Court Opinion

ID: 5136353
Source: CourtListenerOpinion
Date Created: 2021-12-20 09:08:40.700682+00
Date Added: 2024-06-11T08:23:54.969044
License: Public Domain

137 Nev., Advance Opinion      41
                       IN THE SUPREME COURT OF THE STATE OF NEVADA

                PANORAMA TOWERS                                        No. 80615
                CONDOMINIUM UNIT OWNERS'
                ASSOCIATION, A NEVADA
                NONPROFIT CORPORATION,
                Appellant,
                vs.                                                      FILED .•••
                LAURENT HALLIER, AN
                INDIVIDUAL; PANORAMA TOWERS I,
                LLC, A NEVADA LIMITED LIABILITY
                COMPANY; PANORAMA TOWERS I
                MEZZ, LLC, A NEVADA LIMITED
                LIABILITY COMPANY; AND M.J.
                DEAN CONSTRUCTION, INC., A
                NEVADA CORPORATION,
                Respondents.

                            Appeal from a district court order granting summary judgment,
                certified as final under NRCP 54(3), in a construction defect action. Eighth
                Judicial District Court, Clark County; Susan Johnson, Judge.
                            Vacated and remanded.

                Kemp Jones, LLP, and Michael J. Gayan and Joshua D. Carlson, Las Vegas;
                Lynch & Associates Law Group and Francis I. Lynch, Henderson; Williams
                & Gumbiner, LLP, and Scott A. Williams, San Rafael, California,
                for Appellant.

                Lewis Roca Rothgerber Christie LLP and Daniel F. PoIsenberg, Joel D.
                Henriod, and Abraham G. Smith, Las Vegas; Bremer Whyte Brown &
                O'Meara LLP and Peter C. Brown, Jeffrey W. Saab, and Devin R. Gifford,
                Las Vegas,
                for Respondents.

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BEFORE THE SUPREME COURT, EN BANC.'

                                 OPINION
By the Court, HERNDON, J.:
             Appellant Panorama Towers Condominium Unit Owners'
Association filed a construction defect claim against respondents
(collectively, the Builders), which the district court concluded was time-
barred under the NRS 11.202 statute of repose. The Association filed two
motions to alter or amend the court's resulting sumrnary judgment. Before
the district court considered the second motion, the Legislature amended
the statute of repose to extend the filing deadline and specified that the
amendment was retroactive. The amended statute also became effective
before the district court considered the second motion. Nevertheless, the
district court denied the Association's motion to alter or amend the
judgment. We conclude that, in accordance with our opinion in
Dekker I Perich 1 Sabatini Ltd. v. Eighth Judicial District Court, 137 Nev.,
Adv. Op. 53, 495 P.3d 519 (2021), because the amended statute of repose
was retroactive and, under that statute of repose, the Association's
construction defect claim was timely, the district court erred in denying the
motion.
                                  FACTS
             The Builders constructed the Panorama Towers in Las Vegas,
including 616 units across two high-rise condominium buildings.
Substantial completion of each tower corresponded with the date of its
respective certificate of occupancy, which issued on January 16, 2008, and

      1The  Honorable Abbi Silver, Justice, voluntarily recused herself frorn
participation in the decision of this matter.

                                     2
                       March 31, 2008.2 The Association filed an initial construction defect action
                       against the Builders in 2009, and the parties settled that action in June
                       2011, but the settlement agreement applied only to known defects at that
                       time.
                                      The Association sent the relevant underlying NRS 40.645 notice
                       of construction defect to the Builders on February 24, 2016. In addition to
                       other defects, the notice asserted that all of the residential units window
                       assemblies were defective.3 The notice alleged that the defect permits water
                       to enter the assemblies, causing corrosion to the metal parts and
                       components of the wall and floor assemblies, which creates an unreasonable
                       risk of structural degradation and injury to person and property.
                                      NRS Chapter 40 requires builders to have certain opportunities
                       to investigate and repair construction defects and requires parties to
                       mediate the construction defect claims before an action can be filed. See
                       NRS 40.647; NRS 40.648; NRS 40.652; NRS 40.670; NRS 40.680. The
                       prelitigation construction defect proceedings, including mediation, were
                       completed on September 26, 2016. Two days later, the Builders filed an
                       action against the Association seeking declaratory relief and damages,
                       asserting that the previous settlement agreement precluded the underlying

                               2Tothe extent the Association challenges the substantial completion
                       dates, the Association has waived this argument on appeal by not raising it
                       in its opening brief. See Khoury v. Seastrand, 132 Nev. 520, 530 n.2, 377
                       P.3d 81, 88 n.2 (2016) (providing that issues raised for the first time in a
                       reply brief are waived).

