LEIGH-PINK v. RIO PROPERTIES, LLC (NRAP 5)

2022 NV 48

Opinion

138 Nev., Advance Opinion Ug INTHE SUPREME COURT OF THR STATE OF NEVADA

AARON LEIGH-PINK: AND TANA Ne. 824572 EMERSON, Appellants,

ve FILED -

J) PROPERTIES, LLC. RIO PROPE JUN 30 2022

Respondent. r - A

Ae REPUTY CLERK,

Certified question under NRAT' 5 concerning the scope of damages under common-law fraudulent concealment and = statutory consumer fraud claims. United States Court of Appeals fer the Ninth Circuit: Ronald M. Geuld and Ryan D. Nelson, Circuit Judges, and Brian M. Cogan, [istrict Judge!

Ghuestion answered,

Law Office of Rebert A. Waller, Jr, and Rebert A. Waller, dr, Cardifi-by- the-Sea, California. for Appellants.

Cozen O'Connor and Richard Fama, New York, New York: Cozen O'Connor and F. Brenden Coller. Philadelphia, Pennsylvania; Cozen Connor and Karl ©, Riley. Las Veeas: Lemons, Grundy & Hisenberg and Robert L. Kisenberg, Rena,

for Respondent.

(resund & Pailet, LLC, and Keren kK. Giesund, Las Vegas. for Awicar Curtae Public (2itiven. National Assocation af Consumer Advoentes. National Consumer Law flenter, and Publie Justice,

'The Honorable Brian Al. Cogan, United States District Jidge tor the Eastern District of New York, sittitur by designation,

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Jones Lovelock and Stephen a. davis and Marta DO. Kurshumova, las Vegas, for Amicus Curiac Legal Aid Center of Southern Nevada, Ine.

BEFORE THE SUPREME COURT, EN BANC.

OPINION

By the Court, STIGLPCH, J:

Thisense cones fousasa certified question under NRA S from the United States Court of Appeals for the Ninth Cireuit. The Ninth Cireuit asks us to determine whether a plaintiff has suffered damages for purposes of common-law fraudulent concealment and NRS 41.600 consumer fraud claims if the defendant's actions caused the plaintiff tu purchase a product or service the plaintiff would otherwise not have purchased, even if that product or service's vatue was at least equal to what the plaintiff paid.

In this opinion, we eonclude that a plainuff who receives the true value of the goods or servicea purchased has not suffered damages under theories af common-law fraudulent concealment or NAS 47.600,

BACKGROUND

We aceeepl the fvets al the underlying case as stated in the certification order. Seo fare Foutainebleau Las Vegas Holdings, LLC, 127 Nev. 11, 956, 267 [dd 786, 793 (2011. Appellants Aaron Leigh-Pink and Tana LEmersen stayed at respondent Rio Properties, LLC's Rie All-Suite Hotel & Casino in 2017, The Rio comped appellants’ room costs but charged

appellants a daily S44 resort fee to access telephones, computers, and the

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fitness room Although the Ria had previgusly received a letter from the Southern Nevada Health District informing it that two guests had contracted Legionnaires’ disease and informed past guests of the contamination, the Rie did not share this information with incoming guests, including appellants.

Asserting that they should have been informed of the potential lav exposure, appellants brought a class action lawsuit in Clark County District Court, alleging, as relevant here, fraudulent concealment and consumer fraud elaims under NERS 41.600, Appellants did not contract Logionnaires disease, nor did the /egronelia hacteria impede their access to the phenes, computers. or fitness room included in the resort fees: instead, they based their claims on the Rica's failure to disclose the presence of the legionella bacteria and sought to recover their resort fees. The matter was removed to federal court. The federal district court dismissed the action, dutermining that the appellants suffered ne damages. It concluded that the resort fees did not amount to damages because appellants received access tothe amenities the fees covered and thus had received the “benefit of thetr hargain. Ames v. Caesars Katmt Corp, No.) 2:17-cv-02916-GMN-VCE, 2019 WL 11794277, at *2 (D. Nev. Nov. 26, 2019) (internal quotation marks omitted).

