Date: 10-16-2014

Case Style: D.R. Horton, Inc. v. Steven M. Betsinger

Case Number: 59319

Judge: Cherry

Court: Supreme Court of Nevada on appeal from the District Court, Clark County

Plaintiff's Attorney: McDonald Carano Wilson LLP and Pat Lundvall, Debbie A. Leonard, and Kerry St. Clair Doyle, Las Vegas, for Appellants/Cross-Respondents.

Defendant's Attorney: Feldman Graf, P.C., and David Feldman and John Dorame, Las Vegas, for Respondent/Cross-Appellant.

Description: This appeal arises from punitive damages proceedings on
remand after we issued our decision in Betsinger v. D.R. Horton, Inc.
(Betsinger I), 126 Nev. 162, 232 P.3d 433 (2010), a case that involved fraud
and deceptive trade practices in the context of a real estate purchase and
loan arrangement. On appeal, we consider whether the proceedings on
remand violated MRS 42.005(3), which requires any trier of fact who
determines that punitive damages are warranted to also determine the
amount of damages to award. Specifically, we consider whether MRS
42.005(3) applies in a remand situation so as to require the second jury on
remand to reassess whether punitive damages are warranted before that
jury may determine the amount of punitive damages to be awarded. We
conclude that NRS 42.005(3) is unambiguous in imposing this
requirement. Thus, when the fact-finder is limited to solely making a
determination regarding punitive damages, MRS 42.005(3) requires that
fact-finder to first determine whether punitive damages are justified—i.e.,
whether there is clear and convincing evidence of a defendant's
oppression, fraud, or malice—and then to determine the amount of
damages to award. Because the jury on remand in this case was
prevented from determining whether punitive damages were justified, we
reverse the district court's punitive damages award and remand for a new
trial. We also affirm the denial of attorney fees to D.R. Horton.
FACTS AND PROCEDURAL HISTORY
This case arose from a failed attempt to purchase a home in
Las Vegas, the details of which are more fully set forth in Betsinger I, 126
Nev. 162, 232 P.3d 433 (2010). Briefly, respondent/cross-appellant Steven
Betsinger contracted to purchase a house from appellant/cross-respondent
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D.R. Horton, Inc., and applied for a loan to fund that purchase with D.R.
Horton's financing division, appellant/cross-respondent DHI Mortgage,
Ltd. Id. at 163, 232 P.3d at 434. After DHI Mortgage refused to fund the
loan at the interest rate originally offered, Betsinger canceled the
purchase contract. When D.R. Horton failed to return Betsinger's earnestmoney
deposit, he sued, asserting claims for fraud and deceptive trade
practices based on allegations that D.R. Horton caused him to cancel the
purchase agreement with false assurances that his deposit would be
returned and that it and DHI Mortgage used a "bait and switch" tactic to
lure him into making the deposit in the first place. After a trial, the jury
found in favor of Betsinger and awarded him compensatory damages
against D.R. Horton and DHI Mortgage consisting of actual damages and
emotional distress damages, as well as punitive damages against DHI
Mortgage.2 Id. at 164, 232 P.3d at 434-35.
All parties appealed, and we reversed the judgment as to
consequential damages because of Betsinger's failure to present evidence
of any physical manifestation of emotional distress. Id. at 166, 232 P.3d at
436. We accordingly reduced the compensatory damages award to the
amount of Betsinger's actual damages, $10,727 ($5,190 from D.R. Horton
and $5,537 from DHI Mortgage). Id. at 164, 167, 232 P.3d at 434, 436.
Because it was impossible to determine what the jury would have awarded
Betsinger in punitive damages against DHI Mortgage given the reduction
2The jury also awarded emotional distress damages and punitive
damages against another defendant, who was DHI Mortgage's branch
manager, for his role in the "bait and switch." Betsinger I, 126 Nev. at
164, 232 P.3d at 434-35. Given this court's resolution of the first appeal,
that defendant was not involved in the remanded proceedings
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in the compensatory damages award, we declined to arbitrarily reduce the
punitive damages amount. Instead, we concluded that "the punitive
damages award must be remanded for further proceedings because we
cannot be sure what the jury would have awarded in punitive damages as
a result of the substantially reduced compensatory award." Id. at 167, 232
P.3d at 437.
On remand, questions arose as to the appropriate scope of the
trial in light of this court's remand instructions. Specifically, confusion
