136 Nev., Advance Opinion 714
IN THE SUPREME COURT OF THE STATE OF NEVADA
SILVERWING DEVELOPMENT, A No. 79134
NEVADA CORPORATION; AND J.
CARTER WITT, III, AN INDIVIDUAL,
Appellants, FILED
vs.
NEVADA STATE CONTRACTORS DEC 0 3 2020
BOARD, ELIZABETH A. BROWN
CLERK Of §UPREME COURT
Respondent. By
DEPU1Y CLERK f
Appeal from a district court order denying a petition for judicial
review in a matter before the Nevada State Contractors Board. Second
Judicial District Court, Washoe County; Elliott A. Sattler, Judge.
Affirmed .
Hoy Chrissinger Kimmel Vallas P.C. and Michael S. Kimmel, Reno;
Lemons, Grundy & Eisenberg and Robert L. Eisenberg, Reno,
for Appellants.
Allison Law Firm Chtd. and Noah G. Allison, Las Vegas,
for Respondent.
Laxalt & Nomura, Ltd., and Holly S. Parker, Reno,
for Amici Curiae Builders Association of Northern Nevada, Nevada
Builders Alliance, and Reno & Sparks Chamber of Commerce.
Christensen James & Martin and Evan L. James and Laura J. Wolff, Las
Vegas,
for Amici Curiae Glaziers Labor-Management Cooperation Committee and
Southern Nevada Painters and Decorators.
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McDonald Carano LLP and Philip M. Mannelly and Adam D. HosmerHenner, Reno,
for Amicus Curiae Construction Trade Associations.
BEFORE PARRAGUIRRE, HARDESTY and CADISH, JJ .
OPINION
By the Court, PARRAGUIRRE, J.:
INTRODUCTION
NRS 624.220(2) requires respondent Nevada State Contractors
Board to impose a monetary license limit on the amount a contractor can
bid on a project. The limit is calculated with respect to "one or more
construction contracts on a single construction site or subdivision site for a
single client." NRS 624.220(2). Here, the Board lodged a complaint against
appellant Silverwing Development and its owner, appellant J. Carter Witt,
III (collectively Silverwing), alleging that Silverwing had improperly
entered into contracts with contractors that exceeded the contractors'
license limits in conjunction with several of Silverwing's condominium
development projects. A hearing officer determined that "subdivision site
in NRS 624.220(2) refers to the general location of a subdivision, rather
than a particular location within a subdivision, such that the multiple
contracts that Silverwing entered into with each contractor for work within
the condominium development project should be added together to
determine whether the contractors license limits had been exceeded. The
hearing officer consequently sustained the Board's complaint and fined
Silverwing. Silverwing petitioned for judicial review, which the district
court denied.
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Silverwing appeals, arguing primarily that "subdivision site in
NRS 624.220(2) is unconstitutionally vague. We conclude that "subdivision
site is commonly used in the planning-and-zoning context to mean the
general location of a subdivision. Consequently, that term as it is used in
NRS 624.220(2) is not unconstitutionally vague. And because we agree with
the Board's construction of that term, we necessarily affirm the district
court's denial of Silverwing's petition for judicial review.
FACTS AND PROCEDURAL HISTORY
As indicated, NRS 624.220(2) requires the Board to impose a
monetary license limit on the amount a contractor can bid on a particular
project. The limit applies with respect to "one or more construction
contracts on a single construction site or subdivision site for a single client."
NRS 624.220(2) (emphasis added). The italicized portion of the statute was
added in 1967, see 1967 Nev. Stat., ch. 535, § 2, at 1593, and although there
is no recorded legislative history regarding the meaning of the added
language, both Silverwing and the Board agree that the primary purpose of
NRS 624.220(2)s monetary limit is to ensure that contractors have the
financial solvency to pay their subcontractors, as well as to ensure that
subcontractors have the financial solvency to complete their projects. In
turn, NRS 624.3015(3) prohibits an entity such as Silverwing from
knowingly hiring a contractor to perform work in excess of the contractor's
license limit.
As these statutes pertain here, Silverwing developed three
different condominium projects in Reno and Sparks between 2013 and 2017.
For each project, Silverwing recorded a plat map describing the project as a
"Condominium Subdivision." Each project comprised multiple, separate
buildings, and Silverwing was required to obtain separate building permits
and certificates of occupancy for each building. In 2016, the Board received
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an anonymous complaint that one of Silverwing's contractors was exceeding
its NRS 624.220(2) license limit, and one of the Board's investigators, Jeff
Gore, began an investigation.
Mr. Gores investigation revealed that Silverwing had entered
into multiple contracts with its contractors within a given condominium
development, none of which individually exceeded the contractors'
respective license limits, but when added together did exceed those limits.
