124 NOV., Advance Opinion 77
`IN THE SUPREME COURT OF THE STATE OF NEVADA
`
`No. 48347
`
`Free
`
`M.C. MULTI-FAMILY DEVELOPMENT,
`L.L.C., A NEVADA LIMITED
`LIABILITY COMPANY; WALTER
`HOMES, LTD., A NEVADA LIMITED
`LIABILITY COMPANY; AND JOHN H.
`MIDBY, INDIVIDUALLY AND AS
`MANAGING MEMBER OF M.C.
`MULTI-FAMILY DEVELOPMENT,
`L.L.C., AND WALTER HOMES, LTD.,
`Appellants/Cross-Respondents,
`vs.
`CRESTDALE ASSOCIATES, LTD., A
`NEVADA LIMITED LIABILITY
`COMPANY; DAVID ALLSOP,
`INDIVIDUALLY AND AS MANAGING
`MEMBER OF CRESTDALE
`ASSOCIATES, LTD.; AND KAREN
`ALLSOP, INDIVIDUALLY AND AS
`MANAGING MEMBER OF
`CRESTDALE ASSOCIATES, LTD.,
`Respondents/Cross-Appellants.
`
`Appeal and cross-appeal from a district court order entered on
`
`a jury verdict in a contract and tort action. Eighth Judicial District Court,
`
`Clark County; Kathy A. Hardcastle, Judge.
`
`Affirmed in part, reversed in part and remanded with
`instructions.
`
`a
`
`0
`no
`Christensen, Glaser, Fink, Jacobs, Weil &
`Shapiro, LLC, and Corey M. Eschweiler and Richard C. Gordon, Las
`I -&-m eig.Gt( .se, Las Anjelcs, C_1 i-frl ► iat,,, anj
`Vegas ,
`for Appellants/Cross -Respondents.
`
`Santoro, Driggs, Walch, Kearney, Holley & Thompson and Anthony
`Zmaila and Charles L. Titus, Las Vegas,
`for Respondents/Cross-Appellants:
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`BEFORE MAUPIN, CHERRY and SAITTA, JJ.
`
`OPINION
`
`By the Court, MAUPIN, J.:
`
`In this case, we primarily consider whether intangible
`
`property, in particular a contractor's license, can be the subject of a claim
`
`in tort for conversion. In doing so, we adopt the California definition of
`
`"property rights" and the Restatement (Second) of Torts rule defining
`
`conversion of "intangible personal property," and expressly reject the
`
`notion that personal property must be tangible in order to give rise to a
`
`conversion claim. We therefore conclude in this case that the mere fact
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`that one's use of a contractor's license does not physically prevent others
`
`from using the same license does not preclude a plaintiff in a conversion
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`action concerning alleged unauthorized use of the license from presenting
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`the claim for determination by a trial jury. Instead, we hold that the
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`exercise of a right that belongs to another may constitute an act
`
`inconsistent with the titleholder's rights and may therefore satisfy the
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`"wrongful dominion" element of conversion. Accordingly, we conclude that
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`the use of a corporate contractor's license by an individual for independent
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`projects, without the permission of the entity named in the license, may
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`constitute a conversion when the license is the exclusive property of the
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`individual or entity to which it is issued.
`
`FACTS
`
`In 1995, Lance Walter, Allen Stern, Toni Stern, Paul Kenner,
`
`and David Allsop formed Walter Homes, Ltd., a limited liability company,
`
`to engage in the business of residential real estate development. Allsop
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`owned 12.5 percent of the company, and the remaining owners collectively
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`held 87.5 percent of the issued corporate shares. During the year 1998,
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`Allsop engaged in two separate interactions with John H. Midby and M.C.
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`Multi-Family Development, L.L.C., Midby's real property development
`
`company.
