Wheeler Springs Plaza, LLC v. Beemon

• Citation: 71 P.3d 1258,119 Nev. 260
• Decision Date: 02 July 2003
• Docket Number: No. 39094.,39094.
• Parties: WHEELER SPRINGS PLAZA, LLC, Appellant, v. Dennis BEEMON; Donald Marks; Steve Williams; Mike Bolen; Phyllis Marks; James M. Hudspeth; and Mary Anne Hudspeth, Respondents.
• Court: Supreme Court of Nevada

71 P.3d 1258

119 Nev. 260

WHEELER SPRINGS PLAZA, LLC, Appellant, v. Dennis BEEMON; Donald Marks; Steve Williams; Mike Bolen; Phyllis Marks; James M. Hudspeth; and Mary Anne Hudspeth, Respondents.

No. 39094.

Supreme Court of Nevada.

July 2, 2003.

Goold, Patterson, Ales, Roadhouse & Day, Chartered, and Jeffrey D. Patterson, Las Vegas, for Appellant.

Dennis Beemon, Las Vegas, in Proper Person.

Mike Bolen, Pahrump, in Proper Person.

James M. Hudspeth, Sparks, in Proper Person.

Mary Anne Hudspeth, Sparks, in Proper Person.

Donald Marks, Reno, in Proper Person.

Phyllis Marks, Reno, in Proper Person.

Steve Williams, in Proper Person.

Before AGOSTI, C.J., MAUPIN and GIBBONS, JJ.

OPINION

MAUPIN, J.

This case presents an issue of first impression in Nevada: whether payment of a monetary judgment pending an appeal renders the appeal moot. We hold that payment of a judgment only constitutes a waiver of the judgment debtor's appellate rights when the payment is intended as a compromise or settlement of the matter.

FACTS

Respondents Dennis Beemon, Donald Marks, Steve Williams, Mike Bolen, Phyllis Marks, James M. Hudspeth and Mary Anne Hudspeth (the Tenants), entered into commercial leases with appellant Wheeler Springs Plaza, LLC. The Tenants later filed a complaint against Wheeler Springs alleging breach of contract and misrepresentation. In response, Wheeler Springs filed counterclaims alleging, among other things, breaches of the various leases by the Tenants. A jury returned verdicts in favor of both parties on their respective claims. After offsetting the damage awards, the district court determined that the Tenants were the prevailing parties and awarded them their individual damages, attorney fees, and costs pursuant to the lease agreements.

Wheeler Springs appealed the judgment and award of attorney fees and costs, primarily contending that substantial evidence did not support the jury verdicts. It did not seek a stay of the judgment pending appeal or post a supersedeas bond.

The Tenants garnished Wheeler Springs' accounts to enforce payment of the judgment while the appeal was pending. Rather than undergo further garnishments, Wheeler Springs tendered payment of the outstanding balance owed on the judgments. Thereafter, in an unpublished order, we reversed the judgment against Wheeler Springs, concluding that substantial evidence did not support the jury's verdict. We also reversed the award of attorney fees and costs. We then remanded the case to the district court to redetermine the amount of damages owed to Wheeler Springs.

On remand, the district court ordered the parties to submit briefs on the issue of damages to be awarded. Wheeler Springs submitted a brief calculating its damages, including interest and its own attorney fees. In response, the Tenants filed a motion to dismiss the remanded cases for lack of jurisdiction, arguing that Wheeler Springs' payment of the judgment rendered the proceedings moot. Wheeler Springs then filed a countermotion for restitution of the monies Wheeler Springs paid to the Tenants pending the original appeal.

The district court entered a series of orders on these applications. On one hand, the district court determined Wheeler Springs' contract damages, vacated the Tenants' award of attorney fees and costs, and denied the Tenants' motion to dismiss for mootness, which as noted above, was based upon the payment of the judgment by Wheeler Springs while the original appeal was pending. On the other hand, the district court denied Wheeler Springs' claims for interest, costs, attorney fees, and restitution on the grounds that such relief was beyond the scope of the remand order, i.e., that the relief was not mandated under the law of the case generated by the first appeal.

Wheeler Springs appeals from the post-remand order denying its claims for interest, attorney fees, costs, and restitution.

