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Dezzani v. Kern & Associates, Ltd.

Supreme Court of Nevada, En Banc

March 1, 2018

DAVID DEZZANI; AND ROCHELLE DEZZANI, Appellants,
v.
KERN & ASSOCIATES, LTD.; AND GAYLE A. KERN, Respondents. DAVID DEZZANI; AND ROCHELLE DEZZANI, Appellants,
v.
KERN & ASSOCIATES, LTD.; AND GAYLE A. KERN, Respondents.

         Consolidated pro se appeals from orders dismissing a complaint in a tort action and awarding attorney fees and costs. Second Judicial District Court, Washoe County; Elliott A. Sattler, Judge.

          David Dezzani and Rochelle Dezzani, San Clemente, California, in Pro Se.

          Kern & Associates, Ltd., and Gayle A. Kern and Veronica A. Carter, Reno; McDonald Carano LLP and Debbie A. Leonard, Reno, for Respondents.

          Marquis Aurbach Coffing and Micah S. Echols and Adele V. Karoum, Las Vegas, for Amicus Curiae State Bar of Nevada.

          OPINION

          HARDESTY, J.

         In these consolidated appeals, we consider whether an attorney can be held liable for a claim under NRS 116.31183 as an agent of a common-interest community homeowners' association. We also consider whether attorneys litigating pro se and/or on behalf of their law firms can recover attorney fees and costs.

         We conclude that an attorney is not an "agent" under NRS 116.31183 for claims of retaliatory action where the attorney is providing legal services for a common-interest community homeowners' association. We further conclude that attorneys litigating pro se and/or on behalf of their law firms cannot recover fees because those fees were not actually incurred by the attorney or the law firm. However, we conclude that attorneys litigating pro se and/or on behalf of their law firms can recover taxable costs in the action. Accordingly, we affirm in part and reverse in part.

         FACTS AND PROCEDURAL HISTORY

         Appellants David and Rochelle Dezzani own a condominium in Incline Village, Nevada. Like all unit owners, the Dezzanis are members of the McCloud Condominium Homeowners' Association (HOA), which is governed by a board of directors and subject to the Revised Declaration of Limitations, Covenants, Conditions, and Restrictions of McCloud Condominium Homeowners' Association (CC&Rs). Respondents Gayle Kern, a Nevada attorney, and her law firm, Kern & Associates (collectively, Kern), represent the HOA and provide legal advice to its governing board.

         In 2013, a dispute arose between the Dezzanis and the HOA regarding an extended deck on the Dezzanis' unit: The previous unit owner installed the deck extension with board approval in 2002. The board issued the Dezzanis a notice of violation (NOV) with drafting assistance from Kern informing the Dezzanis that the deck encroached into the common area and thus violated the CC&Rs. The NOV indicated that the Dezzanis had two choices: (1) submit an architectural application to the board to revert the deck back to its original size; or (2) execute a covenant for the deck extension, which would allow it to remain for the Dezzanis' ownership and one subsequent conveyance.

         After the Dezzanis responded to the NOV, Kern sent the Dezzanis a letter stating that she represented the HOA and restating the board's position on the deck extension. Kern and the Dezzanis exchanged several letters wherein Kern communicated the board's position regarding the deck and the Dezzanis challenged the NOV and criticized Kern's legal advice, understanding of Nevada law, and competency. The board held a hearing and ultimately upheld the NOV. Throughout this time, Kern advised the HOA regarding the Dezzanis' and other members' deck extensions.

         The Dezzanis filed a complaint against Kern and board member Karen Higgins.[1] The complaint alleged retaliation based on NRS 116.31183. This statute allows a unit owner to "bring a separate action" for compensatory damages, attorney fees, and costs. NRS 116.31183(2)(a), (b). Such an action is permissible when "[a]n executive board, a member of an executive board, a community manager or an officer, employee or agent of an association" takes

retaliatory action against a unit's owner because the unit's owner has:
(a) Complained in good faith about any alleged violation of [NRS Chapter 116] or the governing documents of the association;
(b) Recommended the selection or replacement of an attorney, community manager or vendor; or
(c) Requested in good faith to review the books, records or other papers of the association.

NRS 116.31183(1). The Dezzanis alleged that Kern retaliated against them because they requested that the HOA retain a new attorney; however, the Dezzanis did not specify how Kern retaliated against them other than furnishing advice to the HOA and communicating with the Dezzanis on behalf of the HOA.