`
`One interaction involved Multi-Family Development's
`
`acquisition of all Walter Homes' corporate stock except for the 12.5 percent
`
`held by Allsop. A second interaction involved a consulting arrangement
`
`under which Allsop agreed to assist in the development of a Multi-Family
`
`Development project known as Sienna Villas located in the Las Vegas
`
`area. As described below, these interactions became the subject of the
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`dispute litigated in this matter.
`
`The licensing dispute
`
`In November 1998, Allsop approached Midby, the managing
`
`partner of Multi-Family Development, about buying the 87.5 percent
`
`interests in Walter Homes held by Walter, Kenner, and the Sterns. A year
`
`later, in November 1999, the parties entered into an express agreement
`
`whereby Multi-Family Development acquired the 87.5 percent interest in
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`Walter Homes as well as management rights in the company. Allsop
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`retained his 12.5 percent ownership interest in Walter Homes.
`
`In October 1999, Allsop formed Crestdale Associates, Ltd., for
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`the purpose of developing residential real estate. Although Crestdale
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`Associates became a competitor with Walter Homes, such business activity
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`was not prohibited under the basic Walter Homes Operating Agreement.
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`However, rather than obtain a separate contractor's license for Crestdale
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`Associates, Allsop instead used the Walter Homes license to develop
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`Crestdale Associates properties.
`
`In September 2000, Allsop approached Midby with a proposal
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`to purchase, for himself, Multi-Family Development's interest in Walter
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`Homes. Midby expressed interest and Allsop's attorney, Douglas Gerrard,
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`drew up a proposed written purchase agreement. The draft included a
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`provision that released Allsop from liability for his prior use of the Walter
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`Homes contractor's license, which according to Midby, revealed for the
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`first time Allsop's use of the license in connection with other ventures.
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`Having learned that Allsop had used the Walter Homes license for
`
`independent projects, Midby refused to continue negotiations.
`
`The rights of the members of Walter Homes were set forth in
`
`paragraph 6.3 of the Walter Homes Operating Agreement:
`
`Nonrestriction of Business Pursuits of Members
`This
`and Administrative Committee Members.
`Operating Agreement shall not preclude or limit
`in any respect the right of any Member or
`Administrative Committee Member to engage in
`or invest in any business activity of any nature or
`description, including those which may be the
`same or similar to the Company's business and in
`direct competition therewith. Any such activity
`may be engaged in independently or with other
`Members or Administrative Committee Members.
`No Member shall have the right, by virtue of the
`Operating
`this
`Articles
`of Organization,
`Agreement or the relationship created hereby, to
`any interest in such other ventures or activities, or
`to the income or proceeds derived therefrom. The
`pursuit of such ventures, even if competitive with
`the business of the Company, shall not be deemed
`wrongful or improper and any Member or
`Administrative Committee Member shall have the
`right to participate in or to recommend to others
`any investment opportunity. (Emphasis added.)
`
`Article 20 of the Agreement further stated that
`
`of Organization and this
`The Articles
`the
`entire
`contain
`Operating Agreement
`understanding between and among the Members
`and supersede any prior understandings and
`agreements between and among them respecting
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`the subjects of the Articles of Organization and
`this Operating Agreement....
`
`Notwithstanding Allsop's right to. develop other projects under paragraph
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`6.3 of the Operating Agreement, Midby, Multi-Family Development, and
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`Walter Homes filed a complaint in the district court against Allsop and
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`Crestdale Associates seeking damages and various forms of relief, based
`
`on their claim that, among other things, Allsop and Crestdale Associates
`
`converted the Walter Homes contractor's license for their own personal
`
`benefits.
`
`The consulting dispute
`
`In early 1998, before Multi-Family. Development purchased
`
`the bulk of the Walter Homes' corporate shares, Midby and Allsop had
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`discussed the prospect of Allsop consulting with Midby on projects other
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`than those connected with Walter Homes. Although they developed a
`
`draft consulting agreement, neither party could agree on terms.
`
`Nonetheless, they eventually came to an oral understanding that Midby
`
`would pay Allsop $10,000 per month plus a percentage of the profits from
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`the Sienna Villas project for his consulting services.
