167 P.3d 421 | Nev. | 2007
OPINION
This case comes to us by way of an original petition for a writ of mandamus or prohibition. In granting this petition in part, we consider and determine the scope of Nevada’s residential constructional defect statutes, contained within NRS Chapter 40 from NRS 40.600 through NRS 40.695. In general, this legislation sets
Petitioner Westpark Owners’ Association (Association), a 144-unit condominium homeowners’ association, gave written notice of constructional defects under NRS Chapter 40 to the project developer and contractor, real parties in interest Westpark Associates, LLC, and Oxbow Construction, LLC (collectively, Westpark). In response, Westpark filed a preemptive declaratory relief action in the district court seeking, among other things, a judicial determination that the Association could not proceed against Westpark under NRS Chapter 40 or otherwise. This petition challenges the respondent district court’s entry of partial summary judgment in the declaratory relief action in favor of Westpark.
SUMMARY OF DECISION
NRS Chapter 40 provides Nevada homeowners with a remedial process for asserting claims against “contractor[s] ”
With these precepts in mind, the district court determined that 108 of the 144 Westpark condominium units had been originally developed as apartments and thus, despite their ultimate sale to the Association’s members, those units could not be the subject of relief under NRS Chapter 40. It additionally determined that the units, after their sale to the public as condominiums, were not “new” residences subject to the Chapter 40 legislative scheme.
In summary, for NRS Chapter 40 remedies to apply, affected dwellings must be “residences” under NRS 40.630 and be either “new” or include newly completed improvements under NRS 40.615. Because title to the condominium units constructed by Westpark transferred to individual purchasers at the time of sale, we conclude that the 108 units clearly qualified as “residences” under the plain meaning of NRS 40.630. Unfortunately, whether the units were “new” cannot be resolved under a plain reading of NRS 40.615. Accordingly, because the Legislature has not seen fit to define what constitutes a “new” residence for the purpose of lodging statutory constructional defect claims, we must interpret Chapter 40 and provide a reasonable definition of that term. As discussed below, we determine that, for the purposes of NRS Chapter 40, a residence is “new” only if it is a product of original construction that has been unoccupied as a dwelling from the completion of its construction to the point of sale. Because the homes in question in this case were occupied for a period of years by residential tenants before their ostensible “conversion” or release for sale to the general public by Westpark, we conclude that the homes were not “new” residences covered by NRS Chapter 40.
The NRS Chapter 40 statutory scheme applies exclusively to constructional defect claims lodged in connection with new residences as defined in this opinion and to newly effected improvements to existing residences. In the underlying proceedings, the district court was required to determine whether the units constructed by Westpark were “new” under NRS 40.630 or included newly completed improvements under NRS 40.615, and whether any of the Association’s non-Chapter 40 claims for negligence and breach of warranty survived. While the court correctly determined that the units in question were not “new” residences covered by the NRS Chapter 40 remedial scheme,
For the reasons stated below, we grant the petition in part and instruct the district court to consider whether and the extent to
FACTS AND PROCEDURAL HISTORY
This case involves a residential development located in Las Vegas, Nevada. An entity known as Park Lake Partnership originally developed the project on a partial basis, including common areas and 36 residential condominium units. All of the 36 units were sold in the initial release to the general public.
Park Lake eventually declared bankruptcy without completing the project. In the course of the Park Lake bankruptcy proceedings, Westpark acquired the property and ultimately built an additional 108 units within the complex. However, due to a decline in the local real estate market, Westpark opted to lease the added units rather than immediately offer them for sale. These units were referred to as “apartments,” rather than “condominiums” in several loan financing documents. Nonetheless, the building permits and certificates of occupancy identified the units as ‘ ‘new condominiums” and, at the completion of construction, Westpark annexed the 108 units into the existing homeowners’ association, forming the 144-unit “Westpark Owners’ Association.”
Westpark leased the additional 108 units to individual tenants from 1997 until 2003, when it began to offer the units for sale on the open market. It entered into separate sales agreements with each buyer, under which the buyer purportedly waived “any” possible constructional defect claims pursuant to NRS Chapters 40 and 116.
Some months later, following problems encountered within the project, the Association served Westpark with a formal NRS Chapter 40 notice,
The district court ultimately entered partial summary judgment in favor of Westpark, declaring generally that Westpark had “no liability” in connection with the development or sale of the 108 later-constructed units. This determination was supported, in part, by the following conclusions of law in the written order:
• NRS 40.630 defines a “Residence” as any dwelling in which title to the individual units is transferred to the owners;
• NRS 40.615 defines “Constructional defect” as a defect in the design, construction, manufacture, repair or landscaping of a new residence, [sic] of an alteration of or addition to an existing residence;
• Oxbow was not a contractor as defined by NRS 40.620 because it constructed an apartment project where title to the individual units was not transferred;
• Westpark [Associates] was not a contractor as defined by NRS 40.620 because it developed an apartment project where title to the individual units was not transferred. Furthermore, when Westpark [Associates] did transfer title in 2003, it did not transfer title to a new residence as contemplated by NRS 40.615.