arose regarding whether the jury needed to first consider DHI Mortgage's
liability for punitive damages, or if the jury was simply to consider the
amount of punitive damages warranted. Ultimately, the district court
instructed the jury that it was to decide "what amount, if any, Mr.
Betsinger is entitled to for punitive damages." 3 Based on this instruction,
the jury returned a verdict against DHI Mortgage and in favor of
Betsinger with respect to punitive damages in the amount of $675,000.
The district court subsequently entered judgment against D.R. Horton in
the amount of $5,190 plus interest and denied D.R. Horton attorney fees.
Judgment was entered against DHI Mortgage in the amount of $5,537
plus interest and $300,000 in punitive damages, the total after NRS
42.005(1)(b)'s punitive damages cap was applied. Thereafter, D.R. Horton
and DHI Mortgage appealed, and Betsinger cross-appealed.
'We note that the requirements of NRS 42.007(1) did not need to be
met coming into the second trial because the first jury had previously
determined that DHI Mortgage had engaged in fraud and in deceptive
trade practices. Betsinger I, 126 Nev. at 164, 232 P.3d at 434.
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DISCUSSION
Although the parties raise numerous arguments on appeal
and cross-appeal, this opinion need analyze only two of those arguments.
We first address DHI Mortgage's argument that the district court's jury
instruction regarding punitive damages violated NRS 42.005(3)'s "same
trier of fact" requirement. We then turn to whether the district court
should have awarded D.R. Horton attorney fees.
NRS 42.005(3) requires the same fact-finder to determine whether liability
exists for punitive damages and, if so, the amount of damages
NRS 42.005 governs when punitive damages are authorized
and the process by which those damages are to be awarded. In particular,
subsection 1 authorizes punitive damages when "it is proven by clear and
convincing evidence that the defendant has been guilty of oppression,
fraud or malice." NRS 42.005(1). Subsection 3, in turn, sets forth the
process by which those damages are to be awarded:
If punitive damages are claimed pursuant to
this section, the trier of fact shall make a finding
of whether such damages will be assessed. If such
damages are to be assessed, a subsequent
proceeding must be conducted before the same trier
of fact to determine the amount of such damages to
be assessed.
NRS 42.005(3) (emphases added). On appeal, DHI Mortgage asserts that
NRS 42.005(3) unambiguously provides that a single jury must determine
both a defendant's liability for punitive damages—i.e., whether clear and
convincing evidence demonstrates that the defendant is guilty of
oppression, fraud, or malice—and the amount of any award. Thus,
according to DHI Mortgage, the district court erred as a matter of law by
permitting the second jury to consider only the amount of damages to be
awarded. In response, Betsinger contends that NRS 42.005(3)'s "same
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trier of fact" requirement should not apply when a case has been
remanded. In particular, Betsinger contends that DHI Mortgage's reading
of NRS 42.005(3) is untenable, as it would essentially entitle DHI
Mortgage to a new trial on its underlying liability for fraud, since the jury
considering whether punitive damages are warranted would necessarily
need to find that DHI Mortgage was guilty of oppression, fraud, or malice. 4
In interpreting this statute de novo, we will not look beyond
the plain language when it is clear on its face. Pub. Agency Comp. Trust v.
Blake, 127 Nev. „ 265 P.3d 694, 696 (2011); Pankopf v. Peterson,
124 Nev. 43, 46, 175 P.3d 910, 912 (2008). Here, the plain language of
NRS 42.005(3), specifically the phrase "before the same trier of fact,"
indicates that a single judge or jury must determine both whether punitive
damages should be assessed and, in a subsequent proceeding, the amount
of such damages. NRS 42.005(3). Because this language is plain and
clear, we decline to delve into legislative history. Pankopf, 124 Nev. at 46,
175 P.3d at 912. As for Betsinger's contention that NRS 42.005(3)
necessarily leads to a retrial of the entire action, we disagree. In many
instances, such as in this case's first trial, the fact-finder who determines
whether compensatory damages are warranted will be the same one as
determines liability for and the extent to which punitive damages are
4Betsinger also contends that DHI Mortgage should be barred by the
law-of-the-case doctrine from arguing that the trial on remand violated