For example, Silverwing entered into five separate contracts with ABC
Builders, which had a license limit of $150,000, all for work at the same
condominium development. One contract was for roughly $80,000, and the
other four were for roughly $147,000 each. Consequently, the combined
amount of the five contracts greatly exceeded ABC Builders $150,000
license limit.
Based on Mr. Gores findings, the Board filed a complaint
against Silverwing alleging that Silverwing had committed 30 of the abovedescribed violations. The Board eventually clarified that it believed each of
Silverwing's three condominium development projects was a "subdivision
site under NRS 624.220(2). Silverwing answered the complaint by denying
the allegations and arguing primarily that NRS 624.220(2) is
unconstitutionally vague in violation of Silverwing's Fifth Amendment dueprocess rights under the United States Constitution.'
1Si1verwing also argued that NRS 624.220(2) violated the United
States Constitution's Equal Protection Clause and that, even if NRS
624.220(2) was constitutional, its condominium development projects were
not actually "subdivisions" subject to NRS 624.220(2)'s license limit.
Silverwing continues to make these same two arguments on appeal, which
we summarily reject.
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A hearing was held before an administrative law judge (A-U),
at which the Board's counsel put forth the Board's position that "subdivision
site" in NRS 624.220(2) means a place where a subdivision is, i.e., the
location of an entire subdivision. Silverwing's counsel reiterated
Silverwing's belief that "subdivision site" is unconstitutionally vague
because it could mean the location of an entire subdivision or an
indeterminate location within a subdivision. In this respect, Silverwing's
owner, Mr. Witt, testified that he viewed each individual building within
each condominium development as its own separate "site" since each
building required separate building permits and certificates of occupancy.
He explained that the reason Silverwing had multiple contracts with a
given contractor was because each contract pertained to a specific building.
Following the hearing, the ALJ issued a decision in which he
sustained the Board's complaint, concluding that Silverwing violated NRS
624.220(2) by entering into multiple contracts with its contractors within a
particular condominium development that, when added together, exceeded
the contractors license limits. He also determined that "subdivision site" is
not unconstitutionally vague and that the Board's construction of that term
was entitled to deference. The hearing officer imposed a $1,000 perviolation fine against Silverwing.
Silverwing petitioned for judicial review, which the district
court denied, concluding that the hearing officer appropriately deferred to
the Board's construction of "subdivision site." This appeal followed.
DISCUSSION
"On appeal from a district court order denying a petition for
judicial review, this court reviews an appeals officer's decision in the same
manner that the district court reviews the decision." City of Reno v.
Yturbide, 135 Nev. 113, 115,
440 P.3d 32, 34 (2019). "The construction of a
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statute is a question of law, and independent appellate review of an
administrative ruling, rather than a more deferential standard of review, is
appropriate."2 Maxwell v. State Indus. lns. Sys., 109 Nev. 327, 329,
849
P.2d 267, 269 (1993). Relatedly, "Mhe determination of whether a statute
is constitutional is a question of law, which this court reviews de novo."
Flamingo Paradise Gaming, LLC v. Chanos,
125 Nev. 502, 509,
217 P.3d
546, 551 (2009).
Silverwing contends that "subdivision site" in NRS 624.220(2)
is unconstitutionally vague. "A law may be struck down as impermissibly
vague for either of two independent reasons: (1) if it fails to provide a person
of ordinary intelligence fair notice of what is prohibited% or (2) if 'it is so
standardless that it authorizes or encourages seriously discriminatory
enforcement.'" Carrigan v. Comm'n on Ethics, 129 Nev. 894, 899, 313 P.3d
2A1though we defer to an agency's interpretation of its governing
statutes if the interpretation is "within the language of the statute," Taylor
v. State, Dep't of Health & Human Servs., 129 Nev. 928, 930,
314 P.3d 949,
951 (2013) (internal quotation marks omitted), Silverwing contends that no
deference is owed here because the Board engaged in ad hoc rulemaking, in
that the Board never promulgated any regulations defining "subdivision
site" and proffered its definition of that term for the first time in the
underlying proceedings. We agree with Silverwing that the Board cannot
engage in ad hoc rulemaking and that no deference is owed to the Board's
interpretation of "subdivision site." Cf. Pub. Serv. Comm'n of Nev. v. Sw.
Gas Corp.,
99 Nev. 268, 273,
662 P.2d 624, 627 (1983) (recognizing that an
agency engages in ad hoc rulemaking when its interpretation of a statute,
even though directed at a single entity in the adjudication of a contested
case, is of "major policy concern and . . . significance to all [similarly
situated entities]). However, we are not persuaded that the Board needed
to formally define "subdivision site" in a regulation to enforce NRS
624.220(2) and its use of that term. See State v. GNLV Corp.,
108 Nev. 456,
458,
834 P.2d 411, 413 (1992) (recognizing that an agency need not
promulgate a regulation in order to enforce a statute's plain meaning).
