HAWKINS VS. DIST. CT. (GGP MEADOWS MALL)
Citation2017 NV 109
Date Filed2017-12-28
Docket71759
Cited0 times
StatusPublished
Full Opinion (plain_text)
133 Nev., Advance Opinion 101
IN THE SUPREME COURT OF THE STATE OF NEVADA
X'ZAVION HAWKINS, AN No. 71759
INDIVIDUAL,
Petitioner,
vs.
THE EIGHTH JUDICIAL DISTRICT
FILED
COURT OF THE STATE OF NEVADA, DEC 2 2011
IN AND FOR THE COUNTY OF
E EM A. BROWN
CLARK; AND THE HONORABLE 1 711re‘'CCP
JOANNA KISHNER, DISTRICT BY
HIEF OE CLEM
JUDGE,
Respondents,
and
GGP MEADOWS MALL, A DELAWARE
LIMITED LIABILITY COMPANY;
MYDATT SERVICES, INC., DfB/A
VALOR SECURITY SERVICES, AN
OHIO CORPORATION; AND MARK
WARNER, AN INDIVIDUAL,
Real Parties in Interest.
Original petition for a writ of mandamus challenging a district
court order awarding attorney fees, as a sanction, for work done by later-
disqualified attorneys.
Petition granted.
Injury Lawyers of Nevada and David J. Churchill and Jolene J. Manke, Las
Vegas,
for Petitioner.
Backus, Carranza & Burden and Edgar Carranza, Las Vegas,
for Real Parties in Interest Mydatt Services, Inc., dba Valor Security
Services; and Mark Warner.
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Lee, Hernandez, Landrum, Garofalo and David S. Lee and Charlene
Renwick, Las Vegas,
for Real Parties in Interest GGP Meadows Mall; Mydatt Services, Inc., dba
Valor Security Services; and Mark Warner.
BEFORE HARDESTY, PARRAGUIRRE and STIGLICH, JJ.
OPINION
By the Court, HARDESTY, J.:
In this petition for extraordinary writ relief, we address what
the district court should have considered when awarding attorney fees
sought for work done by a disqualified firm. We conclude that the district
court must consider the factors from the Restatement (Third) of the Law
Governing Lawyers § 37 cmt. d (2000) when awarding attorney fees sought
for a disqualified law firm's work.
FACTS AND PROCEDURAL HISTORY
At Meadows Mall in Las Vegas, petitioner X'Zavion Hawkins
was shot multiple times by another patron while attending an event.
Hawkins consulted with attorney Paul Shpirt at the Eglet Law Group
concerning the shooting. Shpirt initially agreed to represent Hawkins, but
later declined representation after reviewing the evidence. Hawkins
retained a different attorney, who filed suit against real parties in interest
GGP Meadows Mall; Mydatt Services, Inc., dba Valor Security Services; and
Mark Warner (collectively, Meadows Mall) for premises liability and failure
to provide adequate security.
Shpirt left the Eglet Law Group and began working at Lewis
Brisbois Bisgaard & Smith (LBBS). In the underlying action, Meadows
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Mall retained LBBS to assist its separately retained counsel with its
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defense in the matter. Meadows Mall then sought discovery sanctions and
moved to dismiss Hawkins' complaint based on Hawkins changing his
version of events, providing false information, and/or omitting information
required by NRCP 16.1 from his discovery responses.
When LBBS discovered the conflict stemming from Shpirt's
prior representation of Hawkins and the firm's current representation of
Meadows Mall, LBBS screened Shpirt from the case. However, LBBS did
not notify Hawkins of the conflict. When Hawkins discovered the conflict
involving Shpirt, he moved to disqualify LBBS. While that motion was
pending, the district court scheduled an evidentiary hearing to determine
whether to dismiss Hawkins' complaint. LBBS participated in the
evidentiary hearing and argued for dismissal. The district court denied the
motion to dismiss, but it granted as a discovery sanction a curative jury
instruction for Hawkins' discovery abuses.
Thereafter, the district court disqualified LBBS because the
firm failed to notify Hawkins and failed to obtain his informed consent
regarding the conflict pursuant to RPC 1.9 (duties to former clients) and
RPC 1.10(e) (imputation of conflicts of interest). Meadows Mall substituted
LBBS with Backus, Carranza & Burden.
