BOCA PARK MARTKETPLACE SYNDICATIONS GROUP, LLC, A NEVADA LIMITED LIABILITY COMPANY, Appellant,
HIGCO, INC., A NEVADA CORPORATION, Respondent.
from a district court judgment following a bench trial in a
breach of contract action. Eighth Judicial District Court,
Clark County; Elizabeth Goff Gonzalez, Judge.
Hejmanowski & McCrea LLC and Charles H. McCrea, Las
Vegas, for Appellant.
Turner Gordon and Eric R. Olsen and Dylan T. Ciciliano, Las
Vegas, for Respondent.
DOUGLAS, GIBBONS and PICKERING, JJ.
a commercial dispute over an exclusive use clause in a lease
for space in a shopping center. The question presented is
whether the doctrine of claim preclusion prevents a tenant
from suing its landlord for contract damages after having won
an earlier suit against the landlord for declaratory
judgment, where both suits concern the same underlying facts.
Ordinarily, claim preclusion bars a second suit seeking to
vindicate claims that were or could have been asserted in the
first suit. But the claim-preclusion doctrine makes an
exception for declaratory judgment actions, which are
designed to give parties an efficient way to obtain a
judicial declaration of their legal rights before positions
become entrenched and irreversible damage to relationships
occurs. While a party may join claims for declaratory relief
and damages in a single suit, the law does not require it. So
long as the first suit only sought declaratory relief, a
second suit for contract damages may follow. Also, in a case
involving a continuing or recurrent wrong, a party may sue
separately for after-accruing damages. We therefore reject
the landlord's argument that the doctrine of claim
preclusion requires reversal of the judgment awarding
contract damages to the tenant and affirm.
Boca Park owns a Las Vegas shopping center. In 2002, Boca
Park entered into a 20-year lease with respondent Higco, Inc.
The lease allowed Higco to operate a tavern in its leased
space and included an exclusive use clause, by which Boca
Park granted Higco "an exclusive for Boca Park I for a
tavern and gaming, except for any tenants currently located
in the center which allow gaming (i.e. Vons, Longs)."
Based on the lease, Higco opened a tavern and installed slot
machines for its patrons' use.
2011 or early 2012, Higco learned that Boca Park had entered
into a lease with a new tenant, Wahoo's Fish Tacos, and
that Wahoo's had applied for a gaming license. On April
23, 2012, Higco sued Boca Park for declaratory relief. In its
complaint, Higco alleged that Boca Park had leased space to
Wahoo's, who had applied for a gaming license, and sought
a judgment declaring that the Higco/Boca Park lease gave
Higco the exclusive right to offer gaming in the shopping
after Higco filed its declaratory judgment complaint,
Wahoo's obtained its gaming license and opened for
business, competing with Higco by also offering slot-machine
gaming. Higco did not amend its complaint to seek damages or
injunctive relief, and the case was submitted to the district
court on cross-motions for summary judgment. The district
court decided the cross-motions in Higco's favor and
entered declaratory judgment for Higco. The judgment declared
that the "controlling lease is unambiguous, and . . .
Higco has a right to an exclusive use both for tavern and for
gaming in Boca Park I, except for any tenants offering gaming
in Boca Park I as of November 5, 2002." Neither side
appealed, and the declaratory judgment became final in
December of 2012, less than nine months after the action
the declaratory judgment, Boca Park continued to allow
Wahoo's to offer slot-machine gaming. Higco protested
that this breached the exclusive use clause in the lease,
causing ongoing economic damages. The parties tried to settle
their differences, to no avail, and in December 2014, two
years after the declaratory judgment became final, Higco
filed a second complaint against Boca Park. In this
complaint, Higco sought damages from Boca Park for breach of
contract and breach of the implied covenant of good faith and
Park moved to dismiss, arguing that the doctrine of claim
preclusion barred Higco's claims for contract damages
because those claims could and should have been made in the
earlier declaratory judgment action. The district court
denied Boca Park's motion. A bench trial followed, in
which the district court awarded Higco $497, 000 in damages
for Boca Park's breach of the exclusive use clause in
Higco's lease. Boca Park appeals.
preclusion makes a valid final judgment conclusive on the
parties and ordinarily bars a later action based on the
claims that were or could have been asserted in the first
case. See Five Star Capital Corp. v. Ruby, 124 Nev.
1048, 1055, 194 P.3d 709, 713 (2008). Whether claim
preclusion operates to bar this action for contract damages
based on the final judgment Higco obtained in its earlier
declaratory relief action presents a question of law ...