DISCUSSION

To resolve this case, we must determine whether the district court complied with our mandate on remand, a question of law that this court reviews de novo.¹ When a reviewing court determines the issues on appeal and reverses the judgment specifically directing the lower court with respect to particular issues, the trial court has no discretion to interpret the reviewing court's order; rather, it is bound to specifically carry out the reviewing court's instructions.²

Satisfaction of the original judgment

We must first resolve whether Wheeler Springs' payment of the judgment constituted acquiescence in it, thus rendering the proceedings in this case moot.³

We have held that a party who accepts the benefits of a judgment waives the right to appeal, "because a party may not follow two legally inconsistent courses of action."⁴ However, we have yet to decide whether payment of a judgment automatically renders an appeal moot.

Some jurisdictions hold that a judgment debtor does not waive the right to appeal or render the controversy moot by payment or satisfaction of the judgment under coercion, unless the judgment creditor demonstrates that the payment or satisfaction was intended to compromise or settle the matter.⁵ In line with this view, the Supreme Court of Colorado notes the inherent unfairness in imposing a waiver of appeal upon a party who has paid a judgment to avoid a distress sale upon execution by the judgment creditor.⁶ Accordingly, jurisdictions not precluding appeal after coercive satisfaction of a judgment have stated that a judgment debtor's payment without attempting to stay execution pending appeal or to post a supersedeas bond does not amount to voluntary satisfaction of a judgment or render the controversy moot.⁷ Indeed, as the Supreme Court of Kansas has noted, the filing of a supersedeas bond or seeking a stay of execution pending appeal is permissive.⁸

We agree with the jurisdictions that do not preclude the right to appeal after coercive satisfaction of a judgment. Courts are divided regarding what constitutes payment under coercion; some hold that there must be actual threatened execution of the judgment,⁹ while others hold that the payment of a judgment, even before actual threat of execution thereon, is sufficient.¹⁰ Although we recognize that Wheeler Springs did not satisfy the judgment until a garnishment actually coerced payment, we are of the view that actual or potential threat of garnishment or execution is sufficient coercion to avoid a mootness challenge based upon payment of the judgment. Thus, we hold that payment of a judgment only waives the right to appeal or renders the matter moot when the payment is intended to compromise or settle the matter. Accordingly, the failure to file a supersedeas bond or seek a stay of execution of a judgment does not amount to acquiescence in the judgment.

Here, after Wheeler Springs timely filed its appeal, the Tenants garnished Wheeler Springs' accounts to enforce payment of the judgment. To stop the garnishments, which could adversely affect its ability to secure credit, Wheeler Springs paid the outstanding balance owed on the judgment. Thus, Wheeler Springs' payment of the judgment was not intended to compromise or settle the matter; rather, the record indicates that the Tenants' garnishment of Wheeler Springs' accounts coerced payment.

In light of our holding above, we conclude that Wheeler Springs did not waive its rights to prosecute the original appeal when it paid the judgment. Accordingly, the issues on remand and in this appeal are not moot.

Compliance with our prior order of remand

Under the law-of-the-case doctrine, when an appellate court decides a rule of law, that decision governs the same issues in subsequent proceedings.¹¹ The doctrine only applies to issues previously determined, not to matters left open by the appellate court.¹²

On remand, the district court redetermined and awarded Wheeler Springs damages, but refused to award Wheeler Springs interest, costs, and attorney fees, on the basis that this relief was not mandated under the law of the case of the first appeal. In our remand order, however, we specifically instructed the district court to award Wheeler Springs "rent and other charges due to Wheeler Springs under the various lease agreements" with the Tenants. Each of the respective lease agreements expressly provided for interest, costs, and attorney fees.¹³ Thus, because the law of the case on the original appeal mandates these awards, we conclude that the district court erred in its failure to provide Wheeler Springs this relief.

In light of our original order of reversal and remand, Wheeler Springs also requested restitution for the monies it paid— the judgment, costs, and attorney fees—to the Tenants. As noted, the district court refused to award restitution, concluding that such a request was also beyond our order of reversal and remand.

We have stated: "`Upon the reversal of the judgment against him, the appellant is entitled to the restitution from the respondent of all the advantages acquired by the latter by virtue of the erroneous judgment.'"¹⁴ The Restatement of Restitution § 74 (1937), extends this principle:

A person who has conferred a benefit upon another in compliance with a judgment, or whose property has been taken thereunder, is entitled to restitution if the judgment is reversed or set aside, unless restitution would be inequitable or the parties contract that payment is to be final....

"To permit one who has collected money upon a judgment later reversed to retain the same would in most cases result in unjust enrichment."¹⁵

Although we have recognized the principle of restitution when a judgment is reversed, we have yet to decide whether the district court has the inherent authority to grant an order of restitution when we have not expressly ordered it. However, other jurisdictions addressing the issue have held that the trial court has inherent authority to order restitution when a judgment has been reversed, even though the...