Reno Partner Brian Walters recently negotiated a favorable settlement for a firm client, an international manufacturer of heating and cooling systems and components. Walters negotiated the settlement after obtaining a dismissal of the case, an award of the client’s attorney’s fees and two appeals.
The case was initiated by the plaintiff-owners of a luxury single-family home against a company that installed a ground source geothermal heating and cooling system utilizing heat pumps and related components that were designed and manufactured by the client. The plaintiffs complained to the installer about problems with the system. The installer failed to include the client in those discussions or consult the client about the plaintiffs’ complaint. The plaintiffs eventually notified the installer of their intent to remove and replace the system. However, the installer failed to notify client of plaintiffs’ intent to do so.
The plaintiffs eventually brought suit against the installer. However, in doing so they did not comply with Nevada’s statutory procedures for residential construction defects (“Chapter 40”). The installer answered the plaintiffs’ complaint without objection. The installer then filed a third-party complaint against client and another supplier of components for the system. The installer alleged that the client’s components were defectively designed and were thus the cause of the system failure.
Walters conducted discovery and established that the installer failed to notify the client of its knowledge that the plaintiffs intended to remove and replace the system, thereby depriving client of an opportunity to assess the design defect allegations. Prior to initiating discovery, Walters served a statutory offer of judgment in the amount of $10,001 on the Installer. In Nevada, rejection of a statutory offer of judgment exposes the offeree to the offering party’s attorney’s fees from the date of the offer. The installer rejected the client’s offer.
Walters then collaborated with counsel for the other third-party component supplier to bring a motion to dismiss the plaintiffs’ first-party claims and the installer’s third-party claims for their failure to comply with Chapter 40. The district court granted the motion, dismissing the entire case.
The plaintiffs appealed the district court’s order dismissing their complaint. During the pendency of the appeal, Walters reached out to the installer and with the client’s approval, offered to forego a motion for the client’s attorney’s fees in exchange for a full release and a walk-away settlement. The installer declined, so Walters brought a motion for fees on the client’s behalf. The motion for fees was based on both the rejected offer of judgment and NRS 18.010, which permits the recovery of attorney’s fees for actions “brought and maintained without reasonable grounds.”
Citing the evidence, Walters uncovered during discovery establishing the installer’s spoliation of evidence, the district court ultimately granted the client’s motion for fees for $48,459.50 based on both the rejected offer and NRS 18.010. Walters sought amendment of the order based on additional fees incurred by the client, increasing the fee award to $56,416.50. The installer appealed the amended fee award.
Walters ultimately negotiated a settlement with the installer in which it agreed to dismiss its appeal, fully release and pay the client approximately 84% of the fee award. The firm's client is thrilled with the result.