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.

12 thoughts on “SOA to Appeal the Rockery Wall Lawsuit Summary Judgement

  1. WTF! Time to get out of Dodge.

    SURE AS HECK DON’T VOTE FOR INCUMBENT FRANK LETO.

    I have never seen anything in court documents about the fact that owners never voted for this lawsuit in the first place as required by NRS 116.31088. Aren’t the defendants aware?

    NRS 116.31088 Meetings regarding civil actions; requirements for commencing or ratifying certain civil actions; right of units’ owners to request dismissal of certain civil actions; disclosure of terms and conditions of settlements.

    1.  The association shall provide written notice to each unit’s owner of a meeting at which the commencement of a civil action is to be considered at least 21 calendar days before the date of the meeting. Except as otherwise provided in this subsection, the association may commence a civil action only upon a vote or written agreement of the owners of units to which at least a majority of the votes of the members of the association are allocated. The provisions of this subsection do not apply to a civil action that is commenced:

    (a) To enforce the payment of an assessment;

    (b) To enforce the declaration, bylaws or rules of the association;

    (c) To enforce a contract with a vendor;

    (d) To proceed with a counterclaim; or

    (e) 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.

    2.  At least 10 days before an association commences or seeks to ratify the commencement of a civil action, the association shall provide a written statement to all the units’ owners that includes:

    (a) A reasonable estimate of the costs of the civil action, including reasonable attorney’s fees;

    (b) An explanation of the potential benefits of the civil action and the potential adverse consequences if the association does not commence the action or if the outcome of the action is not favorable to the association; and

    (c) All disclosures that are required to be made upon the sale of the property.

    3.  No person other than a unit’s owner may request the dismissal of a civil action commenced by the association on the ground that the association failed to comply with any provision of this section.

    4.  If any civil action in which the association is a party is settled, the executive board shall disclose the terms and conditions of the settlement at the next regularly scheduled meeting of the executive board after the settlement has been reached. The executive board may not approve a settlement which contains any terms and conditions that would prevent the executive board from complying with the provisions of this subsection.

    1. Joe, that section applies to the “commencement” of an action. Not ‘every step they take’ in an action. One would have to go back to the original decision to file the lawsuit and determine if the HOA’s general manager and staff properly posted the notice of the agenda as to the “consideration of civil action.” The board doesn’t do that, the staff does. Did they property include the discussion would be (mostly likely) was on executive session. And most likely they did properly agendize that discussion.

      There doesn’t appear to be any requirement all steps in the action (such as deciding to appeal) require the same process; which is standard procedure. Once a lawsuit is commenced, it would be unreasonable to require ratification by the association as to further actions, unless we could all be a party to the legal reasoning discussions – which are allowed to be conducted behind closed doors so the other side of the lawsuit is not also informed of the legal analysis and basis for the decisions.

      As a result, this means us members have to trust our board’s decision-making. We are not a party to the discussions and have to wait for the legal filings to read the analysis for the basis of the decision.

      However, that said, we can certainly attend meetings and reach out to board members to see if we can get clarification about the situation.

      Perhaps, we don’t know the legal basis for the appeal? Is it a technicality – is there a good legal position the Court (aka Judge) overlooked? Do we have the best legal advice? Has the board considered a second legal opinion (that might be well worth the time and money before a lengthy appeal).

      Neither the Board nor the GM should be releasing a written opinion as to the merits of the appeal (the other side would surely use that in their filings). Anything the Board or GM writes can be used by the other side’s lawyers — for example, if they think our legal case is flawed, but has a 20% chance of success , should they put that out to the members? Of course not, the other side would use whatever they could in their own filings to the court. Conversely, the lawyers for the Rockery Wall contractor are not going to explain publicly what they think their merits are , except in their filings before the court.

      I would bet the lawyers and contractors have all signed onto this website to read anything they can to pick up perhaps a nugget or two, or test the support the HOA and board has for fighting the case – and often legal cases are ‘won’ by those who stay in the game the longest.

