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Respondent Wins Judgment
by Michael Blahy

A Nevada shopping center owes one of its tenants short of half a million dollars because it allowed another tenant to provide access to slot machines to its customers.

Boca Park (Appellant) owns a shopping center in Las Vegas, Nevada. In 2002, they signed a lease with Higco, Inc. (Respondent), which allowed Higco to open a tavern with slot machines. The 20 year lease included an exclusive use clause which granted Higco “an exclusive for Boca Park I for a tavern and gaming, except for any tenants currently located in the center which allow gaming (i.e. Vons, Longs)."

All was well until late 2011 or early 2012, when Higco learned of a new lease entered with Wahoo’s Fish Tacos who had applied for a gaming license. In April 2012, Higco sued Boca Park seeking a declaratory relief judgment confirming that Higco has the exclusive right to offer gaming at Boca Park.

Wahoo was granted a gaming license and opened a competing business with slot machines. Higco continued with its declaratory relief suit without amendment for an injunction or damages. The result was a judgment that became final in December 2012, stating “controlling lease is “unambiguous, and. . . Higco has a right to an exclusive use both for tavern and for gaming in Boca Park I, except for any tenants offering gaming in Boca Park I as of November 5, 2002.”

Having won declaratory relief, Higco expected to regain exclusivity, but didn’t. Two years after winning in their first judgment and after failed protests and negotiation with Boca Park, Higco filed a second complaint, seeking damages.

Boca Park moved to have the case dismissed, since it was fought two years earlier. Their motion was denied, and a judgment of $497,000 was awarded to Higco.

Boca Park appealed based on their motion of “claim preclusion” being denied. Claim preclusion bars repetitive filing of claims on the same matter, and requires all related claims against an adversary be brought in a single suit. By not amending the first suit to include damages, Higco forfeited their claim.

A number of exclusions previously have been successfully argued in the courts, and many were cited on behalf of the respondent. In its summation, the court stated “This case illustrates the utility of the declaratory judgment exception. Faced with an incipient dispute with Boca Park respecting the proper interpretation of the exclusivity provision in its lease, Higco sought only a declaration of the parties' rights in that respect. Higco has maintained (and Boca Park does not dispute) that it did not seek further relief in the first action because it believed that Boca Park would honor a judgment declaring the parties' rights under the lease agreement, avoiding the need for coercive relief and conserving judicial resources.”

A second, independent ground existed for denying claim preclusion, and that was a continued breach of the lease contract. “A judgment in an action for breach of contract does not normally preclude a plaintiff from thereafter main-taining an action for breaches of the same contract that consist of failure to render performance due after commencement of the first action.”

The Nevada Supreme Court found that the district court did not error in denying the motion to dismiss, the appellant did not have arguments against the lower court judgment, so the judgment was affirmed.

Decision: December 2017 Published: December 2017



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