Back in April, Ticor Title, who holds the Montage escrow accounts, filed an "Interpleader" lawsuit against Montage Marketing Corporation (Corus Bank). Deposit holders wanted their money back, Montage didn’t want to give it back, so Ticor was stuck in the middle. The Docket Report is pretty lengthy. and includes a $1.2M trust disbersment on 29 July.2009 that looks interesting. Can any of you legal types make sense of what is happening witht the case?
Then on Friday, Lee Hotchkins, Esq., who represents most of the deposit holders who have sued for their deposits back, filed this Notice of Lis Pendens (lawsuit pending). For the first time. some of the allegations against the Montage are spelled out. Some seem pretty meaty, , some expected by anyone who follows the building, and others seems like throwing pasta against the wall to see what sticks, but I’m certainly no attorney and can’t judge the claims.
Any of you legal eagles or interested parties care to comment and enlighten the blog about what is going on under the radar here? Everything downtown is in suspended animation until the New Montage shows their hand and starts talking price.
Reno Ignoramus
Mike, the “Docket Report” linked in your thread is part of the Court’s Banner system which is available online for the world to view. As you can see, however, all it provides is the description of the pleadings that have been filed in the case. If anybody wants to actually read the pleadings, that is possible, but it will require a trip to the courthouse and access to the Court’s Contexte system. On Contexte, the actual pleadings can be read. Unfortunately, Contexte is not available outisde of the courthouse, so you can’t access it from home at midnight in your pajamas.
So far all that has happened is that the title co. has paid the deposit money into the Court, which is what an interpleader is. You can see a fair amount of posturing and lawyering going on so far, but to date no determination by the Court as to the final disposition of the deposit funds. One thing is for sure….by the time this thing is finally resolved, the lawyers will have done very well.
SkrapGuy
“…the lawyers will have done very well.”
This case will ultimately settle, just like 99% of all cases settle. But it will not settle until the lawyers have made their payday. After counsel for both sides have made tens of thousands of dollars in fees, they will recommend to their respective clients that settlment is best because “the outcome of litigation is uncertain.”
So in the end, both sides will go away about equally unhappy, which is the standard definition of a good settlement.
Except the lawyers, who will go away very happy.
FutureRenoHomebuyer
Maybe the lawyers can buy themselves a nice penthouse at the Montage….
smarten
RI, I have read a whole lot more from the Docket than “so far all that has happened is that the title co. has paid the deposit money into the Court, which is what an interpleader is.”
I could be wrong but it seems as if,
1. The title company’s request for attorney’s fees for having to bring the interpleader action have been granted [and I presume have been deducted from buyers’ deposits interpled];
2. Buyers’ cross-complaint for affirmative relief has been dismissed or stayed because they must pursue/complete arbitration [as called for in their purchase contracts];
3. Developers’ motion for attorney’s fees in connection with their motion to dismiss because buyers haven’t pursued arbitration has been granted;
4. It’s unclear to me where the buyers’ deposits have gone but they may have been released “somewhere.”
Remember, I haven’t seen any of the docs – I’m just playing out the types of motions and orders that appear in the docket. But three things seem clear. First, the developers have won round one [maybe even round one and one-half].
Second, the amount of funds posted by buyers is less than before the litigation commenced inasmuch as two sets of attorneys have already recovered judgments for their fees.
Third, a jury trial [and consequently the prospect of punitive damages] seems unlikely.
One other observation. I don’t understand buyers’ notice of lis pendens. A lis pendens is a formal notice that the moving parties claim and assert some interest in real property. Once recorded against that property, the notice [and what it references] takes priority over subsequent recordations.
Now why would buyers be recording a notice of lis pendens against properties they assert no interest in? In fact to the contrary, their cross-action seeks to relieve them from the obligation to purchase those properties. So if the lis pendens has been stricken, it certainly should be.
Too many attorneys and too much of a mess – by the time all is said and done, don’t know what, if anything, will be left for the buyers; assuming they actually prevail.
F D I See
Smarten,
Everything you say appears to be accurate, but from the perspective of the unfortunate ones (depositors) who have some skin in this game, everything up to now is just posturing and lawyering going on.