      We have to trust the board (or elect new members) , and get smart people on the board , hire the best lawyers.

      1. Thanks Nancy for your comments.
        First of all the original lawsuit failed miserably as shown by the judgment hearing minutes and the judgement itself. The Judge excoriated every point our legal team tried to make. The arguments were poor at best.
        Now our legal team wants a new argument which they will have to detail in their appeal filing. So providing those new arguments to the Association will not jeopardize anything with regard to its merits. The defense team will be given time to respond to any appeal attempt. No one is asking our legal team to guess what are chances of success are. I think we can do that. Our questions relate to how much it will cost, how long will the case go, what can we gain and what can we lose (defense attorney fees). I suspect if an appeal is accepted, it will go for many months before we get a hearing on the appeal and then more months for any trial etc. this does not include any appeal from the defense if they lose. This thing will go on and on with us paying for expensive legal counsel awaiting for an outcome that will yield any payoff. In addition we will have to try to collect. That is another lengthy process which may yield little or nothing for many years to come.

        So asking our Board to provide us with answers to basic questions on the appeal is well within our rights. If they cannot do that then I am afraid they should not serve. Secret sessions to vote for an action with large implications is not good stewardship for the Association. More openness about issues is needed. That is how trust for the Board can be developed.

        As far as the appeal goes, what can be filed can be withdrawn just as simply.

        1. Craig, “secret sessions” is not what is going on — this isn’t Capital Hill and federal politics. ALL public boards and agencies must follow state laws governing when and if there is a reason for the board to meet in executive session. The allowances are narrow in scope: it essentially boils down to personnel, lawsuits and related negotiations, and property negotiations for obvious reasons. You might think the board should tell you everything they discuss, but they are not legally allowed to release the discussions occurring in executive session without personally violating the law – if you are elected, I would expect you and every other member of the board to follow the law. If the HOA attorney approves the release of information in accordance with what is allowable under the law, then great – that’s what the association members should be told. These laws are in place for every HOA and public agencies similarly. The duty of the board to hold “executive session” properly remains: they must publicly inform us as to the legal authority for which they are going into exec session, and the general notice of the topic.
          Unfortunately, a lot of boards don’t follow the law.

          As to the costs, sure, we should have an estimate, although anyone with experience with lawfirms know it’s (a) very expensive, (b) no guarantee on outcome whatsoever so no ROI analysis and (c ) a roll of the dice.

          For this lawsuit, you are not a lawyer with vast experience in contract law. Contract law is different in NV verses CA , and for the HOA and contractor, statue of limitations, tolling, etc… these are narrow and decided based on decades of case law so hopefully we have great lawyers providing the board their best legal advice. I would want to speculate on this forum as to the merits.

    2. Joe, I respect your opinions. But you said I would never be elected the first time and it was because I framed the issues and approached them with an open mind leaning toward the homeowner perspective. You are still upset that you lost an expensive court case yourself and have become anti-HOA. As a resident of Somersett, you had numerous opportunities to run for a Board position or to sit on a committee. You chose not to, but instead chose to play guerilla politics with questionable opinions. I’m disappointed you didn’t show up at Candidate’s Night to voice your concerns and ask questions. I wish you well in assisted living. And by the way, it will be up to the new Board to decide if we should proceed with the appeal. Furthermore, if you want to compete with Mr. Haar and provide important information to the community, how about doing a cost analysis of what it will cost to minimally support the golf course, turn it over to a management company, or turn it into a green belt. This is another important issue facing the community. My best to you and your wife. Joe, I have to ask; is it true there was a block party when you left the neighborhood?

  2. This blog is not a place for personal attacks. Rather it is a place to help get the facts out.

    From emails we received at the time, we know Joe not only supported Frank on his first Somersett board run, but also encouraged others to vote for him in the hope that things would get better if a new previously uninvolved person were to be elected without any association baggage. Are owners better off at this second election time than two years ago?

