CONTINENTAL FIRE SPRINKLER COMPANY v. TUTOR SALIBA CORPORATION (2026)

ORDER OF AFFIRMANCE

Respondent Tutor-Saliba Corporation (TSC) acted as general retained appellant Continental Fire Sprinkler as the subcontractor to install roughly 100 fire sprinkler safety systems inside the Encore. After discovering a leak in one system, TSC demanded that Continental fix any defective systems as required by several provisions in the subcontract, but Continental refused. TSC hired a different company, Desert Fire Protection (DFP), to repair the sprinkler systems and brought this lawsuit against Continental.

After a bench trial presided over by the Honorable Nancy Allf, District Judge, the district court found that both parties breached the subcontract, awarded TSC a fraction of its requested damages, and dismissed TSC's claims related to 32 of the sprinkler systems. On appeal, we reversed, determining that the district court erred by (1) improperly using expert testimony to interpret the subcontract's terms, (2) finding that TSC failed to mitigate damages, (3) eliminating certain categories of damages to which TSC was entitled under the subcontract (costs for a project manager and CAD drawings), and (4) dismissing TSC's claims as to the 32 systems. Tutor-Saliba Corp. v. Cont'l Fire Sprinkler Co., No. 81822, 2023 WL 5762966, at *1 (Nev. Sept. 6, 2023) (Order of Reversal and Remand). Judge Allf retired and, on remand, the case was reassigned to the Honorable Joseph Hardy, Jr., District Judge. Judge Hardy awarded TSC nearly all of its requested damages for the remediation project.

Continental appeals, arguing that the district court violated the mandate rule and the law-of-the-case doctrine on several grounds. We disagree and affirm for the reasons below.

Standard of review

“The mandate rule generally requires lower courts to effectuate a higher court's ruling on remand.” Est. of Adams v. Fallini, 132 Nev. 814, 819, 386 P.3d 621, 624 (2016). “The law-of-the-case doctrine refers to a family of rules embodying the general concept that a court involved in later phases of a lawsuit should not re-open questions decided (i.e., established as law of the case) by that court or a higher one in earlier phases.” Recontrust Co. v. Zhang, 130 Nev. 1, 7-8, 317 P.3d 814, 818 (2014) (quotation marks omitted). We review de novo the district court's application of the mandate rule. Wheeler Springs Plaza, LLC v. Beemon, 119 Nev. 260, 263, 71 P.3d 1258, 1260 (2003). And we review the district court's application of the law-of-the-case doctrine for an abuse of discretion. Litchfield v. Tucson Ridge Homeowners Ass'n, 140 Nev., Adv. Op. 57, 555 P.3d 267, 269 (2024).

The district court correctly interpreted this court's order of reversal and the subcontract provisions related to quality control and mitigation of damages

Continental argues that Judge Hardy's award of inspection costs for the sprinkler systems contradicted Judge Allf's finding that most of those systems were unnecessary to repair. Continental claims that Judge Allf's rulings on mitigation and quality control did not reduce TSC's damages by any specific amount, so those reversed rulings cannot now act as a basis to award TSC its actual inspection costs. We disagree.

Judge Allf found “that all of these [defective] couplings could have been repaired during the initial installation had [TSC] not breached its quality control obligations,” and thus rejected TSC's inspection costs—despite DFP's invoices supporting those costs. We reversed that finding, concluding that the district court misinterpreted the subcontract because TSC's quality control obligations did not excuse Continental's own obligations to conduct quality control and install the sprinkler systems in strict conformance with the manufacturer (Victaulic) specifications. Tutor-Saliba, 2023 WL 5762966, at *2. Consistent with our order, Judge Hardy correctly determined on remand that “[a]ny deviation from Victaulic's specifications is defective work,’’ and the plain language of the subcontract provided for TSC's recovery of inspection costs as a necessary component of curing Continental's defective work.