`
`Allsop began
`
`consulting for Midby in June 1998, but Midby paid Allsop only for the
`
`months of January, February, and March 2000. In July 2000, Allsop
`
`terminated the consulting arrangement.
`
`PROCEDURAL HISTORY
`
`Appellants/cross-respondents
`
`M.C.
`
`Multi-Family
`
`Development, LLC, Walter Homes, Ltd., and John H. Midby (collectively
`
`"Multi-Family Development") filed a complaint against respondents/cross-
`
`appellants Crestdale Associates, David Allsop,
`
`and Karen Allsop
`
`(collectively "Crestdale Associates"). Multi-Family Development later
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`amended the complaint to assert claims for (1) fraud in the inducement to
`
`purchase Walter Homes stock, (2) breach of the covenant of good faith and
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`fair dealing, (3) breach of the duty of loyalty, (4) breach of fiduciary duty,
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`(5) conversion, and (6) unjust enrichment. Crestdale Associates filed an
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`answer and counterclaims for breach of the consulting agreement,
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`fraudulent misrepresentation, and unjust enrichment. Multi-Family
`
`Development then moved for summary judgment on all claims and
`
`counterclaims. The district court denied the motion.
`
`Before trial, Crestdale Associates served an unapportioned
`
`offer of judgment under which it agreed to pay Multi-Family Development
`
`$5,000 and dismiss all of its counterclaims. Multi-Family Development
`
`rejected the offer and, thereafter, rejected a second unapportioned offer in
`
`the amount of $50,000. A jury trial on all claims and counterclaims
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`followed.
`
`At trial, Multi-Family Development argued, based on the
`
`terms of the Operating Agreement, and conversations between Allsop and
`
`Midby, that Allsop had no reason to believe that he was authorized to use
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`Walter Homes' assets, including the contractor's license, to compete with
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`Walter Homes. Multi-Family Development further claimed that the
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`members of Walter Homes, including Allsop, agreed to be bound by the
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`provisions in the Operating Agreement. Crestdale Associates, on the other
`
`hand, maintained that the Walter Homes Operating Agreement permitted
`
`its members to compete against one another. In this, the district court
`
`allowed it to present parol evidence regarding the meaning of the
`
`Operating Agreement, including testimony that members of Walter Homes
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`had, in the past, used the contractor's license on a number of independent
`
`projects, pursuant to Paragraph 6.3.
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`Concerning Crestdale Associates' counterclaim for breach of
`
`the consulting agreement, Multi-Family Development attempted to admit
`
`an unexecuted, written draft of the consulting agreement that Midby and
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`Allsop attempted to negotiate. Multi-Family Development offered the
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`draft as evidence of what Midby and Allsop intended when they entered
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`into the oral agreement. Although the district court sustained Crestdale
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`Associates' objection to the admission of the document, it permitted Multi-
`
`Family Development to question Allsop regarding the preliminary
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`negotiations leading to the oral arrangement with Midby.
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`After Multi-Family Development concluded its case-in-chief in
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`the licensing dispute, Crestdale Associates moved for a directed verdict on
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`Multi-Family Development's claims for fraud in the inducement, breach of
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`the covenant of good faith and fair dealing, and conversion. The trial court
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`granted the motion for directed verdict on the fraud in the inducement and
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`conversion claims. As to the conversion claim, the following exchange took
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`place between the district court judge and counsel for Multi-Family
`
`Development:
`
`THE COURT: All right . . . The motion on
`the fifth cause of action on conversion, there's no
`evidence of the taking. There might be evidence of
`use, but not the taking of a license which is
`completely separate from a conversion claim.
`
`MR. ESCHWEILER:
`Your honor, the
`conversion
`claim rests upon the wrongful
`dominion of the license. And that's what we have
`to prove. And the evidence provided by Mr. Midby
`shows that there is a wrongful dominion by the
`Defendants to get us by a Rule 50(b) motion.