    As a political attack and not a personal one, what can Frank claim at the end of his term that benefits the community and would not have come about had he never been on the board? Be interesting to see if Frank’s community concerns compel him, if not elected to the Somersett board, to run a few months later for the Sierra Canyon board; or which committee in either association will benefit from his membership.

    Joe and Ted’s famous lawsuit was not lost entirely on its merits at the district court, but rather on the potential of ever growing legal fees being payable if a true loss occurred at the Supreme Court of Nevada which was the only next option. That possibility caused the suit to be dropped. Many owners today wish the mow strip changes they advocated were now in place.

    Joe has never been anti-HOA. Rather he sees what is wrong and/or not working and points it out in the hope that it can be made right. Many of us had never lived in an HOA as he had. He brought “concerns” to the forefront. Our associations have evolved into “them the board” versus “us the owners” instead of we’re all in this together and you lead and we’ll follow. Too many look on the status quo as inevitable when it isn’t or more likely in Sierra Canyon as “been there done that and leave me alone in retirement.”

    Any cost analysis re the private golf club is long overdue and hindered by the unavailability of data from the golf club. The main source of data looked at now is from “local” digging and digging and from filed tax forms available from IRS upon request.

    Don’t know about any party when Joe left, but we still seek his thoughts on issues and recommendations on candidates (and usually vote that way).

    PS Per a phone call with Joe, he is still an association member until his house closes. He says he’ll stay away from this wonderful blog when that occurs.

  3. Marty and Jim: Point well taken. I was very surprised that Joe said what he did as I have listened to his concerns about many issues facing the community over the past two years. Yes, Joe supported me when I first ran for the Board, took me around to meet many residents, and even gave me an NRS Book and binder to read about past decisions and the law. I guess the one thing we can agree upon is to disagree on things. Don’t trash me because you disagree with one thing I’ve done. Now, what have I done? First, if you took an interest in what my views and opinions are, you would have showed up at Candidate’s Night and would have asked a question. Second, here’s what’s in store for the next Board: They will have to decide if they (1) want to proceed with the Rockery Wall Appeal. (2) How to address and hopefully solve the golf course issue. On the Sierra Canyon Candidate’s Night, I asked for a show of hands to see how many people would like to see the rockery wall issue continue with an appeal or to be dropped completely. I saw the result of that inquiry and I get it. I know that the residents who live in Sierra Canyon are on fixed incomes, most retired, and expect the wheels of government to turn faster than they do. Just remember that I am one vote, and if you want more of a say, get out and support those candidates from your sub association. We have a candidate from Somersett who has a great deal of financial experience to offer if he is elected to the Board. Most people vote their pocketbook, but when you do, there are consequences. Whoever wins in this election, each Board member is one vote and it takes three votes to carry a motion. I hope whoever wins has the knowledge and foresight to make the right decisions. Why didn’t one of you run for the Board? I would consider voting for you if you used your full legal name. Joe started it, I finished it. Finally, I’d be happy to visit Joe one weekend; I’ll even bring a coffee cake or some canolis.

    1. Frank

      I attended the first candidate night, so the Rockery Wall “appeal” was not discussed, I am sure that if asked most would have said no. The only assumption I can make (after years of running a small business and being involved in all sorts of legal activities), is that the Schulman and Company were mortified by the result, and want to appeal pro bono. Appeals in NJ are relatively inexpensive, as no new evidence can be introduced; having gone that route myself! Even with AB421, recently signed by Sisolack, extending construction defects back to 10 years; I would not be optimistic about success.

      What I really wanted to ask you about is why at candidate night you addressed many of the concerns I have asked the Board to discuss… As a “customer” homeowner, I believe that I was given short shrift by the Board. Ignoring customers does not make anyone feel happy.