NRS 42.005(3). "Th[is] doctrine only applies to issues previously
determined, not to matters left open by the appellate court." Wheeler
Springs Plaza, LLC v. Beemon, 119 Nev. 260, 266, 71 P.3d 1258, 1262
(2003). To the extent that Betsinger is contending that we determined in
Betsinger I that a new trial was warranted on the amount of punitive
damages only, we do not read Betsinger I as having made such a narrow
determination.
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warranted. Nevertheless, "Nile issue of exemplary damages is separate
and distinct from that of actual damages, for they are assessed to punish
the defendant and not to compensate for any loss suffered by the plaintiff,"
Brewer v. Second Baptist Church of L.A., 197 P.2d 713, 720 (Cal. 1948),
and thus, we think, they may be tried separately on remand. Nothing in
the statute purports to govern the procedure on remand, and there is no
reason why issues concerning compensatory damages, already affirmed by
this court in Betsinger I, must be relitigated to determine issues
concerning the punitive damages sought. 5 See Wickliffe v. Fletcher Jones
of Las Vegas, Inc., 99 Nev. 353, 357, 661 P.2d 1295, 1297 (1983)
(recognizing, without discussing any statutory language, that in a retrial
on remand based on failure to give a punitive damages instruction, a
litigant should not have to readdress issues concerning liability and
amount of compensatory damages when those issues were not challenged
on appeal), superseded by statute on other grounds as stated in
Countrywide Home Loans, Inc. v. Thitchener, 124 Nev. 725, 741 n.39, 742-
43, 192 P.3d 243, 253 n.39, 254-55 (2008).
But where, as in this case's second trial, the fact-finder is
tasked only with making a determination regarding punitive damages,
NRS 42.005(3) unambiguously requires that fact-finder to first determine
whether punitive damages are warranted—i.e., whether there is clear and
convincing evidence of a defendant's oppression, fraud, or malice—before
determining the amount of punitive damages to award. Thus, we agree
5VVhile we agree with Betsinger that, in some instances, there will
be an overlap of evidence presented in an initial trial and in a second trial
ordered on remand for punitive damages only, we believe that this is the
only reasonable application of NRS 42.005(3)'s unambiguous requirement.
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with DHI Mortgage that the district court's interpretation and application
of our remand instruction in Betsinger I deprived it of its right under NRS
42.005(3) to have the jury determine whether punitive damages were
warranted. Even if the district court's instruction that the jury was to
determine "what amount, if any, Mr. Betsinger is entitled to for punitive
damages" may have permitted the jury to determine that $0 was an
appropriate award, this instruction did not require the jury to make the
threshold determination of whether punitive damages could be awarded.
We emphasize that, under NRS 42.005(3), the trier of fact who determines
the amount of punitive damages to be awarded must also make the initial
determination of whether punitive damages are warranted.
Attorney fees
Finally, we consider D.R. Horton's separate appeal of the
district court's order denying its post-remittitur motion for attorney fees
as untimely. We conclude that the district court did not abuse its
discretion in declining to award attorney fees under the offer of judgment
rule. Certified Fire Prot., Inc. v. Precision Constr., Inc., 128 Nev. ,
283 P.3d 250, 258 (2012); Farmers Ins. Exch. v. Pickering, 104 Nev. 660,
662, 765 P.2d 181, 182 (1988). In addition to reversing and remanding for
determination of punitive damages as to DHI Mortgage, Betsinger I
reduced the compensatory damages award against D.R. Horton to an
amount less than its pretrial offer of judgment to Betsinger. 126 Nev. at
167, 232 P.3d at 436. However, after this reduction triggered D.R.
Horton's ability to seek attorney fees, D.R. Horton waited nine months to
file a motion for attorney fees, and did so the night before the second trial
was to commence against DHI Mortgage. Thus, we cannot conclude that
the district court abused its discretion in determining that D.R. Horton's

Outcome: Under NRS 42.005(3), a defendant is entitled to have the same
finder of fact who determines the amount of punitive damages to be
awarded also make the threshold determination of whether punitive
damages are warranted. Because that did not happen here, we reverse
and remand for a new trial on punitive damages.

Plaintiff's Experts:

Defendant's Experts:

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