Clark Cty. Sch. Dist. v. Richardson Constr., 40976.

• Citation: 168 P.3d 87
• Case Date: October 04, 2007
• Court: Supreme Court of Nevada

168 P.3d 87

CLARK COUNTY SCHOOL DISTRICT, Appellant, v. RICHARDSON CONSTRUCTION, INC., A Nevada Corporation, Respondent.

No. 40976.

Supreme Court of Nevada.

October 4, 2007.

Lewis & Roca, LLP, and Daniel F. Polsenberg and Heidi J. Parry Stern, Las Vegas; Kolesar & Leatham, Chtd., and Alan J. Lefebvre, Las Vegas, for Appellant.

Lemons Grundy & Eisenberg and Robert L. Eisenberg, Reno; Parker Nelson & Arin, Chtd., and Theodore Parker III, Las Vegas, for Respondent.

BEFORE MAUPIN, C.J., GIBBONS and HARDESTY, JJ.

OPINION

By the Court, HARDESTY, J.:

In this appeal, we consider whether appellant Clark County School District (CCSD) waived its right to assert the statutory damages limitation under NRS 41.035, which limits tort damages against a political subdivision to $50,000, when it did not mention the statutory cap as an affirmative defense in its answer to respondent Richardson Construction, Inc.'s district court complaint.

We conclude that CCSD cannot waive its statutory damages protection, even though CCSD did not raise the statutory cap issue in its answer. Therefore, under NRS 41.035, any tort damages awarded in this case against CCSD must be limited to $50,000.

We also take this opportunity to consider the non-delineated defenses included in NRCP 8(c)'s "catchall" provision for pleading affirmative defenses in an answer. Further, we consider whether the district court properly sanctioned CCSD during trial for discovery abuses by striking the affirmative defenses that CCSD had asserted in its answer. While the district court did not abuse its discretion in sanctioning CCSD by striking its affirmative defenses, the district court overbroadly applied the sanction to exclude evidence relating to Richardson's prima facie case that were not required to be affirmatively pleaded, which effectively resulted in the striking of CCSD's entire answer. Under NRCP 8(c), as we interpret the "catchall" provision in that rule, non-delineated defenses must be affirmatively pleaded only if they raise new facts and arguments that would defeat the plaintiff's claims even if all allegations in the complaint were true. Since, under this interpretation of NRCP 8(c)'s "catchall" provision, several of CCSD's pleaded affirmative defenses responded to Richardson's prima facie case and were not true affirmative defenses, the district court erroneously precluded the jury from considering evidence offered to support those arguments. Accordingly, we reverse the district court's judgment and remand this matter for a new trial.

FACTS

CCSD hired Richardson, a general contractor, to construct improvements to the school district's food service facilities. After construction was completed, a subcontractor filed a complaint against Richardson for unpaid amounts due on its completed work. Richardson, in turn, brought a third-party complaint against CCSD for, among other things, indemnity, contribution, and wrongful interference with a prospective business advantage. CCSD filed an answer to Richardson's complaint, setting forth several assertions as affirmative defenses.

Thereafter, the parties conducted discovery and prepared for trial. Richardson's expert prepared a report on delay damages allegedly caused by CCSD. The expert, however, was late in producing the report. Consequently, before trial, CCSD filed a motion in limine to exclude Richardson's expert witness testimony, arguing that CCSD did not have sufficient time to prepare a defense against the delay damage claim and offering an affidavit by Dan McPartlin, a CCSD employee, in support of the motion.

At the hearing on CCSD's motion, Richardson argued that its expert's report was late because CCSD had not produced documents that were needed to complete the report. Among those missing documents, it asserted, was a file from McPartlin. Although McPartlin averred that he might have certain documents that CCSD had not previously produced, Richardson was unable to name the specific documents that it sought from CCSD. Therefore, the district court continued the hearing to a later date so that the parties could submit information on the specific documents.

When the hearing resumed, CCSD provided the district court with an affidavit from McPartlin. The affidavit stated, "To the best of [McPartlin's] knowledge, no other material exists regarding this matter which has not already been provided." Based on this affidavit, the district court found that CCSD was not responsible for delaying Richardson's expert's report. Therefore, the district court granted CCSD's motion to exclude the expert's testimony on delay damages.

