Nev. Contractors Ins. Co., Inc. v. Risk-Serv's.-Nev., Inc. C/W 61279/62049/62340

IN THE SUPREME COURT OF THE STATE OF NEVADA
NEVADA CONTRACTORS No. 61279
INSURANCE COMPANY, INC.,
Appellant, iLED
vs.
JUN 1 0 2016
RISK SERVICES-NEVADA, INC.; AND
MIKE ROGERS,
Respondents.
NEVADA CONTRACTORS No. 6204
INSURANCE COMPANY, INC., A
NEVADA CORPORATION,
Appellant,
vs.
RISK SERVICES-NEVADA, INC.; AND
MIKE ROGERS,
Respondents.
NEVADA CONTRACTORS No. 62340
INSURANCE COMPANY, INC.,
Appellant,
vs.
RISK SERVICES-NEVADA, INC.; AND
MIKE ROGERS,
Respondents.
NEVADA CONTRACTORS No. 64532
INSURANCE COMPANY, INC., A
NEVADA CORPORATION,
Appellant,
vs.
RISK SERVICES-NEVADA, INC.; AND
MIKE ROGERS,
Respondents.
ORDER OF AFFIRMANCE
These are consolidated appeals from a district court judgment
enforcing a settlement agreement in a tort action and a subsequent post-
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judgment order awarding attorney fees (Docket Nos. 61279 and 62049),
and from a final order granting summary judgment based on claim and
issue preclusion in a breach of contract action and a second post-judgment
order awarding attorney fees (Docket Nos. 62340 and 64532). Eighth
Judicial District Court, Clark County; Elizabeth Goff Gonzalez, Judge.
After respondent Risk Services-Nevada (RSN) and a third
party each separately sued appellant Nevada Contractors Insurance
Company (NCI) for breach of a settlement agreement, NCI sought to
rescind the agreement against both the third party and RSN, alleging
fraudulent inducement (2011 case). The enforceability issue was
transferred to the department that heard the original case (2008 case) for
an evidentiary hearing on the limited issue of the settlement agreement's
enforceability. The district court concluded in the 2008 case that the
agreement was valid and enforceable. Thereafter, the district court
granted summary judgment in the 2011 case in favor of RSN and against
NCI's fraudulent inducement defense on claim and issue preclusion
grounds. NCI appealed, challenging the district court's enforceability and
preclusion rulings, as well as attorney fee awards in both cases.
The district court did not erroneously conclude that the settlement
agreement was enforceable
NCI contends that the district court used an improper
standard in conducting the evidentiary hearing on the enforceability of the
settlement agreement in the 2008 case by subjecting the evidence to a
more rigorous standard than the prima-facie-evidence standard stated in a
pre-trial stipulation. Further, NCI argues that, by doing so, the court
denied it the right to a jury trial.
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The district court's power to enforce a settlement agreement is
equitable in nature, including when fraudulent inducement is asserted in
defense, and the district court has discretion to address an action's
equitable issues before allowing a jury to resolve the action's legal issues.
Awada v. Shuffle Master, Inc., 123 Nev. 613, 621-22, 173 P.3d 707, 712-13
(2007); Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987). Thus, we
conclude that the district court did not erroneously deprive NCI of any
jury-trial right.
Moreover, the parties' stipulation does not bind the district
court on legal questions. Ahlswede u. Schoneveld, 87 Nev. 449, 452, 488
P.2d 908, 910 (1971). The matter presented to the district court was
whether the settlement agreement was enforceable in light of NCI's
fraudulent-inducement defense. As the district court properly applied the
clear-and-convincing standard required by Nevada law, J.A. Jones Const.
Co. v. Lehrer McGovern Bovis, Inc., 120 Nev. 277, 290-91, 89 P.3d 1009,
1018 (2004), we conclude that it did not err, Matter of Halverson., 123 Nev.
493, 509, 169 P.3d 1161, 1172 (2007) ("The correct standard of proof to be
used by a tribunal is a legal question, thus subject to our de novo review.").
Next, NCI argues that the district court's ruling on
enforceability was not supported by substantial evidence, alleging that it
demonstrated several instances of fraudulent inducement. "Substantial
evidence is evidence that a reasonable mind might accept as adequate to
support a conclusion." VVhitemaine v. Aniskovich, 124 Nev. 302, 308, 183
P.3d 137, 141 (2008). That Salvatore Gugino described the condition of
the claims files after the parties had agreed to the material terms of the
settlement agreement supports the district court's conclusion that NCI did
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not rely on that representation in entering the agreement. See J.A. Jones
Const. Co., 120 Nev. at 290-91, 89 P.3d at 1018 (setting forth fraudulent-
inducement elements); Pac. Maxon, Inc. v. Wilson, 96 Nev. 867, 870-71,
619 P.2d 816, 818 (1980) (holding that actual, rather than justifiable
reliance, is required for rescission pursuant to fraudulent inducement).
The context of demanding a buy-out as a counteroffer during negotiations
supports the district court's conclusion that Gugino's demand was his
opinion of the value of his position. See Johansson v. Stephanson, 154
U.S. 625, 625 (1877); Bulbman, Inc. ix Nev. Bell, 108 Nev. 105, 111, 825
P.2d 588, 592 (1992); Clark Sanitation, Inc. v. Sun Valley Disposal Co., 87
Nev. 338, 341-42, 487 P.2d 337, 339 (1971). Evidence that the
representations regarding the self-insured retentions and policy exclusions
occurred years before the negotiations supports the district court's
conclusion that NCI did not rely on those representations in connection
with the negotiations. The testimony that NCI's directors believed that
legal malpractice was not released by the settlement supports the finding
that NCI did not rely on the alleged statements on this topic. Accordingly,
we conclude that substantial evidence supports the district court's
enforceability ruling, and the July 6, 2012, order is affirmed in Case No.