This case will indeed settle, at some point, and the lawyers fees will be part of the settlement.
As RI says, and as you say, and as SkrapGuy says, the lawyers are going to be the only winners in this deal.
Tom
“This case will ultimately settle, just like 99% of all cases settle. But it will not settle until the lawyers have made their payday.”
Blog readers, the above seems to represent the general tenor of comments posted so far on this topic. It may look like a legal fee-oriented result to those outside of a piece of litigation, and yes, counsel get paid for their work, as I am sure each of you expects to be paid for your own services, right? But it is wrong to think that time delays in reaching a settlement are automatically attributable to counsel. Here is the truth of the matter, after forty years of litigation practice in a litigious county:
The parties are almost always angry going into a civil case, especially when the plaintiffs are non-commerical, consumer-type plaintiffs who aren’t in an ordinary course of business lawsuit. They may have never been a litigant before. They are universally pumped up on the righteousness of their own position. At the early stages of the case, they are all emotionally humming the USC fight song because they want to Fight On; after all, aren’t I entitled to justice? Even the commercial defendants are invested in the strength of their position in the case at time of filing their response.
It usually takes some battle fatigue and incurred expense before most litigants are emotionally ready to consider a settlement, no matter how hard you may try to persuade them otherwise. After a few rounds of motions, discovery, and the billing cycles that go with those things, suddenly the desire to fight to the finish becomes more flexible, and a settlement seems pretty reasonable. That is when the majority of such cases will settle.
Of all of the civil attorneys known to me in Los Angeles and Washoe Counties, I know of NONE who would intentionally litigate on in a case, beyond an achievable settlement point, just to run up legal fees. NONE. And I have appeared in your courts in major matters over the years, as well as those of Los Angeles County.
Now you don’t need to hit me back with a stack of “hate the lawyer” messages, please. I am just sharing with you the reason in my experience why most of these cases seem to drag on longer than they might before settling.
Ben
“I know of NONE who would intentionally litigate on in a case, beyond an achievable settlement point, just to run up legal fees. NONE. And I have appeared in your courts in major matters over the years, as well as those of Los Angeles County.”
Good to know Tom. In all of your experience, you’ve NEVER met an unscrupulous attorney? I’ll put “Tom” at the top of my list for first names of attorneys not to hire.
Sully
For the most part I agree with Tom. In my own personal experiences and that of several friends the scenario Tom describes is pretty accurate.
I’m not saying that there aren’t unscrupulous lawyers around, but I would say they are the exception not the rule.
Sully
BTW Tom as a side note since this is a real estate blog.
(4) Where an obligation secured by a deed of trust was paid in
full prior to July 1, 1989, and no reconveyance has been issued and
recorded by October 1, 1989, then a release of obligation as provided
for in paragraph (3) may be issued.
This is in C.C. 2941 and was inserted for the benefit of myself and one other person living in Van Nuys. Just thought I’d mention it.
Tom
Ben, aren’t you able to see that you have expanded what I said beyond my post? I did not say there were no unscrupulous attorneys, I have met some who I think should not be practicing. There are many types of misconduct and unethical practices which could make someone be considered “unscrupulous.” What I said was that I had personally met none who would litigate a case beyond a reasonable settlement point solely for the sake of legal fees, and that remains my observation. That is altogether different from what you attribute to my post.
Your attribution to me of more than what I said, and then making a discourteous comment based on your own attribution, just to be clever, apparently, as it added nothing substantive to your response, is sophomoric at best.
Sully
Again I’m not taking one side or the other, but here is a Santa Clara County real estate case I’m very familiar with.
The case settled for a tad over 3 million. Attorney fees were $210K. Now, for the time invested in this case, under six months. It appears on the surface these fees were excessive.
Take that same transaction, in Santa Clara County, and sell a house for a tad over $3 million. Add the realtor fees, sales taxes, and every other nickel California will drain out of this transaction and see if you don’t come up with a $300,000 bill.
Now, which way like to do this deal?
smarten
Tom –
So why would an attorney looking to minimize his clients’ exposure/litigation costs:
1. File a lawsuit over a controversy the subject of an arbitration clause that would potentially subject his/her clients to the other side’s attorney’s fees/costs incurred in their bringing a motion to dismiss/abate pending the completion of arbitration which is where the controversy should have been filed in the first place?
