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Oxbow Constr., LLC v. The Eighth Judicial Dist. Court of the State

Supreme Court of Nevada

October 16, 2014

OXBOW CONSTRUCTION, LLC, A NEVADA LIMITED LIABILITY COMPANY, Petitioner,
v.
THE EIGHTH JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA, IN AND FOR THE COUNTY OF CLARK; AND THE HONORABLE ALLAN R. EARL, DISTRICT JUDGE, Respondents, and THE REGENT AT TOWN CENTRE HOMEOWNERS' ASSOCIATION, A NEVADA NONPROFIT CORPORATION, Real Party in Interest. THE REGENT AT TOWN CENTRE HOMEOWNERS' ASSOCIATION, A NEVADA NONPROFIT CORPORATION, Petitioner,
v.
THE EIGHTH JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA, IN AND FOR THE COUNTY OF CLARK; AND THE HONORABLE ALLAN R. EARL, Respondents, and OXBOW CONSTRUCTION, LLC, A NEVADA LIMITED LIABILITY COMPANY, Real Party in Interest

Page 1235

Consolidated original writ petitions seeking relief from two district court orders in a construction-defect matter.

Koeller Nebeker Carlson & Haluck, LLP, and Robert C. Carlson, Jr., and Megan K. Dorsey, Las Vegas, for Oxbow Construction, LLC.

Feinberg Grant Mayfield Kaneda & Litt, LLP, and Bruce Mayfield and Daniel H. Clifford, Las Vegas, for The Regent at Town Centre Homeowners' Association.

Douglas, J., Gibbons, C.J., Pickering, J., Hardesty, J., Parraguirre, J., Cherry, J., Saitta, J.

OPINION

Page 1236

BEFORE THE COURT EN BANC.

DOUGLAS, J.:

In this opinion, we consider several issues raised by consolidated writ petitions arising out of a construction-defect action. Specifically, we address whether the district court acted arbitrarily or capriciously by failing to

Page 1237

perform an NRCP 23 class-action analysis, determining that previously occupied units in a common-interest community do not qualify for NRS Chapter 40 remedies,[1] and allowing claims seeking NRS Chapter 40 remedies to proceed for alleged construction defects in limited common elements assigned to multiple units in a building containing at least one " new residence." We conclude that the district court's order was not arbitrary or capricious, and therefore, we deny both petitions.

FACTS AND PROCEDURAL HISTORY

These consolidated writ petitions arise from a construction-defect action initiated by The Regent at Town Centre Homeowners' Association against Oxbow Construction, LLC. El Capitan Associates, the original developer of The Regent at Town Centre mixed-use community (Town Centre), hired Oxbow as its general contractor. Town Centre includes 20 buildings containing 274 residential units and 10 commercial units, as well as an office and recreation building. After each building's completion, El Capitan obtained a certificate of occupancy from the Department of Building and Safety so that the building's units could be leased out as apartments.

After Town Centre's completion, El Capitan submitted a condominium plan for the complex, which the City of Las Vegas approved. After this approval, El Capitan entered into an agreement to sell Town Centre to Regent Group II, LLC (Regent II), which recorded Covenants, Conditions and Restrictions (CC& Rs) for Town Centre. As relevant here, section 5.1 of the CC& Rs, entitled " Assigned Limited Common Elements," defines certain elements as limited common elements assigned to a particular unit or units.

Adhering to their agreement, El Capitan transferred titles to Town Centre's units to Regent II in groups over a period of four months. When Regent II received the final group of titles, lessees occupied between 212 and 246 units in the complex,[2] and multiple buildings contained at least one unoccupied unit. Over a period of nine months, Regent II sold all of its condominiums to individual purchasers. The average lease to sale occupancy of the community's units was 7.7 months, and the average unit age was 11.4 months.

Pursuant to NRS 40.645, the Association, on behalf of itself and the condominium unit-owners, served Oxbow with an NRS Chapter 40 notice, alleging construction defects in exterior walls and openings, entry decks/exterior stairs, interior walls and ceilings, and sloped roofs, among other things. After receiving the notice, Oxbow filed a complaint for declaratory relief in district court seeking a determination that NRS Chapter 40 does not apply to Oxbow because the Town Centre units did not qualify as residences after being rented as apartments. In response, under NRS 116.3102(1)(d), the Association, on behalf of itself and the unit-owners, filed an answer and counterclaims for, inter alia, construction defects. Oxbow then filed a motion to dismiss the Association's counterclaims for construction defects. The district court denied Oxbow's motion, ordering limited discovery to determine which units were occupied before the title transfers from El Capitan to Regent II.

The Association filed its own motion requesting that all units, irrespective of prior occupancy, be declared " new residence[s]" under NRS 40.615 based on their chronological age and the duration of their occupancy. The district court also denied this motion. The Association then filed a second motion, this time seeking a determination that NRS Chapter 40 remedies are available for all common ...


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