Background
Andrew Clark ran a red light and struck Nadia Marin’s vehicle. Marin sustained multiple serious injuries, including chronic regional pain syndrome (CRPS) in her right hand — a neurological pain condition diagnosed through process of elimination after several surgeries. She sued Andrew Clark for negligence and his mother, Tracy Clark, for negligent entrustment of the vehicle. Four years into litigation and 24 days before trial, Marin served a $2 million offer of judgment under NRCP 68. The Clarks did not respond and the offer expired. Because the Clarks had conceded liability, trial focused entirely on damages. Following a 13-day trial, a Clark County jury awarded Marin $2,045,117.55 — exceeding the rejected offer — triggering the attorney fee-shifting provisions of NRCP 68.
The district court denied the Clarks’ motion for a new trial, awarded Marin $118,875 in expert fees under NRS 18.005(5) (well above the former $1,500 per-expert statutory cap), and awarded Marin $818,047.02 in attorney fees — the entirety of her 40 percent contingency fee agreement. The district court relied on Capriati Construction Corp. v. Yahyavi, 137 Nev. 675 (2021), which held that contingency fees are not “incurred” until judgment, so the entire contingency fee qualifies as post-offer costs under NRCP 68. The court also assigned the Clarks’ contract and tort claims against their insurance carriers to Marin in execution of the judgment. The Clarks appealed all adverse orders.
The Court’s Holding
Capriati overruled; contingency fees are incurred as work is performed. Writing for a unanimous en banc court, Justice Stiglich reversed the attorney fee award and overruled Capriati on the key point. NRCP 68 authorizes an award of reasonable attorney fees “actually incurred by the offeror from the time of the offer.” Capriati reasoned that a contingency fee does not “vest” until the client prevails, so the entire contingency fee is necessarily incurred post-offer. The court found this reasoning flawed because it conflated vesting with incurrence. A party “incurs” an expense when it becomes legally obligated to pay it. Under a contingency fee agreement, the client becomes obligated to pay for legal services as the attorney performs the work — even though no money becomes due unless and until the client prevails. Fees accrue as work is done; only collection is contingent on outcome. The practical consequences of Capriati’s contrary rule were also untenable: it would mean attorneys on contingency could never recover fees “incurred” during litigation under NRCP 37 (discovery sanctions), NRS 41.670 (anti-SLAPP), or NRCP 11 (sanctions) — results the court found “absurd.”
Post-offer work must be valued and isolated. Going forward, district courts must determine what work was performed after the offer was served and award fees proportionate to that work only — excluding the value of pre-offer work regardless of the contingency structure. Courts retain discretion over methodology: they may use the lodestar with an upward adjustment for contingency risk (as Alaska and Michigan do), or prorate the contingency fee based on the ratio of post-offer to total hours (as Georgia does). What they may not do is rubber-stamp the entire contingency fee without isolating and excluding pre-offer work. In this case, the offer was served only 24 days before trial, four years into the litigation. Even crediting counsel’s estimate of “hundreds of hours” of post-offer work, the full $818,047 award necessarily compensated work performed over the preceding four years — far in excess of what NRCP 68 permits. Reversed and remanded for reconsideration.
All other issues affirmed. The court affirmed the jury verdict, the new-trial denial, the expert fee award, and the assignment order. On trial management, it found the district court had not violated due process by conducting a 13-day trial: the scheduling was collaborative, the Clarks never formally requested additional time or moved to limit presentations, and they failed to proffer what excluded witnesses would have said. On deemed admissions, it held the district court did not abuse its discretion in permitting Marin to withdraw admissions under NRCP 36(b) where the Clarks conceded liability, never used the admissions during nine days of trial, and then moved for a directed verdict only after Marin’s case-in-chief concluded. On expert fees, the district court’s analysis satisfactorily applied the Frazier factors and explained why the nature and importance of each expert’s testimony justified fees above the statutory cap. On the insurance assignment, NRS 21.320 authorizes assignment of judgment debtors’ claims that are “in the hands of such debtor” once a final judgment is entered; ripeness — i.e., the pendency of the appeal — is not a prerequisite to assignment.
Key Takeaways
- Capriati Construction Corp. v. Yahyavi is overruled to the extent it held that contingency fees are incurred at the time of judgment rather than as work is performed; the entire contingency fee cannot be awarded as post-offer attorney fees under NRCP 68 without isolating and excluding the value of pre-offer work.
- Under NRCP 68 and NRS 17.117, an attorney fee award in a contingency case must reflect only the value of work performed after the offer of judgment was served; district courts may use lodestar with a contingency risk adjustment, or prorate the contingency fee by post-offer hours — but any methodology must exclude pre-offer work.
- Under NRCP 36(b), the two-factor test — whether withdrawal promotes resolution on the merits and whether the requesting party would be prejudiced — is the sole standard; no additional factors apply, and a party that concedes liability and fails to use deemed admissions during trial cannot claim prejudice from their withdrawal.
- Under NRS 21.320, a judgment debtor’s claims against an insurer are property rights assignable upon entry of the final judgment in the underlying case; ripeness (i.e., the judgment’s pendency on appeal) is not a barrier to an assignment order.
Why It Matters
Clark v. Marin is the most consequential Nevada civil litigation decision in years. By overruling Capriati, the court eliminates the tool plaintiffs’ firms had used to claim the entire contingency fee as “post-offer” costs under NRCP 68 — a practice that had generated awards covering four or five years of pre-offer litigation simply because fees “vest” at judgment. Going forward, plaintiffs’ counsel handling contingency cases should document post-offer time and be prepared to defend an NRCP 68 fee request with evidence of work actually performed after the offer: time entries, a methodical prorating of the contingency amount, or a lodestar calculation with a contingency risk premium. Defense counsel now have a strong argument that any NRCP 68 fee award must be grounded in post-offer work — and that a request for the full contingency amount must be scrutinized for whether it improperly covers pre-offer preparation.
The decision also offers useful guidance on ancillary issues that arise frequently in Nevada personal injury practice. The reaffirmation that NRCP 36(b)’s two-factor test is exclusive — no extra factors — and that a party who concedes liability and ignores deemed admissions for nine trial days cannot claim prejudice from their withdrawal, closes a tactical door that defense counsel had been using to try to end cases on procedural grounds. The affirmance of the insurance claims assignment under NRS 21.320 is also notable: insurers should expect that a judgment debtor’s bad-faith and breach-of-contract claims can be immediately assigned to the plaintiff upon entry of judgment, even during an appeal, and should factor that risk into settlement calculations at every stage of the underlying litigation.