Considerable concern has been raised on whether it is too late for the SOA to seek redress for the rockery wall defects based on the statute of limitations under Nevada Law. For those interested, the Statute of Limitations for Chapter 40 Construction Defects is defined by NRS 11.202 as follows:
NRS 11.202 Actions for damages for injury or wrongful death caused by deficiency in construction of improvements to real property.
1. No action may be commenced against the owner, occupier or any person performing or furnishing the design, planning, supervision or observation of construction, or the construction of an improvement to real property more than 6 years after the substantial completion of such an improvement, for the recovery of damages for:
(a) Any deficiency in the design, planning, supervision or observation of construction or the construction of such an improvement;
(b) Injury to real or personal property caused by any such deficiency; or
(c) Injury to or the wrongful death of a person caused by any such deficiency.
NRS 11.2055 further defines “substantial completion” as follows:
NRS 11.2055 Actions for damages for injury or wrongful death caused by deficiency in construction of improvements to real property: Determination of date of substantial completion of improvement to real property.
1. Except as otherwise provided in subsection 2, for the purposes of this section and NRS 11.202, the date of substantial completion of an improvement to real property shall be deemed to be the date on which:
(a) The final building inspection of the improvement is conducted;
(b) A notice of completion is issued for the improvement; or
(c) A certificate of occupancy is issued for the improvement,
The question here is what constitutes substantial completion for the Somersett rockery walls in question. Surely, construction of these walls was completed far earlier than six years prior to the litigation filing date of December 29, 2017. Additionally, Washoe County records indicate that ownership turnover of rockery wall parcels from Somersett Development Company to the Somersett Owners Association occurred in the 2004 to 2006 time frame, also well outside the six-year limit. Therefore, the SOA Attorneys would have to substantiate some other basis for start of the six-year period or otherwise argue it as being non-applicable. At the Litigation Information Meeting, the SOA Attorney implied that the date of SOA Board turnover from the Developer to the Homeowners could apply, although this apparently has no precedence in the Courts. The SOA Attorney referenced a December 2013 date in this regard. However, this was an erroneous reference, as Board Turnover occurred in November 2012. Regardless, both dates are within the six-year period.
In response to concerns/questions on legal fees, rockery wall repair costs, damage recovery limitations, effect on homeowner assessments etc., the SOA Attorney advised that it was too early in the discovery process to provide meaningful estimates. That more needs to be known not only about the existing defects (i.e., more concise inspections), but also defendant asset limitations (e.g., insurance) and the applicable design documents, inspection reports, code provisions, etc., under which the rockery walls were constructed. He implied that given the statute of limitations there was insufficient time to investigate all these issues prior to filing the lawsuit. However, this does not compute with the November 2012 date referenced above, which could support a filing date as late as November 2018 (assuming the BOD turnover date has some basis in the six-year limit). Therefore, there is a question as to whether the December 29th filing date was premature and should have been delayed permitting more time to provide meaningful estimates. However, this assumes that such information is publicly available and, therefore, the filing of civil procedures (Discovery process) would not have been required.
To RATIFY or NOT RATIFY?
What effect should the preceding have on whether to RATIFY or NOT RATIFY the lawsuit? Sure, it would have been nice to have some more meaningful information and cost estimates, and there is a strong possibility that the lawsuit will be dismissed based on the six-year statute. However, now that “the cat has been let out of the bag” with the American Geotechnical Report, the cost of the current rockery wall failures, potential for future failures, SOA liability and Homeowner disclosure issues, it would appear that for homeowners to RATIFY the litigation is the logical choice. Hopefully the SOA BOD and their Attorneys will then act responsibly in assessing future discoveries and either move forward or terminate the lawsuit as appropriate.
Whatever your choice, all are encouraged to submit your ballot by the March 28th deadline. Abstentions just delay the inevitable.