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.

10 thoughts on “SOA Legal Complaint Against the SGCC

  1. Not only did the SGCC benefit from the Rockery Wall Repair, I maintain that the SGCC members, serving as Board members, profited, as well in violation of NRS 116.31034, item 10 (a) (2), unless they have personally reimbursed the SOA. If they are guilty of violation of NRS, I believe this would invalidate indemnity by SOA legal.

    1. Agree. NRS 116.31034(10)
      (a) A person may not be a candidate for or a member of the executive board of the association if:
      (2) The person stands to gain any personal profit or compensation of any kind from a mater before the executive board of the association.

      1. Whether those in question voted on anything related, or not, they may have influenced other board members in other ways, thus benefiting from being on the board. They should have stated their conflicts of interest when running for election.

  2. I am in agreement with Patricia Brooks. The HOA Board Members have a legal fiduciary duty to the entire community to not personally benefit from any issue that poses itself as a CONFLICT OF INTEREST. In this instance, any board member who is also a member of the Country Club, must recuse himself from any involvement or vote regarding this issue or they can face personal legal action by the Homeowners individually or collectively. This should also be reported to the State Department of Real Estate.

  3. Even in these very troubled pandemic times: we all live in a wonderful high mountain desert community, surrounded by stunning mountain vistas that make all feel great to be alive. To maintain our “world” we all have to be a part, play a part and contribute financially to ensure that we have and can maintain a viable social fabric.

    In 2019 each resident household contributed $1200 to fix storm damage to the rockery walls which fell down. ~$215 of this was used to pay for repairs to walls on SOA owned land leased to a private golf course. Our community owns ~400 Acre Feet of water rights, which are leased to the private golf course, who have an agreement to maintain the wells, catchment lakes and pumping stations
    required to water the 200 acre golf course. The law suit indicates that the Private Golf Club have failed to live up to their agreement, and have allowed the “water system” to fall into disrepair … requiring approximately another up to $700K in fix-up costs …. yet another special assessment of ~$215 each?

    I would like to suggest that all resident members of the private golf course who are on the Board or who live here in Somersett and are truly community minded, believe in social harmony, Make a personal contribution for their share of the repairs to the Association … a quick calculation indicates (at 300 members) that it is ~ $2100 each for the Rockery Wall repair. Plus another $2000 each towards fixing the water issues? Doing that will surely convince fellow residents that they are complying with NRS 116.31034 (10).

    We all have to live here together

    1. As we have no information/meeting minutes from the focus group established to help resolve SGCC/SOA issues with possible solutions.. time to look at:

      1. Additional SGCC member user fee assessed monthly at a reasonable rate to bring in revenue in support of funds due/required to meet signed agreements.
      2. Restart the process on resolving issues and hold all special meeting public using zoom and recorded so all of our great community can review.
      3. Work with SGCC to dissolve the SGCC, pay what is due and bring in a management group to run and market our course.
      4. Scaling down to possible 9 holes and going green with adding appropriate amenities to support all of Somersett.
      5. Put responsible adults in a Zoom meeting, have a dedicated agenda and get a solution(s) to propose to our community.

      Enough is enough. Back and forth, wasting legal fees, covering for all the past fees/mistakes… it is time to move forward and make Somersett a real community of family, friends and focused.

      Anyone seen a 3-5 year short term plan or 20 year plan for our community???

      1. I volunteered to work on the Facilities Committee, which, at the time included Strategic Planning.., for the very reason you ask about (about 3 years ago..) The board at the time did not want any opinions opposing the SGCC, so they removed Strategic Planning from that committee, and established it as a board function. Geoffrey volunteered for the Finance Committee, a couple of times, but they did not want him on that committee, for the same reason..possible opposing views on the SGCC. He was well-qualified..

  4. I am pleased to see that the BOD has acted to protected the interests of all SOA homeowners. SGCC signed a contract and they should honor the terms of it, SOA has subsidized SGCC by millions and never got so much as a thank you.

    1. Dan, I totally agree that its about time that a SOA Board has done its fiduciary duty and finally seems to be acting in the interest of all the homeowners rather than SGCC. If SGCC can’t or won’t meet its legal obligations its time for it to foreclose.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s