Appellants thereafter appealed tothe Ninth Cireuit, contending

and would nat. have

infer alin that they would not have stayed at the Rio paid the resort fee—had the Rio disclosed the /egionella outbreak. ‘The Ninth @ireuit reversed in part and affirmed in part the district court's

dismissal ofelaims. See Letgh-Pink vn. Rio Props., LEC, 849 Fed App'x 628

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th Cir. 2021). However. if left one issue unaddressed: whether appellants suffered damages for purposes of their claims for fraudulent concealment and consumer fraud under NRS d1.6u0. ‘The Ninth Circuit concluded thal this court's cuselaw was unclear on this issue and certified (he question for this court's consideration, The question presented is this:

Hor purposes of a fraudulent concealment. claim, and for purposes afa consumer fraud claim under NARS 41.600, has a plaintil sullered damages if the defendant's fraudulent aetions caused the plaintif lo purchase 9 praduet ar servicw that the plamuff would not otherwise have purchased, even if the product or service was not worth less than what the plaintiff paid?

Leigh-Pink cv. Bro Props. LOC. 988 bod 748, 748 (Oth Cir, 2027).

PISOESS ION

We dectine fo rephrase Ue certified qteesttoit

jsoa factual matter, the Ninth Cireuit determined that

appellants received the frue value of their resort fees. Appellents challenge this determination. arguing that the certified questian should be rephrased Lo take into account their position ehnor they did not im fact receive the true value of their fees. i.c.. that the value of the amenities covered by their daily resort fee in a fete! containing legionella bacteria was less than $34. The Rio contends that the scape of the certified question is limited ta those scenarios in which the product or service received “was not worth jeas than what the plaintiff paid.”

This court “is limited to answering the questions of law posed” by the certifying court. Prugvesstie Gulf fis, Cou. Puecfricf:, 130 Nev, 167, 170, 327 P.od 1061, 1063 (014) Ganernal quotation marks omitted). A certified question permite this court to answer “questions of law of this state which may be determinative of the cause then pending in the certifying

court.” NRBAP Sta) SER ines. Pool 1, LLC u. Bank of N.Y. Mellon, 134 Nev.

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(83, 489 1.5. 422 Po8d 1248, 1253 0.5 (2018). This court has the discretion to rephrase a certified question. Achevereta pv, State, 137 Nev., Adv. Op. 49, 495 Plaid 471, 4¥4 (2021).

[In Feheverria, the federal district court certified a question to this court to consider whether Nevada had waived its sovereign immunity from damages liability under federal or state law ina minimum wage action by enacting SRS 41001) fd. This court elected to rephrase the certified question to remove the consideration of waiver as it related to state law because the plaintiffs’ state-law claims had already been dismissed by the certifying court. fd. at d73. Neglecting todo so, this court concluded, wouid have violated the prehibition against issuing advisory opinions. See id.; see aise Capanna vu. Orth, 134 Nev. 888. 897, 492 14d 726. 734 (2078) (noting that this court does not have the power to render advisery opinions}.

We decline to restate the certified question as appellants request because doing so would impreperiy ao beyond “answering the questions of law posed” by the Ninth Circuit, See Progressive Guly, 130 Nev. at 170. 327 Pad at 1063." Appellants challenge the Ninth Circuit's factual determination, which we are bound to accept, See fn re Fontainebleau, 127 Nev. at 956, 267 Pd at 7O5. Furthermerc, appellants have net established that our consideration of the cerlified question as tramed by the Ninth Circuit poses any risk of rendering an advisory opinion, See Acheverrta, 1387 Nev,, Adv. Op, 49, 495 Po3d at 475, We thus move on lo addressing the

certified question as posed ly the Ninth Cireuit.

4Appellants alsu argue that they should receive relief for unjust enrichment. We do not consider this chiim, as it is beyond the scope of the

certified question. Surmewe Count

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A plaintiff has net been damaged for purposes af common-law fraudulent coneeataiert a edesuiner fratad wader NRA FP.6O0 intien Chey recetied the trie volte of the goods or seruices Hew purchased Conunon-fare fraudulent concedtment

We first consider the common-law portion of the certified question: whether a fraudulent concealment claim can be sustained where + plaintiff has received the true value of the goods or services purchased. Appellants present no argument in support of answering this portion in the affirmative. The Rio maintains that this court should respond in the negative because the act of canecalment and a showing of damages are separate elements af a fraudulent concealment claim under the common law. ‘Therefore, the Rio contends that a plaintiff secking te recover under 4 theory af common-law fraudulent concealment muat show not only that 1 defendant concealed a material fact hut also that this act caused the plaintiff cognizable damages.

