Recreation Dev. Co. v. Clearwater Mechanical C/W 63637 ( 2015 )


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  •                  debt. Rather than proceed with the purchase or a merger, RDC and
    Paonessa entered into an employment agreement.
    During this time, Clearwater was a subcontractor for Jaynes
    Corporation on a project to remodel a portion of the Clark County Family
    Court Building. At the conclusion of the project, RDC and Paonessa
    disputed who was entitled to receive the final payment from Jaynes.
    Consequently, Jaynes filed an interpleader action in the district court.
    Clearwater and RDC filed separate answers, cross-claims, and third-party
    complaints for breach of contract, among other claims. The final payment
    from Jaynes was deposited with the court, Jaynes was released from the
    action, and RDC and Clearwater were ordered to litigate or settle between
    themselves.
    Prior to trial, RDC extended to Clearwater and Paonessa an
    apportioned offer of judgment for half of the final payment from Jaynes.
    Paonessa and Clearwater rejected the offer. Following a bench trial, the
    court decided all claims in favor of RDC and awarded it the entire Jaynes
    payment. Accordingly, RDC filed a post-judgment motion for fees and
    costs pursuant to NRS 17.115 and NRCP 68. The court denied RDC's
    motion for fees, but granted its motion for costs. On appeal, Paonessa
    challenges the district court's decision on the merits, and on cross-appeal,
    RDC challenges the district court's denial of its motion for attorney fees.
    District court findings of fact
    Clearwater contends that the district court was clearly
    erroneous in finding that (1) RDC did not make a profit on the remodel
    project; (2) RDC was not in possession of any assets that belonged to
    Clearwater or Paonessa; and (3) RDC's principals were not parties to any
    agreement, intended or alleged, for the purchase of Clearwater. Findings
    of fact are clearly erroneous and subject to reversal when "there is no
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    evidence in support of [them]." Pink v. Busch, 
    100 Nev. 684
    , 688, 
    691 P.2d 456
    , 459 (1984). In a contract dispute, the complaining party carries the
    burden of proof.   See 23 Richard A. Lord, Williston on Contracts § 63:14
    (4th ed. 2002).
    Regarding Clearwater's first contention, Clearwater's only
    proof that RDC profited from the project is a report that profits of $886.14
    were anticipated when the project was 99% complete. This does not
    conclusively establish that RDC profited from the project. At trial,
    Paonessa conceded that he did not know if any profits were realized; and
    Clearwater does not even argue (let alone prove) that the remaining 1% of
    the project would have cost less than $886.14 to complete. Clearwater's
    unsupported argument that RDC may have realized a profit does not
    justify reversal. Accordingly, we conclude that the district court did not
    err in finding that RDC did not profit from the project.
    Second, the district court did not err in finding that RDC is
    not in possession of any of Clearwater's assets. Possession is "having or
    holding property in one's power; the exercise of dominion over
    property. ... The detention or use of a physical thing with the intent to
    hold it as one's own."     Black's Law Dictionary 1351 (10th ed. 2014).
    Paonessa took three water heaters that Clearwater owned to RDC's
    facilities, along with the rest of Clearwater's inventory and assets, when
    he vacated Clearwater's business premises. Paonessa testified at trial
    that he was informed he could retrieve the water heaters from RDC.
    RDC's principals also testified at trial that RDC has no use for the heaters
    and wants Paonessa to remove them. RDC solely "possesses" the water
    heaters because Paonessa failed to retrieve them pursuant to RDC's
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    direction. Therefore, we conclude that RDC does not have the intent
    necessary to possess the heaters from a legal perspective.
    Third, Clearwater argues that RDC's letter of intent and the
    financial documentation it gave RDC preclude the trial court's finding that
    RDC's principals did not agree to purchase Clearwater. This argument is
    unpersuasive. RDC explains that after reviewing the financial
    information, its accountant advised against purchasing Clearwater due to
    its substantial debt. Testimony at trial indicated that a review of financial
    documentation is generally necessary to allow the purchasing company to
    perform due diligence. We consequently conclude that the district court
    did not err in finding that RDC's principals did not agree to purchase
    Clearwater.
