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Liu v. Christopher Homes, LLC

Supreme Court of Nevada

March 27, 2014

JUN LIU, Appellant,
v.
CHRISTOPHER HOMES, LLC, A NEVADA LIMITED LIABILITY COMPANY; AND CHRISTOPHER HOMES RIDGES, LLC, A NEVADA LIMITED LIABILITY COMPANY, Respondents

Appeal from a district court judgment in a real property action. Eighth Judicial District Court, Clark County; Susan Johnson, Judge.

Affirmed in part, reversed in part, and remanded.

Pengilly Robbins Slater and James W. Pengilly and Craig D. Slater, Las Vegas, for Appellant.

The Hayes Law Firm and Dale A. Hayes, Jr., Las Vegas, for Respondents.

BEFORE GIBBONS, C.J., DOUGLAS and SAITTA, JJ. GIBBONS, C.J., dissenting.

OPINION

Page 876

SAITTA, J.:

The court in Sandy Valley Associates v. Sky Ranch Estates Owners Association stated that when a defendant's breach of contract with a plaintiff causes the plaintiff to incur attorney fees in his or her defense in a legal dispute that is brought by another party, the plaintiff can recover from the defendant the attorney fees as damages that arose from the breach of the contract. 117 Nev. 948, 957, 35 P.3d 964, 970 (2001). The Sandy Valley court also stated, " Attorney fees may . . . be awarded as damages in those cases in which a party incurred the fee . . . in clarifying or removing a cloud upon the title to property." Id. The court in Horgan v. Felton retreated from this latter statement about the recovery of attorney fees in cloud-on-title cases, stating that " in cases concerning title to real property, attorney fees are only allowable as special damages in slander of title actions, not merely when a cloud on the title to real property exists." 123 Nev. 577, 579, 170 P.3d 982, 983 (2007). It held that slander of title was a prerequisite for a plaintiff to " recover as damages the expense of legal proceedings necessary to remove a cloud on the plaintiff's title." Id. at 584-85, 170 P.3d at 987.

Here the district court relied on Horgan in denying appellant Jun Liu's specially pleaded request to recover attorney fees from respondents Christopher Homes Ridges, LLC (CHR), and Christopher Homes, LLC (CH), concluding that because the breach of contract related to title to real property, and because Liu failed to allege and prove slander of title, she could not recover the attorney fees that she sought as special damages. We conclude that the district court erred in rejecting as a matter of law Liu's claim for attorney fees as special damages, as Horgan does not apply to preclude such recovery here. Although Horgan held that slander of title must be pleaded as a prerequisite for a party to recover attorney fees as damages in an action to clarify or remove a cloud on title to real property, that opinion did not retreat from the portion of Sandy Valley which held that a party, such as Liu, may recover attorney fees incurred in defending against third-party litigation because of CHR's or CH's breach of contract. Horgan, 123 Nev. at 583-86, 170 P.3d at 986-88. Accordingly, we reverse the district court's judgment to the extent that it denied Liu's request for special damages and affirm all other aspects of the district court's judgment. We remand this matter to the district court for proceedings consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

Liu's appeal only challenges the district court's legal determinations regarding the recovery of attorney fees as special damages. Thus, our discussion of the facts is based on the district court's findings of fact, which Liu does not contest or seek to undo on appeal.

CHR was the developer of a residential community that hired CH as a general contractor for the construction of homes within its community. CH subcontracted with K& D Construction, LLC, for various construction services. One of the homes upon which K& D performed its services was Liu's. Liu had purchased the home from CHR pursuant to a contract (the Agreement), wherein CHR agreed to convey good and marketable title to Liu at the close of escrow. As K& D performed its construction services at CHR's residential community, K& D was neither timely nor fully paid. As a result, K& D recorded liens on various properties within CHR's residential community, including Liu's property.

In addition, K& D filed a civil action against CHR, CH, Liu, and other homeowners. In its complaint, K& D sought to

Page 877

foreclose on its liens on numerous properties, including Liu's property. Liu filed an answer to K& D's complaint and a cross-claim against CHR and CH. She asserted a breach of contract claim against CHR and CH, alleging that they breached their duty under the Agreement to deliver good and marketable title when they failed to pay the debts to K& D that resulted in a lien on her property. Under this claim, Liu tried to recover from CHR and CH the attorney fees and costs that she allegedly incurred in ...


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