SOA to Appeal the Rockery Wall Lawsuit Summary Judgement

As previously reported on this website, the Washoe County District Court on October 2, 2019 issued a Summary Judgement in favor of the Defendants in the SOA’s lawsuit for a Chapter 40 Claim for Damages pertaining to the SOA Common Area Rockery Wall Failures. This was reported on in the following Post:

Rockery Wall Litigation Update (6)

The question at the time being, what would the SOA do, if anything, with reagrd to a follow up action? This has now been answered with the SOA Board deciding to appeal the Courts ruling, which was based on the SOA not filing a claim within the six-year Statute of Repose. The six-year period beginning with “Substantial Completion” of the project. The SOA Attorney argued that this period began with the date of Board turnover from the Developer to the Somersett Owners, which occured in Janurary 2013, therefore, well within the six-year period. In issuing his ruling, the Judge rejected this premise.

So what is the basis for an appeal? Apparently this was discussed/decided at the October 21st Executive Session. In this regard, the SOA General Manager has advised that a document outlining what took place at the Executive Session would be released sometime next week. Hopefully this document will address the following:

  • Basis for continuing the lawsuit
  • Was a formal vote by the Board required? If so, who voted Yes, No or Abstained. (it is fair to assume that Board members Fitzgerald, Strout, Retter and Leto voted Yes as Roland would have recused himself as before, therefore, this would have required all other Board members to vote in favor).
  • Attorney fee estimates to file and defend the appeal, and if successful, the amount to retry.

It has been speculated that the recently passed Assembly Bill 421 will somehow now come into play, as this extends the Statute of Limitations and Repose to 10 years. The Legislative Summary of AB 421 is quoted as follows:

“AN ACT relating to construction; revising provisions relating to the information required to be included in a notice of a constructional defect; removing provisions requiring the presence of an expert during an inspection of an alleged constructional defect; establishing provisions relating to a claimant pursuing a claim under a builder’s warranty; removing certain provisions governing the tolling of statutes of limitation and repose regarding actions for constructional defects; revising provisions relating to the recovery of damages proximately caused by a constructional defect; increasing the period during which an action for the recovery of certain damages may be commenced; revising the prohibition against a unit-owners’ association pursuing an action for a constructional defect unless the action pertains exclusively to the common elements of the association; and providing other matters properly relating thereto.”

For the complete text of AB 421, click on the following:

AB 421 Text

With regard to AB 421: To what extent is AB 421 retroactive to the SOA’s Chapter 40 Claim for Damages? Since AB 421 was passed before the Court’s ruling, to what extent did the Judge consider its relevance? Given that Statutes of Limitations and Repose start from the “substantial completion” date of the project (not changed under AB 421), and that the Court rejected the premise that the Developer Board turnover date equated to the substantial completion date, would a 10 year period under this ruling now suffice? Doubtfull, as the date of substantial completion, as adressed in the Court’s ruling, most likely occured more than 10 years ago. For those interested, a reading on the substantial completion date as defined by the Court is contained within the following document:

Order Granting Defenant’s Motion for Summary Judgement

Obviously, a very controversial decision by the Board, will the results be the same? Does this action affect your vote on the on-going Board of Directors election?  If so, perhaps one should wait for the appeal information document to be released next week by SOA management before voting.