SOA Legal Complaint Against the SGCC

On June 5th the Somersett Owners Association (SOA) filed a Complaint with the Washoe County District Court (Case No. CV20-00872) against the Somersett Golf and Country Club (SGCC). The Complaint addresses two issues 1) Liability for Rockery Wall failure repairs and 2) Liability for Water Well Pump repairs. The filed Complaint consists of seventeen pages and may be accessed via the following link:

SOA Complaint Against SGCC, CV20-00872

In summary the Complaint (allegations) against the SGCC is based on the following:

  1. Failure to live up to the Warranty provisions of Section 9A of the Purchase Agreement (whereby the SOA purchased the Land and Water Rights owned by the SGCC), which included a four-year warranty provision, wherein the SGCC agreed, at their expense, to repair damage to or destruction of any part of the purchased property.
  2. Failure to live up to Section 8.1 of the Lease Agreement (whereby the SOA leased back the land and water rights to the SGCC) wherein the SGCC agreed, at their expense, to remedy all damage to or destruction of any part of the leased property.

The Complaint documents the history between the Parties’ leading up to the filing of the Complaint and categorizes seven “Causes of Action” against the SGCC as follows (as paraphrased by SU):

  1. Breach of Contract – The SGCC breached the contractual provisions of the Purchase Agreement, Lease Agreement and Water Facilities Agreement.
  2. Breach of Implied Covenant of Good Faith and Fair Dealing – The SGCC deliberately failed to perform the terms, provisions and covenants required by the Purchase, Lease and Water Facilities Agreements, including failing to reimburse the SOA for expenses incurred to repair the Rockery Wall failure damage.
  3. Breach of Express Warranty – The SGCC breached the express warranty of the Purchase Agreement by failing to repair the Rockery Wall damage.
  4. Unjust Enrichment – The SGCC unjustly benefitted from the SOA repairing the Rockery Wall damage, at SOA expense, without subsequent reimbursement from the SGCC.
  5. Equitable Relief/Specific Performance – The SGCC improperly replaced a failed Water Well pump (i.e., with an undersized pump), which risks under-utilization and abandonment of essential water rights.
  6. Declaratory Relief – A request for a judicial determination on the part of the Court as to the Parties’ rights and duties under the Purchase and Lease Agreements, as well as their rights and duties pertaining to the Rockery Wall failure. Also, a request for an order awarding the SOA the entire amount of expenses it incurred to repair the Rockery Wall damaged area.
  7. Equitable Relief – Specific Performance for Termination and Turnover of Premises – Given that the SGCC has defaulted on the terms of the Lease Agreement, as an alternate remedy, the SOA seeks eviction and turnover of the Premises, at its election, at the time of trial.

In summary, the SOA is seeking judgments against the SGCC as follows:

  1. For general, special, and compensatory damages
  2. Award of attorney fees and costs
  3. Judgement if favor of the SOA
  4. Water Well pump replacement
  5. An order to turn over the premises to the SOA
  6. A declaration of the Parties’ rights and obligations
  7. An award of pre-judgment and post-judgment interest

Note that the Complaint did not include any dollar value associated with the SOA’s incurred expenses for repair of the damaged area caused by the Rockery Wall failures, of which there were two, an upper wall on SOA common area property and a lower wall on SGCC leased property. It is the SOA’s contention (based on an engineering report) that the lower wall failure is what caused the upper wall failure and subsequent hillside damage. In a Tolling Agreement between the SOA and SGCC, which put litigation on hold, the damage repair cost was estimated at $680K. It should also be noted that the SOA had previously proposed to split the repair costs with the SGCC on a 50-50 basis.

The SGCC has filed a response to the SOA Complaint along with a Counterclaim, which will be addressed in a subsequent Blog Post.