While Continental points to Litchfield to argue that no law-of-the-case exception existed for Judge Hardy to rule contrary to Judge Allf as to these inspection costs, Litchfield, discussed the law of the case in the context of a successor judge overruling a predecessor judge's earlier decisions. 140 Nev., Adv. Op. 57, 555 P.3d at 270. That case did not address the effect of a reversal on appeal and a successor judge implementing remand instructions. Continental's reliance on Haines Pipeline Construction, Inc. v. Montana Power Co., 876 P.2d 632 (Mont. 1994), fares no better. There, a successor judge violated the law-of-the-case doctrine by making factual findings that were contrary to her predecessor's after those findings were already affirmed by the Montana Supreme Court. Id. at 636. In contrast to Haines, in the prior appeal, we reversed several holdings on which the district court rested its judgment and did not explicitly affirm any of the district court's factual findings. On remand, Judge Hardy properly revisited any factual findings that were inconsistent with our order, including Judge Allf's erroneous finding that TSC's quality control obligations defeated TSC's legal entitlement to inspection costs. Id. at 637 (explaining that “the trial court is not free to ignore the mandate and opinion of the reviewing court, but must proceed in conformity with the views expressed by the appellate court”). Therefore, we conclude that the district court acted within its discretion and did not violate the law of the case or this court's mandate by applying the quality-control and mitigation-of-damages provisions consistently with Tutor-Saliba.

The district court correctly determined, that an expert witness's categories for recoverable damages were inconsistent with the subcontract

Continental argues that our order of reversal did not disturb Judge Allf's factual findings that relied on defense expert William Koffel's testimony establishing, as relevant to damages, three categories of couplings installed by Continental. As a result, Judge Allf's rulings that relied upon these categories to reduce TSC's damages became the law of the case, according to Continental. Again, we disagree.

Judge Allf awarded damages for only the 545 couplings that fell into the third Koffel category—those exhibiting a visual gap and requiring emergency repair. She excluded couplings exhibiting gaps that, in Koffel's opinion, did not require emergency repair. But, as explained in our prior order, the subcontract unambiguously required Continental to install all couplings in strict conformance with Victaulic's specifications. Tutor-Saliba, 2023 WL 5762966, at *2. And those specifications required Continental, in relevant part, to “[v]isually inspect the bolt pads at each joint to ensure pad-to-pad metal contact is achieved” and instructed that “PAD GAPS, REGARDLESS OF THEIR SIZE, ARE NOT PERMITTED.”

On remand, Judge Hardy thus properly rejected Koffel's categories as inconsistent with the express terms of the subcontract. We therefore conclude that the district court acted in accordance with our mandate when determining that Judge Allf's findings and rulings relying on Koffel's categories contravened the subcontract. See State Engh v. Eureka Cnty., 133 Nev. 55 7, 559, 402 P.3d 1249, 1251 (2017) (“[W]here an appellate court deciding an appeal states a principal or rule of law, necessary to the decision, the principal or rule becomes the law of the case and must be adhered to throughout its subsequent progress both in the lower court and upon subsequent appeal.” (alteration in original) (quotation marks omitted)).

This court's rulings as to specific categories of damages did not negate other holdings affecting the calculation of TSC's damages

Pointing to a section of the order titled, “The district court erred by eliminating some categories of damages,’’ Continental argues that we only partially reversed the district court with respect to a few narrow categories of damages and left intact all other district court factual findings and legal conclusions. But Continental ignores the context of this section and in doing so, misinterprets our mandate.

