Recreation Dev. Co. v. Clearwater Mechanical C/W 63637

 debt. Rather than proceed with the purchase or a merger, RDC and
Paonessa entered into an employment agreement.
During this time, Clearwater was a subcontractor for Jaynes
Corporation on a project to remodel a portion of the Clark County Family
Court Building. At the conclusion of the project, RDC and Paonessa
disputed who was entitled to receive the final payment from Jaynes.
Consequently, Jaynes filed an interpleader action in the district court.
Clearwater and RDC filed separate answers, cross-claims, and third-party
complaints for breach of contract, among other claims. The final payment
from Jaynes was deposited with the court, Jaynes was released from the
action, and RDC and Clearwater were ordered to litigate or settle between
themselves.
Prior to trial, RDC extended to Clearwater and Paonessa an
apportioned offer of judgment for half of the final payment from Jaynes.
Paonessa and Clearwater rejected the offer. Following a bench trial, the
court decided all claims in favor of RDC and awarded it the entire Jaynes
payment. Accordingly, RDC filed a post-judgment motion for fees and
costs pursuant to NRS 17.115 and NRCP 68. The court denied RDC's
motion for fees, but granted its motion for costs. On appeal, Paonessa
challenges the district court's decision on the merits, and on cross-appeal,
RDC challenges the district court's denial of its motion for attorney fees.
District court findings of fact
Clearwater contends that the district court was clearly
erroneous in finding that (1) RDC did not make a profit on the remodel
project; (2) RDC was not in possession of any assets that belonged to
Clearwater or Paonessa; and (3) RDC's principals were not parties to any
agreement, intended or alleged, for the purchase of Clearwater. Findings
of fact are clearly erroneous and subject to reversal when "there is no
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evidence in support of [them]." Pink v. Busch, 100 Nev. 684, 688, 691 P.2d
456, 459 (1984). In a contract dispute, the complaining party carries the
burden of proof. See 23 Richard A. Lord, Williston on Contracts § 63:14
(4th ed. 2002).
Regarding Clearwater's first contention, Clearwater's only
proof that RDC profited from the project is a report that profits of $886.14
were anticipated when the project was 99% complete. This does not
conclusively establish that RDC profited from the project. At trial,
Paonessa conceded that he did not know if any profits were realized; and
Clearwater does not even argue (let alone prove) that the remaining 1% of
the project would have cost less than $886.14 to complete. Clearwater's
unsupported argument that RDC may have realized a profit does not
justify reversal. Accordingly, we conclude that the district court did not
err in finding that RDC did not profit from the project.
Second, the district court did not err in finding that RDC is
not in possession of any of Clearwater's assets. Possession is "having or
holding property in one's power; the exercise of dominion over
property. ... The detention or use of a physical thing with the intent to
hold it as one's own." Black's Law Dictionary 1351 (10th ed. 2014).
Paonessa took three water heaters that Clearwater owned to RDC's
facilities, along with the rest of Clearwater's inventory and assets, when
he vacated Clearwater's business premises. Paonessa testified at trial
that he was informed he could retrieve the water heaters from RDC.
RDC's principals also testified at trial that RDC has no use for the heaters
and wants Paonessa to remove them. RDC solely "possesses" the water
heaters because Paonessa failed to retrieve them pursuant to RDC's
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direction. Therefore, we conclude that RDC does not have the intent
necessary to possess the heaters from a legal perspective.
Third, Clearwater argues that RDC's letter of intent and the
financial documentation it gave RDC preclude the trial court's finding that
RDC's principals did not agree to purchase Clearwater. This argument is
unpersuasive. RDC explains that after reviewing the financial
information, its accountant advised against purchasing Clearwater due to
its substantial debt. Testimony at trial indicated that a review of financial
documentation is generally necessary to allow the purchasing company to
perform due diligence. We consequently conclude that the district court
did not err in finding that RDC's principals did not agree to purchase
Clearwater.
The district court's legal conclusions
Clearwater contends that the district court erred in concluding
as a matter of law that (1) Paonessa interfered with the payment from
Jaynes to RDC, and (2) that RDC was not unjustly enriched.
A determination based on factual conclusions but requiring
distinctively legal analysis is reviewed as a mixed question of law and fact.
Hernandez v. State, 124 Nev. 639, 646,188 P.3d 1126, 1131 (2008). Thus,
deference will be given to factual findings so long as those findings are
supported by substantial evidence and are not clearly erroneous; the legal
consequences of those factual findings will be reviewed de novo. Ybarra v.
State, 127 Nev. 47, 58, 247 P.3d 269, 276 (2011).
The district court did not clearly err when it determined that
Paonessa interfered with payments from Jaynes, because the court heard
testimony that Paonessa misappropriated a check that the parties
designated for deposit in RDC's account. See Pink, 100 Nev. at 688,691
P.2d at 459. Paonessa did not dispute this testimony. Hence, we conclude
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that the district court did not err in concluding Paonessa interfered with
the payment.
Clearwater also failed to prove that RDC was unjustly
enriched. See Kitchin V. Mori, 84 Nev. 181, 184, 437 P.2d 865, 866 (1968)
(stating that the burden is on the alleging party to prove unjust
enrichment); see also Unionamerica Mortg. & Equity Trust v. McDonald,
97 Nev. 210, 212, 626 P.2d 1272, 1273 (1981) (defining unjust enrichment).
Clearwater failed to prove that RDC profited during the time that it
employed Paonessa. Clearwater also failed to prove any damages or an
amount of damages. And Clearwater failed to prove that Paonessa's
salary and RDC's payment of Clearwater's debts was inadequate
compensation. Consequently, we conclude the district court did not err in
determining that RDC was not unjustly enriched.