`
`THE COURT: I disagree. It's granted as to
`the fifth cause of action....
`
`As to the remaining Multi-Family Development claims, the jury found for
`
`Crestdale Associates. As to the counterclaims, the jury found in favor of
`
`Crestdale Associates on the claims for breach of oral contract and unjust
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`enrichment, and awarded $678,500 in damages.
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`The district court subsequently denied Crestdale Associates'
`
`motion for attorney fees brought under NRCP 68 and NRS 17.115,
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`Nevada's "offer of judgment" rule and statute, finding that Crestdale
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`Associates' offer of judgment was not properly apportioned among the
`
`plaintiffs .1
`
`The district court also refused Crestdale Associates'
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`application for prejudgment interest brought under NRS 99 . 040(1)(a),
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`which provides that , in contract actions , interest must be awarded upon
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`all monies owed from the time an obligation becomes due.
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`Multi -Family Development filed this timely appeal from the
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`district court's directed verdict on the conversion claim, assigning error to
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`several evidentiary rulings and arguing that a new trial on that claim is
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`warranted . Crestdale Associates cross-appeals the portion of the order
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`denying it attorney fees and prejudgment interest.2
`
`'The district court considered the first offer of judgment.
`
`2Multi-Family Development also assigns error to certain alleged
`trial irregularities. In particular, Multi-Family Development asserts that
`Crestdale Associates' expert. witness was permitted to revise his opinions
`at trial without notice, the district court refused to permit proper
`impeachment, and the district court improperly allowed Crestdale
`Associates to make a formal closing argument after Multi-Family
`Development's rebuttal closing argument.
`However, Multi-Family
`Development neglected to address these alleged irregularities in its briefs.
`Accordingly, we do not discuss them further. See Carson v. Sheriff, 87
`Nev. 357, 360-61, 487 P.2d 334, 336 (1971); NRAP 28(a) (providing that
`briefs must present an argument containing the appellant's contentions
`with respect to the issues presented and the reasons therefore, with
`citations to the record and parts of the record upon which the appellant
`relies). See also Edwards v. Emperor's Garden Rest., 122 Nev. 317, 330
`n.38, 130 P.3d 1280, 1288 n.38 (2006) (explaining that it is the appellant's
`responsibility to provide authority and cogent arguments to support its
`position on appeal).
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`DISCUSSION
`
`Multi-Family Development asserts that Crestdale Associates
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`engaged in wrongful, unauthorized use of the Walter Homes contractor's
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`license and, accordingly, is liable for conversion. On appeal, as it did in
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`the district court, Multi-Family Development claims that intangible
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`property, such as a license, can be converted under Nevada law.
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`Multi-Family Development further argues that Crestdale Associates
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`exercised "wrongful dominion" over the license. In this, Multi-Family
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`Development
`
`asserts
`
`that,
`
`based
`
`on
`
`NRS
`
`624.2603
`
`and
`
`3NRS 624.260, which governs contractor's license qualifications,
`states, in relevant part, that:
`
`1. The Board shall require an applicant or
`licensee to show such a degree of experience,
`financial
`responsibility
`and
`such
`general
`knowledge of the building, safety, health and lien
`laws
`of
`the
`State
`of Nevada
`and
`the
`administrative
`principles
`of
`the
`contracting
`business as the Board deems necessary for the
`safety and protection of the public.
`
`2. An applicant or licensee may qualify [for
`a contractor's license] in regard to his experience
`and knowledge in the following ways:
`
`(b) If a copartnership, a corporation or any
`other combination or organization, it may qualify
`by the appearance of the responsible managing
`officer or member of the personnel of the applicant
`firm.
`
`3. The natural person qualifying on behalf
`of
`another natural
`person
`or
`firm under
`paragraphs (a) and (b) of subsection 2 must prove
`continued on next page ...
