ZAP's Elec. v. Monarch Constr.

[ECF Nos. 148, 153]

ORDER GRANTING PLAINTIFF'S MOTION FOR ATTORNEY'S FEES AND MOTION TO AMEND JUDGMENT TO INCLUDE INTEREST

This case involves an action filed by Plaintiff Zap's Electrical, LLC (“Zap's”) against Defendant Monarch Construction (“Monarch”). Currently pending before the Court are two motions filed by Zap's. First, Zap's filed a motion for attorney's fees, (ECF No. 148.) Monarch responded, (ECF No. 149), and Zap's replied. (ECF No. 152.) Second, Zap's filed a motion to amend the judgment to include interest. (ECF No. 153.) Monarch responded, (ECF No. 154), and Zap's replied. (ECF No. 155.) For the reasons stated below, the Court grants Zap's motion for attorney's fees and motion to amend the judgment to include interest.

I. FACTUAL BACKGROUND^[1]

This dispute stems from alleged contracts between Zap's and Monarch related to construction work which occurred when Zap's was not a licensed contractor in the state of Nevada. Initially, Zap's contracted with Monarch to perform electrical work on projects at the Circus Circus Hotel and Casino and El Dorado Hotel and Casino for general contractor Digney York. Shortly after beginning the work, the Nevada contractor's board shut down the construction and fined the parties because Zap's was not a licensed contractor. Following the shutdown by the contractor's board, construction restarted and was completed. Ultimately, the parties disagreed over how the money earned from the El

Dorado project should be distributed.

In its complaint, Zap's alleged three claims for relief: (1) breach of contract; (2) promissory estoppel; and (3) unjust enrichment. (ECF No. 22.) As to the first claim, Zap's alleged Monarch breached a contract between the parties by refusing to pay Zap's the full amount upon completion of the construction project. (Id. at 3.) Next, Zap's alleged it is entitled to recoup the reasonable amount of benefits obtained by Monarch based on promissory estoppel because of Zap's detrimental reliance on Monarch's promise to pay for work completed. (Id. at 4.) Finally, Zap's alleged Monarch inequitably retained the payment for completing the project and Zap's is entitled to recoup the reasonable amount of benefits obtained by Monarch based on the doctrine of unjust enrichment.

Thereafter, Monarch filed its answer and asserted counterclaims against Zap's for: (1) breach of contract; (2) unjust enrichment; (3) promissory estoppel; and (4) conversion. (ECF Nos. 8, 15.) Monarch's first counterclaim alleged Zap's breached a contract between the parties by failing to pay Monarch after Monarch performed under the contract. (Id. at 4-5.) Monarch's second counterclaim alleged Zap's received benefits which were due to Monarch and which Monarch is entitled to recover to prevent unjust enrichment of Zap's. (Id. at 5-6.) Next, Monarch alleged it was entitled to a portion of the proceeds from the construction work in connection with the work performed by both parties under the theory of promissory estoppel. (Id. at 6-7.) Finally, Monarch alleged Zap's was not entitled to any of the proceeds from the construction work and therefore, by keeping the funds, converted the proceeds to the exclusion of Monarch. (Id.)

On September 9, 2021, the district court entered an order ruling on the parties' competing motions for summary judgment and Zap's motion to strike. (ECF No. 68.) In the order, the district court granted Zap's motion to strike Monarch's motion for summary judgment as it was filed “nearly three weeks after the deadline.” (Id.) As to the merits of Zap's motion for summary judgment, the district court determined there was genuine issue of material fact existed with respect to whether a contract existed. (Id. at 8-9.) The district court then considered Monarch's argument that even if a contract did exist, the

contract was illegal pursuant to NRS 624.320 because Zap's was not a licensed contractor in the state of Nevada at the time the agreement was formed. (Id.) Although Zap's conceded the contract between the parties was illegal, Zap's argued two exceptions applied through which Zap's could still recover under the terms of the contract: substantial compliance and the Magill test. (Id.) The district court determined that neither exception applied and therefore denied Zap's motion for summary judgment. (Id.)

After the case was set for trial, Monarch filed a document entitled a “Memorandum” in support of its statement of the case. (ECF No. 110.) In this memorandum, Monarch raised - for the first time - the issue of whether the district court's order related to Monarch's motion for summary judgment was binding as law of the case and precluded Zap's claims from being presented to the jury. (Id.) Accordingly, the Court ordered the parties to submit supplemental briefing on the issues raised by Monarch's memorandum in order to determine what, if any, claims could proceed to trial. (ECF No. 119.) Specifically, the Court ordered to the parties to brief:

(1) Whether the district court's order, (ECF No. 68), is law of the case, and, if so, whether the factual findings in that order are binding; and

(2) Whether, despite those decisions appearing to be legal decisions, such decisions can be presented to the jury

(Id.) At the hearing where the Court ordered this briefing, Monarch argued its counterclaim for breach of contract was based on a separate, second contract between the parties. (Id.)