    The district court's legal conclusions
    Clearwater contends that the district court erred in concluding
    as a matter of law that (1) Paonessa interfered with the payment from
    Jaynes to RDC, and (2) that RDC was not unjustly enriched.
    A determination based on factual conclusions but requiring
    distinctively legal analysis is reviewed as a mixed question of law and fact.
    Hernandez v. State, 
    124 Nev. 639
    , 646,188 P.3d 1126, 1131 (2008). Thus,
    deference will be given to factual findings so long as those findings are
    supported by substantial evidence and are not clearly erroneous; the legal
    consequences of those factual findings will be reviewed de novo.    Ybarra v.
    State, 
    127 Nev. 47
    , 58, 
    247 P.3d 269
    , 276 (2011).
    The district court did not clearly err when it determined that
    Paonessa interfered with payments from Jaynes, because the court heard
    testimony that Paonessa misappropriated a check that the parties
    designated for deposit in RDC's account.     See Pink, 100 Nev. at 688,691
    P.2d at 459. Paonessa did not dispute this testimony. Hence, we conclude
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    that the district court did not err in concluding Paonessa interfered with
    the payment.
    Clearwater also failed to prove that RDC was unjustly
    enriched. See Kitchin   V.   Mori, 
    84 Nev. 181
    , 184, 
    437 P.2d 865
    , 866 (1968)
    (stating that the burden is on the alleging party to prove unjust
    enrichment); see also Unionamerica Mortg. & Equity Trust v. McDonald,
    
    97 Nev. 210
    , 212, 
    626 P.2d 1272
    , 1273 (1981) (defining unjust enrichment).
    Clearwater failed to prove that RDC profited during the time that it
    employed Paonessa. Clearwater also failed to prove any damages or an
    amount of damages. And Clearwater failed to prove that Paonessa's
    salary and RDC's payment of Clearwater's debts was inadequate
    compensation. Consequently, we conclude the district court did not err in
    determining that RDC was not unjustly enriched.
    Employment agreement
    Clearwater contends that the district court erred by failing to
    identify which of two similar employment agreements executed by the
    parties (trial exhibit 6 agreement or trial exhibit 16 agreement) was valid.
    It also contends that limiting enforcement of the agreement to the joint
    payment requirement was erroneous.
    At trial, the parties disputed which version of the employment
    agreement (exhibit 6 or 16) controlled. If exhibit 16 controlled, as
    Paonessa contends, the terms of the contract may have required RDC to
    employ Paonessa for a minimum of three years.' If exhibit 6 controlled, as
    RDC contends, the terms of the contract do not require RDC to employ
    'The agreement referenced as exhibit 16 states that "Mario
    Paonessa agrees to obtain and maintain Plumbing, Class 'Cl' Qualified
    Employee (QE) status with RDC while maintaining his employee status
    for same for a period of not less than three (3) year[s]."
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    Paonessa for any specific length of time. 2 Accordingly, whether RDC could
    terminate Paonessa's employment without being in breach of the
    employment agreement depends upon which agreement controls.
    The existence of a contract is a question of fact, "requiring this
    court to defer to the district court's findings unless they are clearly
    erroneous or not based on substantial evidence."        May v. Anderson, 
    121 Nev. 668
    , 672-73, 
    119 P.3d 1254
    , 1257 (2005). Unfortunately, the district
    court's order does not expressly state which version of the contract that
    the court found to be binding; the court's findings simply indicate that
    "Recreation Development Company entered into an [']Employment and
    Projects Transactions Agreement' (the 'agreement') with Clearwater and
    Paonessa and said agreement is valid and binding." Regardless, "[i]ri the
    absence of an express finding it is the duty of the appellate court to
    presume the findings of the lower court to have been such as were
    necessary to support the judgment." Edwards v. Jones, 
    49 Nev. 342
    , 352,
    
    246 P. 688
    , 691 (1926).
