Davis v. Beling

278 P.3d 501

128 Nev. Adv. Op. 28

Cheryl DAVIS, an Individual; and Triple Win, LLC, d/b/a Platinum Properties GMAC Real Estate, A Nevada Limited Liability Company, Appellants/Cross–Respondents,

v.Kristen L. BELING, an Individual; and William Dougherty, Jr., an Individual and as Trustee of The Dougherty–Beling Family Trust, Respondents/Cross–Appellants.

No. 53182.

Supreme Court of Nevada.

June 14, 2012.

Appeal and cross-appeal from a district court judgment in a real property contract action. Eighth Judicial District Court, Clark County; Douglas W. Herndon, Judge.¹

Affirmed in part, reversed in part, and remanded.

David J. Winterton & Associates, Ltd., and David J. Winterton and David E. Doxey, Las Vegas, for Appellants/Cross–Respondents.

Dziminski & Associates and Brian R. Dziminski, Las Vegas, for Respondents/Cross–Appellants.

Before SAITTA, HARDESTY and PARRAGUIRRE, JJ.

OPINION

By the Court, SAITTA, J.:

In this appeal and cross-appeal, we address several issues arising from a dispute over a series of property transactions. First, we are asked to construe NRS 48.105, which provides that evidence of offers of compromise must be excluded when introduced “to prove liability for or invalidity of the claim or its amount,” but also states that exclusion is not required “when the evidence is offered for another purpose.” In particular, we consider whether evidence of compromise offers is admissible for the purpose of demonstrating a failure to mitigate damages. Applying the plain language of NRS 48.105, we conclude that compromise offers are not admissible for this purpose because evidence demonstrating a failure to mitigate damages necessarily goes to the “amount” of a claim. Accordingly, the district court did not err in excluding such evidence.

Next, we interpret NRS 645.251, which provides, in pertinent part, that real estate licensees are “not required to comply with any principles of common law that may otherwise apply to any of the duties of the licensee as set forth in NRS 645.252, 645.253 and 645.254.” Specifically, we address whether NRS 645.251 shields real estate licensees from common law forms of liability. We conclude that although the statute does not, in all instances, shield real estate licensees from common law forms of liability, it precludes such liability when the type of conduct complained of is covered by NRS 645.252, 645.253, or 645.254. Here, because the fraud-by-concealment claim brought against appellant/cross-respondent Cheryl Davis by respondents/cross-appellants Kristen Beling and William Dougherty, Jr. (the Doughertys) is premised on the type of conduct covered in NRS 645.252–645.254, the district court erred in entering judgment on this claim. The court did not err, however, in entering judgment, as to liability, on the Doughertys' NRS 645.257 claim that Davis breached the duties imposed by NRS 645.252–645.254. Nor did the district court err in entering judgment, as to liability, on the Doughertys' NRS 645.257 claim against appellant/cross-respondent Triple Win, LLC, d.b.a. Platinum Properties GMAC Real Estate (Platinum) because that claim is predicated on a theory of liability not covered in NRS 645.252–645.254.

We next address the damages that are recoverable for a real estate licensee's breach of the duties set forth in NRS 645.252–645.254, in light of NRS 645.257's declaration that “actual damages” may be recovered for such violations. We conclude that the term “actual damages” is synonymous with the term “compensatory damages.” Thus, although punitive damages may not be recovered under NRS 645.257, we conclude that compensatory damages are recoverable under the statute in accordance with the measure of damages that appropriately compensates the injured party for the losses sustained as a result of the real estate licensee's violations. In the instant case, the district court did not err in determining that diminution damages were an appropriate measure of the Doughertys' compensatory damages, but it erred in precluding their recovery of the consequential damages necessaryto fully compensate them for their losses.

Finally, we address whether the Doughertys are entitled to an award of attorney fees pursuant to the listing and purchase agreements for the properties at issue. We conclude that because the Doughertys successfully defended against the breach of contract claims brought against them under these agreements, they are entitled to an award of attorney fees under the terms of these agreements. Consequently, the district court erred in denying the Doughertys' request for these fees.

