ROBERT L. MENDENHALL, AN INDIVIDUAL; AND SUNRIDGE CORPORATION, A NEVADA CORPORATION, Appellants,
RONALD TASSINARI, AN INDIVIDUAL; AND AMERICAN VANTAGE BROWNSTONE, LLC, A NEVADA LIMITED LIABILITY COMPANY, Respondents.
from a district court order dismissing a tort action. Eighth
Judicial District Court, Clark County; Rob Bare, Judge.
Marquis Aurbach Coffing and Micah S. Echols, Avece M. Higbee,
and Adele V. Karoum, Las Vegas; Howard & Howard Attorneys
PLLC and Gwen Rutar Mullins and Wade B. Gochnour, Las Vegas,
Santoro Whitmire and Nicholas J. Santoro and Oliver J.
Pancheri, Las Vegas; Harry Paul Marquis, Chtd., and Harry
Paul Marquis, Las Vegas; Legal Offices of James J. Lee and
James J. Lee, Las Vegas, for Respondents.
DOUGLAS, GIBBONS and PICKERING, JJ.
case addresses the tension in the law that arises where a
party that served an NRCP 68 offer of judgment discovers
facts, during the ten-day irrevocable period for acceptance
of NRCP 68 offers, that would otherwise impact the offering
party's decision to serve an NRCP 68 offer in the first
instance. Specifically, we must determine whether claims that
are brought by the offering party in a second action, and
arise out of these facts that were discovered after serving
the NRCP 68 offer, are barred by general principles of claim
preclusion or by the very terms of the NRCP 68 offer.
that both the general principles of claim preclusion and the
terms in an NRCP 68 offer are implicated where a party seeks
to relitigate claims after entry of a final judgment pursuant
to the NRCP 68 offer, even when they arise out of facts
discovered during the NRCP 68 offer's ten-day irrevocable
period for acceptance. We further hold that these subsequent
claims are barred where principles of claim preclusion apply
or, in the alternative, where the terms of the offer of
judgment indicate that such claims are barred. Because
appellants' claims are barred by both the doctrine of
claim preclusion and by the terms of the offer of judgment,
we affirm the district court's decision.
AND PROCEDURAL HISTORY
appeal involves two distinct cases. The first case was
dismissed after payment of an accepted offer of judgment
(district court case no. A653822, the First Action), and the
second case was dismissed under the doctrine of claim
preclusion because it raised claims that were or could have
been raised in the First Action (district court case no.
A708281, the Second Action).
First Action, Brownstone Gold Town, LLC, and Brownstone Gold
Town CV, LLC (collectively, the Brownstone Entities), sued
appellants Robert Mendenhall and Sunridge Corporation for
allegedly breaching an agreement entered into by the parties
(the Term Sheet). Pursuant to the Term Sheet, appellants
agreed to contribute real property for the development of a
300-room hotel with casino and convention space. In exchange
for the contribution of the property, appellants agreed to
receive a 27 percent membership interest. The Term Sheet
further provided that the Brownstone Entities would
contribute $1, 500, 000 for a 2.7 percent membership
interest, while other unnamed, nonparty investors (the Other
Investors) would contribute $7, 000, 000 for a 12.6 percent
membership interest. Additionally, the Term Sheet included
signature blocks for the following four parties: (1)
respondent American Vantage Brownstone, LLC (AVB), (2) the
Brownstone Entities, (3) appellants, and (4) the Other
on the Term Sheet, the Brownstone Entities invested
considerable time and expense in acquiring plans, surveys,
approvals, and land use entitlements. However, in spite of
their assurances that they would contribute the property,
appellants failed to fulfill this obligation. Alleging that
appellants had breached the Term Sheet, the Brownstone
Entities brought suit.
trial commenced in the First Action, appellants presented the
Brownstone Entities with an offer of judgment (the Offer) in
the amount of $1, 200, 000. The Offer was "in settlement
of all claims between and among ROBERT L. MENDENHALL,
SUNRIDGE CORPORATION, BROWNSTONE GOLD TOWN, LLC and
BROWNSTONE GOLD TOWN CV, LLC or those asserted or that
could have been asserted on behalf of each of them
against one another”. (Emphasis added.) The Offer
Acceptance of this Offer of Judgment would fully discharge
and release any and all claims as alleged, or that could
have been alleged, in this action by ROBERT L.
MENDENHALL, SUNRIDGE CORPORATION, BROWNSTONE GOLD TOWN, LLC,
and BROWNSTONE GOLD TOWN CV, LLC, including, but not limited
to, those asserted in the Complaint as well as any
related or potential claims that could be asserted in
this action against one another.
the end of discovery, and during the Offer's ten-day
irrevocable period, appellants learned that respondent Ronald
Tassinari, a corporate officer of AVB, allegedly committed
fraud concerning the Term Sheet. In particular, Tassinari
testified during his deposition that he signed the Term Sheet
on behalf of the Other Investors, even though prior
representations were made that there were nonparty investors
who would contribute the required amount of capital. Thus,
appellants filed for leave to amend their answer to add a
third-party complaint against respondents and assert
counterclaims against the Brownstone Entities. The proposed
amended pleading included allegations that Tassinari was a
principal of the Brownstone Entities and AVB and that
Tassinari, individually and in his role with the Brownstone
Entities and AVB, misled appellants into believing there were
other third-party investors. Appellants' motion argued
that the claims arose out of the same set of facts and
transactions as those set forth in the complaint.
Brownstone Entities accepted the offer of judgment and the
First Action was dismissed with prejudice, however, rendering
appellants' motion moot. A few months after the Offer was
accepted, appellants initiated the Second Action by filing a
complaint that alleged fraud against respondents. Respondents
subsequently filed a motion to dismiss appellants'
complaint, which the district court granted. Ultimately, the
district court determined that the doctrine of claim
preclusion barred the Second Action. The court found that (1)
the order of dismissal from the First Action was a final,
valid judgment; (2) the claims asserted by appellants in the
Second Action were based ...