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`NRS 624.305,4 Allsop, even as a qualified employee and shareholder of
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`Walter Homes, had no ownership or possessory interest in the corporate
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`contractor's license and that such a license can only be used by the
`
`... continued
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`that he is a bona fide member or employee of that
`person or firm and when his principal or employer
`is actively engaged as a contractor shall exercise
`authority in connection with his principal or
`employer's contracting business in the following
`manner:
`
`(a) To make technical and administrative
`decisions;
`
`(b) To hire, superintend, promote, transfer,
`lay off, discipline or discharge other employees
`and to direct them, either by himself or through
`others, or effectively to recommend such action on
`behalf of his principal or employer; and
`
`(c) To devote himself solely to his principal
`or employer's business and not to take any other
`employment which would conflict with his duties
`under this subsection.
`
`(Emphasis added.)
`
`4NRS 624.305, which pertains to unlawful use, assignment, or
`transfer of a contractor' s license , states:
`
`1. No license may be used for any purpose
`by any person other than the person to whom such
`license is issued, and no license may be assigned,
`transferred or otherwise disposed of to permit the
`unauthorized use thereof.
`
`2. The license of any person who violates
`any provision of this section shall be automatically
`cancelled and revoked.
`
`(Emphasis added.)
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`individual or entity to which it is issued. Multi-Family Development
`
`further argues that Allsop, although "a qualified employee" of Walter
`
`Homes, was not given permission by Midby, as Walter Homes' other
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`shareholder, or under the Walter Homes Operating Agreement to use the
`
`license, which was in the company's name and not in Allsop's name, for his
`
`use in independent projects.
`
`Crestdale Associates conceded at the oral argument of this
`
`appeal that a contractor's license constitutes personal property that can be
`
`converted. Nevertheless, it argues that the district court properly directed
`
`a verdict on the conversion claim because Multi-Family Development
`
`failed to establish that Allsop lacked authority to use the Walter Homes
`
`license or that he used the license to the exclusion of Walter Homes.
`
`Thus, Crestdale Associates contends it did not exercise "wrongful
`
`dominion" over the license. In this, Crestdale Associates asserts that the
`
`owners of Walter Homes had established a practice of using the license for
`
`their independent projects and that the Operating Agreement did not
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`expressly prohibit the use of the license for non-Walter Homes projects.
`
`Conversion
`
`A directed verdict is proper pursuant to NRCP 50 when "the
`
`evidence is so overwhelming for one party that any other verdict would be
`
`contrary to the law."5 In determining the merits of a motion for directed
`
`verdict, "the trial court must view the evidence and all inferences most
`
`5Bliss v. DePrang, 81 Nev. 599, 602, 407 P.2d 726, 727-28'(1965).
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`favorably to the party against whom the motion is made."6 We apply the
`
`same standard as the trial court on appeal.?
`
`In Evans v. Dean Witter Reynolds, Inc.,8 we defined
`
`conversion as "`a distinct act of dominion wrongfully exerted over another's
`
`personal property in denial of, or inconsistent with his title or rights
`
`therein or in derogation, exclusion, or defiance of such title or rights."'9
`
`Additionally, "conversion is an act of general intent, which does not
`
`require wrongful intent and is not excused by care, good faith, or lack of
`
`knowledge."10 "Whether a conversion has occurred is ... a question of fact
`
`for the jury.""
`
`Despite Crestdale Associates' concession that a contractor's
`
`license is personal property that can be converted, we nonetheless begin
`
`by clarifying if and when intangible property can be converted under
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`Nevada law. In so doing, we note a trend toward recognizing intangible
`
`property as personal property that can be converted and expressly reject
`
`6Id. at 601, 407 P.2d at 727.
`
`?University & Cmty. Coll. Sys. v. Sutton, 120 Nev. 972, 986, 103
`P.3d 8, 18 (2004).
`
`8116 Nev. 598, 5 P.3d 1043 (2000).
`
`91d. at 606, 5 P.3d at 1048 (quoting Wantz v. Redfield, 74 Nev. 196,
`198, 326 P.2d 413, 414 (1958) (emphasis added).
