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D.R. Horton, Inc. v. Betsinger

Supreme Court of Nevada

October 16, 2014

D.R. HORTON, INC., A NEVADA CORPORATION; DHI MORTGAGE COMPANY, LTD, A TEXAS LIMITED PARTNERSHIP F/K/A CH MORTGAGE COMPANY, LTD, A NEVADA LIMITED PARTNERSHIP, Appellants/ Cross-Respondents,
v.
STEVEN M. BETSINGER, Respondent/Cross-Appellant

Appeal and cross-appeal from a final district court judgment entered on remand in a torts action. Eighth Judicial District Court, Clark County; Linda Marie Bell, Judge.

McDonald Carano Wilson LLP and Pat Lundvall, Debbie A. Leonard, and Kerry St. Clair Doyle, Las Vegas, for Appellants/Cross-Respondents.

Feldman Graf, P.C, and David J. Feldman and John C. Dorame, Las Vegas, for Respondent/Cross-Appellant.

Cherry, J., Gibbons, C.J., Pickering, J., Hardesty, J., Douglas, J., Saitta, J.

OPINION

Page 1231

BEFORE THE COURT EN BANC.[1]

CHERRY, J.:

This appeal arises from punitive damages proceedings on remand after we issued our decision in Betsinger v. D.R. Horton, Inc. ( Betsinger I ), 126 Nev. 162, 232 P.3d 433 (2010), a case that involved fraud and deceptive trade practices in the context of a real estate purchase and loan arrangement. On appeal, we consider whether the proceedings on remand violated NRS 42.005(3), which requires any trier of fact who determines that punitive damages are warranted to also determine the amount of damages to award. Specifically, we consider whether NRS 42.005(3) applies in a remand situation so as to require the second jury on remand to reassess whether punitive damages are warranted before that jury may determine the amount of punitive damages to be awarded. We conclude that NRS 42.005(3) is unambiguous in imposing this requirement. Thus, when the fact-finder is limited to solely making a determination regarding punitive damages, NRS 42.005(3) requires that fact-finder to first determine whether punitive damages are justified-- i.e., whether there is clear and convincing evidence of a defendant's oppression, fraud, or malice--and then to determine the amount of damages to award. Because the jury on remand in this case was prevented from determining whether punitive damages were justified, we reverse the district court's punitive damages award and remand for a new trial. We also affirm the denial of attorney fees to D.R. Horton.

FACTS AND PROCEDURAL HISTORY

This case arose from a failed attempt to purchase a home in Las Vegas, the details of which are more fully set forth in Betsinger I, 126 Nev. 162, 232 P.3d 433 (2010). Briefly, respondent/cross-appellant Steven Betsinger contracted to purchase a house from appellant/cross-respondent D.R. Horton, Inc., and applied for a loan to fund that purchase with D.R. Horton's financing division, appellant/cross-respondent DHI Mortgage, Ltd. Id. at 163, 232 P.3d at 434. After DHI Mortgage refused to fund the loan at the interest rate originally offered, Betsinger canceled the purchase contract. When D.R. Horton failed to return Betsinger's earnest-money deposit, he sued, asserting claims for fraud and deceptive trade practices based on allegations that D.R. Horton caused him to cancel the purchase agreement with false assurances that his deposit would be returned and that it and DHI Mortgage used a " bait and switch" tactic to lure him into making the deposit in the first place. After a trial, the jury found in favor of Betsinger and awarded him compensatory damages against D.R. Horton and DHI Mortgage consisting of actual damages and emotional distress damages, as well as punitive damages against DHI Mortgage.[2] Id. at 164, 232 P.3d at 434-35.

All parties appealed, and we reversed the judgment as to consequential damages because of Betsinger's failure to present evidence of any physical manifestation of emotional distress. Id. at 166, 232 P.3d at 436. We accordingly reduced the compensatory damages award to the amount of Betsinger's actual damages, $10,727 ($5,190 from D.R. Horton and $5,537 from DHI Mortgage). Id. at 164, 167, 232 P.3d at 434, 436. Because it was impossible to determine what the jury would have awarded Betsinger in punitive damages against DHI Mortgage given the reduction in the compensatory damages award, we declined to arbitrarily reduce the punitive damages amount. Instead, we concluded that " the punitive damages award must be remanded for further proceedings because we cannot be sure what the jury would have awarded in punitive damages as a result of the substantially reduced compensatory award." Id. at 167, 232 P.3d at 437.

Page 1232

On remand, questions arose as to the appropriate scope of the trial in light of this court's remand instructions. Specifically, confusion arose regarding whether the jury needed to first consider DHI Mortgage's liability for punitive damages, or if the jury was simply to consider the amount of punitive damages warranted. Ultimately, the district court instructed the jury that it was to decide " what amount, if any, Mr. Betsinger is entitled to for punitive damages." [3] Based on this instruction, the jury returned a verdict against DHI Mortgage and in favor of Betsinger with respect to punitive damages in the amount of $675,000. The district court subsequently entered judgment against D.R. Horton in the amount of $5,190 plus interest and denied D.R. Horton attorney fees. Judgment was entered against DHI Mortgage in the amount of ...


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