{"id":901163,"date":"2023-05-11T15:34:00","date_gmt":"2023-05-11T21:34:00","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=901163"},"modified":"2023-05-10T15:40:48","modified_gmt":"2023-05-10T21:40:48","slug":"attorneys-fees-retention-dispute","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/attorneys-fees-retention-dispute\/","title":{"rendered":"The American Rule Doesn\u2019t Stand: Contractor Uses Offer of Judgment to Recover Attorneys\u2019 Fees in Retention Dispute"},"content":{"rendered":"\n<p>John Mark Goodman | <a href=\"https:\/\/www.buildsmartbradley.com\/2023\/05\/the-american-rule-doesnt-stand-contractor-uses-offer-of-judgment-to-recover-attorneys-fees-in-retention-dispute\/?utm_source=Bradley+Arant+Boult+Cummings+LLP+-+BuildSmart&amp;utm_campaign=e0d8be6fe8-RSS_EMAIL_CAMPAIGN&amp;utm_medium=email&amp;utm_term=0_b504caf31b-e0d8be6fe8-78863422\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">BuildSmart<\/a><\/p>\n\n\n\n<p>Last week we saw the\u00a0<em>Menard court<\/em>\u00a0reject the use of an <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/indemnity-clause-attorney-fees-rejects-shifting\/\" target=\"_blank\" rel=\"noreferrer noopener\">indemnity clause to shift fees<\/a> in a dispute between contracting parties.\u00a0This week, a very recent decision from Nevada highlights another creative way to shift fees where there is no statute or contract provision on point: offers of judgment (see\u00a0<em>Helix Electric of Nevada v. APCO Construction, Inc<\/em>., 2023 WL 2987662\u00a0(Nev. Apr. 17, 2023)).\u00a0<em>Helix Electric<\/em>\u00a0involved a payment dispute between the electrical subcontractor, Helix, and the initial general contractor, APCO Construction, which left the project before it was completed. The gist of the dispute was whether APCO owed Helix retention that had accrued when APCO left the project.\u00a0APCO argued that it did not owe the retention because (1) under the contract the retention did not become due and payable until project completion and (2) Helix and the new general contractor entered an assignment\u00a0<em>and novation<\/em>\u00a0of the subcontract thereby relieving APCO of its obligations under the original subcontract.\u00a0Helix argued the retention provision was an illegal and unenforceable \u201cpay-if-paid\u201d provision.\u00a0The lower court ruled in APCO\u2019s favor, and the Nevada Supreme Court affirmed.\u00a0<\/p>\n\n\n\n<p>On the attorneys\u2019 fees issue, the Nevada Supreme Court rejected APCO\u2019s argument that it was entitled to recover under the fee-shifting provision in the contract.&nbsp;That\u2019s because of the assignment and novation: Once the subcontract was assigned and novated, APCO was no longer a party to it and could not enforce it. Enter the offer of judgment, an often-overlooked procedural tool designed to encourage settlement that can be used to recover certain litigation costs and, in some jurisdictions, attorneys\u2019 fees.&nbsp;In Nevada, Rule 68 of the Nevada Rules of Civil Procedure provides that any party may serve an offer of judgment at least 21 days before trial. If the offer is not accepted and the offeree fails to obtain a more favorable judgment at trial, the offerer may recover post-offer costs and reasonable attorneys\u2019 fees.&nbsp;<\/p>\n\n\n\n<p>That\u2019s exactly what happened in\u00a0<em>Helix Electric<\/em>. APCO made an offer of judgment more than 21 days before the trial.\u00a0Helix did not accept the offer, and then failed to obtain a more favorable judgment.\u00a0Helix was therefore ordered to pay APCO\u2019s post-offer attorneys\u2019 fees and expenses.\u00a0Note that while most jurisdictions have a similar procedural tool, the mechanics of making an offer of judgment and what can be recovered (e.g., costs, fees or both) varies from jurisdiction to jurisdiction.\u00a0Nevertheless, the next time you find yourself with no clear path to recover fees, consider making an offer of judgment. It may just be your ticket to stick the other side with your fees.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\" target=\"_blank\" rel=\"noreferrer noopener\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>John Mark Goodman | BuildSmart Last week we saw the\u00a0Menard court\u00a0reject the use of an indemnity clause to shift fees in a dispute between contracting parties.\u00a0This week, a very recent decision from Nevada highlights another creative way to shift fees where there is no statute or contract provision on point: offers of judgment (see\u00a0Helix Electric&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/attorneys-fees-retention-dispute\/\">Continue reading <span class=\"screen-reader-text\">The American Rule Doesn\u2019t Stand: Contractor Uses Offer of Judgment to Recover Attorneys\u2019 Fees in Retention Dispute<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[9895,142,224,9288,152],"class_list":["post-901163","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-attorneys-fees","tag-construction-contract","tag-indemnity-clause","tag-nevada","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The American Rule Doesn\u2019t Stand: Contractor Uses Offer of Judgment to Recover Attorneys\u2019 Fees in Retention Dispute - Advise &amp; 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