Beyond these explicit conclusions of law, the challenged order prevents the Association from pursuing any claims concerning the 108 units, thus also foreclosing any causes of action by the Association in connection with alterations or modifications Westpark may have made in preparing the units for sale, as well as non-Chapter 40 claims for breach of warranty or negligence.
DISCUSSION
Propriety of writ relief
A writ of mandamus is available ‘ ‘to compel the performance of an act which the law . . . [requires] as a duty resulting from an of
This case presents significant questions of law concerning the scope of constructional defect remedies under NRS Chapter 40. And, as acknowledged in previous decisions of this court, the purchase of a home is the largest investment most consumers will ever make.
This court reviews questions of statutory interpretation, such as interpretation of NRS Chapter 40, de novo.
Applicability of NRS Chapter 40 to the Association’s claims
NRS Chapter 40 provides a comprehensive procedural process for resolving constructional defect disputes between contractors and homeowners, under which a homeowner must provide notice of defects and give the contractor an opportunity to inspect and repair.
Meaning of “residence”
NRS 40.630 defines “ ‘[residence’ [as] any dwelling in which title to the individual units is transferred to the owners.’ ’ Westpark maintains that, under this definition, the district court correctly determined that it did not construct residences because the units were originally built as apartments. We reject that proposition. Whether or not these units were constructed as apartments or condominium units,
Meaning of “new” or “altered” residence
Because we determine that the 108 units constructed by West-park were “residences” under NRS 40.630, we must address
As demonstrated by the parties’ arguments, the term “new residence,” as used in NRS 40.615, is subject to more than one reasonable interpretation. Because the Legislature has addressed this issue with “imperfect clarity,” and the meaning is therefore ambiguous, it is our responsibility to discern the law.
Nonetheless, while this court must interpret NRS Chapter 40 “in light of the policy and the spirit of the law,” our interpretation must also avoid absurd results.
Because the 108 units constructed and sold by Westpark were occupied as dwellings for a period of seven years before their sale to the general public, we conclude that these residences were not “new residences” under our interpretation of NRS 40.615 and that the remedies of NRS Chapter 40 do not generally apply to the Association’s claims as to those units. That said, NRS 40.615 provides that a constructional defect can also exist “in the design, construction, manufacture, repair or landscaping ... of an alteration of or addition to an existing residence.” Thus, if Westpark altered or repaired the units before their sale to the general public, the Association may still be able to advance some of its claims under the provisions of NRS Chapter 40 if the defects concern the alterations or additions.
CONCLUSION
Because title to the 108 condominium units constructed by West-park transferred to individual purchasers at the time of sale, the units in question here were “residences” for the purposes of NRS Chapter 40. However, as the units were occupied on a rental basis for seven years before sale, we conclude that the units were not “new” under NRS 40.615. Therefore, the remedies of NRS Chapter 40 only apply to the Association’s claims if Westpark altered or repaired the units prior to sale and the defects are related to those alterations or repairs.
Accordingly, we conclude that the district court abused its discretion in foreclosing the opportunity to litigate the Association’s claims arising from any alterations or repairs to the 108 condominium units, and in foreclosing any of the Association’s non-Chapter 40 claims. We therefore grant the Association’s petition for a writ of mandamus. We direct the clerk of this court to issue a writ of mandamus directing the district court to: (1) vacate its partial summary judgment order, (2) determine whether Westpark altered or repaired the 108 units before sale and whether any of the Association’s defect claims arose from those alterations,
See NRS 40.615 (defining “constructional defect”). While NRS Chapter 40 embraces a broad range of actions and proceedings concerning property disputes beyond constructional defect claims, the residential constructional dispute provisions found in NRS 40.600 through 40.695 have become known in common parlance as “Chapter 40 remedies.” See Olson v. Richard, 120 Nev. 240, 243, 89 P.3d 31, 33 (2004) (noting that “the Legislature enacted Chapter 40 to aid in resolving construction defects disputes between contractors and homeowners”). As stated, Chapter 40 is not restricted to constructional defect claims.
See NRCP 56.
NRS 40.640.
NRS 40.615.
As explained infra, the district court erred in its conclusion of law that the 108 units were not “residences” under the statute, but it correctly determined that the units were not “new.”
We have further noted that the general waivers executed by Association members will be unenforceable to bar such claims. See infra notes 37-38.
NRS Chapter 116, commonly known as the Uniform Common-Interest Ownership Act, provides certain rights and remedies with regard to condominium developments.
See NRS 40.645 (requiring that claimant give written notice of constructional defects before filing a cause of action for a constructional defect).
The district court denied summary judgment with respect to the 36 units and common areas constructed by Park Lake, to allow a period of discovery to determine whether Westpark or Oxbow had altered or improved those units.
NRS 34.160.