                               3The
                                  notice also addressed other defects, but the district court
                       dismissed the claims pertaining to those defects because the notice was
                       insufficient to demonstrate the defects without extrapolation, and the
                       Association does not challenge the dismissal of those defects' claims in this
                       appeal.
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                construction defect claims and the NRS Chapter 40 notice was insufficient.
                On March 1, 2017, the Association filed its answer and counterclaim
                asserting its construction defect causes of action, roughly nine years after
                substantial completion of the towers.
                             The Builders moved for summary judgment, arguing that the
                Association's construction defect claim was time-barred under the statute
                of repose in NRS 11.202(1) (2015) because it was not filed within six years
                of the substantial completion of each tower.. See 2015 Nev. Stat., ch. 2, § 17,
                at 17. The district court concluded that because the Association filed its
                NRS Chapter 40 notice on the last day of the six-year statute of repose,
                when considering the grace period provided for in the 2015 amendment to
                NRS 11.202(1), the NRS Chapter 40 notice tolled that statute of repose.4
                The court also concluded, however, that the NRS Chapter 40 notice tolled
                the statute of repose only until 30 days after the preligitation proceedings
                were completed, and because the Association did not file its answer and
                counterclaim during those 30 days, the Association's construction defect
                claim was time-barred. Thus, the district court granted the Builders'
                motion for summary judgment and dismissed the Association's construction
                defect claim on May 23, 2019.
                             Thereafter, on June 3, 2019, the Governor signed into law
                Assembly Bill (A.B.) 421, which amended NRS 11.202s statute of repose
                from six years to ten years. 2019 Nev. Stat., ch. 361, at 2257 & § 7, 2262.
                The Association filed a motion to alter or amend the court's order dismissing
                the construction defect claim in light of A.B. 421. The Builders opposed the

                      4The district court reached this conclusion before our opinion in Byrne
                v. Sunridge Builders, Inc., 136 Nev. 604, 475 P.3d 38 (2020), clarified that
                an NRS Chapter 40 notice cannot toll the statute of repose.
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                 motion and requested the district court certify its order dismissing the
                 construction defect claim as final under NRCP 54(b). The district court
                 denied the motion to alter or amend its order, concluding that A.B. 421 did
                 not become effective until October 1, 2019. The district court also granted
                 the Builders motion for NRCP 54(b) certification.
                                On September 9, 2019, the Association filed its second motion
                 to alter or amend the judgment based on A.B. 421. Although filed before
                 October 1, 2019, when A.B. 421 became effective, the hearing on the motion
                 did not occur until after that date. On January 14, 2020, the district court
                 denied the Association's motion, concluding the court had properly
                 determined the claim was time-barred based on the effective law at the
                 time.
                                                 DISCUSSION
                                An NRCP 59(e) motion to alter or amend a judgment may be
                 appropriate to correct "manifest errors of law or fact," address "newly
                 discovered or previously unavailable evidence," "prevent manifest
                 injustice," or address a "change in controlling law." AA Primo Builders, LLC
                 v. Washington, 126 Nev. 578, 582, 245 P.3d 1190, 1193 (2010) (internal
                 quotation marks omitted). We review an order denying an NRCP 59(e)
                 motion for an abuse of discretion. Id. at 589, 245 P.3d at 1197.
                                The 2015 version of NRS 11.202(1) precluded construction
                 defect actions from being filed more than six years after the substantial
                 completion of an improvement. A.B. 421 changed the repose period in NRS
                 11.202(1) from six years to ten years.5 2019 Nev. Stat., ch. 361, § 7, at 2262.