    We conclude that a careful reading of the district court's order
    reflects that it found exhibit 6 to be the controlling agreement, because in
    the district court's findings of fact, the court quoted language from exhibit
    6. The language quoted in the district court's findings of fact does not
    appear in exhibit 16. Moreover, the district court's order explicitly states
    that the agreement is valid and binding. Therefore, we conclude that the
    district court did not find that the only enforceable term is the joint
    payment provision.
    2 The agreement referenced as exhibit 6 states, "Mario Paonessa
    agrees to obtain and maintain Plumbing, Class 'Cl' Qualified Employee
    (QE) status with RDC while maintaining his employee status for same."
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    Attorney fees
    RDC requests that this court reverse the district court's denial
    of its motion for attorney's fees and remand the matter for a hearing on
    the amount of fees. RDC asserts that the district court abused its
    discretion in denying its request for fees because the court did not apply
    the factors as required in Beattie v. Thomas, 
    99 Nev. 579
    , 588-89, 
    668 P.2d 268
    , 274 (1983).
    This court reviews attorney fees awards for an abuse of
    discretion. Gunderson v. D.R. Horton, Inc., 
    130 Nev. Adv. Op. No. 9
    , 
    319 P.3d 606
    , 615 (2014). The district court's ruling will be upheld unless "the
    trial court's exercise of discretion [in evaluating the Beattie factors] is
    arbitrary or capricious."      Schouweiler v. Yancey Co.,   
    101 Nev. 827
    , 833,
    
    712 P.2d 786
    , 790 (1985).
    Offerees who reject an offer of judgment but fail to obtain a
    more favorable judgment "shall pay the offeror's post-offer costs,
    applicable interest on the judgment from the time of the offer to the time
    of entry of the judgment and reasonable attorney's fees, if any be allowed."
    NRCP 68(f)(2) (emphasis added); see also NRS 17.115(4)(d)(3). When the
    trial court finds that an offer of judgment was valid, the court "must
    consider and weigh" the factors enumerated in Beattie. Gunderson, 
    130 Nev. Adv. Op. No. 9
    , 319 P.3d at 615 (emphasis added).
    We cannot say that the district court's decision was arbitrary
    or capricious in this instance. Implicitly, the court's minutes reflect that
    the court found the joint offer of judgment valid for the purposes of NRS
    17.115 and NRCP 68 sanctions and that it considered the Beattie factors in
    its denial of attorney fees. See 
    Beattie, 99 Nev. at 588-89
    , 668 P.2d at 274.
    Further, the court's order stated that Paonessa's claims were not brought
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    in bad faith and his decision to reject the offer of judgment and proceed to
    trial was not grossly unreasonable.
    However, the court's written order did not address the
    remaining two Beattie factors. Although "the district court's failure to
    make explicit findings is not a per se abuse of discretion," the record must
    nonetheless reflect that the district court considered all the factors.   Wynn
    v. Smith, 
    117 Nev. 6
    , 13, 
    16 P.3d 424
    , 428-29 (2001). Here, the court's
    minutes and the record are insufficient to clearly reflect that the district
    court properly considered the validity of the offer of judgment and all of
    the Beattie factors. See Schwartz v. Estate of Greenspun, 
    110 Nev. 1042
    ,
    1049-50, 
    881 P.2d 638
    , 642-43 (1994); see also NRCP 58(c); Rust v. Clark
    Cnty. Sch. Dist., 
    103 Nev. 686
    , 689, 
    747 P.2d 1380
    , 1382 (1987) (an oral
    pronouncement of judgment or the clerk's minute order are not valid for
    any purpose). Consequently, we remand with instructions to enter an
    order that addresses the validity of the offer and all of the Beattie factors. 3
    Accordingly, we
    ORDER the judgment of the district court AFFIRMED IN
    PART, REVERSED IN PART AND REMANDED to the district court for
    entry of an order regarding RDC's request for attorney's fees that
    considers all of the Beattie factors.
    P.Parragielli.er
    ,J.
    J.
    Douglas                                      Cherry
    3 We have considered the parties' remaining arguments and conclude
    that they are without merit.
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    cc: Hon. Timothy C. Williams, District Judge
    Williams & Associates
    Scott Michael Cantor, Ltd.
    Accelerated Law Group
    Eighth Judicial District Court Clerk
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