Court Opinion

ID: 2644774
Source: CourtListenerOpinion
Date Created: 2013-12-03 21:22:23.909082+00
Date Added: 2024-06-11T09:02:24.971943
License: Public Domain

FILED
                            NOT FOR PUBLICATION                               DEC 03 2013

                                                                          MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

GREYSTONE NEVADA, LLC, a                         No. 12-16768
Delaware limited liability company; U.S.
HOME CORPORATION, a Delaware                     D.C. Nos. 2:11 cv-1424 RCJ
corporation,                                               2:11 cv-1422 RCJ

                Plaintiffs-Counter-Defendants
- Appellants,                                    MEMORANDUM*

  v.

ANTHEM HIGHLANDS COMMUNITY
ASSOCIATION; FIESTA PARK
HOMEOWNERS’ ASSOCIATION,

            Defendants-Counter-
Claimants - Appellees.

GREYSTONE NEVADA, LLC, a                         No. 12-16769
Delaware limited liability company; U.S.
HOME CORPORATION, a Delaware                     D.C. Nos. 2:11 cv-1424 RCJ
corporation,                                               2:11 cv-1422 RCJ

                Plaintiffs-Counter-Defendants
- Appellees,

  v.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
ANTHEM HIGHLANDS COMMUNITY
ASSOCIATION; FIESTA PARK
HOMEOWNERS’ ASSOCIATION,

            Defendants-Counter-
Claimants - Appellants,

  v.

UPONOR, INC.; UPONOR NORTH
AMERICA, INC.; UPONOR
CORPORATION; UNITED PLUMBING,
LLC; RCR PLUMBING; MECHANICAL,
INC.; INTERSTATE PLUMBING; AIR
CONDITIONING, LLC,

              Third-Party-Defendants -
Appellees.

                  Appeals from the United States District Court
                            for the District of Nevada
                Robert Clive Jones, Chief District Judge, Presiding

                     Argued and Submitted November 4, 2013
                            San Francisco, California

Before:      TASHIMA, W. FLETCHER, and NGUYEN, Circuit Judges.

       Greystone Nevada and U.S. Home Corporation (“Developers”) appeal from

the district court’s adjudication of their claims to compel subsequent purchasers to

arbitrate. Anthem Highlands and Fiesta Park Home Owner Associations

(“HOAs”) cross-appeal from the district court’s judgment compelling arbitration

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against original purchasers of homes constructed by the Developers. Both the

Developers and HOAs moved for reconsideration, and the district court denied

each motion. We have jurisdiction over the appeal under 9 U.S.C. § 16(a)(1)(B)

and over the cross-appeal under 28 U.S.C. § 1291. We review dismissals,

summary judgments, and orders compelling arbitration de novo. Akhtar v. Mesa,

698 F.3d 1202, 1212 (9th Cir. 2012); Bushley v. Credit Suisse First Boston, 360
F.3d 1149, 1152 (9th Cir. 2004); EEOC v. Luce, Forward, Hamilton & Scripps,

345 F.3d 742, 746 (9th Cir. 2003) (en banc). We review an order denying a

motion for reconsideration for abuse of discretion. Smith v. Pac. Props. & Dev.

Corp., 358 F.3d 1097, 1100 (9th Cir. 2004). We reverse in part, affirm in part, and

remand.

      1.     We conclude that the district court erred by effectively granting

summary judgment against the Developers on their claims to compel subsequent

purchasers to arbitrate. Although the court appears to have decided the issue as a

matter of law in connection with the HOAs’ motion to dismiss, the Developers

pointed out that the issue was not fully briefed and, given the centrality of the issue

to the litigation, they should have been afforded an opportunity to present evidence

and argument. See Fed. R. Civ. P. 12(d); Buckingham v. United States, 998 F.2d
735, 742 (9th Cir. 1993); Portland Retail Druggists Ass’n v. Kaiser Found. Health

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Plan, 662 F.2d 641, 645 (9th Cir. 1981). The Developers did not, for example,

have an opportunity to present the Anthem Highlands covenants, conditions and

restrictions (“CC&Rs”), which governed for some subsequent purchasers.

