Casal v. Kurt K. Harris, Esq.

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ERNEST DEL CASAL, AN INDIVIDUAL; AND MICHAEL FRANKLIN, JR., AN INDIVIDUAL, Appellants, v. KURT K. HARRIS, ESQ., P.C., A NEVADA CORPORATION; AND KURT HARRIS, AN INDIVIDUAL, Respondents.

ERNEST DEL CASAL, AN INDIVIDUAL; AND MICHAEL FRANKLIN, JR., AN INDIVIDUAL, Appellants, v. KURT K. HARRIS, ESQ., P.C., A NEVADA CORPORATION; AND KURT HARRIS, AN INDIVIDUAL,

No. 85660-COA

Court of Appeals of Nevada

July 31, 2024

UNPUBLISHED OPINION

ORDER AFFIRMING IN PART AND REVERSING IN PART (DOCKET NO. 85660-COA) AND REVERSING AND REMANDING (DOCKET NO. 86644- CO A)

Gibbons, C.J.

Ernest Del Casal and Michael Franklin, Jr., bring these consolidated appeals from a final judgment on a jury verdict and a post-judgment order awarding attorney fees in a contract and tort action. Eighth Judicial District Court. Clark County David M. Jones, Judge; James M. Bixler, Senior Judge.^[1] Respondent Kurt Harris, who is an attorney, and his law firm, respondent Kurt K. Harris, Esq., P.C. (generally referred to collectively herein as Harris), commenced the underlying proceeding against Del Casal and Franklin. In the operative complaint, Harris alleged that he purchased a business known as Equal Rights for Divorced Fathers (ERDF) from Del Casal who initially stayed on with the business, but later left. Harris further alleged that Del Casal subsequently began posting defamatory content about Harris online to harm ERDF. Harris essentially alleged that Del Casal posted such content on a website he created with the domain name equalrightsfordivorcedfathers.com (referred to herein as the rogue website) and that he caused the rogue website to be associated with the "Google listing" for ERDF to misdirect customers and harm Harris. Lastly, Harris alleged that Franklin was an internet technician who assisted Del Casal in the foregoing actions.

Based on his allegations concerning the defamatory statements, Harris asserted claims against Del Casal and Franklin for business disparagement and defamation per se.^[2] In connection with his allegations concerning the rogue website, Harris asserted a claim for conversion^[3] against Del Casal and Franklin as well as a claim for breach of contract against Del Casal. To establish that Del Casal and Franklin were subject to secondary liability, Harris asserted a claim against them for civil conspiracy.

Following a five-day jury trial, the jury returned a verdict in favor of Harris on all claims. The jury awarded Harris a total of $13,600 in damages against Del Casal, itemizing the damages as follows: (1) $1,000 for defamation per se, (2) $4,500 for lost business opportunities, (3) $8,100 for lost profits, (4) $0 for breach of contract, and (5) $0 for conversion. The jury also awarded Harris a total of $7,250 in damages against Franklin, itemizing the damages as follows: (1) $500 for defamation per se, (2) $2,250 for conversion, (3) $2,250 for lost profits, and (4) $2,250 for lost business opportunities. After the district court entered judgment on the jury's verdict, Del Casal and Franklin filed the appeal in Docket No. 85660-COA to challenge the judgment.

Harris then filed a post-judgment motion for attorney fees, citing to NRCP 68 and MRS 18.010(2)(a) and (b) as the bases for the award, which Del Casal and Franklin opposed. At the hearing that followed, the district court orally ruled that Harris could not recover attorney fees pursuant to NRCP 68 because his conditional offer of judgment required Del Casal and Franklin to agree to a permanent injunction against them. However, the district court further reasoned that Harris could recover attorney fees as the prevailing party in the underlying proceeding and directed the parties to provide supplemental briefing on the reasonableness of only those attorney fees that were attributable to a third-party attorney who represented Harris during the underlying proceedings based on the factors set forth in Brunzell v. Golden Gate National Bank, 85 Nev. 345, 349, 455 P.2d 31, 33 (1969). Following supplemental briefing, the district court conducted a second hearing where it orally awarded Harris $2,500 in attorney fees in connection with the third-party attorney's representation. Thereafter, in February 2023, the district court entered a written order that summarily awarded Harris $2,500 in attorney fees. Del Casal and Franklin then moved to set aside the portion of the February 2023 order awarding Harris attorney fees pursuant to NRCP 60(b)(1), arguing that the district court failed to identify the legal basis for the attorney fees award. Harris opposed that request, which the district court denied insofar as it related to the attorney fees award, finding that the February 2023 order accurately conveyed the court's oral ruling at the second hearing on Harris's request for attorney fees.^[4] Del Casal and Franklin filed the appeal in Docket No. 86644-COA to challenge the February 2023 order awarding Harris attorney fees.

