Court: Nevada Supreme Court; August 2, 2018; Nevada; State Supreme Court
The court addressed the appeal concerning the district court's award of attorney fees and costs to GL Construction, Inc. (GL) on its counterclaim against Northern Nevada Homes, LLC (NNH). The main issue was whether GL was correctly identified as the "prevailing party" after bifurcated trials, where NNH settled its claims for $362,500, surpassing the $7,811 awarded to GL on its counterclaim. The court concluded that the district court did not abuse its discretion in determining GL as the prevailing party for two reasons: (1) there is no requirement under statute or rule to offset one party's damages by another's settlement amount when deciding the prevailing party status, and (2) the interpretation of NRS 18.010(2)(a) and 18.020(3) supports excluding settlement amounts from this determination.
The procedural history involved NNH and Cerberus Holdings filing a complaint against GL for trespassing, which led GL to counterclaim for breach of contract regarding unpaid invoices. The case was bifurcated into a jury trial for NNH's claims and a bench trial for GL's counterclaim. After a jury trial, the parties settled NNH's claims, and the district court subsequently ruled in favor of GL on its counterclaim. GL sought $67,595 in attorney fees and $2,497.33 in costs, which NNH contested, arguing that it had a net recovery from the settlement, thus challenging GL's prevailing party status. The district court awarded GL $10,000 in attorney fees and $390 in costs, concluding GL was the prevailing party and the settlement was irrelevant to this determination.
The standard for reviewing attorney fee awards is for abuse of discretion, while legal questions are reviewed de novo. The court emphasized that if a statute’s language is ambiguous, the interpretation that best reflects the legislature's intent should be chosen.
NNH contends that the district court erred in designating GL as the prevailing party under NRS 18.010(2)(a) and NRS 18.020(3), arguing that NNH achieved the net monetary recovery when the parties' recoveries were offset, citing Parodi v. Budetti as precedent. NRS 18.010(2)(a) allows for attorney fees to a prevailing party only if that party has not recovered more than $20,000, while NRS 18.020(3) stipulates that costs must be awarded to the prevailing party when a plaintiff seeks over $2,500. A party cannot be deemed the prevailing party under NRS 18.010 if the action has not reached a judgment. The document references Works v. Kuhn and Buckhannon Bd. Care Home, Inc. to clarify that private settlements do not confer prevailing party status unless judicially enforced. In Parodi, the court determined that when both parties are awarded damages, the trial court must offset these awards to identify the prevailing party and assess whether the net damages exceed the $20,000 threshold before deciding on the award of costs and attorney's fees.
Other courts have determined that parties achieving settlement can be considered the prevailing party under attorney fee statutes. For example, in DeSaulles v. Cmty. Hosp. of Monterey Peninsula, the California Supreme Court ruled that its attorney fee statute, defining the prevailing party as one with a "net monetary recovery," includes settlement recovery, reasoning that settlement money is a type of recovery gained through legal processes. This reflects the statute's purpose of imposing costs on losing parties. Similarly, the Idaho Court of Appeals ruled that the statutory language regarding the "resultant judgment" for attorney fees included settlements.
However, in the current case, NNH has not provided Nevada authority to justify offsetting its settlement recovery against GL's damages award to determine the prevailing party under NRS 18.010(2)(b) and 18.020(3). The court concluded that the district court correctly refrained from aggregating NNH's settlement recovery with GL's judgment for damages, as Parodi dictates consideration of monetary damages alone for determining the prevailing party. Furthermore, ambiguity in determining the prevailing party when both settlements and damages are involved does not compel adherence to other jurisdictions' interpretations.
The court emphasized that allowing aggregation of damages and settlements would undermine the legislative intent of NRS 18.010(2)(a), which aims to ensure small claim litigants can be made whole. Therefore, it held that NRS 18.010(2)(a) and NRS 18.020(3) do not permit comparing a monetary settlement from one party's claim against a judgment for damages from another's counterclaim in determining the prevailing party.
No Nevada statute or court rule mandates that a trial court offset a judgment for damages on one party's independent claim with a settlement recovery from the other party's claim to determine the prevailing party. The interpretation of NRS 18.010(2)(a) and 18.020(3) indicates that settlement recovery should not be used for this purpose. Consequently, the district court did not abuse its discretion by not aggregating the settlement recovery and damages award, and the order awarding attorney fees and costs is affirmed. The appeal specifically challenges the attorney fees and costs awarded on GL’s counterclaim against NNH, after NNH and Cerberus settled their claims against GL and Lemich. NNH contends that the district court arbitrarily deemed $10,000 a reasonable fee but fails to provide a compelling argument or supporting authority, leading to the disregard of this issue. Furthermore, even after amendments to NRS 18.010, subsection (2)(a) remains unchanged.
