Rockery Wall Litigation Info

On Friday April 20th, the Somersett Owners Association (SOA) distributed an email to Association members which contained:

INFORMATION BEING PROVIDED PURSUANT TO NRS 40.6472

For our readers who may not be on the SOA’s email distribution list, nor received notification via another mechanism, this information may be accessed by clicking on the above link.

The above transmittal consists of responses from Somersett Development Company (SDC) and Q&D Construction (Q&D) to the SOA’s law suit (i.e., Chapter 40 Notice of Claims) against them for the Rockery Wall defects. Their responses may be summarized as follows:

  • Q&D disclaimed any liability based on: 1) They were “not involved in any way in the design and construction of the rockery walls that are the subject of this claim” 2) The Notice of Complaint failed “to provide any detail as to which alleged defects in the rockery walls are attributable to Q&D’s scope of work” and that 3) “NRS 11.202 provides that construction defect claims may not be brought more than six years after substantial completion of a work or improvement”.
  • SDC’s response was much shorter, simply disclaiming any liability based on the six-year limitation with December 2006 being the completion date for the newest rockery walls.

Note that the SOA is legally bound to distribute these responses within 30 days of receipt to each member of the Association. This raises the question as to how are Association members not on the SOA’s email list receiving this information? Additionally, the SOA transmittal chose only to inform Association members on that which they were legally bound to do, and not to provide any other details regarding status the law suit.

This given that, effective April 14th, the SOA BOD in a “Unanimous Written Consent of the Board of Directors of the Somersett Owners Association” document (a mechanism usually reserved for time sensitive or BOD quorum issues), the BOD agreed to “move forward and continue to pursue the law suit against the Somersett Developer and associated trade vendors”. This apparently based on the results of the litigation vote count, which resulted in 953 ballots received, 716 in favor, 205 opposed and, 36 unusable. Given that 77% of the received ballots were in favor of the law suit, The BOD obviously believes this provides the justification for continuing the litigation.

However, it is not clear that the BOD has the authority to take this action. The 953 ballots received only represent about 31% of the total number of Association members and the 716 in favor about 23%, which is far below a majority (50% + 1) of allocated Association members. This based on NRS 116.31088 which under subsection 1. (e) states the following:

“To protect the health, safety and welfare of the members of the association. If a civil action is commenced pursuant to this paragraph without the required vote or agreement, the action must be ratified within 90 days after the commencement of the action by a vote or written agreement of the owners of the units to which at least a majority of votes of the members of the association are allocated. If the association, after making a good faith effort, cannot obtain the required vote or agreement to commence or ratify such a civil action, the association may thereafter seek to dismiss the action without prejudice for that reason only if a vote or written agreement of the owners of the units to which at least a majority of votes of the members of the association are allocated was obtained at the time the approval to commence or ratify the action was sought”.

It is clear that ratification for the law suit was not obtained via a majority of member allocated votes. Therefore, under what authority does the BOD feel they have the right to continue the litigation? On the surface, they appear to be in violation of the NRS Statute.

At the Rockery Wall Litigation Owners Meeting, the SOA Attorney implied there may be a way to get around the NRS 11.202 six-year limitation statute. Do they now also believe that NRS 116.31088 has an alternate interpretation? Hopefully, the SOA Attorneys have some high degree of legal confidence regarding both these issues, and are not pushing this litigation for their own benefit.

Perhaps this will all be explained at the April 25th BOD Meeting. Although one has good reason to question this, given that the only litigation correspondence to date (i.e., to the Association at large) was the delayed publication of the vote count (after some prompting) and the SDC and Q&D responses to the law suit (required by law).