See Round Hill Gen. Imp. Dist. v. Newman, 97 Nev. 601, 603-04, 637 P.2d 534, 536 (1981).
NRS 34.320; Houston Gen. Ins. Co. v. District Court, 94 Nev. 247, 248, 578 P.2d 750, 751 (1978).
State of Nevada v. Dist. Ct. (Ducharm), 118 Nev. 609, 614, 55 P.3d 420, 423 (2002); Smith v. District Court, 107 Nev. 674, 677, 818 P.2d 849, 851 (1991).
NRS 34.170; NRS 34.330; see also Ducharm, 118 Nev. at 614, 55 P.3d at 423.
See Guerin v. Guerin, 114 Nev. 127, 131, 953 P.2d 716, 719 (1998), overruled on other grounds by Pengilly v. Rancho Santa Fe Homeonwers, 116 Nev. 646, 5 P.3d 569 (2000).
Ducharm, 118 Nev. at 614, 55 P.3d at 423.
Calloway v. City of Reno, 116 Nev. 250, 261, 993 P.2d 1259, 1266 (2000).
See Consolidated Generator v. Cummins Engine, 114 Nev. 1304, 1312, 971 P.2d 1251, 1256 (1998) (explaining that although an interlocutory order is not independently appealable, it may be challenged in the context of an appeal from the final judgment or order).
Marquis & Aurbach v. Dist. Ct., 122 Nev. 1147, 1156, 146 P.3d 1130, 1136 (2006).
Erwin v. State of Nevada, 111 Nev. 1535, 1538-39, 908 P.2d 1367, 1369 (1995).
Baron v. District Court, 95 Nev. 646, 648, 600 P.2d 1192, 1193-94 (1979).
Gallagher v. City of Las Vegas, 114 Nev. 595, 599, 959 P.2d 519, 521 (1998).
Hunt v. Warden, 111 Nev. 1284, 1285, 903 P.2d 826, 827 (1995).
Id.
NRS 40.645 (notice requirements); NRS 40.647 (opportunity to inspect and repair the alleged defect); NRS 40.655 (limitations on recovery including attorney fees); see also Olson v. Richard, 120 Nev. 240, 243, 89 P.3d 31, 33 (2004).
NRS 40.635(4).
NRS 40.680.
NRS 40.635(2)-(3).
NRS 40.640 (setting forth liability of “contractor”), specifically provides,
In a claim to recover damages resulting from a constructional defect, a contractor is liable for his acts or omissions or the acts or omissions of his agents, employees or subcontractors and is not liable for any damages caused by:
1. The acts or omissions of a person other than the contractor or his agent, employee or subcontractor.
NRS 40.615 defines “constructional defect” as
a defect in the design, construction, manufacture, repair or landscaping of a new residence, of an alteration of or addition to an existing residence, or of an appurtenance and includes, without limitation, the design, constmction, manufacture, repair or landscaping of a new residence, of an alteration of or addition to an existing residence, or of an appurtenance ....
(Emphasis added.)
We incidentally note that the district court incorrectly determined that the 108 units were originally constructed as apartments rather than condominium units. NRS 116.027 defines “condominium” as “a common-interest community in which portions of the real estate are designated for separate ownership and the remainder of the real estate is designated for common ownership solely by the owners of those portions.” While Westpark may have identified the units as “apartments” in several loan financing documents related to the project, the buildings were mapped as condominiums, and the building permits and cer
Baron v. District Court, 95 Nev. 646, 648, 600 P.2d 1192, 1193-94 (1979).
See Hearing on S.B. 395 Before Assembly Comm. on the Judiciary, 68th Leg., at 23 (Nev., June 23, 1995) (statement of Valerie Cooney) (“This is an act which creates a legislative expression of the rights and obligations of individuals who contract to build homes and to purchase them. It also creates the procedures to enforce those rights and obligations.”).
Hunt v. Warden, 111 Nev. 1284, 1285, 903 P.2d 826, 827 (1995).
NRS 40.615.
Because the district court granted summary judgment on the basis that Westpark and Oxbow did not construct “residences” pursuant to NRS 40.630, it did not reach Westpark and Oxbow’s claims that provisions in the individual sales agreements for the 108 units constituted a valid waiver of the Association’s claims under NRS Chapter 40. If the district court determines that the Association has asserted viable claims pursuant to NRS Chapter 40, we conclude that the alleged contractual waivers are clearly invalid. While NRS 40.640(5) allows a contractor and homebuyer to stipulate to a waiver of any potential claims under NRS Chapter 40, the “waived” constructional defect must be disclosed to the buyer in clear language before the purchase of the residence. Here, the waivers did not disclose any constructional defects; they stated only that certain defects “may” exist and listed a number of potential defects. This vague language was not sufficient to waive any claims pursuant to NRS Chapter 40.
See, e.g., NRS 116.4115 (providing that general “as is” language does not effectively waive implied warranties of quality with respect to residential common-interest units).