During McPartlin's testimony at trial, however, he disclosed that he possessed a file that he had not produced to the parties' attorneys. McPartlin informed the court that he believed that the file contained nothing that had not already been produced during discovery. The court, however, ordered McPartlin to produce his file. The following day, McPartlin produced the file, which contained nearly 1,700 documents. After the parties had time to review the documents, the court held a hearing on whether and how to sanction CCSD for not producing the documents earlier.¹

At the sanctions hearing, McPartlin testified that a CCSD attorney, Richard Prato, had prepared McPartlin's affidavit stating that McPartlin had reviewed all of his files and that all of his files had been turned over to CCSD. According to McPartlin, he told Prato that he would not sign the affidavit because he had located another file but had not yet reviewed it. Prato then told McPartlin that anything that could be in the file would already have been produced during discovery. McPartlin then testified that Prato told him not to look in the file. McPartlin and Prato agreed to the language ultimately used in McPartlin's affidavit, but McPartlin also stated that he felt pressured to sign the affidavit.

Prato, however, recalled his discussion with McPartlin differently. Prato agreed that he had telephoned McPartlin to sign the first draft of the affidavit. According to Prato, however, he understood McPartlin to have said that he had not found any files but was still looking, rather than, as McPartlin testified, that he had found a file but had not yet reviewed it. Prato also testified that he never instructed McPartlin not to look at any files.

Following the hearing, the district court made findings and issued sanctions against CCSD. The court found that of the 1,700 documents McPartlin produced, 500 to 700 of them had not been previously produced by CCSD. Thus, the court determined that, in addition to CCSD producing documents late, McPartlin's affidavit was false. For sanctions, among other things, the district court struck all of CCSD's affirmative defenses.² In so doing, the district court stated, "I'm going to strike all of their affirmative defenses. They will not be able to raise any facts or issues relative to their affirmative defenses."

During the remainder of the trial, the district court prevented CCSD from presenting evidence on any of the affirmative defenses that it had pleaded in its answer. In doing so, however, the district court did not analyze whether the evidence that CCSD sought to introduce was offered in support of a defense that NRCP 8(c) required be affirmatively pleaded, or was merely offered to rebut Richardson's prima facie case.

Also, to prevent the jury from considering earlier admitted evidence related to CCSD's stated affirmative defenses, the district court approved three limiting jury instructions: Jury Instructions 19, 20, and 21. Jury Instruction 19 instructed the jury to "disregard any evidence it has seen or heard from [CCSD], or any witness at trial, alleging that Richardson was the cause of any delay on this project." Jury Instruction 20 instructed the jury to "disregard any evidence it has seen or heard from [CCSD], or any witness at trial, alleging that Richardson failed to perform all of its obligations under the contract." Jury Instruction 21 instructed the jury to "disregard any evidence it has seen or heard from [CCSD], or any witness at trial, regarding any damages claimed to have been incurred by [CCSD]."

The jury returned a verdict in Richardson's favor, awarding Richardson, among other damages, $225,000 for CCSD's wrongful interference with a prospective business advantage and $500,000 on its claims for contribution and indemnification. CCSD moved for a new trial but soon thereafter requested that the district court summarily deny the motion, which the court did.

CCSD then appealed from the judgment and from the order denying its new trial motion. Because CCSD had requested that its new trial motion be denied and therefore was not aggrieved by the court's decision to do so, we previously dismissed its appeal as to that order for lack of jurisdiction.³ We further concluded, however, that CCSD could proceed with its appeal from the district court's judgment entered upon the jury verdict.

DISCUSSION

On appeal, CCSD argues that damages for any wrongful interference with Richardson's prospective business advantage, a tort, are limited to $50,000 total because it is a political subdivision entitled to a statutory limitation on tort damages under NRS 41.035(1). Next, CCSD argues that the district court erred in the application of its sanction order. According to CCSD, the court did not merely preclude evidence related to CCSD's affirmative defenses, but rather, all evidence needed to defend against Richardson's prima facie case. CCSD contends that the district court's actions in this respect effectively struck CCSD's entire answer, which CCSD asserts was an improper sanction under the circumstances.⁴

In addition to responding to CCSD's arguments on appeal, Richardson contends that CCSD's appeal should be dismissed in its entirety under the invited error doctrine, which precludes a party from raising on appeal errors that the party induced or provoked the...