`
`'°Id.
`
`"Id. at 606, 5 P.3d at 1048. While we did not expressly reach the
`issue of whether intangible property constitutes property that can be
`converted in Evans, we nonetheless impliedly determined that intangible
`property can be converted by determining that a cognizable claim for
`conversion of securities existed under Nevada law. Id. at 606 n.7, 5 P.3d
`at 1048 n.7.
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`the rigid limitation that personal property must be tangible in order to be
`
`the subject of a conversion claim.12
`
`By way of example, in Kremen v. Cohen,13 the United States
`
`Court of Appeals for the Ninth Circuit, applying California law in a
`
`diversity action, set forth a three-part test for determining whether a
`
`property right exists. According to that court, a property right exists when
`
`(1) there is an interest capable of precise definition, (2) the interest is
`
`capable of exclusive possession or control, and (3) the putative owner has
`
`established a legitimate claim to exclusivity.14 Applying this test, the
`
`court in Kremen explained that property is a broad concept encompassing
`
`"`every intangible benefit and prerogative susceptible of possession or
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`disposition."'15 Under Kremen, such rights included the right to use of an
`
`Internet website domain name.16 Because we conclude that the Ninth
`
`Circuit's formulation for determining whether a property right exists is
`
`consistent with Evans, we now apply to the intangible property at issue
`
`here-the contractor's license issued to Walter Homes.
`
`In assessing whether a contractor's license is personal
`
`property, we first consider whether a contractor's license provides a
`
`property interest capable of precise definition. Because such a license
`
`provides the right to engage in certain, approved instances of construction
`
`12See Kremen v. Cohen, 337 F.3d 1024, 1030 (9th Cir. 2003).
`
`13337 F.3d 1024.
`
`14Id. at 1030.
`
`15Id. (quoting Downing v. Municipal Court, 198 P.2d 923, 926 (Cal.
`Ct. App. 1948) (internal quotation omitted)).
`
`16Id.
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`•
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`and development, we conclude that it satisfies the first element of a
`
`property right. Second, because NRS 624.305 allows only the individual or
`
`entity named on the license to legally use it, and because the license is
`
`capable of Walter Homes' exclusive control, the Kremen test's second
`
`element is also satisfied.17 Third, given the obligation under NRS
`
`624.260(2) that the licensee must individually demonstrate that he or she
`
`or a responsible managing person is qualified to obtain a contractor's
`
`license, Walter Homes, the license holder, has a legitimate claim to
`
`exclusivity in the use of that property right.18
`
`In addition, the Restatement (Second) of Torts Section 242
`
`outlines when intangible personal property can be converted. It states
`
`that "[w]here there is conversion of a document in which intangible rights
`
`are merged, the damages include the value of such rights." Here, the
`
`intangible rights afforded by the contractor's license are merged into the
`
`license document-the document itself is representative of the right of the
`
`named individual or entity to engage in approved instances of construction
`
`and development. Accordingly, we conclude that a contractor's license is
`
`intangible personal property that may be converted under Nevada law.
`
`Crestdale Associates argues that the facts elicited at trial
`
`demonstrate that it exercised no "wrongful dominion" over the license as a
`
`matter of law. We disagree. While the unauthorized use of a contractor's
`
`license does not involve an actual physical appropriation or "taking" as the
`
`district court concluded, it nonetheless may constitute an act inconsistent
`
`with the rights of the titleholder under Evans.
`
`17Id.
`
`18Id.
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`Here, Multi-Family Development provided sufficient evidence
`
`to overcome Crestdale Associates' motion for a directed verdict.
`
`Specifically,
`
`testimony indicated that Midby did not grant Allsop
`
`permission to use the Walter Homes license and that the Operating
`
`Agreement, though it allowed Walter Homes' members to engage in
`
`independent projects, did not authorize the use of the Walter Homes
`
`contractor's license on those projects.19 Although there was testimony
`
`presented at trial that other Walter Homes' members used the license on
`
`individual projects, that evidence is not so overwhelming that any verdict
`
`other than one in favor of Crestdale Associates would be contrary to law.20
`
`Moreover, Multi-Family Development's acquisition of 87.5 percent of the
`
`Walter Homes entity undermined the probative value of any prior course
`
`of conduct concerning the license.
