Westpark Owners' Ass'n v. Dist. Ct.
| Decision Date | 20 September 2007 |
| Docket Number | No. 48664.,48664. |
| Citation | 167 P.3d 421 |
| Parties | WESTPARK OWNERS' ASSOCIATION, a nonprofit corporation, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, in and for the COUNTY OF CLARK, and the Honorable Nancy M. Saitta, District Judge, Respondents, and Westpark Associates, LLC, a Nevada Limited Liability Company; and Oxbow Construction, LLC, a Nevada Limited Liability Company, Real Parties in Interest. |
| Court | Nevada Supreme Court |
Feinberg Grant Mayfield Kaneda & Litt, LLP, and Bruce G. Mayfield, Roger J. Grant, Charles M. Litt, and Daniel H. Clifford, Las Vegas, for Petitioner.
Ellis & Gordon and Aviva Y. Gordon, Las Vegas, for Real Parties in Interest.
BEFORE THE COURT EN BANC.1
By the court, MAUPIN, C.J.:
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 forth rights and remedies of homeowners, developers, and building contractors when disputes over constructional defects arise in connection with new homes or modifications to existing residential dwellings.2
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.3
NRS Chapter 40 provides Nevada homeowners with a remedial process for asserting claims against "contractor[s]"4 for defects in the construction of a "new residence" or for defects in the "alteration of or addition to an existing residence."5 Although NRS 40.630 defines a "residence" as "any dwelling in which title to the individual units is transferred to the owners," nowhere in Chapter 40 does the Legislature define the term "new residence." Important to this decision, however, is that rental apartment units are not residences for the purposes of Chapter 40.
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. Beyond Chapter 40, the district court order also foreclosed relief of any kind concerning these homes.
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,6 it erred in foreclosing any opportunity to litigate the Association's constructional defect claims arising from any additions, modifications or alterations to the units undertaken by Westpark in preparation for their release for sale. To the extent the provisions of Chapter 40 did not apply to the Association's claims, the district court also erred in foreclosing the Association's non-Chapter 40 claims.
For the reasons stated below, we grant the petition in part and instruct the district court to consider whether and the extent to which any of the alleged defects arose from alterations or additions made in preparation for sale, and whether any of the Association's non-Chapter 40 claims survive.7
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 116.8
Some months later, following problems encountered within the project, the Association served Westpark with a formal NRS Chapter 40 notice,9 alleging numerous constructional defects. Westpark responded by filing a complaint for declaratory and injunctive relief. It alleged in the action that the Association had no rights against Westpark in connection with the original 36 units released by Park Lake; that the Association was barred from bringing any constructional defect claims under NRS Chapter 40 with respect to the 108 units, as the units were not "new" or constructed as "residences" within the provisions of NRS Chapter 40; and that the individual homeowners had waived their constructional defect claims in the individual contracts of sale. In response, the Association filed answers and counterclaims, alleging claims for breach of implied warranty, breach of express warranty, and negligence.
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.10 This original writ petition challenges the district court's partial summary judgment in favor of Westpark. As indicated, we conclude that the Association may have limited rights to proceed under NRS Chapter 40 as well as to pursue non-Chapter 40 claims.
Propriety of writ relief
A writ of mandamus is available "to compel the performance of an act which the law . . . [requires] as a duty...
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