2. File a notice of lis pendens against properties just to place a cloud on title when his/her clients are claiming no interest in those properties and a successful motion to release/expunge the lis pendens would unnecessarily subject his/her clients to the other side’s attorney’s fees/costs?
And I can’t recall if the attorney representing the buyers in the subject litigation is the same attorney who recorded a notice of rescission of Diane Cohn’s executory contract to purchase a Montage unit [this is a subject raised on this blog several months ago], but assuming he is, what is gained by recording such a document which accomplishes nothing other than clouding title when the purchaser admits he/she is claiming no interest in the property?
Tom
Smarten,
Not having read a case file or been involved, I couldn’t pass upon the details of a particular case, or second guess why a particular step was taken. I was just commenting on the profession in general.
DownButNot Out
Well there’s a disclaimer if I’ve ever read one.
BTW Tom, other than being offered approximately 20% of what we put down virtually days before Corus went under, I don’t see how your standard scenario is similar to what’s happening here.
No one has even had the chance to sing the USC fight song, nor been offered any type of equitable settlement to accept either.
Smarten articulates some good points.
Tom
Down, I was referring to the profession in general, not the result in your case or in any one case.
As to reviewing a particular case history, no one can truly critique a particular case without a full review of the file and the facts. Gleaning tidbits from a civil register of pleadings filed is not enough to make a pronouncement of much usefulness.
Example: Arbitration clauses are not necessarily automatically preclusive of litigation in all cases. Estoppels to assert arb, or waivers, can sometimes be established. Some plaintiff’s counsel conclude it is worth the effort to try to avoid the arbitration clause, and they may expect to have to defend a motion on it. Seeking to by-pass the arb may be a tactic in a particular case.
Lurker
FWIW,
Thank you Tom and Smarten for your posts. The high level of expertise and professional knowledge of the various contributors out there never ceases to amaze me. It’s what makes this blog so valuable.
noz4nws
Check out this Reno news and Review article called This Toxic House… http://www.newsreview.com/reno/content?oid=1305381#readComment
If the link doesn’t work go to http://www.newsandreview.com
DownButNotOut
Tom- You wrote ‘Of all of the civil attorneys known to me in Los Angeles and Washoe Counties, I know of NONE who would intentionally litigate on in a case, beyond an achievable settlement point, just to run up legal fees. NONE.’
You are emphatic on using the term NONE.
Have you ever met/ been associated with/ heard of/ read about any attorney disciplined or disbarred for behavior detrimental to your vocation?
Your statement makes it sound like the profession has never misrepresented a client. Is that a fair interpretation? Or is it that you just don’t know anyone that would run up a legal fee?
Ben
DownButNotOut might be nicer than I was in my post, but this is the point I was essentially trying to make. I work in a profession that is generally well received by the public and most of my colleagues are ethical and professional, but I have definitely seen more than ONE person not act in the best interest of their client. Tom is so “emphatic” about using the term NONE, that I have my doubts that he has the ability to recognize when someone is not acting in an ethical and professional manner, which is why I would not want him as my attorney.
SkrapGuy
I never said that the lawyers would litigate the case beyond the point of settlement for no purpose other than to run up fees. Since the lawyers control the entire process, there is no need for them to have to do that. It is not litigation past the point of ‘achievable settlement’ that is the problem. The problem is the manipulation of the process on the way to the point of an ‘achievable settlement’.
Everybody knows, Tom, that 99% of all cases never go to trial, and that therefore lawyers do not make their money at trial. The discovery process has now become the substitute for trial, and thus where the lawyers make their money. The endless stream of interrogatories, depositions, requests to admit, objections to discovery requests, oppositions to objections, motions for reconsideration, objections to motions for reconsideration, mortions for protective orders, oppositions to motions for protective orders, motions for sanctions for failure to respond to discovery, oppositions to motions for sanctions, and on and on and on. ALL of this is in the control of the lawyers.