`
`In any case, an issue remains
`
`concerning whether Crestdale Associates' use of the license amounted to a
`
`distinct act of dominion, wrongfully exerted over the contractor's license
`
`and, if so, whether its use was inconsistent with or in derogation of Walter
`
`Homes' rights in the license.
`
`19We note that the Walter Homes Operating Agreement did not
`supersede the requirement set forth in NRS 624.305 that "[n]o license may
`be used for any purpose by any person other than the person to whom
`such license is issued."
`
`20We reject Crestdale Associates' argument that, because the jury
`did not find "wrongfulness" with respect to, the other tort claims, there
`could be no "wrongful dominion." The element of "wrongful dominion" is
`distinct from the elements of "wrongfulness" with respect to other torts,
`and it is for a jury to determine whether the specific elements of
`conversion exist here. See Evans v. Dean Witter Reynolds, Inc., 116 Nev.
`598, 606, 5 P.3d 1043, 1048 (2000).
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`Parol evidence
`
`In addition to its claim that the district court erred in
`
`directing a verdict on its conversion claim, Multi-Family Development
`
`argues that the district court improperly permitted Crestdale Associates to
`
`present parol evidence of the intent and meaning of the Operating
`
`Agreement in defense of Multi-Family Development's breach of contract
`
`claim arising from an alleged breach of the general covenant of good faith
`
`and fair dealing. In this, Multi-Family Development claims that the
`
`Operating Agreement was. clear and unambiguous on its face and was not
`
`modified by the course of conduct that followed. In other words, Multi-
`
`Family Development asserts that while the Operating Agreement clearly
`
`and unambiguously permitted Walter Homes members to engage or invest
`
`in other business activities, it did not provide them with the authority to
`
`use Walter Homes' contractor's license in pursuit of those activities or
`
`projects.
`
`It therefore asserts that the district court abused its discretion
`
`in admitting testimony regarding Allsop's understanding of Paragraph 6.3
`
`of the Operating Agreement, his discussions with Midby regarding the
`
`meaning of the Operating Agreement, and his belief that he was entitled,
`
`under the Operating Agreement, to use Walter Homes' property without
`
`disclosing the use to other . Walter Homes members. Further, according to
`
`Multi-Family Development, Gerrard, Walter Homes' former attorney,
`
`should not have been permitted to testify about the meaning of the
`
`Operating Agreement because he lacked personal knowledge on the
`
`subject and, accordingly, his testimony was not the best evidence available
`
`on the issue. We disagree.
`
`We review a district court's decision to admit or exclude
`
`evidence for abuse of discretion, and we will not interfere with the district
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`court's exercise of its discretion absent a showing of palpable abuse.21
`
`Under the parol evidence rule:
`
`•
`
`"parol or extrinsic evidence is not admissible
`to
`add
`to,
`subtract
`from,
`vary,
`or
`contradict ... written instruments which dispose
`of property, or are contractual in nature and which
`are valid, complete, unambiguous, and unaffected
`by accident or mistake...."
`
`Parol
`evidence
`admissible
`for ... ascertaining
`true
`the
`intentions
`and
`agreement of the parties when the written
`instrument is ambiguous.22
`
`is
`
`Parol evidence may, on the other hand, be introduced to "show subsequent
`
`oral agreements to rescind or modify a written contract."23 In addition,
`
`Nevada permits the admission of extrinsic oral evidence regarding "`[t]he
`
`existence of a separate oral agreement as to any matter on which a written
`
`contract is silent, and which is not inconsistent with its terms."'24
`
`Here, both parties used the Operating Agreement as a means
`
`of demonstrating whether Walter Homes' members were authorized to use
`
`the license for their own independent projects.