         The district court granted Kern's NRCP 12(b)(5) motion to dismiss with prejudice after finding that NRS 116.31183 does not permit attorneys to be held personally liable for action taken on behalf of a client, and that "to permit such causes of action against Kern would result in a chilling effect on individuals' ability to hire and retain counsel."[2] The district court awarded fees and costs to Kern pursuant to NRS 18.010(2)(b) and NRCP 11, finding that the Dezzanis' claims were intended to harass Kern because Kern informed the Dezzanis that their claims were meritless. The Dezzanis appealed both orders.

         The Dezzanis' appeals were consolidated and assigned to the Court of Appeals, where that court affirmed the order dismissing the complaint and reversed the attorney fees and costs award because the Dezzanis failed to submit their claim to mediation under NRS 38.310(1).[3]See Dezzani v. Kern & Assocs., Docket Nos. 69410 & 69896 (Order Affirming in Part and Reversing in Part, Nev. Ct. App., Nov. 16, 2016). Kern filed a petition for review with this court, which we granted.

         DISCUSSION

         NRS 116.31183 permits "a separate action" when an "agent" of a homeowners' association takes certain retaliatory action against a unit's owner. The issue here is whether the term "agent" in the statute includes an attorney who is providing legal services to and acting on behalf of a homeowners' association.

         The district court did not err in dismissing the Dezzanis' complaint

         We review an order granting an NRCP 12(b)(5) motion to dismiss de novo. Buzz Stew, LLC v. City of N. Las Vegas, 124 Nev. 224, 227-28, 181 P.3d 670, 672 (2008). Issues of statutory construction are reviewed de novo. Pub. Emps.' Benefits Program v. Las Vegas Metro. Police Dep't, 124 Nev. 138, 146, 179 P.3d 542, 548 (2008). "The leading rule of statutory construction is to ascertain the intent of the legislature in enacting the statute." McKay v. Bd. of Supervisors of Carson City, 102 Nev. 644, 650, 730 P.2d 438, 443 (1986). To determine legislative intent, we first consider and give effect to the statute's plain meaning because that is the best indicator of the Legislature's intent. Pub. Emps.' Benefits Program, 124 Nev. at 147, 179 P.3d at 548. "[I]t is the duty of this court, when possible, to interpret provisions within a common statutory scheme harmoniously with one another in accordance with the general purpose of those statutes and to avoid unreasonable or absurd results, thereby giving effect to the Legislature's intent." Torrealba v. Kesmetis, 124 Nev. 95, 101, 178 P.3d 716, 721 (2008) (internal quotation marks omitted).

         The word "agent" is not defined in NRS 116.31183 or otherwise in NRS Chapter 116. See NRS 116.31183; NRS 116.003-.095 (definitions). Kern points to NRS 116.31164, which governs foreclosure of liens, and argues that because NRS 116.31164 uses the words "agent" and "attorney" distinctly, it demonstrates that the Legislature purposefully distinguished an attorney from an agent under NRS Chapter 116. Therefore, Kern contends that the Legislature specifically omitted attorneys from NRS 116.31183, and the term "agent" does not include attorneys.

         We agree. NRS 116.31164(4) states that a foreclosure sale can be "conducted by the association, its agent or attorney." (Emphasis added.) This distinction demonstrates that the Legislature used the term "attorney" when it intended to address situations applying to attorneys and the term "agent" when it intended to generically address the duties owed by agents. See Coast Hotels & Casinos, Inc. v. Nev. State Labor Comm'n,117 Nev. 835, 841, 34 P.3d 546, 550 (2001) ("Generally, when the [Legislature has employed a term or phrase in one place and excluded it in another, it should not be implied where excluded."); Allstate Ins. Co. v. Fackett,125 Nev. 132, 138, 206 P.3d 572, 576 (2009) ("We read statutes within a statutory scheme harmoniously with one another to avoid an unreasonable or absurd result."); McGrath v. State Dep't of Pub. Safety,123 Nev. 120, 123, 159 P.3d 239, 241 (2007) (concluding that "we presume that the Legislature intended to use words in their usual and natural meaning"); see also Food & Drug Admin, v. Brown & Williamson Tobacco Corp.,529 U.S. 120, 133 (2000) (concluding that courts must interpret statutes "as a symmetrical and coherent regulatory scheme" (internal quotation marks omitted)); Davis v. Mich. Dep't of Treasury,489 U.S. 803, 809 (1989) ("It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their ...


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