CC&R Amendment Lawsuit Settlement

Somersett United
Somersett United

History

  • In 2014, A group of Somersett homeowners (Plaintiffs) filed a lawsuit against the Somersett Owners Association (SOA) alleging the CC&R Amendment voting process was unlawfully conducted, this resulted in a Temporary Restraining Order (TRO), which prohibited the SOA from officially recording the amended CC&R’s and moving forward any new activities associated with the SGCC purchase agreement.
  • In December 2014, a hearing was held in the 2nd Judicial District Court of Nevada regarding the lawsuit. The purpose of this hearing was to determine Plaintiffs request for a preliminary injunction which would extend the provisions of the Temporary Restraining Order until disposition of the case on its merits.
  • The December hearing resulted in a Court Order denying the issuance of the preliminary injunction. The primary basis for the Court’s denial order was that the Plaintiffs did not demonstrate irreparable harm if the preliminary injunction was not issued. The Order stated “the Court has difficulty in recognizing irreparable harm as a result of defendant’s actions” and that “the Court is convinced that a monetary award can adequately compensate the plaintiffs should they prevail on their claims”.
  • However, in issuing the Order, the Court also made the following findings: “there is a reasonable probability that the plaintiffs will prevail on most of their claims for relief since it is apparent that the Board did not follow the requirements of NRS 116.31035 nor NRS.311(9) as they pertained to the vote on the CC&Rs amendment” and that “The response of the Board to the plaintiffs’ repeated requests for equal time to present their positions, in the Courts opinion, was disingenuous.” 
  • The lawsuit moved forward with the litigants negotiating a settlement, which has been agreed to by all Plaintiffs and the SOA Board of Directors. Pertinent details of the settlement are summarized below.

Settlement

  • Plaintiffs will receive a payment in the amount of $40K from the SOA, and their $5K Bond will be refunded.
  • Case is dismissed and both plaintiffs and the SOA are released from all claims associated with the case.
  • Plaintiffs agree not to pursue any new claims, either through the Courts or the Nevada Real Estate Division, related to the underlying facts of the case. Also, not to work with any other parties in pursuing such claims.
  • Neither the Plaintiffs nor the SOA shall make any disparaging remarks, either verbally or in writing, against each other regarding the subject matter of the case.
  • Settlement does not constitute an admission of liability by either party.
  • Each party will bear its own costs, expenses and legal fees.

Comment

Both parties will most likely spin the settlement to their advantage, but it remains that the BOD felt it better to settle than to continue to pursue through the Court system. Whatever the case, SU believes praise is in order for those homeowners who stood up for what they believed to be for the good of all.  Although costly for the Association, perhaps the BOD has learned a lesson here. That is, to assure that all future ballot measures are conducted in a proper and lawful manner.