      Many thanks for rational responses to my questions, one of which I am happy to hear that the AGC is taking seriously:
      Dramatically reducing the use of Disintegrated Granite (DG), which when blown away is health hazard, replacing much of it with NV Gold pebbles
      The usage of maps and visual aids, useful in a 3200 member association, so one knows what is going on and where. Rather than reading a financial report – Having it up on a screen for all to see.

      One unanswered question – will you insist on the SOA owned Rockery Walls, all 17 miles, being amortized over 50 years and reserves accumulated for their potential need for maintenance and fixing? Will you (as the Board) advise all homeowners who have walls on their property to look for insurance against failure?

      All I can say, is that when I attend Board meetings, the quality of the information is poor, the audio is poor, the complete lack of response to, and often dismissal of ideas and questions. Shutting down members does not indicate that the Board is truly interested in engaging the community! Please explain how you will improve outreach, engage residents (other than at a candidate night (s)) if re-elected?

      1. Geoffrey; Thank you for actively participating at Candidates Night. The community will ultimately decide if I will or will not be involved with the next Board. I hope there will be more town hall-style meetings this coming year to put out as much information as possible on the golf course, rockery wall appeal, growth affecting our community outside of Somersett, and issues dealing with new construction such as The Cliffs. I will bring up your comment concerning the DG issue at the Cliffs at the next AGC meeting which is this Thursday. I will also be asking the Communications Committee to produce a large map of the community for reference at the Board meetings as many residents are not familiar with the location of many of the topics discussed at the Board meetings. I also heard you say you are a creative person and have applied to become a member of some of the committees, but did not have much luck. We are always looking for members to join committees, and as a fellow “Creative”, I think you would do well on the Communications Committee as I will be stepping down from that committee should I be reelected to the Board.

        I learned a lot from Candidate’s Night, and I created a new email address, franksoaboard@gmail.com for homeowners who wish to contact me. I hope other Board members will follow suit.

        I think that communication between the community and the Board can be improved. Terry Retter has made a great effort to establish a dialog among the community with his coffee meetings. Unfortunately, attendance is not good. We also get a lot of misinformation through other media venues. In future Board Meetings, I would like to see a Board member, address the questions that come up at the end of the meeting. I know many people leave the meetings wondering if the Board has heard their concerns. I agree with you that the audio is poor in the gym and great room where we hold the meetings. I will look into the possibility of adding sound battens on two of the walls in the great room to help with the acoustics problems. Unfortunately, I can only suggest the speaker place the microphone next to their mouth for the audience to hear them.

        Now I have a question for you…. I believe it was at the last Board meeting you wore a blue ball cap with the word “Math” on it. Is the math always right? Or can the math ever be wrong? Maybe it’s a math question, or maybe a physics question? You tell me.

        Thanks for your questions.

  4. Frank; I appreciate your response to my comments and questions. I have been to to a “Terry Session” and made suggestions… One of these suggestions (installing Solar Heating for the Pools) has been made by myself to past boards and ignored. Investing in a solar powered (not a poly silicon Solar panel) hot water system to heat the pools will pay for itself in 5 years, help to keep the community “green” and fulfill one of the promises in our PUD. In fact, I acknowledged the importance of Terry’s efforts to enhance communication in a recent comment I made to the Board!

    All the Board meetings I have participated in for “small business”, “large business” and VC start-ups have been big on “visuals”; eg. maps for mining endeavors, engineering diagrams, financial reports (similar to the SOA 2020 Budget presentation Terry organized), research reports, etc… Even non-profits, like VOA who operate the Reno Shelter use modern business tools to facilitate communication as to progress, problems….
    Why indeed, not our SOA?

    MATH on my hat – “Make America Think Harder” is a campaign slogan from Presidential candidate Andrew Yang. As a scientist, I like facts; math makes sure that things add up. Statistics is an applied form of Math where perhaps you can interpret the meaning of the numbers – maybe in a meaningful way! That is an example of thinking harder about the numbers. I don’t have to remind you, that Economics is known as the “dismal science” – if indeed it is a true science … after all how do you measure “human happiness”?

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