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Pardee Homes of Nevada v. Wolfram

Supreme Court of Nevada

July 3, 2019

PARDEE HOMES OF NEVADA, Appellant,
v.
JAMES WOLFRAM, AN INDIVIDUAL; ANGELA L. LIMBOCKER-WILKES, AS TRUSTEE OF THE WALTER D. WILKES AND ANGELA L. LIMBOCKER-WILKES LIVING TRUST, A NEVADA TRUST; AND WALTER D. WILKES AND ANGELA L. LIMBOCKER-WILKES LIVING TRUST, A NEVADA TRUST, Respondents.

          Appeal from a district court judgment in a breach of contract action and post-judgment orders regarding attorney fees and costs. Eighth Judicial District Court, Clark County; Kerry Louise Earley, Judge.

          McDonald Carano LLP and Pat Lundvall and Rory T. Kay, Las Vegas, for Appellant.

          The Jimmerson Law Firm, P.C., and James M. Jimmerson and James J. Jimmerson, Las Vegas, for Respondents.

          BEFORE HARDESTY, STIGLICH and SILVER, JJ.

          OPINION

          STIGLICH, J.

         Nevada adheres to the American Rule of attorney fees- attorney fees may not be awarded unless there is a statute, rule, or contract

         I providing for such an award. This court, however, has recognized a narrow and limited exception for attorney fees as special damages. We have outlined certain requirements for pleading and proving attorney fees as special damages, and we have recognized scenarios that may warrant such fees. We take this opportunity to clarify that attorney fees incurred by a plaintiff in bringing a two-party breach-of-contract claim against a defendant do not constitute special damages under the narrow and limited exceptions recognized by this court. Because the attorney fees at issue here do not fall into any of the narrow and limited exceptions that permit attorney fees as special damages, we reverse the portion of the district court's judgment awarding attorney fees as special damages. We affirm the portion of the district court's award of attorney fees that was based on the parties' contractual prevailing party provision and remand the matter because the prevailing parties may be entitled to additional attorney fees in light of this opinion.

         BACKGROUND

         In the 1990s, Coyote Springs Investment, LLC (CSI), began planning a development project called "Coyote Springs," to be located over thousands of acres of undeveloped land in Lincoln and Clark Counties of Nevada. Real estate brokers James Wolfram and Walter Wilkes[1] introduced appellant Pardee Homes of Nevada (Pardee) to CSI to initiate Pardee's purchase of portions of Coyote Springs. Pardee and CSI subsequently entered into an agreement (Option Agreement) wherein Pardee agreed to purchase from CSI certain lands designated for the development of single-family residences. Pardee's purchase was to be paid in installments. Additionally, the agreement gave Pardee a 40-year option to purchase other designated property.

         To compensate Wolfram and Wilkes for procuring Pardee's purchase of real property from CSI, Pardee agreed to pay the brokers specified commissions for purchases made pursuant to Pardee and CSFs Option Agreement (Commission Agreement). Additionally, Pardee agreed to keep the brokers reasonably apprised of all matters related to their commission payments and to provide the brokers with documentation corresponding to Pardee's purchases under the Option Agreement. Wolfram and Wilkes received commissions from March 2005 through March 2009 totaling $2, 632, 000.

         Pardee and CSI amended the Option Agreement several times after its inception. Wolfram and Wilkes received the first two amendments I to the Option Agreement as well as the Amended and Restated Option Agreement (AROA), but they did not receive any further amendments to the AROA before they filed the underlying lawsuit.[2] When Wolfram and Wilkes requested information to verify the types of property Pardee was purchasing from CSI and to confirm that its commission payments were accurate, Pardee provided some information concerning its acquisition of property for single-family residences but not all of the requested information. Wolfram and Wilkes continued to ask Pardee for additional information regarding land acquisitions and designations, requested the same from the title companies processing the payments, and attempted to obtain it themselves by searching public records. Wolfram and Wilkes also retained an attorney to seek the requested information.

         Because Wolfram and Wilkes were unable to obtain the sought-after information, they filed suit against Pardee. In the complaint, they alleged three causes of action pertaining to Pardee's obligations under the Commission Agreement: (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, and (3) an accounting. Subsequently the district court, despite Pardee's opposition, granted leave for Wolfram and Wilkes to file an amended complaint to plead attorney fees as special damages. Pardee raised a counterclaim of breach of the implied covenant of good faith and fair dealing against Wolfram and Wilkes.

         After a bench trial, the district court found in favor of Wolfram and Wilkes on their causes of action and against Pardee on its counterclaim. Specifically, the district court held Pardee breached the Commission Agreement and the implied covenant of good faith and fair dealing by failing to keep Wolfram and Wilkes reasonably informed per the terms of the contract and by refusing to provide Wolfram and Wilkes with the requested documentation. The district court concluded there was a special relationship between Pardee and the brokers insofar as the respondents had to rely upon Pardee to keep them reasonably informed of any developments at Coyote Springs that could impact their commission payments.

         The district court ordered an accounting, demanding that Pardee provide Wolfram and Wilkes-and their successors or assigns-all future amendments made to the AROA and to continue to keep the respondents reasonably informed under the Commission Agreement. Additionally, the district court awarded Wolfram and Wilkes attorney fees on two grounds: (1) $135, 500 as special damages, concluding that Wolfram and Wilkes were forced to file suit against Pardee in order to get the information to which they were entitled pursuant to ...


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