The Lawletter Vol 40 No 10
Can damages for emotional distress be recovered in a nuisance claim in the absence of physical injury? That was one of three issues of first impression that were recently addressed by the Nevada Supreme Court. In Land Baron Investments, Inc. v. Bonnie Springs Family LP, 356 P.3d 511 (Nev. 2015), a purchaser (Land Baron) contracted to buy land on the outskirts of Las Vegas. The land was largely undeveloped, and the buyer intended to construct a subdivision there. Land Baron conducted no due diligence to investigate the availability of water and access rights, and these issues were not addressed in the contract.
Before the closing occurred, it became apparent that Land Baron would be unable to acquire sufficient water and access rights for the proposed project. Land Baron stopped making payments to extend the escrow period, thereby breaching the contract. Land Baron then filed a complaint with the Clark County Commissioner's office, alleging that there were multiple code violations on the property. The Commissioner and other state and local authorities conducted a large-scale investigation on the premises at a time when guests and children were present.
Land Baron also filed a district court complaint against the seller, Bonnie Springs, asserting claims such as breach of contract and negligent misrepresentation. Bonnie Springs counterclaimed for abuse of process, nuisance, and other causes of action. The Land Baron court summarized the nuisance counterclaim as follows:
Bonnie Springs based its nuisance counterclaim on the complaint filed with the county commissioner and the resulting inspection, alleging that this inspection caused "needless expense and loss of income" and that recoverable costs were incurred when Bonnie Springs paid attorney fees to defend itself in the ensuing litigation. During trial, however, Bonnie Springs' representatives admitted that it had suffered no known economic harm as a result of the inspection, and although it believed the inspection had damaged its reputation, it presented no evidence to that extent. Instead, they urged the jury to award damages for the emotional pain and suffering inflicted by the nuisance.
Id. at 520.
The Nevada Supreme Court observed that in other states, the courts were split on the issue of whether emotional distress damages could be recovered in a nuisance action, absent physical injury. However, the court noted the prevailing view that "in a nuisance action, an owner or occupant of real estate is entitled to recover damages for personal inconvenience, discomfort, annoyance, anguish, or sickness, distinct from, or in addition to, damages for depreciation in value of property or its use." Id. The court ruled that Bonnie Springs was entitled to pursue its nuisance counterclaim, reasoning as follows:
This court has not previously addressed emotional distress damages arising under a nuisance claim. We conclude that California, Colorado, Connecticut, and the Restatement [(Second) of Torts § 929(1)(c) (1979)] offer the better-reasoned approach for recovering damages based on a nuisance claim. Because damages for nuisance include personal inconvenience, discomfort, annoyance, anguish, or sickness, an occupant need not show physical harm to recover.
Id. at 521.