Following the order imposing sanctions for Hawkins' discovery
abuses, Meadows Mall sought attorney fees, requesting $29,201 for LBBS;
$13,681.50 for its other retained counsel; and $11,442.50 for Backus,
Carranza & Burden. At the hearing on the motion for attorney fees, the
district court expressed concern over the amounts requested. Meadows
Mall explained that it had to do extra work to ensure that none of the work
that was negatively impacted by LBBS's conflict was used. Counsel for
Hawkins requested supplemental briefing to consider whether a
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disqualified law firm could receive attorney fees. Both parties provided
supplemental briefing, and the district court ordered Hawkins to pay
$41,635 for Meadows Mall's attorney fees, which was less than the total
amount requested but which included $19,846 for work done by LBBS. The
district court concluded that it had discretion to award attorney fees as
sanctions, rejected Hawkins' contention that awarding fees to LBBS would
be inappropriate, and noted that it reduced each of the law firms' awards
from the amount requested because of "the number of lawyers and law firms
involved in the Motion and Hearing at issue . . . [and] to be consistent with
the nature and scope of the record and applicable law."
The sole issue we address in this opinion is whether the district
court abused its discretion in failing to consider LBBS's disqualified status
in awarding sanctions in the nature of attorney fees.'
DISCUSSION
Hawkins maintains that a disqualified law firm which, like
LBBS, violates its duty of loyalty to a former client should not collect
attorney fees for the work it completed while violating that duty and that,
therefore, Meadows Mall should not be awarded such fees as a sanction
against him. Meadows Mall argues that the district court had broad
discretion to impose sanctions against Hawkins for his failure to comply
'Hawkins also challenges the district court's decision to entertain the
motion to dismiss despite the pendency of his disqualification motion and
the jury instruction sanction. However, the district court denied the motion
to dismiss, which resolves the issue in Hawkins' favor. Moreover, it does
not appear from the record that the parties have drafted the challenged jury
instruction. Thus, the jury instruction issue is not ripe for this court's
review. See Personhood Nev. v. Bristol, 126 Nev. 599, 602, 245 P.3d 572,
574 (2010) ("This court's duty is not to render advisory opinions but, rather,
to resolve actual controversies by an enforceable judgment.").
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with the discovery obligations, and thus, the sanctions were appropriate.
We conclude that the district court failed to analyze the Restatement
(Third) of the Law Governing Lawyers factors regarding attorney fees
sought for a disqualified law firm, and we therefore grant writ relief.
Writ relief is warranted
It is solely within our discretion whether to entertain a writ of
mandamus. Anse, Inc. v. Eighth Judicial Dist. Court, 124 Nev. 862, 867,
192 P.3d 738, 742 (2008). "A writ of mandamus is available to compel the
performance of an act which the law requires as a duty resulting from an
office, trust or station, or to control a manifest abuse or an arbitrary or
capricious exercise of discretion." Cote H. v. Eighth Judicial Dist. Court,
124 Nev. 36, 39, 175 P.3d 906, 907-08 (2008) (internal quotation marks and
alteration omitted). "A writ of mandamus is an extraordinary remedy that
will not issue if the petitioner has a plain, speedy, and adequate remedy at
law." State v. Second Judicial Dist. Court, 118 Nev. 609, 614, 55 P.3d 420,
423 (2002). However, we will consider a writ of mandamus even where
there is an adequate remedy at law "under circumstances of urgency or
strong necessity, or when an important issue of law needs clarification and
sound judicial economy and administration favor the granting of the
petition." Id. Because this case involves an important issue of law and
judicial economy is served by our prompt consideration of that issue, given
its isolation from the merits of the claims below, we grant this petition to
clarify the appropriate factors a district court should consider when
imposing sanctions that include attorney fees sought for a disqualified law
firm.
Factors courts must consider before awarding attorney fees as a sanction
The district court's decision to impose discovery sanctions is
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committed to its discretion. GNLV Corp. ix Serv. Control Corp., 111 Nev.
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866, 869, 900 P.2d 323, 325 (1995). The district court has authority to
impose sanctions through NRCP 37 and its inherent equitable powers,
including "sanctions for discovery and other litigation abuses not
specifically proscribed by statute." Young v. Johnny Ribeiro Bldg., Inc., 106
Nev. 88, 92, 787 P.2d 777, 779 (1990). Discovery sanctions can include an
order to pay "reasonable expenses incurred. . . including reasonable
attorney's fees." NRCP 37(c)(2).