`
`The laundry list of
`
`21Sheehan & Sheehan v. Nelson Malley & Co., 121 Nev. 481, 492,
`117 P.3d 219, 226 (2005).
`
`22State ex rel. List v. Courtesy Motors, 95 Nev. 103, 106-07, 590 P.2d
`163, 165 (1979) (first alteration in original) (quoting Wheeler, Kelly &
`Hagny Inv. Co. v. Curts, 147 P.2d 737, 740 (Kan. 1944) (citations
`omitted)).
`
`23Silver Dollar Club v. Cosgriff Neon, 80 Nev. 108, 110, 389 P.2d
`923, 924 (1964).
`
`24Kaldi v. Farmers Ins. Exch., 117 Nev. 273, 283, 21 P.3d 16, 22
`(2001) (quoting Crow-Spieker #23 v. Robinson, 97 Nev. 302, 305, 629 P.2d
`1198, 1199 (1981)).
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`•
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`evidence that Multi-Family Development cites does not violate the parol
`
`evidence rule. Because the agreement was silent as to the ability of
`
`corporate members to use the license on other projects, parol evidence was
`
`admissible on this point to prove a subsequent oral modification or to
`
`resolve a latent ambiguity in the agreement.25 Accordingly, the district
`
`court acted within its discretion in admitting evidence concerning the
`
`Operating Agreement's meaning with respect to the contractor's license.
`
`Crestdale Associates' counterclaim for breach of the separate consulting
`
`agreement
`
`Multi-Family Development argues that the district court
`
`abused its discretion in denying its request to admit into evidence an
`
`unexecuted written draft of the consulting agreement that Midby and
`
`Allsop attempted to negotiate.
`
`In this, it asserts that the proposed
`
`evidence constituted the best evidence of the parties' failure to come to a
`
`meeting of the minds as to key elements of the consulting agreement.
`
`According to Multi-Family Development, the earlier negotiations between
`
`Midby and Allsop, such as those embodied in the proposed draft
`
`agreement, are relevant to show the existence, or in this case, alleged
`
`nonexistence, of an oral contract as well as Multi-Family Development's
`
`intention not to pay Allsop a percentage of the profits from the Sienna
`
`Villas project.
`
`Under NRS 48.015, relevant evidence is defined as "evidence
`
`having any tendency to make the existence of any fact that is of
`
`consequence to the determination of the action more or less probable than
`
`it would be without the evidence." However, relevant evidence is
`
`25See Glenbrook Homeowners v. Glenbrook Co., 111 Nev. 909, 916,
`901 P.2d 132, 137 (1995).
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`inadmissible under NRS 48.035(1) "if its probative value is substantially
`
`outweighed by the danger of unfair prejudice, of confusion of the issues or
`
`of misleading the jury." As, previously indicated, we review a district
`
`court's decision to admit or exclude evidence for abuse of discretion.26
`
`Here, the district court acted within its discretion in refusing
`
`to admit the unexecuted draft consulting agreement because allowing the
`
`jury to review the document may have resulted in undue confusion,
`
`concerning the existence or nonexistence of the oral consulting agreement,
`
`creating the potential for prejudice outweighing its probative value.
`
`Instead of allowing Multi-Family Development to present the potentially
`
`prejudicial
`
`evidence,
`
`the
`
`district
`
`court
`
`allowed
`
`extensive
`
`cross-
`
`examination of Allsop concerning the draft agreement and the
`
`negotiations that led to the oral consulting agreement. Accordingly, we
`
`conclude that the district court did not abuse its discretion in refusing to
`
`admit the document.
`
`Attorney fees and prejudgment interest
`
`On cross-appeal, Crestdale Associates argues that its offer of
`
`judgment justified an award of attorney fees under both NRS 17.115 and
`
`NRCP 68. Specifically, it argues that Multi-Family, Walter Homes, and
`
`Midby proceeded on a common theory of liability against Crestdale