Lien Expungment – Attorney’s Fees are Mandatory

On July 13, 2016 the Nevada Court of Appeals issued an unpublished decision which squarely addressed the issue of the award of attorney’s fees when dealing with motions to expunge mechanic’s liens.  The facts of the case were simple in that the District Court granted a motion to expunge a mechanic’s lien, which,  per Nevada statutes results in a mandatory award of attorneys fees to the moving party.  The District Court denied the request for attorneys’ fees stating that it had not found that the mechanic’s lien claim had been “frivolous”.  The Appellate Court reversed this decision and found that the statute governing expungment of mechanic’s liens (NRS 108.2275) provided for only three possible outcomes:

“First, if the court finds that “[t.]he notice of lien is
frivolous and was made without reasonable cause, the court shall make an
order releasing the lien and awarding costs and reasonable attorney’s fees
to the applicant for bringing the motion.” NRS 108.2275(6)(a.). Second, if
the court finds that “[t]he amount of the notice of lien is excessive, the
court may make an order reducing the notice of lien to an amount deemed appropriate by the court and awarding costs and reasonable attoriwy’s
fees to the applicant for bringing the motion.” NRS 108.2275(6)(b). And
third, if the court finds that “[t]he notice of lien is not frivolous a~d was
made with reasonable cause or that the amount of the lien is not
excessive, the court shall make an order awarding costs and reasonable
attorney’s fees to the lien claimant for defending the motion.”

The matter was reversed and remanded to the district court for further proceedings to address the issuance of attorneys’ fees.

The case may be found at:  One Trop LLC v. Verma, Nevada Appellate Case No. 68756.

Mediation – A condition precedent to Litigation

On February 4, 2016 the Nevada Supreme Court ruled that mandatory mediation provisions found in contracts act as a condition precedent to the initiation of litigation.  In the case of MB America v. Alaska Pacific Leasing Co., 132 Nev. Adv. Op. 8 (Feb. 4 2016) the Supreme Court of Nevada upheld a district court’s granting of summary judgment when Plaintiff MB initiated litigation without having first fulfilled its duty to submit the dispute to mandatory mediation.   Likewise, the Supreme Court upheld an award of attorneys’ fees to Defendant Alaska Pacific.

Plaintiff MB argued that it had discussed mediation informally with Alaska Pacific, however, the Supreme Court found that this did not meet the requirements of the contract and because Alaska Pacific had not expressly rejected mediation, Plaintiff MB was under an obligation to fulfill the mediation requirement.  The Court likewise rejected the argument that the district court matter should be stayed pending compliance with the mediation requirement, which would be typical when dealing with arbitration provisions.

Parties and their attorneys would do well in future proceedings to strictly comply with any mediation provisions contained in their agreement and memorialize such compliance in the event that it becomes necessary to establish that all “conditions precedent” to litigation have been fulfilled.