And then, after hundreds of hours have been billed, and on the eve of the trial that never happens, out of the smoke emerges the ‘achievable settlement’. And then the inevitable: “Litigation is inherently unpredictable. We really ought to consider settlement.” Maybe we even ought to go to mediation to see if we can’t reach a mutually acceptable resolution.
Funny, Tom, how mediation is never suggested by the lawyers at the beginning. It only ever gets suggested on the eve of trial, and after all the billable hours are on the books.
But don’t rely on anything I say. Let’s all just watch this case unfold. Let’s come back in 6 more months and send somebody down to the courthouse to measure how many feet thick the pleading file is in this case has become, all, of course, on the way to an ‘achievable settlement’.
Tom
Ben, again you expand what I said to include any kind of conduct detrimental to the client’s interests. There are practitioners who I am aware of who have crossed that line in one way or another. But those instances of unprofessionalism are different than intentionally litigating a case beyond a reasonable settlement point solely to increase fees. I believe you are intelligent enough to understand the difference. I have served as a settlement officer for the Superior Court in our county and have personally been involved in many mediations and settlement conferences. Have you?
Usually the cases do settle, as someone posted. While it is a correct comment on our profession that there are some attorneys who do not behave professionally regarding their clients and cases, that doesn’t mean that settlement delays are attributed to fee generation desires by counsel–that is just an erroneous conclusion of the uninformed.
Skrapguy, you commented that “Funny, Tom, how mediation is never suggested by the lawyers at the beginning. It only ever gets suggested on the eve of trial, and after all the billable hours are on the books.” If that is your experience, Skrap, I apologize for the profession, that shouldn’t be the case. At our office we always suggest a settlement dialogue first, before anything is filed, and we consider informal mediation, court-offered mediation, and we renew settlement discussions along the way. Those lines of communication also need to be kept open while the case proceeds. But once a case is started, there are timelines imposed by the civil rules and in Los Angeles County, also by the courts, who have their own rules to move the case along, with discovery cut-offs, time requirements for motions to be completed prior to trial, a whole set of rules which gives the case a momentum of its own. You need to be cognizant of those cut-offs, because if you don’t, you can find yourself at the eve of trial with something needed to be done was not done, then cannot be done, and guess what–you can’t put that witness on or you are surprised by what the other side does because you didn’t depose their expert. Or you are precluded from adopting a certain tactic because it should have been raised by pre-trial motion. Then the client would be complaining that the case wasn’t prepared sufficiently.
We work in an adversarial legal system, imported from England, further developed in America, which is hundreds of years old. To be prepared to present the case–as a proper advocate for the client’s interest–the attorneys and the parties have to deal with these rules once the case is started.
Sorry to all for taking up so much space on the blog, I sometimes want to raise a reply when I see the legal profession getting a bum rap. I do acknowledge that there are some practitioners who don’t properly serve their clients, probably true for general contractors, and any other career group. But I don’t agree with the general comment that settlement of litigation is delayed when otherwise achievable due to counsel’s desires to run up fees. Counsel may feel compelled to cover all the bases, leave no stone unturned, put himself in a position ready to commence trial without surprises, and that is expensive, yes, but that doesn’t mean it is motivated by fee-building.
smarten
Just a side note –
Skrapguy asks why mediation is rarely suggested at the beginning of a case? Do you know exactly what mediation entails? And if so, how does it differ from non-binding arbitration?
Now when you’ve answered these questions, ask yourself why the litigating buyers in the Montage dispute disregarded the remedy of arbitration and in fact fought so adamently against it?
And another side note. When you go to court, how much does the judge charge you for the privilege of letting him/her decide your controversy [the answer’s nothing]. Now when you go to arbitration, how much does the arbitrator charge? I know of one arbitrator that ten years ago was charging $8K/hour!
I disagree with Tom’s observation he would have to examine the pleadings to understand the reasons why a signator to an arbitration clause would avoid arbitration. Simply stated, here the buyers are shopping for a forum [i.e., a jury] they feel will afford them a better result [i.e., punitive damages] than the result an arbitrator would likely come up with even though the buyers agreed at the time of contracting [whether wisely or not] the forum would be arbitration [to give you a comparison, how many of you buyers knowingly opt for and initial the arbitration clauses included in most pre-printed deposit receipts prepared by agents? How about pre-printed liquidated damage provisions?].
