Rockery Wall Lawsuit Appeal

On November 8th, the Somersett Owners Association (SOA) sent the following “Rockery Wall Lawsuit”  Memo (dated November 1, 2019) to Assoiation members via email:


“Dear Somersett Homeowner:

On October 2nd, 2019, Judge Elliott Sattler ruled against the Somersett Owners Association on the Rockery Wall lawsuit. On October 21st, 2019, the Board met with Michael Schulman and Bradley Schrager from Wolf, Rifkin, Shapiro, Schulman & Rabkin, LLP to discuss the judge’s ruling and options available moving forward. The following are bullet points of some of the key items discussed and the responses provided by counsel.

      • Cost to Appeal – Wolf Rifkin has agreed to charge the Association a flat fee for the Appeal Process of $15,000.00 plus nominal court costs. This is a heavily discounted cost provided by our law firm. In the event the Association would prevail and the case be remanded to district court, the Board would be able to negotiate a hybrid contingency fee structure that would limit out of pocket costs for the Association in the future.
      • The Notice of Appeal was filed within the 30 days required after the early-October court ruling. It was noted that filing the Notice of Appeal reserves the Association’s right to appeal, however, we are not locked into the appeal and could withdraw from the process at several junctures in the future.
      • The expected timeline for the appeal process is anticipated to be 18 to 24 months. The first step would be the Supreme Court Mediation process which comes at no cost to the Association. In the event mediation is unsuccessful, briefing would commence at regular intervals for the parties, and we would expect oral argument and a decision to take somewhere in the neighborhood of two years.
      • Bradley Schrager would represent the Association in this appeal. He has handled many Nevada Supreme Court appeals and has argued before the justices on more than a dozen occasions.

Taking into consideration the aforementioned information, the Board feels spending $15,000.00 to possibly win millions, or at least to avoid millions in rockery wall repair costs, is worth the risk, and therefore voted to move forward with the appeal process. Michael Schulman, the Association’s lead attorney, will be available to answer questions at the Board of Directors meeting on December 12th. The meeting will take place at 5:30 pm at The Club at Town Center.

Thank you,

The Management Team”

The above formalizes what was made known (without details) to Association members in late October. However, it still raises the following questions/comments:

  • What is the basis for the appeal? That is, what material facts that resulted in the summary judgement “as a matter of law” are in dispute?
  • The $15K flat fee seems reasonable, and described as a “heavily discounted cost”, but discounted from what? Given all the legal fees collected from the SOA, perhaps pro-bono for the appeal process would have been in order.
  • If we win the appeal, and the case goes back to trial, what would this cost the SOA? What is meant by, “the Board would be able to negotiate a hybrid contingency fee structure that would limit out of pocket costs for the Association in the future”? Bare in mind that the SOA has already incurred approximately $400K in legal fees, without even going to trial. Are we looking at another $400K or more? In the spirit of NRS 116.31088 SU believes Association members are entitled to an updated total cost estimate.
  • How does this affect the Tolling Agreement between the SOA and the SGCC, which put on hold (until December 31st, 2019) litigation against the SGCC for $680K in Rockery Wall repair costs? Something the new Board will have to consider?
  • Given the 30 day deadline to appeal the October 2nd Court ruling, and with the Board not meeting in executive session until October 21st, it is clear the appeal had to be filed before the next open Board Meeting, thereby precluding any owner input/comments and Board voting in public. One might question as to why the Board did not meet on this issue in early October in time for inclusion within the October 16th open Board meeting, or perhaps call a special meeting, which in SU’s opinion would have been the right thing to do.
  • If a formal Board vote was required, how was it accomplished and documented? What was the discussion and how did the individual Directors vote? This is certainly not confidential and should have been addressed in the above memo. That said, it is fair to assume voting was documented via the signing of a written consent document as was used in initiating the original lawsuit. If a quorum of 66% was required, and Director Roland recused himself as previously, then all of the other four Directors (Fitzgerald, Strout, Retter and Leto) would have had to vote for the appeal.

Perhaps all of these and additional questions can be answered at the December 12th Board meeting where the SOA Attorney will be available to address them. As noted in the above memo, “we are not locked into the appeal and could withdraw from the process at several junctures in the future”.


4 thoughts on “Rockery Wall Lawsuit Appeal

  1. Thank You! We appreciate your dedication to keeping us informed. I am opposed to continuing this lawsuit as it never had the necessary votes to authorize to Board to begin it. The SOA Board has caused the community to spend hundreds of thousands of dollars in legal fees for a lawsuit that exceeded the statute of limiations for latent construction defects and never received the necessary number of votes by Owners to proceed. This Board is out of control.

  2. As a follow-up on our “Rockery Wall Lawsuit Appeal” Post, SU questions why the Board waited until October 21st to meet in executive session with the SOA Attorney to discuss appealing the decision handed down by the Court on October 2nd? Given the 30 day filing deadline, the appeal would have to be filed by November 2nd. By waiting until October 21st and subsequently voting to appeal, either then or shortly thereafter, left no opportunity to include in an open Board meeting for discussion and vote, the next open Board Meeting being scheduled for November 18th (i.e., the annual owners meeting for budget ratification and installation of new BOD members). This action essentially denied owners of the right to express their comments/opinions on the issue before the taking of the vote and filing the appeal. Given that the Court decision was rendered on October 2nd, SU believes there was plenty of time for the Board to meet in executive seesion and then to include as an agenda item on the October 16th open Board Meeting, or at least scheduling a “special meeting” to allow owner participation. Hopefully, this was not done intentionally to preclude a discussion and voting in front of owners, but due to other circumstances. Perhaps a Board member who follows this Blog site would care to respond and put this concern to rest.

  3. As a former business owner, unfortunately having experienced the court systems from many aspects, winning some and losing some. Appealing to the Court and winning was a reasonable “bet” when our attorney thought that we might win (60 -70% chance before the appeal), Hence, I believe I can bring a voice with some experience.

    I originally believed that the insurance companies representing Somersett Development, Parsons, etc. might be persuaded to settle out of court. However, our case was so weak, they decided to fight. For the Association to win, new NV law/precedence on the statue of limitations on warranty repairs would have to be established.

    Judge Slatter did not agree! Having read the “hearing”, I would not proffer any hope that his ruling would be overturned, and a trial allowed to proceed. In fact I believe that the judge was doing us a favor by summarily dismissing our complaint. We must be mad to consider an appeal, why not throw more Association money away?

    Our attorneys are obviously miffed at having taken $300K from the Association and lost badly in court… now all they want another $15K – to lose again!

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