That section of the order specifically addressed Judge Allf's decision to exclude from TSC's damages certain costs related to DFP's remediation work, “including project manager costs, CAD drawings, bonuses for an unrelated 2014 Reno project, a duplicative charge for the purchase of four trailers, and DFP's planning and permitting costs.” Tutor-Saliba, 2023 WL 5762966, at *3. We determined that Section 4.7 of the subcontract included a warranty provision that required Continental to pay for all costs incurred by TSC to correct Continental's defective work, which included project manager costs, CAD drawings, and planning and permitting costs. Id. We also held, however, that Judge Allf “properly excluded the bonus for the unrelated project and the duplicate fees.” Id. Thus, our statement that we were reversing “in part, with instructions for the district court to award TSC its damages as outlined above,” referred to our partial reversal of Judge Allf's decision to exclude those specific categories of remediation costs (except duplicate charges and bonuses, which were properly excluded). Id. (emphases added). Our rulings in other parts of the order made clear that we were also rejecting other holdings of the district court that affected the calculation of TSC's damages. So, this statement in one section of our order does not support the broader argument for partial reversal (and affirmance of everything else) that Continental seeks to advance. We conclude that the district court computed TSC's other categories of damages in accordance with our mandate.

The district court properly evaluated the 32 systems and, awarded TSC its actual costs as damages

Continental claims that we gave the district court limited instructions to evaluate only the 32 excluded systems—as opposed to reevaluating all the systems for which TSC incurred remediation costs. We reject this argument because it would render meaningless our other rulings as to Continental's contractual obligations to perform quality control and strictly adhere to Victaulic specifications. As explained above, the subcontract entitled TSC to its remediation costs for the other sprinkler systems, so the district court properly awarded those costs as damages.

To be sure, Judge Hardy complied with our instruction on remand “to properly analyze each [of the 32] system[s], explain what evidence TSC produced for each, and then address the resulting prejudice to Continental, if any, due to TSC's alleged discovery violations [in not producing the associated logs].” Id. at *4. Judge Hardy reviewed the photos, drawings, and DFP excel logs for each system (besides System 83), as well as all available inspection and repair logs. Based on that review, he determined there were 14 systems where DFP inspection and repair logs were permanently lost and 17 systems where DFP inspection and repair logs were inadvertently omitted from DFP's production of documents. Judge Hardy found that the remaining system (System 83) did not have repair or inspection logs but DFP had produced photographs, drawings, timecards, and testimony substantiating DFP's inspection costs for that system. Judge Hardy did not find any evidence of prejudice to Continental for TSC's failure to produce the logs because “there was plenty of alternative evidence available to Continental” and “evidentiary concerns of relevance and prejudice are substantially less in a bench trial than a jury trial.” So the district court complied with our mandate when it evaluated the available evidence for the 32 systems and subtracted $6,597.19 from TSC's final award due to the unsupported System 83 repair work.

Last, Continental argues that the law-of-the-case doctrine required Judge Hardy to use Judge Allf's $555 per-coupling damages formula rather than the actual-cost method. But we did not instruct the district court to use Continental's per-coupling method, nor did Judge Allf's decision to use the per-coupling method become the law of the case after we reversed in TSC's favor on every claim presented in the first appeal and focused on the specific language of the subcontract's warranty provisions. Judge Hardy properly used the actual-cost method based on DFP's invoices. Judge Hardy's decision is consistent with caselaw addressing the reasonableness of costs in such situations because “[i]t is both unfair and unrealistic to place the burden of proof on an innocent [contractor] regarding the reasonableness and necessity of the costs of completion following the [sub]contractor's abandonment of the project or breach of [sub]contract.” Kirkpatrick v. Temme, 98 Nev. 523, 526, 654 P.2d 1011, 1013 (1982). That is exactly what happened here, where Continental refused to participate in the remediation project thus necessitating the hiring of DFP to do the inspection and repairs and ultimately the underlying lawsuit. And in this case, the actual-cost method aligns with the aim of expectancy damages to put TSC in the same position it would have been in had Continental fully performed, Covington Bros. v. Valley Plastering, Inc., 93 Nev. 355, 363, 566 P.2d 814, 819 (1977), and the subcontract's warranty provisions making Continental responsible for all costs associated with curing Continental's defective work. So we conclude that the district court properly awarded TSC's actual costs and did not violate the law of the case. Accordingly, we

ORDER the judgment of the district court AFFIRMED.