338 P.3d 1250
Nev.2014Background
- Elsinore, LLC bought a foreclosed lot in the Peccole Ranch planned community; a preexisting association lien for unpaid assessments remained on the property.
- After purchase Elsinore requested an accounting and stated it would not pay assessments not authorized by NRS 116.3116; an agent of the association (G.J.L./NAS) demanded payment and warned of the lien.
- Elsinore paid the demanded amount and later sold the property; about three years later it filed an administrative complaint with NRED on behalf of itself and a putative class alleging excessive lien demands in violation of NRS 116.3116 and the CC&Rs.
- Peccole Ranch sued for declaratory relief; Elsinore counterclaimed (class claims) for damages; the district court certified the class and denied Peccole Ranch’s motion to dismiss the unmediated/unarbitrated counterclaims.
- NAS (association agent) moved for summary judgment arguing the voluntary payment doctrine bars recovery; the district court denied summary judgment, finding Elsinore paid under duress/to save property. NAS and Peccole petitioned this court for writ relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Nevada recognizes the voluntary payment doctrine as a defense to recovery of payments | Elsinore: doctrine should not bar claims where payments were disputed or challenged administratively | NAS/Peccole: doctrine is valid and bars recovery of voluntarily paid assessments | Court: Nevada recognizes the voluntary payment doctrine as a valid affirmative defense |
| Whether Elsinore’s payment was involuntary (duress/business compulsion) so an exception applies | Elsinore: payment was made under business compulsion/duress because refusing would have jeopardized property sale or interest | NAS/Peccole: Elsinore had reasonable alternatives (NRED mediation/arbitration) so no duress | Held: Elsinore failed to show it lacked reasonable alternatives; no duress exception applies |
| Whether Elsinore paid in defense of property (exception to doctrine) | Elsinore: payment was to remove a lien and protect property interest | NAS/Peccole: a mere lien, absent imminent foreclosure or lack of legal remedies, does not force involuntary payment | Held: Cobb exception inapplicable—no evidence of imminent foreclosure or lack of remedies; defense-of-property exception fails |
| Scope of relief as to class members beyond Elsinore | Elsinore: class-wide relief should survive because all class members paid under similar circumstances | NAS/Peccole: summary judgment should bar class recovery too | Held: Petition granted only as to Elsinore; petitioners failed to show voluntariness for other class members, so summary judgment limited to Elsinore’s claims |
Key Cases Cited
- Best Buy Stores v. Benderson-Wainberg Assocs., 668 F.3d 1019 (8th Cir. 2012) (definition and general application of the voluntary payment doctrine)
- Berrum v. Otto, 255 P.3d 1269 (Nev. 2011) (voluntary payment doctrine discussed; statutory right to challenge payments can remove doctrine’s application)
- Emp'rs Ins. of Wausau v. United States, 764 F.2d 1572 (Fed. Cir. 1985) (business compulsion/duress requires lack of reasonable alternatives)
- Randazzo v. Harris Bank Palatine, N.A., 262 F.3d 663 (7th Cir. 2001) (plaintiff who voluntarily pays may recover only upon showing fraud, coercion, or mistake)
- Ross v. City of Geneva, 357 N.E.2d 829 (Ill. App. Ct. 1976) (payment under duress where sole provider and no protest mechanism existed)
- Cobb v. Osman, 433 P.2d 259 (Nev. 1967) (recognized defense-of-property exception where payor risked loss of other property interests)
- Hamm v. Arrowcreek Homeowners' Ass'n, 183 P.3d 895 (Nev. 2008) (lien alone does not transfer title; foreclosure required to threaten loss of property)