6
880, 884 (2013) (quoting State v. Castaneda, 126 Nev. 478, 481-82,
245 P.3d
550, 553 (2010)).
We are not persuaded that either of these standards is met. To
the contrary, "subdivision site has a common meaning in statutes,
regulations, and ordinances relating to planning and zoning.3 See 2A
Norman J. Singer & Shambie Singer, Sutherland Statutes & Statutory
Construction § 47:31 (7th ed. 2014) (recognizing the rule of statutory
construction that "commercial terms in a statute relating to trade or
commerce have their trade or commercial meaning"); see also Yassin v.
Solis, 108 Cal. Rptr. 3d 854, 859 (Ct. App. 2010) (applying this rule);
Lawyers Sur. Corp. v. Riverbend Bank, N.A., 966 S.W.2d 182, 185-86 (Tex.
Ct. App. 1998) (same); Rest. Dev., Inc. v. Cananwill, Inc., 80 P.3d 598, 603
(Wash. 2003) (same). And as the Board points out, that common meaning
is consistent with the Board's construction of NRS 624.220(2), i.e.,
"subdivision site" means the general physical location of a subdivision. See,
e.g., Md. Code Ann., Envir. § 9-514 (West 2014) (referring to "subdivision
site as the general location of a subdivision); Wash. Rev. Code Ann.
§ 58.17.120 (West 2004) (same); N.Y. Comp. Codes R. & Regs. tit. 10, § App.
3 A1though NRS 624.220(2) does not pertain to planning and zoning,
"subdivision site appears to be most prevalently used in the context of
planning and zoning. Nevada's chapter pertaining to planning and zoning,
NRS Chapter 278, does not use the phrase "subdivision site but instead
refers simply to a "subdivision." See generally NRS 278.320-.5695.
Although NRS 278.320 defines "subdivision" by referring to land that is
"divided or proposed to be divided into five or more lots, parcels, sites, units
or plote (emphasis added), we are not persuaded by Silverwing's argument
that the inclusion of "sites" in that definition proves that "subdivision site"
as it is used in NRS 624.220(2) means a particular location within a
subdivision.
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74-A (2020) (same); see also Redding, Cal., Code § 17.12.050 (2010)
(referring to "subdivision site as the general location of a subdivision); Iron
County, Utah, Code § 16.12.020 (2000) (same); N.J. Admin. Code § 5:21-1.5
(2020) (using "subdivision" and "site" synonymously).
Consistent with this common usage, we conclude that
"subdivision sitein NRS 624.220(2) plainly refers to the general physical
location of a subdivision.4 Consequently, the statute provides a person of
ordinary intelligence fair notice that it is impermissible to exceed a
contractor's license limit in a particular subdivision, and it provides an
adequate standard to preclude the Board from enforcing it discriminatorily.
The statute is therefore not unconstitutionally vague. Carrigan, 129 Nev.
at 899,
313 P.3d at 884.
Silverwing contends that construing "subdivision site to mean
an entire subdivision is bad policy because a subdivision could comprise
hundreds of homes and that a developer might be able to hire a contractor
to do work on only a handful of homes before that contractor's license limit
is exceeded. Silverwing also contends that such a construction is unfair
because a contractor could do work contemporaneously for multiple
developers within a subdivision, which would defeat NRS 624.220(2)s
purpose of ensuring contractors solvency.5 While we do not discount these
4And as the Board points out, Silverwing's own recorded plat maps for
the projects refer to each particular project as the "site." Relatedly,
Silverwing's plat maps belie Silverwing's contention that it did not intend
for its projects to be "subdivisions" for purposes of NRS Chapter 278.
5The Board observes that allowing a contractor to perform work for
multiple developers lessens the likelihood that the subcontractor will go out
of business if the contractor does not get paid by a particular developer.
This is a rational explanation for the Legislature's decision to permit work
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arguments, we believe that they involve policy considerations that would be
best addressed by the Legislature and the Board. In light of the foregoing,
we affirm the district court's denial of Silverwing's petition for judicial
review.
J.
Parraguirt
We concur:
Hardesty
fir4, J.
Cadish
for multiple developers, which defeats Silverwing's equal-protection
argument. See Flamingo Paradise Gaming, 125 Nev. at 520,
217 P.3d at
559 ("This court is not limited, when analyzing a rational basis review, to
the reasons enunciated for enacting a statute; if any rational basis exists,
then a statute does not violate equal protection." (emphasis added)).
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