Being a practitioner for 40 years, Tom should agree that some of the problems with avoiding a contract arbitration clause are: it’s an uphill battle; it’s generally contested; it’s generally expensive [for the reasons noted]; and if the contract has an attorney’s fee clause [which it usually does], it subjects the party avoiding arbitration to his/her adversary’s attorney’s fees and costs should arbitration be ordered. Stated differently, salt in the wound before the case even starts.
Now if these “realities” are fully explained to the client up front so the client knows exactly what he’s/she’s getting into when he/she avoids arbitration, that’s fine. But my experience is they generally are not. And since we apparently have some of the litigating Montage buyers on this blog, maybe they can share with us whether the pitfalls of avoiding the arbitration clause they initially agreed to were adequately explained up front?
Tom
Smarten, I said the reason for litigating without going into arbitration could involve decision-making [i.e. tactics, strategy] and the attorney may well know he would be facing a motion to compel the arbitration. He may prefer not to arbitrate., for tactical reasons. That is why he might want to try to avoid arbitration if he had a basis for doing so. I also said you cannot effectively review a case history without reading the file, not just the pleadings register.
I personally have always discussed the arbitration clause with the clients in advance of filing the Complaint, because even if you think you can get around it and it is desired to do so, there is a risk that it will not be avoided, with the resultant delays and costs Smarten mentions.
Sometimes though I actually prefer an arbitration, if the facts are straight-forward and favorable, or we don’t want a lay jury as a trier of fact. In those cases we would opt for the speed of non-judicial adjudication. Also, a good retired judge as an arbitrator will have the time and case load to read everything, whereas our bench officers are way overloaded with cases and the trial is often segmented into available court days. An arbitration can get you in and out, resulting in a quicker, better-studied result. It depends on the case.
John Newell
I agree with Tom’s statements above. I have never had cause to believe that any opposing attorney I dealt with was prolonging a case to pad his/her fees. In fact, most of the opposing attorneys I have dealt with wanted to resolve cases as quickly as possible. That is not to say that I believe that all the attorneys I know are competent and/or ethical, just that in my experience I do not believe I have encountered an instance in which an opposing attorney seemed to be intentionally delaying settlement or other proceedings merely for pecuniary gain.
As far as the Montage lawsuit, I agree with Smarten’s assessment of the status of the matter, at least as far as I can determine without actually reading the various filings and orders in the case. However, I would be loath to comment as to strategy of the parties/merits of the case without reading the pleadings and supporting documentation. Additionally, I know a couple of the attorneys involved, so I will keep the rest of my thoughts to myself.
DownButNotOut
Tom – since you have given us the background of our American legal system maybe you can confirm or dispel a popular arguing point that I consistently hear pertaining to what’s wrong with our US legal system. In the US the party initiating suit isn’t responsible for those they’re suing defense costs win, lose or draw.
My understanding is in most (all?) other countries when you lose your case you must also pay the legal fees of the party that you’ve chosen to sue. Is this true?
Norton
Sinve this thread has to do with the Montage, and since the Montage is downtown, did you all see the two articles in the RGJ this morning? One is about another downtown shooting, and the other is about how the police are asking the downtown bars to close for a while late at night to cut down on the noise and ruckus. There are a couple of great quotes from Arlington Towers residents who say they have to sleep with earplugs now because of the noise emanating from the all the bars.
At least a year ago somebody on this blog said that all the so-called renovation going on downtown was nothing more than a bunch of bars springing up all over the place, and that was great if you happend to be a 20 something barfly.
Shootings…..cops having to put in overtime on weekends because of the rowdy bar crowds…….yep, downtown sure is becoming more attactive. This kind of news really makes people want to pay hundreds of thousands of dollars to live downtown?
Ok, Makeover Dude, here’s your chance to give us your standard speech, again.
Rick
That’s an interesting article on the number of police calls to downtown bars. But hey, if they want to turn downtown Reno into a barbary coast, especially on weekends, so be it. Any fool who chooses to live in the middle of it is only experiencing the logical consequences of that decision.