      Because the record was not adequately developed, we reverse and remand

for consideration of the parties’ evidence and arguments. Although we need not

reach the merits, we note that the California Supreme Court recently held

enforceable arbitration clauses in analogous CC&Rs against an owners association

that was not originally party to those CC&Rs. See Pinnacle Museum Tower Ass’n

v. Pinnacle Mkt. Dev. (US), LLC, 282 P.3d 1217, 1231 (Cal. 2012). We also note

that because “it appears . . . there is no controlling precedent in the decisions of the

Supreme Court of [Nevada]” on this issue, Nev. R. App. P. 5, the district court may

wish to consider certification of the question to the Nevada Supreme Court upon

further development of the record.

      2.     On cross-appeal, we reject the HOAs’ contentions and affirm the

district court’s judgment compelling arbitration against original purchasers.

      First, even if the HOAs – who are defendants in the litigation below – lack

standing to assert the homeowners’ defect claims, that does not affect the district

court’s jurisdiction over the Developers’ claims for declaratory relief, injunctive

relief, and to compel arbitration. Vaden v. Discover Bank, 556 U.S. 49 (2009), and

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Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667 (1950), teach that federal

question jurisdiction must be assessed with respect to the actual, underlying

controversy between the parties, to ensure that the court does not exceed its

jurisdiction by operation of the unique procedural remedies afforded by the

Declaratory Judgment Act and the Federal Arbitration Act (“FAA”). Vaden, 556
U.S. at 66. But even assuming the same concern arises in diversity litigation, it is

not implicated by standing, the failure of which is personal to the party and does

not expand or contract the scope of the district court’s general grant of jurisdiction.

Allen v. Wright, 468 U.S. 737, 752 (1984) (standing turns on “whether the

particular plaintiff is entitled to an adjudication of the particular claims asserted”).

      Second, the amount in controversy in an action for injunctive and

declaratory relief is determined “by the value of the object of the litigation,” Hunt

v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347 (1977), and in actions to

compel arbitration, by the value of the federal defendant’s underlying substantive

claims. See Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. Lhotka, 599
F.3d 1102, 1106-08 (9th Cir. 2010). The HOAs’ potential lack of standing does

not preclude aggregation of the homeowners’ claims for purposes of calculating

the amount in controversy. To repeat, standing is personal to the party. Allen, 468
U.S. at 752. It does not affect the value of the object of the litigation or the value

                                           -5-
of the underlying substantive claims in diversity actions for injunctive relief,

declaratory relief, or to compel arbitration.

      Third, the district court properly applied the FAA to the arbitration clauses

in the homeowners’ Purchase and Sale Agreements, because those agreements

“evidenc[e] a transaction” – development by an out-of-state developer,

construction by an out-of-state contractor, and the sale of homes assembled with

out-of-state materials – “involving commerce.” 9 U.S.C. § 2; see also Citizens

Bank v. Alafabco, Inc., 539 U.S. 52, 56-58 (2003) (per curiam); Allied-Bruce

Terminix Cos. v. Dobson, 513 U.S. 265, 273-74 (1995).

      Finally, the district court did not abuse its discretion by refusing to

reconsider its entry of a “judgment” rather than an “order” compelling arbitration

against the original purchasers. See 9 U.S.C. §§ 4, 9. The FAA does not preclude

entry of a “judgment” against parties compelled to arbitrate, and in some places

even uses the terms “judgment” and “order” interchangeably. Id. at § 9. The

HOAs also fail to point to any statute or case law suggesting that the Developers

would be precluded from recording the district court’s decision were it to be styled

an “order” rather than a “judgment,” or that they are in any other way prejudiced.

See Nev. Rev. Stat. § 17.150 (authorizing recordation of judicial “judgment” or

                                          -6-
“decree”). The district court neither misinterpreted the FAA nor abused its

discretion in denying the HOAs’ motion for reconsideration.

                                      • ! •

      Accordingly, the district court’s order granting summary judgment in favor

of the HOAs on the Developers’ claims against subsequent purchasers is reversed

and remanded for further proceedings consistent with this disposition. The district

court’s judgment compelling arbitration of the original purchasers claims is

affirmed. Each party shall bear its own costs on appeal.

      REVERSED and REMANDED in part, and AFFIRMED in part.

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