A-08-558139-B.
The district court properly granted summary judgment
NCI argues that the district court erred in granting summary
judgment on its claims in the 2011 case based on claim and issue
preclusion because it could not have litigated its fraud claims against
Gugino in its 2008 complaint. Having reviewed the record de novo, see
Wood v. Safeway, Inc., 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005), we
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conclude that claim preclusion applied because the parties in the 2011
case were the same to or in privity with those in the 2008 case, as the
cases were coordinated and NCI and RSN both participated in the
evidentiary hearing; the final judgment in the 2008 case was valid; and
NCI pursued the same claim in the 2011 case as in the evidentiary
hearing in the 2008 case. See Five Star Capital Corp. v. Ruby, 124 Nev.
1048, 1054, 194 P.3d 709, 713 (2008) (setting forth claim preclusion
standards), holding modified by Weddell v. Sharp, 131 Nev., Adv. Op. 28,
350 P.3d 80 (2015) (modifying the privity element). Further, we conclude
that issue preclusion applied because the same fraudulent-inducement
issues were raised in the 2011 case as in the 2008 case, the district court's
decision on the enforceability of the settlement agreement was on the
merits and became final, the parties were again the same or in privity,
and the fraudulent-inducement issue was actually and necessarily
litigated. See id. at 1055, 194 P.3d at 713. Accordingly, we conclude that
no genuine issues of material fact remained, see Wood, 121 Nev. at 729,
121 P.3d at 1029, and that the district court properly granted summary
judgment on claim and issue preclusion grounds. The December 7, 2012,
order in Case No. A-11-637935-B is affirmed.
Attorney fees were properly awarded
NCI argues that the district court's award of attorney fees and
costs in the 2008 case was improper because the court did not limit RSN's
fees and costs to those directly related to enforcing the settlement
agreement. We review the district court's decision to award attorney fees
or costs for an abuse of discretion. Las Vegas Metro. Police Dep't v.
Blackjack Bonding, Inc., 131 Nev., Adv. Op. 10, 343 P.3d 608, 614 (2015).
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The district court noted the circumstances and unusual evidentiary
hearing and awarded attorney fees and costs based on the settlement
agreement's provision entitling a party to receive reasonable fees and costs
for successfully enforcing any term of the agreement. NCI has failed to
show that the district court relied on a clearly erroneous factual
determination or disregarded controlling law. See id. NCI's argument
regarding paralegal fees also lacks merit. See Missouri v. Jenkins, 491
U.S. 274, 285 (1989); Las Vegas Metro. Police Dep't v. Yeghiazarian, 129
Nev., Adv. Op. 81, 312 P.3d 503, 510 (2013). Thus, we conclude that the
district court did not abuse its discretion in awarding attorney fees and
costs in the 2008 case and affirm the district court's October 8, 2012, order
in Case No. A-08-558139-B.
NCI also argues that the district court abused its discretion in
awarding attorney fees and costs in the 2011 case because RSN's motion
was untimely. A motion for attorney fees must be filed no later than
twenty days after notice of entry of judgment is served. NRCP 54(d)(2)(B).
Where service is made by electronic means, the prescribed period is
extended by three days. NRCP 6(e). RSN's counsel electronically served
the notice of entry of judgment in the 2011 case on December 10, 2012.
The twenty-day window extended to Monday, December 31, 2012, and the
additional three days extended to January 3, 2013. See NRCP 6(a), (e).
RSN filed its motion for attorney fees and costs on January 2, 2013, and
thus timely filed its motion. Accordingly, we conclude that the district
court did not abuse its discretion in awarding attorney fees and costs in
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the 2011 case and affirm the district court's November 14, 2013, order in
Case No. A-11-637935-B. 1
Accordingly, we
ORDER the judgment of the district court AFFIRMED. 2
/ vesaS. , J.
Hardesty
Saitta
'We note that Estate of Herrmann, 100 Nev. 1, 677 P.2d 594 (1984),
is distinguishable for its application of NRAP 4(a), which is not at issue in
the instant case.
2We have considered all other arguments, including those
concerning whether the legal-malpractice claims were improperly waived
and whether all matters other than attorney fees and costs are moot, and
conclude that they lack merit. The district court expressly declined to rule
on the legal-malpractice-claims release, and this court can provide
effective relief on matters beyond merely attorney fees and costs, see DHX,
Inc. v. Allianz AGF MAT, Ltd., 425 F.3d 1169, 1174 (9th Cir. 2005)
(Beezer, J., concurring).
Additionally, we decline to rule on RSN's request for appellate
attorney fees and costs, which presents a matter of fact that should be
presented to and ruled upon by the district court in the first instance. See
Musso v. Binick, 104 Nev. 613, 615, 764 P.2d 477, 478 (1988).
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cc: Hon. Elizabeth Goff Gonzalez, District Judge
Ara H. Shirinian, Settlement Judge
Marquis Aurbach Coffing
Holland & Hart LLP/Las Vegas
Thorndal Armstrong Delk Balkenbush & Eisinger/Las Vegas
Eighth District Court Clerk
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