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DTJ Design, Inc. v. First Republic Bank

Supreme Court of Nevada

February 13, 2014

DTJ DESIGN, INC., Appellant,
v.
FIRST REPUBLIC BANK, a Nevada Corporation, Respondent.

Martin & Allison, Ltd., and Noah G. Allison and Debra L. Pieruschka, Las Vegas, for Appellant.

Gerrard Cox & Larsen and Douglas D. Gerrard and Gary C. Milne, Henderson, for Respondent.

BEFORE THE COURT EN BANC.

OPINION

PARRAGUIRRE, J.:

In this appeal, we address the registration requirements set forth in NRS 623.349(2) in the context of a foreign architectural firm's ability to bring or maintain an action in Nevada. We conclude that regardless of whether a foreign firm employs a registered architect, NRS 623.349(2) and NRS 623.357 mandate that the firm be registered in Nevada in order to maintain an action on the firm's behalf. Accordingly, we affirm the district court's judgment.

FACTS AND PROCEDURAL HISTORY

Appellant Downing, Thorpe & James Design, Inc. (DTJ), is an architectural firm incorporated in Colorado. Thomas W. Thorpe is a professional architect and one of DTJ's three founding principals. In 1998, Thorpe sought reciprocity to practice in Nevada and submitted two applications to the State Board of Architecture (the Board). First, he submitted an " Application for Architect Registration," which would allow him to practice individually as a foreign architect. Second, Thorpe submitted an " Application for Registration

Page 710

of a Business and Firm Name Approval," which would allow DTJ to practice as a foreign corporation. Although the Board approved Thorpe's individual application for registration, there is no evidence that the Board ever received or approved DTJ's application to practice as a foreign corporation in Nevada.

In 2004, DTJ contracted with a Nevada developer to provide architectural services for a Las Vegas subdivision owned by Prima Condominiums, LLC (Prima). Prima obtained a $14 million loan from respondent First Republic Bank in exchange for a promissory note secured by a deed of trust on one of the subdivision's units, the Bergamo building. As additional security, First Republic demanded an assignment of all construction documents associated with the Bergamo building, including DTJ's architectural drawings. DTJ consented to the assignment in exchange for $350,000 of the loan proceeds. The parties agreed that in the event of foreclosure, First Republic's access to DTJ's plans was conditioned upon DTJ being paid in full for services completed to date. Prima subsequently defaulted on its payments.

In July 2008, DTJ recorded a notice of mechanic's lien against the property for unpaid services to date. In December 2008, First Republic foreclosed and purchased the property at a trustee's sale. DTJ then brought an action against First Republic for lien priority and unjust enrichment. The district court bifurcated the trial into two phases: lien priority (phase one) and lien valuation (phase two). After a hearing on phase one, the district court concluded that DTJ was a valid claimant with lien priority over First Republic's deed of trust.

Prior to phase two, First Republic moved for summary judgment, arguing that NRS 623.357 prohibited DTJ from maintaining its lien foreclosure action because DTJ had not properly registered as a foreign corporation under NRS 623.349(2) or satisfied the state's foreign corporation statutory filing requirements under NRS 80.010(1). First Republic also argued that DTJ's unjust enrichment claim lacked legal basis. The district court concluded that because DTJ had failed to comply with Nevada's statutory registration and filing provisions, DTJ was barred from maintaining an action against First Republic. The district court further concluded that there was no legal basis for DTJ's unjust enrichment claim, and it granted First Republic's motion for summary judgment. DTJ now brings this appeal.

DISCUSSION

Standard of review


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