Polly
I have a friend who bought a condo at the Riverwalk. He says it is the biggest mistake he ever made. He says from 11:00 pm until 4:00 am on weekends it is impossible to sleep because of the bar noise and the people out on the street yelling at each other. He says the police have become immune to calls about it. Says unless somebody has been stabbed and is bleeding to death in the street, the police don’t care anymore.
tired of waiting
Downtown makeover LOVES to make downtown seems amazing..
When the reality is that it’s a complete Sh*thole.
Talk about putting lipstick on a PIG!
Tom
Down, it is an interesting topic but probably too much reading to impose on our real estate blogger friends here to compare American and other legal systems. It could be a lunch topic sometime. In California practice, however, fees can be awarded against a losing plaintiff or petitioner, if a contract provides for fees; if the court awards fees as a sanction against the plaintiff for his conduct, in some cases; if a statute creates a basis for award of fees; or in certain substantive areas (Example: if the matter is a family wealth dispute over a trust or estate, the probate judge can order the losing beneficiary’s beneficial share or interest surcharged for the prevailing party’s fees, if the loser’s objections/or/petition was found wholly meritless and not filed in good faith. A probate judge can also allow the prevailing parties to be paid from the estate, rather than paying their attorneys themselves, which has the effect of spreading the costs upon the other parties, presumably those who caused the work to be done.
Martin
Pretty much everything that has to do with downtown now is connected to alcohol. (I am not talking about casino gambling).Note the endless array of “wine walks” and “pub crawls” and various attractions that happen in bars. This is fine, but what you are going to get are the same bunch of barflys, mostly in their 20s, who get trashed every weekend. This is not a way to revitalize a downtwon core.
And yes, I know about the Aces. They are here for 5 months, and are out of town 2 weeks out of four. And as the attracion fades, it will be interesting to see how this plays out over the next 2-3 years. Word is that many season ticket holders are not renewing.
DownButNotOut
Tom – thanks for your response and for hanging in there. Usually new professionals that step in and voice their opinions get a case of initiation fright and we never hear from them again.
As you saw with Sane Economist, agree or disagree you’ll at least get told how we feel.
Now if we could just get a Realtor, (other than Guy, Mike & Diane obviously) to stick with us for a few weeks we might get some insight into the over $400K housing market mentality. 🙂
smarten
DBNO, now that Tom has responded to your query [which you specifically directed to him], I’d like to comment upon where I think you were heading. Now correct me if I’m wrong.
You were criticizing the judicial system because plaintiffs can bring questionable actions; defendants are forced to respond; it generally ends up costing defendants a lot of money in attorney’s fees when they respond; and if defendants are vindicated [at a presumable substantial attorney’s fee cost to them], they in essence have no remedy to recover those costs. Did I get it right?
Now there are remedies [at least in the federal and California systems] for defendants where an action is brought without a good faith belief in its merit, or for improper purposes. But setting aside those limited circumstances, let me share the other side of the coin.
If the United States were like the U.K. and the losing party were forced to pay the winning party’s attorney’s fees in all cases, it would chill the average Joe’s decision to litigate a controversy [as opposed to exercising self help] because of the potential cost. The net effect would be to in essence foreclose a great percentage of the population from exercising its constitutional right to petition our courts for redress of their grievances. Make sense?
Sorry for going off on a tangent but it kind of reminds me of the argument against the electoral college. If we elected presidents simply by tallying the popular vote nationwide, it would in essence render the votes of many of the smaller states [like North Dakota, Wyoming and yes Nevada] virtually meaningless inasmuch as those votes would be offset by the massive number of voters in California and to a lesser extent, New Your and Florida.
The point being, our founding fathers really knew what they were doing when they set up our form of government which in part, created the “American Rule” when it comes to attorney’s fees.
tired of waiting
Our founding fathers also grew marijuana and SMOKED it together.
Yet, our government insist on keeping it illegal at the federal level.
nevermind that alcohol, and tobacco products continue to kill THOUSANDS. Oh, and don’t get me started on Big pharma!