‘A plaintiff must demonstrate five elements ta establish a prima facie case of fraudulent concealment uncer Nevada law:

(1} the defendant concesled ur suppressed a material fact: (2) the defendant was under a duty tu disclose the fact ta the plarntill: 63) the defendauit intentionally concealed or suppressed the fact with the inteat to defraud the plointiffh that is, the defendant coneeeled or stippressed the tact for the purpose of inductng the plaintiff te act differently than she would have if she had known the fact; (4} the plaintiff was unaware of the fact and would have acted differently if she had known of the econeealed or suppressed Fact: (5) and. as a result of the concealment or suppression of the fact, the plainuff sustained damages.

Dow Chea Coe. u. Mahiuedar, 11d Nev. 1468. 1485, 970 P.ad 98, 110 61998), avorrifedd in partan ather growtds by GES, ine, vu. Corbitt, 117 Nev, 265, 21

Potd 11 (2000) This court has uxpiabied that

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The measure of darinces for frauclulent misrepresentation can be deterdiined in coe of two wavs, ‘The first allaws the defrauded party to recover the benetit-of-his-bareain, that is, the value ef what he would have Wo Che representalians were true, less what he had received. The second allows the defrauded party to recover only what he has lost out-of-pocket. that is. (he difference between what he gave snd what he actually received.

Randone u. Turk, 86 Nev. 123. 130, 466 Pogd 218, 2ev-24 (1970) (internal quotation marks omitted); aceard Catlins 6. Burns, 10d New, 384, 498-99, T-+4l P.2d 819, 822 (LO87) !

In Coffins, a family-owned business misrepresented ts profitability te prospective purchasers. TUS Nev, at du6-37, 741 Pld at 820- 21. The purchasers. relying on the information provided by the family. bought the business only te find oul that the figures they reviewed were grossly inflated, fd. al 396, 741 Pizd at 820. The purchasers alleged that the family had fraudulently niisrepresented the business's finances. Jd. This court determined that the purchasers were enutled to damages equaling their out-of-pocket expenses: “the difference between the amount they paid te the respondents and the actual value of the business at the time ofthe sale” fe. at BOG, 741 Pied at age.

This court alee considered a fraudulent eanecalment claim in ffanmenvant tc. Downer, 110 Nev. TO7, 87) ld 270 (198. There, the defendant sold her home to the pluintitts, whe later discovered that over

four acres of the property heleuged to che foderal governioent. ff. at 177,

‘Nevada law treats Fraudulent cancealment claims similarly to fraudulent misrepresentation elatms See Foafe u. Net. cluto Dearershrp favs., LEC, 135 New. 280, 288 1.3, da9 Pad a7. 486 1.38 (Cr, App. 2079) (holding “that failure to disclose a fact is equivalent to affirmative representation of that facts nenexistence }.

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871 Pidd at 28, ‘Phe plaintiffs sued the delendant for, among other claims, fraudulent. misrepresentation. dd. at 171. STL P.2d at 282. This court determined that the plaintiffs were entitled to out-of-pocket damages that reflected the difference in the value’ of the preperty that the plaintiffs received (ic., the relative worth of the portion of the land not owned by the federal government) when subtracted fram the value of the property as it was represented tothem. fed. at 172-70, 871 P.dd at 283.

Other state high courts have held that a plaintiff bringing a fraudulent concealment claim must demonstrate cognizable damages. In Smeatiw, Loritlard Tobaceo Co, T20 NE.Zd 892 (NY, 1999), New York's highest court held that “an act of deception, entirely independent or separate from any injury, 1s not sufficient 10 state a cause of action under a theory of fraudulent concealment.”? fd. at 898. The eonsumers in Smaéi alleged they would nat have bought cigarettes had they known that nicotine was highly addictive. fd. However. they did not altemplt to recover damages for health issties that they may have incurred as a result of theur addiction to cigarettes. fd. They only sought to recover the price they paid for the cigarettes, Which the court rejected as an unavailing “deception as injury” theary. fe.