FACTS AND PROCEDURAL HISTORY

Background

In 2005, the Doughertys decided to sell their home located on Augusta Drive in Henderson (the Augusta Property) and build a custom home in the MacDonald Highlands development in Henderson. The Doughertys entered into a listing agreement with Davis and Platinum, whereby Davis would serve as the agent for the listing and sale of the Augusta Property and Platinum would act as the broker. The Doughertys explained to Davis that they wished to use the proceeds from the sale of the Augusta Property in order to finance the acquisition of the lot for their custom-built home.

Thereafter, the Doughertys agreed to sell the Augusta Property to Chris and Tracy Byrd. The Byrds provided the Doughertys with an earnest money deposit, and escrow was set to close in a few months. The Doughertys then located a lot in the MacDonald Highlands development on which they wished to build their custom home (the MacDonald Highlands Property). Davis assured the Doughertys that the Byrds would go through with the purchase of the Augusta Property and, relying on these assurances, the Doughertys closed on the MacDonald Highlands Property, despite the fact that the Byrds had not yet closed on the Augusta Property.

The Doughertys needed a place to live during the interim period between the anticipated sale of the Augusta Property and the estimated two-year construction of the MacDonald Highlands Property. Davis convinced the Doughertys that purchasing a property and then selling it at a profit after they moved into the MacDonald Highlands Property would be preferable to renting a residence. Thus, Davis showed the Doughertys a few properties located in Henderson, including a residence located on Ping Drive (the Ping Property). The Doughertys thereafter entered into an agreement to purchase the Ping Property for $825,000. The Doughertys explained to Davis, however, that it was imperative that the closing of the Ping Property be contingent on the closing of the Augusta Property because they needed to use the funds from the sale of the Augusta Property in order to close on the Ping Property. Contrary to these instructions, Davis did not make the Doughertys' offer on the Ping Property contingent.

The planned series of transactions started to unravel when problems began to threaten the closing of the Augusta Property due to the Byrds' difficulty in selling their home. Davis, however, repeatedly represented to the Doughertys that the sale of the Augusta Property had successfully closed. In fact, the sale had not closed, and Davis thereafter called the Doughertys and conceded that the Augusta Property was not closing. Davis explained to the Doughertys that the Byrds were unable to sell their home, and, as a result, they could not purchase the Augusta Property.

The following day, the Doughertys spoke with the Byrds' lender, who informed the Doughertys that the Byrds still wished to purchase the Augusta Property, but that they needed three days to obtain the necessary funds to do so. Immediately thereafter, Davis called the Doughertys and told them that they needed to close escrow on the Ping Property or they would lose their earnest money deposit. By this time, the Doughertys no longer trusted Davis, and they told her that they did not wish to close on the Ping Property because the Augusta Property had not closed. Then, purporting to be acting on behalf of the Byrds, Davis offered to advance the Doughertys the $150,000 needed to close on the Ping Property. Davis told the Doughertys that the Byrds would close on the Augusta Property in a few more days. She then represented that she was placing the money into escrow on behalf of the Byrds for the Augusta Property. Relying on Davis's assurances that she had worked out an arrangement for the Byrds to close on the Augusta Property, the Doughertys accepted the $150,000 advance and closed on the Ping Property. Ultimately, the Byrds were unable to successfully close on the Augusta Property. Afterward, Davis verbally offered to purchase the Ping Property from the Doughertys, but the Doughertys refused.

Proceedings below

Davis sued the Doughertys under various theories of liability, including breach of contract, unjust enrichment, and fraud, seeking to recover the $150,000 that she had advanced to the Doughertys. The Doughertys countersued Davis for, among other things, negligent misrepresentation, fraud by misrepresentation and concealment, breach of fiduciary duty, slander of title, and abuse of process. In addition, the Doughertys brought a claim against Davis under NRS 645.257, which provides a statutory cause of action for the victim of a real estate licensee's breach of the various duties imposed by NRS 645.252–645.254. The Doughertys also sued Platinum under NRS 645.257, based on a respondeat superior theory. Platinum filed a third-party complaint against the Doughertys for breach of the listing and purchase agreements for the Augusta Property and the purchase agreement for the Ping Property.

The Doughertys later rejected an offer of judgment made by Davis. Davis similarly rejected an offer of judgment made by the Doughertys, and the dispute was scheduled for a jury trial. Around this time, the Doughertys filed a motion in limine to exclude evidence of Davis's oral offer to buy the Ping Property, asserting that NRS 48.105(1) requires the...