After full briefing, the Court first found that because the district court's order, (ECF No. 68), was a denial of summary judgment for the plaintiff, the order did not bind the Court as the law of the case. (ECF No. 123 at 7 (citing Fred Segal, LLC v. CormackHill, LP, 821 F. Appx 783, 786 (9th Cir. 2020).) Next, the Court determined that there were questions of fact for a jury and therefore Zap's claims should proceed to trial. (Id. at 7-8.) Regardless of whether Zap's claims were precluded by the district court's order, (ECF No. 68), the Court specifically noted that because Monarch affirmatively represented that

its counterclaims are based on a separate contract, those claims would also have to proceed to trial. (Id. at 8 (citing ECF No. 119).) The Court therefore concluded that as a matter of judicial economy, proceeding as to both Zap's claims and Monarch's counterclaims in the same trial was prudent because a trial on any alleged separate contract would involve the same parties and much, if not all, of the same evidence and testimony which would be used to try Zap's claims. (Id.)

The jury trial began on February 12, 2024. (ECF No. 138.) After Monarch rested its case but before the case was submitted to the jury, Zap's made a Rule 50 motion on all of Monarch's counterclaims. (ECF No. 150 at 147.) The Court granted Zap's motion as to Monarch's counterclaims of breach of contract and promissory estoppel based on Monarch's concession that these claims should be dismissed. (Id. at 151, 158.) At the conclusion of the trial, on February 14, 2024, the jury returned a verdict in favor of Zap's. (ECF No. 145.) The jury found in favor of Zap's. Specifically, the jury found that although Monarch did not breach its contract with Zap's, Zap's could recover under the theories of unjust enrichment and promissory estoppel. (Id.) Moreover, the jury rejected each of Monarch's counterclaims for unjust enrichment and conversion. (Id.)

On February 27, 2024, Zap's filed a motion for attorney's fees. (ECF No. 148.) Zap's requests attorney's fees under Nevada Revised Statute section 18.010 for fees incurred defending against Monarch's counterclaims for breach of contract and promissory estoppel and for filing the motion itself. (Id.; ECF No. 152.) Zap's argues section 18.010(2) supports the award of attorney's fees as to those claims because they were brought or maintained without reasonable ground. (Id.) Monarch opposed this motion, arguing that Zap's failed to meet its burden to support an award of attorney's fees. (ECF No. 149.)

On March 20, 2024, Zap's filed a motion to amend the judgment to include prejudgment and post-judgment interest. (ECF No. 153.) Zap's argues the Court is allowed to amend the judgment to include interest under Federal Rule of Civil Procedure 60(a) and NRS 99.040. (Id.) Monarch opposed the motion, arguing that the amount owed

by Monarch was not ascertainable before the litigation and that the date the payment was due is not clear. (ECF No. 154.)

The Court will discuss each of Zap's motions in turn.

II. MOTION FOR ATTORNEY'S FEES

A. Legal Standard

“In diversity actions, federal courts are required to follow state law in determining whether to allow attorneys' fees.” Swallow Ranches, Inc. v. Bidart, 525 F.2d 995, 999 (9th Cir. 1975). Under Nevada law, a prevailing party cannot recover attorney's fees unless authorized by statute, rule, or agreement between the parties. First Interstate Bank of Nevada v. Green, 694 P.2d 496, 498 (Nev. 1985). Relevant here, a party can obtain an award of attorney's fees if the court finds that the action was “brought or maintained without reasonable ground.” NRS § 18.010(2)(b). “The court shall liberally construe the provisions of [NRS 18.010(2)(b)] in favor of awarding attorney's fees in all appropriate situations,” and “[i]t is the intent of the Legislature that the court award attorney's fees pursuant to [NRS 18.010(2)(b)] ... in all appropriate situations to punish for and deter frivolous or vexatious claims and defenses.” Id.

Once it is established that a party is entitled to attorney's fees and costs, the court must then determine the proper amount owed to ensure the award is reasonable. Hensley v. Eckerhart, 461 U.S. 424, 433-34 (1983). In the Ninth Circuit, “[t]he customary method of...