Nevada Supreme Court Rules That Offers of Judgment Apply in Arbitration

In WPH Architecture, Inc. v. Vegas VP, __ P.3d __, 131 Adv. Op. 88 (Nev. Nov. 5, 2015), the Nevada Supreme Court held that Rule 68 Offers of Judgment, together with statutes allowing offers of judgment in Nevada, “are substantive laws that apply to the arbitration proceedings in the current case.”  In this case, the contract between the litigants required arbitration of any disputes pursuant to the American Arbitration Association’s Construction Arbitration Rules, and applying Nevada substantive law.  Prior to arbitration, the claimant made a statutory and Rule 68 offer of judgment.  The respondent rejected the offer of judgment, then lost at arbitration.

The arbitrator refused to award attorney fees based on the offer of judgment.  The claimant then asked the court to modify the arbitrator’s award, claiming the arbitrator “manifestly disregarded the law.”  The Supreme Court declined to modify the award.  Although Nevada Rules of Civil Procedure 68, Nevada Revised Statute  17.115, and NRS 18.020 are routinely used in state court litigation as a tool to award costs to the prevailing party, the Court held they do not expressly apply to include arbitration proceedings. Therefore, an arbitrator is not required to award attorney fees or costs pursuant to Nevada Rules of Civil Procedure 68, Nevada Revised Statute  17.115, or NRS 18.020.  Moreover, the Court noted that under NRS 38.238, an award fees and costs by an arbitrator is discretionary.

Nevada arbitrators may be asked to apply Nevada Rules of Civil Procedure 68, Nevada Revised Statute  17.115, and NRS 18.020 when awarding attorney fees to a prevailing party in arbitration.  Litigants should understand, however, that such an award is still discretionary.







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