Pardee Homes of Nevada v. Wolfram

In this breach of contract action the Supreme Court reversed the portion of the district court's judgment awarding attorney fees as special damages, holding that attorney fees incurred by a plaintiff in bringing a two-party breach-of-contract claim against a defendant do not constitute special damages under the limited exceptions recognized by the Court.

While Nevada adheres to the American Rule of attorney fees, the Supreme Court has recognized a narrow and limited exception for attorney fees as special damages. In the instant case, Plaintiffs brought an action against Defendants alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and an accounting. The district court found in favor of Plaintiffs and awarded Plaintiffs attorney fees as special damages and because they were the prevailing parties pursuant to the contract. The Supreme Court affirmed in part and reversed in part, holding (1) attorney fees was properly awarded based on the parties' contractual prevailing party provision; but (2) the district court erred in awarding Plaintiffs attorney fees as special damages for the two-party breach-of-contract action. The Court remanded the matter because the prevailing parties may be entitled to additional attorney fees in light of this opinion.