John Rusin
Anyone considering living downtown MUST take a visit there at midnight on a weekend night. Very few locals have seen how our downtown really turns into a loud, drunken mini-Mardi Gras: Loud-mufflered cars cruising while blasting hip hop, a long line of rowdies waiting to get into 210 North just outside the Montage, or screaming kareoke through open windows at the 2nd St Bar. It is quieter in winter, and there are police visable, but they do keep to themselves.
tired of waiting
GLAD I don’t live downtown..
tired of waiting
Nice to see the OTHER side of things in regard to downtown JOHN.
It would seem that others here would have you believe that downtown is sort cultural amazement on the verge of utopia LOL.
nevermind the fact they neglect to mention anything BAD!
John Newell
On the subject of attorney’s fee to the prevailing party under Nevada law, NRS 18.010(2) provides:
“In addition to the cases where an allowance is authorized by specific statute, the court may make an allowance of attorney’s fees to a prevailing party:
(a) When he has not recovered more than $20,000; or
(b) Without regard to the recovery sought, when the court finds that the claim, counterclaim, cross-claim or third-party complaint or defense of the opposing party was brought or maintained without reasonable ground or to harass the prevailing party. The court shall liberally construe the provisions of this paragraph in favor of awarding attorney’s fees in all appropriate situations. It is the intent of the Legislature that the court award attorney’s fees pursuant to this paragraph and impose sanctions pursuant to Rule 11 of the Nevada Rules of Civil Procedure in all appropriate situations to punish for and deter frivolous or vexatious claims and defenses because such claims and defenses overburden limited judicial resources, hinder the timely resolution of meritorious claims and increase the costs of engaging in business and providing professional services to the public.”
—
Interestingly, in Nevada Justice Courts (civil amount in controversy under $10k) the prevailing party is entitled by statute to an award of costs in cases brought under the court’s regular civil jurisdiction (NRS 69.020), and NRS 69.030 further provides that reasonable attorney’s fees “shall be fixed by the justice and taxed as costs against the losing party.” While on its face this would seem to have a chilling effect on plaintiffs, there are also circumstances in which it benefits plaintiffs who otherwise might have little incentive to file. When I was practicing as a legal services attorney, I spoke with many judgment debtors who had failed to file an answer and subsequently had default judgments rendered against them for petty amounts (between $200 ~ $2000), with legal fees claimed and awarded that were in excess of the original amount in controversy. This situation became sufficiently problematic that the Reno Justice Court routinely began reducing cost awards on default judgments to a nominal attorney’s fee amount (often around $250) and actual costs.
DownButNotOut
John N.- Good points in that there are ways to recover costs from certain lawsuits, at least in Nevada. I was unaware there were any.
Smarten,
I follow you and agree with your summary up to this point; ‘The net effect would be to in essence foreclose a great percentage of the population from exercising its constitutional right to petition our courts for redress of their grievances. Make sense?’
If I read you right, I’d have to disagree, as either way no one is limiting the population from exercising their constitutional right. It’s about whose responsibility it becomes to pay for this election of rights.
Example; If I sue Joe Blow for xx amount, and it costs him $5K to litigate this claim in order to eventually prove innocence, money he would never get back. Many might consider the tipping point being to offer <$5K and upon acceptance this goes away. I see this in insurance claims all the time.
So my actual line of thought with concern to Tom went this way; If he knows no one that has litigated beyond what was necessary in order to increase fees, isn’t the law, presumably petitioned by lobbyist, structured in a way to do exactly that; I sue you, you have to pay for representation whether or not your innocent, and now we’ve just run up a bill. And who is the recipient of that bill? The attorney.
Smarten, again if I read you right, in the UK, this would not be the case, therefore it might make people running around claiming ‘I’ll sue you’ think twice as to if they have a real case. This in turn would greatly reduce insurance rates, I would think.
Matthew
$2000 is a petty amount, John Newell? Spoken like a salaried legal aid lawyer indeed. Never had to try to collect for work done from a client/customer trying to rip you off, John?
To all the self-employed doctors, dentists, veternarians,accountants, and small business owners for whom $2000 in unpaid fees for services competently and professionally renedered, or for goods sold and delivered, who do not regard that income as “petty”, may you never have to encounter John Newell, salaried legal aid lawyer who has never had to chase a deadbeat to make payroll.
