Jsjbd Corp v. Tropicana Invs., Llc ( 2022 )

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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