In this writ petition, Hawkins does not dispute that he violated
his discovery obligations. Rather, he contends that awarding fees to a
disqualified law firm, LBBS, was inappropriate. In his supplemental
briefing to the district court, Hawkins provided California authority that
relied on the Restatement (Third) of the Law Governing Lawyers § 37
(2000), but the district court expressly rejected that authority. 2 The
Restatement provides that "[a] lawyer's improper conduct can reduce or
eliminate the fee that the lawyer may reasonably charge." Restatement
(Third) of the Law Governing Lawyers § 37 cmt. a (2000). The Restatement
also includes factors for the district court to consider in analyzing "whether
2 Hawkins relied on Sheppard, Mullin, Richter & Hampton, LIP v.
J-M Mfg. Co., 198 Cal. Rptr. 3d 253 (Ct. App. 2016), review granted and
opinion superseded, 368 P.3d 922 (Cal. 2016). In Sheppard, an attorney
disqualified because of a conflict of interest sought attorney fees, and the
client asserted the conflict of interest as a defense to payment of fees. Id.
at 272. The California Court of Appeal determined that the attorney was
not entitled to fees because the attorney was involved in an actual conflict
and "[i]t is the general rule in conflict of interest cases that where an
attorney violates his . . . ethical duties to the client, the attorney is not
entitled to a fee for his . . . services." Id. at 274 (internal quotation marks
omitted). We note that the California Supreme Court granted the petition
for review in that case, and thus we do not rely on the Court of Appeal's
decision.
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violation of duty warrants fee forfeiture." Id. § 37 cmt. d. The factors are
(1) "[t]he extent of the misconduct," (2) "Iwthether the breach involved
knowing violation or conscious disloyalty to a client," (3) whether forfeiture
is "proportionate to the seriousness of the offense," and (4) "[t]he adequacy
of other remedies." Id.
The Restatement further explains that for flagrant violations,
forfeiture is justified even where no harm is proved, but for minor violations,
merely reducing the fee may be warranted. Id. "The remedy of fee forfeiture
presupposes that a lawyer's clear and serious violation of a duty to a client
destroys or severely impairs the client-lawyer relationship and thereby the
justification of the lawyer's claim to compensation." Id. § 37 cmt. b.
Additionally, "[forfeiture is . . . a deterrent," and it allows courts to impose
a sanction where damages from attorney misconduct are difficult to
measure. Id. The Ninth Circuit has reasoned that, where an attorney
simultaneously represents clients with conflicting interests without getting
written informed consent, `Uri attorney cannot recover fees for such
conflicting representation. . . because payment is not due for services not
properly performed." Image Tech. Serv., Inc. v. Eastman Kodak Co., 136
F.3d 1354, 1358 (9th Cir. 1998) (internal quotation marks and citation
omitted); see also State Farm Mitt. Auto. Ins. Co. v. Hansen, 131 Nev., Adv.
Op. 74, 357 P.3d 338, 342 n.6 (2015) ("The representation of clients with
conflicting interests and without informed consent is a particularly
egregious ethical violation that may be a proper basis for complete denial of
fees." (quoting Rodriguez v. Disner, 688 F.3d 645, 655 (9th Cir. 2012))).
Moreover, "[a] court has broad equitable power to deny attorneys' fees (or to
require an attorney to disgorge fees already received) when an attorney
represents clients with conflicting interests." Rodriguez, 688 F.3d at 653.
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Meadows Mall argues that this case is distinguishable from
Hawkins' provided authority because, here, the attorney fees were ordered
in the form of sanctions from the opposing party to the disqualified law
firm's former client, whereas in Sheppard and other cases applying the
Restatement factors, the attorney was directly seeking attorney fees from
the client. We acknowledge that these factors have been analyzed in cases
involving attorneys seeking fees from clients and that this writ involves a
different context. Nevertheless, we determine that it is appropriate to
consider the Restatement factors when the district court orders payment of
attorney fees in the form of sanctions to a disqualified law firm's former
client because the policy underlying fee forfeiture applies without regard to
for whom the court orders the attorney fees paid; a party should not be
awarded attorney fees that ultimately are not due the attorney. See id. at
654 (stating that "payment is not due for services not properly performed"
(internal quotation marks omitted)); see also Silbiger v. Prudence Bonds
Corp., 180 F.2d 917, 920 (2d Cir. 1950) ("Certainly by the beginning of the
Seventeenth Century it had become a common-place that an attorney must
not represent opposed interests; and the usual consequence has been that
he is debarred from receiving any fee from either, no matter how successful
his labors." (footnote omitted)).
CONCLUSION
We therefore hold that when imposing sanctions in the form of
attorney fees, a district court must analyze and apply the factors from the
Restatement (Third) of the Law Governing Lawyers § 37 cmt. d (2000) in
determining whether an award of attorney fees based on work done by a
disqualified law firm is reasonable. The district court did not do so here
when imposing sanctions in the form of attorney fees for work done by
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LBBS, a disqualified law firm. As the district court awarded the attorney
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fees without the benefit of our guidance on this issue, we grant the petition
and direct the clerk of this court to issue a writ of mandamus directing the
district court to vacate its order granting the motion for attorney fees and
to reconsider the motion in light of this opinion. 3
J.
Stiglich
3 Given our resolution of this writ petition, we hereby vacate the stay
imposed by our April 11, 2017, order.
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