Mello
If you spend enough time representing deadbeats, after a while you begin to think like they do. You know, your a rich doctor or accountant, or business owner, and I’m just a poor working stiff. Why should I have to pay you that measly $2000 for the tooth you pulled for me, or for the foot surgery, or for the services you did that relieved my dog’s pain, or for that furnace you repaired for me? It’s so “petty” of you to ask me to pay that $2000. Can’t you just write it off?
Richard
John Newell,
I own a couple of apartment complexes here in Reno. When tenants skip out, and leave owing me $2000 in unpaid rent, should I just walk away from it and not clog up the Justice Court with such a “petty” claim?
Sully
I think what John was talking about was small claims court, and that the defendants were no shows. The court was awarding legal fees that were higher than the original amount. So they finally lowered them to nominal attorneys fees.
I can see where it looks like he is saying 2K is a petty amount. I didn’t read it that way, but the jurisdiction of the court is for claims 10K and under. In California its called small claims court.
$2000 is a petty amount, when courts are involved.
It is not a petty amount when small business is involved. Fortunately I only had one such default in many years in business and I’m still fuming about it.
I see the point John was making, and if you guys step back and try to see the forest for the trees you will too. 🙂
Ralston
If you think $2000 is a petty amount when courts are involved, then I invite you spend a day at the Justice Court in Reno or Sparks. Probably more than half of the cases are for less than $2000.
Nobody disagrees that when the defendant does not appear in a Justice Court case that the attorney’s fee ought to fairly nominal. No problem with that.
But to suggest that a $2000 debt owed is “petty” was an unfortunate choice of words. The implication is that such a debt is trivial, and not worthy of pursuing in court. Or that it is harrassmnet of his legal aid clients to be asked to pay such a “petty” amount.It is obvious that Mr. Newell works for paycheck. If Mr. Newell’s employer just decided this pay period to not pay him $2000 of what he was owed, would he condsider that petty?
There is no difference between an employer who stiffs his employee $2000 and a patient who stiffs his doctor, or dentist, or a customer who stiffs a small business.
John Newell
What Sully said! 😉
Yes, I meant “petty” in a technical sense as the amounts at issue were under the threshold for small claims jurisdiction, although the lawsuits I mentioned above were filed in regular Justice Court jurisdiction, not small claims, in order to take advantage of the fee shifting rules in Justice Court. Nevada law allows a plaintiff to choose small claims jurisdiction for amounts in controversy less than $5k, but unlike many states, Nevada also allows the plaintiff to elect to file lawsuits with amounts in controversy less than $5k in regular Justice Court jurisdiction ($0 – $10k). The result is that lawsuits for relatively low amounts can run up costs and take up court time disproportionate to the amounts in controversy.
I believe that small claims jurisdiction should be mandatory for most civil lawsuits with amounts in controversy under $5k (unless they involve possession of real property) in order to streamline the process and to lessen costs and fees. That being said, I do not disagree with some of the sentiments expressed above regarding the fact people should pay their debts, and I am no longer a legal aid attorney.
Sully
I suppose we now have to find a politically correct name for the office “petty” cash fund. 🙂
Richard
“people should pay their debts”
Why, John, thinking that way I can see why you had to stop being a legal aid attorney.
FutureRenoHomebuyer
Guy,
Will the RSAR monthly report for September be coming out anytime soon?
Sorry guys, you seem to know your stuff, but all this lawyer talk is boring me to tears.
Would love to be able to crunch on some Reno real estate data….
Mello
People should pay their debts? Why that’s almost akin to the notion that people ought to be held accountable for their actions. Surely that’s heresy inside the walls of the legal aid office, isn’t it?
Radical thinking, John, radical thinking. Clearly you did not adhere to the legal aid mantra that whatever bad circumstances befall a legal aid client, it is somebody else’s fault.
Walter
I agree Future. Sometimes there is just not any new real estate news, so the blog goes off on a tangent.
Maybe we all could go downtown tonight, as John Rusin suggests, and watch all the drunken college kids throwing up outside 210 N. Sierra. Right across the street from the Montage. Tommorrow is a holiday remember?