Employment agreement
Clearwater contends that the district court erred by failing to
identify which of two similar employment agreements executed by the
parties (trial exhibit 6 agreement or trial exhibit 16 agreement) was valid.
It also contends that limiting enforcement of the agreement to the joint
payment requirement was erroneous.
At trial, the parties disputed which version of the employment
agreement (exhibit 6 or 16) controlled. If exhibit 16 controlled, as
Paonessa contends, the terms of the contract may have required RDC to
employ Paonessa for a minimum of three years.' If exhibit 6 controlled, as
RDC contends, the terms of the contract do not require RDC to employ
'The agreement referenced as exhibit 16 states that "Mario
Paonessa agrees to obtain and maintain Plumbing, Class 'Cl' Qualified
Employee (QE) status with RDC while maintaining his employee status
for same for a period of not less than three (3) year[s]."
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Paonessa for any specific length of time. 2 Accordingly, whether RDC could
terminate Paonessa's employment without being in breach of the
employment agreement depends upon which agreement controls.
The existence of a contract 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). Unfortunately, the district
court's order does not expressly state which version of the contract that
the court found to be binding; the court's findings simply indicate that
"Recreation Development Company entered into an [']Employment and
Projects Transactions Agreement' (the 'agreement') with Clearwater and
Paonessa and said agreement is valid and binding." Regardless, "[i]ri the
absence of an express finding it is the duty of the appellate court to
presume the findings of the lower court to have been such as were
necessary to support the judgment." Edwards v. Jones, 49 Nev. 342, 352,
246 P. 688, 691 (1926).
We conclude that a careful reading of the district court's order
reflects that it found exhibit 6 to be the controlling agreement, because in
the district court's findings of fact, the court quoted language from exhibit
6. The language quoted in the district court's findings of fact does not
appear in exhibit 16. Moreover, the district court's order explicitly states
that the agreement is valid and binding. Therefore, we conclude that the
district court did not find that the only enforceable term is the joint
payment provision.
2 The agreement referenced as exhibit 6 states, "Mario Paonessa
agrees to obtain and maintain Plumbing, Class 'Cl' Qualified Employee
(QE) status with RDC while maintaining his employee status for same."
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Attorney fees
RDC requests that this court reverse the district court's denial
of its motion for attorney's fees and remand the matter for a hearing on
the amount of fees. RDC asserts that the district court abused its
discretion in denying its request for fees because the court did not apply
the factors as required in Beattie v. Thomas, 99 Nev. 579, 588-89, 668 P.2d
268, 274 (1983).
This court reviews attorney fees awards for an abuse of
discretion. Gunderson v. D.R. Horton, Inc., 130 Nev. Adv. Op. No. 9, 319
P.3d 606, 615 (2014). The district court's ruling will be upheld unless "the
trial court's exercise of discretion [in evaluating the Beattie factors] is
arbitrary or capricious." Schouweiler v. Yancey Co., 101 Nev. 827, 833,
712 P.2d 786, 790 (1985).
Offerees who reject an offer of judgment but fail to obtain a
more favorable judgment "shall pay the offeror's post-offer costs,
applicable interest on the judgment from the time of the offer to the time
of entry of the judgment and reasonable attorney's fees, if any be allowed."
NRCP 68(f)(2) (emphasis added); see also NRS 17.115(4)(d)(3). When the
trial court finds that an offer of judgment was valid, the court "must
consider and weigh" the factors enumerated in Beattie. Gunderson, 130
Nev. Adv. Op. No. 9, 319 P.3d at 615 (emphasis added).
We cannot say that the district court's decision was arbitrary
or capricious in this instance. Implicitly, the court's minutes reflect that
the court found the joint offer of judgment valid for the purposes of NRS
17.115 and NRCP 68 sanctions and that it considered the Beattie factors in
its denial of attorney fees. See Beattie, 99 Nev. at 588-89, 668 P.2d at 274.
Further, the court's order stated that Paonessa's claims were not brought
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in bad faith and his decision to reject the offer of judgment and proceed to
trial was not grossly unreasonable.
However, the court's written order did not address the
remaining two Beattie factors. Although "the district court's failure to
make explicit findings is not a per se abuse of discretion," the record must
nonetheless reflect that the district court considered all the factors. Wynn
v. Smith, 117 Nev. 6, 13, 16 P.3d 424, 428-29 (2001). Here, the court's
minutes and the record are insufficient to clearly reflect that the district
court properly considered the validity of the offer of judgment and all of
the Beattie factors. See Schwartz v. Estate of Greenspun, 110 Nev. 1042,
1049-50, 881 P.2d 638, 642-43 (1994); see also NRCP 58(c); Rust v. Clark
Cnty. Sch. Dist., 103 Nev. 686, 689, 747 P.2d 1380, 1382 (1987) (an oral
pronouncement of judgment or the clerk's minute order are not valid for
any purpose). Consequently, we remand with instructions to enter an
order that addresses the validity of the offer and all of the Beattie factors. 3
Accordingly, we
ORDER the judgment of the district court AFFIRMED IN
PART, REVERSED IN PART AND REMANDED to the district court for
entry of an order regarding RDC's request for attorney's fees that
considers all of the Beattie factors.
P.Parragielli.er
,J.
J.
Douglas Cherry
3 We have considered the parties' remaining arguments and conclude
that they are without merit.
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cc: Hon. Timothy C. Williams, District Judge
Williams & Associates
Scott Michael Cantor, Ltd.
Accelerated Law Group
Eighth Judicial District Court Clerk
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