Eldan LLC v. Gordana ( 2016 )

IN THE SUPREME COURT OF THE STATE OF NEVADA
ELDAN LLC, No. 66922
Appellant/Cross-Respondent,
vs.
JOHN GORDANA, AN INDIVIDUAL, FILED
Respondent/Cross-Appellant.
JUN 2 3 2016
TRACIE K. LINDEMAN
CLERK OF SUPREME COURT
BY •
DEPUTY CLER
ORDER OF AFFIRMANCE
This is an appeal and cross-appeal from a district court final
judgment in a contract action. Eighth Judicial District Court, Clark
County; Nancy L. Allf, Judge.
Respondent/cross-appellant John Gordana partnered with a
non-party to this case to open and operate a restaurant in a commercial
space leased from appellant/cross-respondent Eldan LLC. The
restaurant's lease was for five years, and the monthly rent was $4,000
with monthly common area maintenance fees (CAMs) of $1,400. The lease
contained the following provision: "This lease agreement is contingent
upon tenant qualifying for a Liquor License Only." Gordana signed a
personal guarantee guaranteeing the payment of rent for the leased space.
Shortly after entering the lease, the restaurant stopped making monthly
payments, and Eldan evicted the restaurant and brought this suit. The
district court denied Gordana's pretrial motion to dismiss, and after a
bench trial, ruled in favor of Eldan on its breach of contract claim, but
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awarded damages only up to the time that the restaurant's temporary
liquor license expired. This appeal and cross-appeal followed.'
Gordana first asserts that the district court erred when it did
not find that Eldan's action was barred by issue preclusion. 2 Gordana
failed, however, to identify any particular issue that had been actually and
necessarily litigated in a separate action, and has not done so on appeal.
Five Star Capital Corp. v. Ruby, 124 Nev. 1048, 1055, 194 P.3d 709, 713
(2008) (identifying the elements of issue preclusion and explaining that
issue preclusion does not apply when an identical issue has not previously
been "actually and necessarily litigated" such that there was a final ruling
on the merits on the issue in the first case). Because the elements of issue
preclusion were not met, the district court did not err when it concluded
that issue preclusion did not apply. 3 Id.'Contrary to Eldan's argument, Gordana did not waive his right to
appeal from the district court's interlocutory order denying his motion to
dismiss. Consol. Generator-Nev., Inc. v. Cummins Engine Co., 114 Nev.
1304, 1312, 971 P.2d 1251, 1256 (1998) (providing that while an
interlocutory order is not independently appealable, it may be considered
in the context of an appeal from a final judgment).
2 Gordana uses the term "collateral estoppel," however, this court
previously clarified that it would use the terms "issue preclusion" instead
of "collateral estoppel," and "claim preclusion" instead of "res judicata" to
refer to the two distinct doctrines of estoppel. Five Star Capital Corp. v.
Ruby, 124 Nev. 1048, 1051, 1054, 194 P.3d 709, 711, 712-13 (2008).
3 Moreover, it appears from the parties' arguments on appeal that
the separate action was resolved by default judgment without fully
litigating the merits• of any specific issue that would be relevant to the
instant case. In re Sandoval, 126 Nev. 136, 141, 232 P.3d 422, 425 (2010)
(holding that a default judgment does not generate issue preclusion
because no issue is actually and necessarily litigated).
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Gordana next argues that the case should have been dismissed
under NRCP 19 for failure to join a necessary party. 4 Gordana, however,
has never addressed in the district court or on appeal why the non-party
should be joined if feasible under NRCP 19(a)—an essential showing for a
motion to dismiss under NRCP 19. We therefore conclude that the district
court did not err when it denied Gordana's NRCP 19 motion to dismiss.
Gordana also argues that the district court abused its
discretion when it allowed Eldan to file an untimely reply pleading to
Gordana's answer and counterclaims. We conclude that the district court
did not abuse its discretion when it allowed Eldan to file a reply. See
NRCP 6(b) (providing that a district court has discretion when considering
an untimely filing). Moreover, Gordana has not demonstrated that he was
prejudiced by the untimely reply, and indeed the district court extended to
him an extra day to present evidence to address the reply filing.
Gordana additionally argues that Eldan unreasonably
withheld consent to assign the lease. The district court, however, heard
testimony on this issue and determined that Gordana's witness was not
credible. This court will not reweigh credibility of witnesses on appeal,
and we conclude the district court did not abuse its discretion as to this
matter. Castle v. Simmons, 120 Nev. 98, 103, 86 P.3d 1042, 1046 (2004)
(providing that this court "will not reweigh the credibility of witnesses on
appeal").
4 Gordana preserved his right to raise this argument in the district
court by pleading it in his answer. NRCP 12(b)(6), (h)(2) (providing that
an objection for failure to join a necessary party may be made by
pleading).
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Finally, both parties attack on appeal the district court's
award of damages and its interpretation of the liquor license provision in
the lease. "When the facts in a case are not in dispute, contract
interpretation is a question of law, which this court reviews de novo."
Lehrer McGovern Bovis, Inc. v. Bullock Insulation, Inc., 124 Nev. 1102,
1115, 197 P.3d 1032, 1041 (2008). However, courts shall effectuate the
parties' intentions, and determining the parties' intentions is a question of
fact, which this court reviews for substantial evidence. Whitemaine v.
Aniskovich, 124 Nev. 302, 308, 183 P.3d 137, 141 (2008); Anvui, LLC v.
G.L. Dragon, LLC, 123 Nev. 212, 215-16, 163 P.3d 405, 407 (2007). A
contract term is ambiguous when it is subject to more than one reasonable
interpretation, and ambiguities will be construed against the drafter.
Anvui, 123 Nev. at 215-16, 163 P.3d at 407.
Here, the lease's liquor license requirement is ambiguous as it
does not address the consequences of the restaurant failing to obtain a
license and it does not specify which category of license is required. The
district court heard testimony about the parties' intent regarding the
liquor license contingency and why it was added to the lease, and found
that the lease excused payment after the temporary liquor license expired.
This finding is supported by the record. Whitemaine, 124 Nev. at 308, 183
P.3d at 141. Thus, when the temporary liquor license expired, the
restaurant no longer qualified for a liquor license and under the terms of
the lease, the lease was no longer in effect. 5 Anvui, 123 Nev. at 215, 163
5 We reject Eldan's argument that because Gordana did not make a
reasonable good faith effort to obtain a liquor license, he cannot rely on the
absence of a license to avoid his lease obligation. The evidence that the
continued on next page. . .
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P.3d at 407. And because the district court weighed the conflicting
evidence regarding damages, we affirm the district court's damages
award. Mort Wallin of Lake Tahoe, Inc. v. Commercial Cabinet Co., 105
Nev. 855, 856-57, 784 P.2d 954, 955 (1989) (providing that this court will
uphold an award of damages when it is supported by the record).
Accordingly, we
ORDER the judgment of the district court AFFIRMED.
, J.
Douglas
J.
Cherry Gibbons
cc: Hon. Nancy L. Allf, District Judge
Lansford W. Levitt, Settlement Judge
Chattah Law Group
Accelerated Law Group
Eighth District Court Clerk
. • . continued
restaurant's location was wholly ineligible for a permanent license was
never rebutted at trial and thus it was not Gordana's action that caused
the lease condition to remain unfulfilled. 13 Williston on Contracts § 39:8
(4th ed.) ("[T]he prevention doctrine assumes a 'but for' test: that but for
one party's conduct, . . . the condition. . . would have occurred.");
Restatement (Second) of Contracts § 245.
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