                         5NRS11.202(1) is a statute of repose because it precludes actions after
                 a certain amount of time, regardless of injury. See Libby v. Eighth Judicial
                 Dist. Court, 130 Nev. 359, 364 n.1, 325 P.3d 1276, 1279 n.1 (2014)
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                A.B. 421 also provided that "Mhe period of limitations on actions set forth
                in NRS 11.202, as amended by section 7 of this act, apply retroactively to
                actions in which the substantial completion of the improvement to the real
                property occurred before October 1, 2019." Id. at § 11, at 2268.
                            While A.B. 421 was signed into law on June 3, 2019, the
                amendment of the statute of repose did not become effective until
                October 1, 2019. NRS 218D.330(1) provides that "[e]ach law and joint
                resolution passed by the Legislature becomes effective on October 1
                following its passage, unless the law or joint resolution specifically
                prescribes a different effective date." A.B. 421 did not prescribe a different
                effective date for the amendment to the statute of repose. Further, even
                though the amendment to the statute of repose was explicitly applicable
                retroactively, a retroactive-application provision does not alter a hill's
                effective date. Thus, the amended statute of repose in A.B. 421 became
                effective on October 1, 2019, and was not retroactive until that date.
                            Accordingly, at the time the district court considered the
                Association's second motion to alter or amend the judgment, there had been
                a change in controlling law since the entry of the judgment. Instead of
                considering this change in controlling law, the district court determined
                that alteration or amendment of the judgment was unnecessary because the
                court had properly concluded that the Association's claim was time-barred
                under the applicable law at the time the judgment was entered. The district
                court failed to consider the fact that the amended statute of repose was

                (explaining that "[a] statute of repose bar[s] causes of action after a certain
                period of time, regardless of whether damage or an injury has been
                discovered, whereas, a statute of limitations forecloses suit after a fixed
                period of time following the occurrence or discovery of an injury" (second
                alteration in original) (internal citations and quotations omitted)).
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                       retroactive, which changed the applicable law not only at the time the court
                       considered the motion, but also at the time the judgment was entered. In
                       re Estate of Thomas, 116 Nev. 492, 495-96, 998 P.2d 560, 562 (2000) ("The
                       general rule is that statutes are prospective only, unless it clearly, strongly,
                       and imperatively appears from the act itself that the legislature intended
                       the statute to be retrospective in its operation."); 2019 Nev. Stat., ch. 361,
                       § 11, at 2268 (providing that the change to the statute of repose applies
                       retroactively). Because A.B. 421s statute of repose was retroactive, the
                       Legislature intended it to apply to construction defect actions pending as of
                       October 1, 2019. See Dekker I Perich I Sabatini Ltd. v. Eighth Judicial Dist.
                       Court, 137 Nev., Adv. Op. 53, 495 P.3d 519 (2021) (explaining that the
                       Legislature intended NRS 11.202s amended statute of repose to apply
                       retroactively to projects completed before October 1, 2019, "to relieve
                       prejudice to Nevada landowners who were unaware of property damage
                       that did not manifest within the six-year repose period"). As soon as A.B.
                       421 became law on October 1, 2019, all construction defect actions filed
                       within ten years of substantial completion of the project were no longer
                       time-barred. See id. Because the Association's construction defect action
                       was filed within nine years of the substantial completion of each of the
                       towers, the action was no longer time-barred. Accordingly, the district court
                       abused its discretion in denying the Association's second motion to alter or
                       amend the judgment.
                                                      CONCLUSION
                                   A.B. 421 became effective on October 1, 2019. As of that date,
                       the statute of repose for filing construction defect claims was ten years from
                       substantial completion of the project. Further, that change in the law
                       applied retroactively. Because the district court did not consider the

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                retroactive change in the controlling law when denying the Association's
                second motion to alter or amend the judgment, we conclude the district
                court abused its discretion in denying that motion. Accordingly, as the court
                should have granted the Association's second motion to alter or amend the
                judgment, we vacate the district court's summary judgment and remand
                this matter for proceedings consistent with this opinion.6

                                                        çÇ
                                                                                   J
                                                      Herndon

                We concur:

                Hardesty

                                                 J.
                Parraguirre

                Stiglich

                                             7   J

                                             ,   J
                Pickering

                      61nlight of this opinion, we need not reach the other arguments raised
                by the parties on appeal.
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