

                                            , J.                                            J.
                Pickering                                    Herndon

                      6Many   other jurisdictions have understood their analogs to the
                NDTPA similarly. See, e.g., Rule v. Fort Dodge Animal Health, Inc., 607
                F.3d 250, 253 (1st Cir. 2010) (concluding that a consumer was not damaged
                under Massachusetts law where she could not demonstrate economic
                damages); Mewhinney v. London Wineman, Inc., 339 S.W.3d 177, 181 (Tex.
                App. 2011) (establishing that the appropriate measure of damages under
                Texas's analog to the NDTPA is "the difference between the amount the
                company paid and the value it received").
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