Docket No. 85660-COA

As discussed above, in Docket No. 85660-COA, Del Casal and Franklin challenge the judgment on the jury verdict. They initially contend that their defamatory statements were not actionable in the context of a claim for defamation per se because the statements concerned the cost and quality of ERDF's services, and, therefore, needed to be addressed in the context of Harris's claim for business disparagement. We review questions of law de novo. Erie v. Graham, 140 Nev., Adv. Op. 26, 546 P.3d 1232, 1236 (2024).

Although claims for defamation per se and business disparagement are similar insofar as they impose liability for injuries sustained due to the publication of false statements to third parties, the two claims protect different interests. See Clark Cnty. Sch, Dist. v. Virtual Educ. Software, Inc., 125 Nev. 374, 385-86, 213 P.3d 496, 503-04 (2009) (setting forth the elements of defamation per se and business disparagement and comparing the interests protected by each). In particular, a claim for defamation per se generally protects the plaintiffs personal reputation while a claim for business disparagement protects the plaintiffs economic interests against injurious falsehoods that concern its goods and services and interfere with business. Id. at 385, 213 P.3d at 504. "Thus, if a statement accuses an individual of personal misconduct in his or her business or attacks the individual's personal reputation, the claim may be one for defamation per se; however, if the statement is directed towards the quality of the individual's products or services, the claim is one for business disparagement." Id. at 385-86, 213 P.3d at 504.

Here, Harris presented evidence of many false statements concerning the cost and quality of ERDF's services, which were portrayed as expensive, predatory, and unlawful as well as inconsistent with those it once provided. As a result, the statements supported an actionable claim for business disparagement. See id. However, those statements also supported an actionable claim for defamation per se because they implied that Harris was operating ERDF in a manner that amounted to misconduct or even a fraud upon the public. See Restatement (Second) of Torts § 623A cmt. g (Am. Law Inst. 1977) (stating that claims for defamation and business disparagement may overlap and explaining that statements about a business or its services may support a claim for defamation where the statements fairly imply an imputation that the "plaintiff is dishonest or lacking in integrity or that he is perpetrating a fraud upon the public by selling something that he knows to be defective"); see also see Clark Cnty. Sch. Dist., 125 Nev. at 385, 213 P.3d at 504. Moreover, additional defamatory statements were made that accused Harris of being dishonest and untrustworthy, which were likewise actionable in the context of his claim for defamation per se given that they impugned his reputation. See Clark Cnty. Sch. Dist., 125 Nev. at 385, 213 P.3d at 504. Consequently, Del Casal and Franklin have not presented a basis for relief in this respect. See Ene, 140 Nev., Adv. Op. 26, 546 P.3d at 1236.

Del Casal and Franklin further assert that the district court should have found that Harris was a limited-purpose public figure, an argument they advance in an effort to show that Harris was required to establish actual malice to satisfy the intent element of his claim for defamation per se. See Pegasus v. Reno Newspapers, 118 Nev. 706, 718-20, 57 P.3d 82, 90-91 (2002) (explaining that, to prevail on a claim for defamation against a limited-purpose public figure, the plaintiff must establish actual malice by showing that the defendant's defamatory statement was made with "knowledge that it was false or with reckless disregard of whether it was false or not" (alteration omitted)); see also Tesla, Inc. v. Tripp, 487 F.Supp.3d 953, 970 (D. Nev. 2020) (stating that whether a plaintiff is a limited-purpose public figure is a question of law for the court to decide).

"A limited-purpose public figure is a person who voluntarily injects himself or is thrust into a particular public controversy or public concern, and thereby becomes a public figure for a limited range of issues." Pegasus, 118 Nev. at 720, 57 P.3d at 91. A plaintiff is a limited-purpose public figure if the following factors are satisfied: (1) "a public controversy existed when the statements were made," (2) "the alleged defamation is related to the plaintiffs participation in the controversy," and (3) "the plaintiff voluntarily injected itself into the controversy for the purpose of influencing the controversy's ultimate resolution." Planet Aid, Inc. v. Reveal 44 F.4th 918, 925 (9th Cir. 2022); see also Pegasus, 118 Nev. at 720, 57 P.3d at 91 (stating that the test for evaluating whether a plaintiff is a...