Breusha vo Olson stands for a similar proposition as Small. Breaska invelved dental patients who asserted claims of fraudulent Misrepresentation against the estate of their former dentist who concealed his HIV-positive status. 468 Ad 1354 (Del 1995). These patients sought

damages for, inter alia, reimbursement of the fees they paid to the dentist,

“The Sete? court also rejected the consumers deceptive trade practice claim under New York's analog te the Nevada Deceptive Trade Practices Act (NDTPA) becnuse they were not able lo demonstrate actual or pecuniary harm, fef,

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id. at 1359. None of the patients contracted the H1V virus. fd. at 1367, The Delaware Supreme Court noted that recovery for fraudulent isrepresentation is limited to “those damages which are the direct and proximate result of the false representation consisting of the loss of bargain ar actual out of pocket losses fd. Since the plaintiffs could not demonstrate they were injured by the dentist's health status and because there was no showing that the dentist performed dental services an the plaintiffs in a deficient manner. the Arzeska court determined that the plaintiffs did net suffer any compensable damages. fd. :

This survey of caselaw is clear: a common-law fraudulent eoncealment claim requires a plaintiff to demonstrate that they either did not receive the benefit of the bargain or show out-of-pocket losses caused hy the defendant's alleged misrepresentation. See id.; Hfanneman, 110 Nev. at 172-73, 871 P.2d at 283; Coffins, 103 Nev. at 399, 7-41 Pl2d at 822; Smeal, 720 N.E.2d at 898. An act of concealment does not, in and of itself. lead to a eognizable injury under the common ifaw: Instead, a corresponding showing that such concealment caused the plaintiff cognizable damages is required. See Dow Chem., 114 Nev, at 1485, $70 P.2d at 110 (establishing that the plaintiff must demonstrate that they sustained damages “as a result of the concealment or suppression” (emphasis added)): see also Small, TZ0 N.EL2d at 898 (similar). Where a plaintiff received the value of their purchase, we conclude that they cannot demonstrate that they did not receive the benefit of their bargain or show any out-of-pocket losses, because the value of the guods or services they received 18 cqual to the value that they paid. See Randono, 86 Nev. at 130. 466 P.2d at 222-23: see alazo rooster, 668 A2d at $367 fdetermining that the plaintiffs’ claim failed

hecause they could not demonstrate that the defendant performed deficient

services), Here, because appellants received the full value of the amenities

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envered by cheir resort fee, chev did vot suffer any damages, We therefore auawer thia part of the certified question in the negative. Cunsumer fraud under NAS 41.600

llaving answered the common-law portion of tne certified question. we now consider whether a consumer fraud claim under NRS 41.600 may be sustained where a party bas received the true value of the coods they purchased. We conclude that the party may not, tor the reasons that follow,

This court first locks to the plain language cf a statute when interpreting a statutory provision, Croviu. Brgitth fudionaf Dist. Court, 129 New. 115. 191, 304 Pasd 898. 902 (2010). “When presented with a question of statutory interpretation. the infent of the legislature is the controlling factor...” Robert ow diatice Court, OO New, 443, 175, 664 22d 957, 959 (1983). Where a statate is unambiyuots, the court does not go beyond its plain language to divine legislative intent. fe.

NRS 41.600(1) provides a cause of action te victima of consumer fraud. it defines a deceptive trade practice as outlined in the NDTPA, eodified in NRS Chapter 598, as one type ef consumer fraud. ' NRS i600) A person whe anowinely fails to disctose s material fact related to the sale of a good or scrvice has engaged in a deceptive trade practice. NRS $98.6923(1)(b). fn a conaumer fraud action, “{:]f the claimant is the prevailing party. the court shall award the claimant... {a]ny damages that the claimant has sustained.” NIRS 41.600¢3)(a).

The plain language of NES 41,.600(3)a) counsels this court to conclude that a plaintiff whe has suffered no injury has not been damaged under the statute. Gf Clie 120 Nev, at 451, dU5 Pisd at 902. NERS 41.G00(34a) permits a plalutiff te recover any damages they have “sustained” To “sustain” as ina harm, is “[tlo undergo: suffer.” Sussteren, SUPREME COURT

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Black's Law Dictionary (ith ed, 4019). The United States Supreme Court has defined dumuges as “the compensation which the law will award fer an injury dane.” Scatt u. Powedd, 165 U.S. 58. 86 (1897), Ceambining these definilions, NRS 1).b00CH{a) permits the plaintiff to recover compensation for the injuries they have suffered as a result of the defendant's conduct. Where. as here, the plaintiffs assert only economic injury but have received the true value of their goada or services, we determine that the plaintiffs have not been injured and thus have not “sustained” any damages hy the defendant's conduct under NERS 41.600(3}(a).

