Rockery Wall Litigation Information Meeting

Some Take-away points from the March 10th Information Meeting:

  • The American Geotechnical representative did an excellent job of explaining rockery wall construction techniques, the types of deficiencies associated therewith and how they were pervasive throughout Somersett. This along with actual pictures of some blatant Somersett Rockery Wall defects painted an effective picture to support the SOA’s litigation process against the Somersett developer and its subcontractors.
  • The American Geotechnical representative revealed that he has served as a technical expert in several other SOA Attorney (Wolf, Rifkin, Shapiro, Schulman & Rabkin, LLP) lawsuits (did not address successes or failures). Undoubtedly, as in most lawsuits, if it gets that far, Somersett Development Company et. al. will have their own experts with opposing opinions (whose expert will win out?).
  • It is not possible to determine cost estimates for future rockery wall defect remediation without more detailed inspections, but they will most likely far exceed the $2.5M currently being spent on failed wall and hillside repairs. Since short and long-term repair costs cannot currently be determined, there is no way to estimate the future cost to homeowners or determine how it will be paid for. However, of the 13.5 miles of the 325 rockery walls inspected, The American Geotechnical representative felt that only a small percentage would need near-term remediation.
  • The SOA Attorneys are banking on the six-year statute of limitations for defect claims as starting with Developer Board turnover to homeowners. That is, as opposed to the actual rockery wall substantial completion dates, which have exceeded the six-year statute (good luck with this, as it apparently has not been tested in the courts). The Developer turnover date established the basis for the December 29th, 2017 filing date, which also impacted the discovery process and the inability to obtain more data and background information on the rockery walls prior to filing.
  • No violations of required building codes or standards in effect at the time the rockery walls were constructed have been identified. In the absence of such published codes or standards, the SOA Attorneys will most likely claim that the walls were not constructed in accordance with common local building and industry practices in effect at the time, and that the defendants were aware of such and hid it. The question being what did they know and when did they know it?
  • Current Law prohibits recovery of legal fees in construction defect claims. However, the SOA attorney assured Association members that they will be looking out for the SOA’s best interests (i.e., as opposed to their own pocketbook) and would recommend terminating the lawsuit if it did not make sense to move forward. (Note: in the Attorney litigation letter to homeowners, they estimated $100K – $300K in legal fees and $100K – $250K in testing costs or $200K – $550K total over a 2-4-year period).
  • Recovery amount will most likely be limited to what is available from defendant’s insurance policies, yet to be determined.
  • Many inquired about potential rockery wall deficiencies on their property, marketability impact and related real estate disclosures. Bottom line – you are on your own here.
  • The lawsuit does not include any common area walls within the Sierra Canyon, The Vue and Villages sub-associations.
  • There was no strong reasoning put forth to indicate that the SOA would prevail in winning the lawsuit, basically a crap shoot at this time.
  • No official response had yet been received from the defendants refuting the SOA’s construction defect claim (Per NRS statutes, the defendants have 90 days from the Notice of Claim filing date to provide their response, after which the SOA has 30 days to provide this response to Association members, given the December 29th filing date it does not appear that this response will be made available prior to the March 28th ballot submittal deadline).

Herein lies the dilemma for Association members, even if there is a low probability for success, is the reward worth the cost of moving forward? Assuming the high end legal cost estimate of $550K, this would equate to approximately $176/unit owner, not a huge amount. Estimating future rockery wall repair/replacement costs at this time is problematic. However, if one assumes that these costs will “far exceed” the $2.5M currently being spent, say $8M as an example, the cost would equate to approximately $2600/unit owner (one can do their own math by dividing their assumed values by Somersett’s 3124-unit owners).

The bottom line opinion here is that: given the potential for future failures and SOA liability issues, it makes sense for homeowners to RATIFY the litigation. If future discovery points to not pursuing the litigation, the SOA BOD can then act accordingly.

Comments/Opinions anyone?

8 thoughts on “Rockery Wall Litigation Information Meeting

  1. As a resident of Sierra Canyon I would like to know if the litigation covering Somersett also covers Sierra Canyon or not. If not, when do our statute of limitations begin? Do any of our walls stratified and identified? Would we have to hire our own firm?
    If SC walls were not included in the study, nor in the litigation, why do Sierra Canyon residents have to pay for the litigation? These walls are not common areas like landscaping.They are not located in Sierra Canyon. Therefore I believe that we should not contribute anything for either repair or litigation, and instead, take care of our own.ira

    1. The Somersett litigation on “rickety” walls does not include the walls in any of the three sub-associations (The Vue, The Village, Sierra Canyon). Each entity maintains its own common areas. Common area is common area and includes landscaping and walls and trails and man-made structures therein.

      However, under an agreement with Somersett they maintian the common area center dividers on (Somersett Parkway from the NE Monument to the intersection of DWParkways East & West across from the Lodge; DWPEast; and Somersett Ridge) and their adjacent sides.

      The exact boundaries are spelled out in the Maintenance Easement Agreement (MEA), last revised in April 2017. Let me know if you want a copy. It is very very lengthy. It also would be a separate subject unto itself for this blog and/or the Sierra Canyon website.

      Sierra Canyon owners are members of the Somersett Owners Association and as such they pay for common area maintenance throughout Somersett, but not the within the subs.

      Good question of “limitation.” When a wall was built or when Pulte relinquished control of the Association to the Sierra Canyon all-owner board??? Maybe the Somersett lawsuit will provide an answer.

      Sierra Canyon has a Report on its Walls but it has not been released to owners as of today (March 11, 2017).

  2. What a load of crap. $176 is a lot of money for me and no walls in SC, where I live, seem to be defective. But, I quess the rich folks in Somersett expect us retirees to continue to bail them out.

  3. Hey, Umm… why don’t we just put up a couple of dozen signs around the rockery walls saying “play on or around the rockery walls at your own risk”. Duhhh. Hell of a lot cheaper.

    1. I find the hard sell tactics of this Law Firm (as in, ratify this litigation or else it’ll probably be much worse) to be highly suspicious (and obvious).

      I’m also not impressed by the “alleged” integrity of these so called “Experts” that claim that there is something TERRIBLY wrong with these walls.

      The whole presentation sounds extremely fishy.

      1. The American GeoTechnical Report on all the walls – pointing out the visible deficiencies, is not backed up with data (i.e. soil data, engineering drawings, construction requirements, city approvals, etc.) – These visible conclusions could be applied to all the Rockery Walls in NW Reno, not just those in Somersett. Most importantly, none of these walls have fallen down! If you see a wall falling down or about to fall down – please call the HOA!!!

        I am sure that law firms who represent HOA’s and homeowners are looking for ways to challenge the legality of the NV Republican bill passed in 2015 to reduce builder/developer liability. It would be indeed great if someone else spent the money to challenge this law first… Defects are defects… building pads and house foundations shouldn’t collapse in less than 10 years. Roofs shouldn’t leak, HVAC systems should work reliably.

        Builders often forget to inspect the work of there subs thoroughly… why should the homeowner be forced to pay for lack of QA?

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