Qur reading of NRS 41,.600(3)a) also has the salutary purpose of coupling the statutory consumer fraud understanding of damages with this courts determination of damages at common law. See Samartar o. Yousuf. o60 LS. 306, 320 (2010) (The canon of construction that statutes should be interpreted consistently with the common law helps us interpret a statute that. clearly covers «a Geld formerly governed by the canumon law.”) To be sure, “[s]tatutory offenses that sound in fraud are separate and distinet frem common luw fraud.” Betstnger vy. DUR, Horton, fac, 120 Nev. 162, 166, 252 Pogd da, 136 (2010), And “the NDTVA ta a remedial statutory scheme” that should he afforded a liberal construction. See Poole, 1B Nev. at 286-87, 4G Posi at dei: Welfare Div. of State Dent af Health, Welfare d& Rehab, oo Washoe Cty, Welfare Dep't, 88 Nev. 645. 637. 505 Pogd 457, 458 (1972). But such oo Uberal construction must be faithful to the first. prinetples of statutory interpretation. And so where. as here, the plain language of a statutory term is in accord with the term’s definition at

common law. we elect to mterpret them similarly.

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The Ninth Circuit draws our attention to the Umted States District Court for the District of Nevada’s decision in Cruz vu. Aate Spade & Gin., that reached a contrary result. No. ¥:19-ev-00952-APG-BNW, 2020 WI. ASd8095 (D. Nev, Sept. 30, 2020). While Cruz is merely persuasive, rather than binding authority. we take this opportunity to consider it here. Ch Lagares vu. Camdenton R-Hi Sch, Pret. GR SW od 418, 528 (Mo. Ct. App. 2001) (determining that federa] cases interpreting Missouri law are persuasive): Stanley cv. Reef See., fre. 314 S.Wo3d 659, 667 nd (Tex. App. 2010) (affirming the same proposition under Texas law).

Cruz held that a plaintiffs claim under NRS 41.600 may survive a motion to dismiss even when they received the true value of the goods they purchased. 2020 WL 5848095, at *5, The plaintiff in Cruz alleged that Kate Spade listed items on sale, when in actuality the items wero nover sold for the reference price listed on the clothing tags. fd. The plaintiff cantended “that she did not get the cienl she theught she was velling and that she would not have purchased the items if she had “known their true market value” fd. at *1. However, the plaintiff did not allege that the items she purchased were worth less than what she paid, fe, at *5. The district court determined that the plaintiff had sufficiently alleged harm to survive a motien 10 dismiss because the plaintiff “alleged she would nut have purchased the items but for the reference pricing” fd. It further noted that a consunier does net have to allege that “her items are worth less than what she paid for them... to survive a motion te dismiss.’ fd.

Cruz is not on point. It did not analyze NRS 41.600(3)(a) and merely relied on NRS Gt-diia¢1y's classification of a “vietim” to reach its holding. See Cruz, 2020 WL S848008, at 74. Creve therefore did nat consider

the ineaning of “suatained” and “damages’ ug used in NARS 41.660(3)(8), and

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so its applicability in assisting this court to interpret these terms is limited. ‘To the extent Cruz would counsel a different result here, we reject it for the reasons stated above, As a result, our analysis is unchanged, and we respond to the certified question's second inquiry in the negative.* CONCLUSION

We answer this certified question as follows: a plaintiff is not damaged for purposes of a common-law fraudulent concealment claim or an NRS -11.600 consumer fraud claim when they receive the true value of the

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(Many other jumedictiong have understood their analogs to the NDTPA similarly, See, og., efet. Mort Dodge Animal Health, ine, 607 Pd 250, 858 (ist Cir. 2010) (concluding that a consumer was not damaged under Massachusetts law where she could not demonstrate ceonomie (honapes): Mewhinney o London Wineman, inc., 339 S.W.o8d 177, 181 (Tex. App. 2011) (establishing that the appropriale measure of damages undor Toxus's analog to the NDTPA is “the difference between the amount the company pald and the value it received").