Court Opinion

ID: 2750355
Source: CourtListenerOpinion
Date Created: 2014-11-11 16:04:23.949803+00
Date Added: 2024-06-11T12:35:19.370558
License: Public Domain

ORDER GRANTING IN PART AND DENYING IN PART
                       PETITIONS FOR WRITS OF MANDAMUS OR PROHIBITION

                              These are consolidated original petitions for writs of
                  mandamus or prohibition challenging district court orders granting and
                  then denying sequential motions to dismiss for failure to comply with NRS
                  38.310's arbitration requirements in a real property action.
                              At foreclosure auctions, Prem Deferred Trust and others
                  purchased real property located in the Southern Highlands Community.
                  Afterwards, Southern Highlands Community Association sought to collect
                  from Prem and other purchasers the full amount of past due assessments,
                  together with all accrued interest, fees, and other charges. Prem and the
                  remaining real parties in interest, however, refused to pay, or paid and
                  now seek to recoup, all sums greater than the amount given superpriority
                  status by NRS 116.3116(2).
                              Prem initially sought, on behalf of itself and others similarly
                  situated, to arbitrate the disputes with Southern Highlands before the
                  Nevada Real Estate Division (NRED) under NRS 38.310. NRS 38.310
                  requires claims involving the interpretation of homeowners' association
                  covenants, conditions, and restrictions (CC&Rs) to be submitted to NRED
                  for arbitration or mediation before either party may institute a civil action
                  in district court.' After refusing to rule on the merits of the claims as they

                        'Although the parties do not, in many cases, adequately identify
                  which version of the statutes applies to the different facets of their
                  dispute, the 2009 version of NRS Chapter 38 applies to our consideration
                  herein of whether NRS 38.310 requires arbitration of the claims in the
                  complaint. Accordingly, we refer herein to the 2009 statutes unless
                  otherwise specified.

SUPREME COURT
        OF
     NEVADA
                                                        2
(0) 1947A    .0
                   pertained to claimants other than Prem, the arbitrator ruled against
                   Prem. Prem then sued Southern Highlands in district court, seeking to
                   resolve the disputes as a class action.
                               Southern Highlands filed a motion to dismiss the class
                   allegations and all claims that were not individually submitted to NRED
                   for arbitration or mediation. The district court initially granted Southern
                   Highlands' motion to dismiss the claims that directly involved the CC&Rs,
                   and with leave of the court, Prem ultimately filed a second amended
                   complaint, omitting reference to the CC&Rs. Southern Highlands again
                   moved to dismiss the class allegations against all plaintiffs except for
                   Prem, but the district court denied its motion. Southern Highlands
                   consequently filed the writ petition in Docket No. 61940, seeking a writ of
                   mandamus or prohibition directing the district court to grant its motion to
                   dismiss the second amended complaint because the dispute involved the
                   interpretation of the CC&Rs and thus had to be submitted to NRED for
                   arbitration or mediation first under NRS 38.310. Prem then filed the writ
                   petition in Docket No. 62587 in February 2013, belatedly challenging the
                   district court's February 2012 order dismissing its original complaint
                   nearly one year earlier.
                               These writ petitions were consolidated and, as requested,
                   answers and replies were filed. Having considered the parties' arguments
                   therein and for the reasons explained below, we grant in part and deny in
                   part Southern Highlands' petition. We refuse to consider the petition filed
                   by Prem.
                   Southern Highlands' petition warrants the court's consideration
                               Mandamus relief is available to compel an act that is required
                   by law or to control an arbitrary or capricious abuse of discretion. NRS
                   34.160; see also Int'l Game Tech., Inc. v. Second Judicial Dist. Court, 124
SUPREME COURT
       OF
    NEVADA
                                                             3
(0) 1947A 741t4p
                Nev. 193, 197, 179 P.3d 556, 558 (2008). 2 Because a writ petition seeks an
                "extraordinary remedy, we will exercise our discretion to consider such a
                petition only when there is no plain, speedy and adequate remedy in the
                ordinary course of law or there are either urgent circumstances or
                important legal issues that need clarification in order to promote judicial
                economy and administration." Cheung v. Eighth Judicial Dist. Court, 121
Nev. 867, 869, 124 P.3d 550, 552 (2005) (internal quotations omitted).
                "[W]hether an appeal is an adequate and speedy remedy necessarily turns
                on the underlying proceedings' status, the types of issues raised in the
                writ petition, and whether a future appeal will permit this court to
                meaningfully review the issues presented."       Rolf Jensen & Assocs. v.
                Eighth Judicial Dist. Court, 128 Nev. „ 282 P.3d 743, 745-46 (2012)
                (internal quotations omitted).
                            As to Prem's petition, the doctrine of laches bars our
                consideration. Laches precludes review of a writ petition when there is an
                inexcusable delay in seeking relief, waiver can be implied from the
                petitioner's knowing acquiescence in existing conditions, and the real
                party in interest is prejudiced thereby. Bldg. & Constr. Trades Council of
                N. Nev. v. State ex rel. Pub. Works Bd.,   108 Nev. 605, 611, 836 P.2d 633,
                637 (1992). By waiting nearly one year after the challenged order was
                entered, Prem unreasonably delayed filing its writ petition, which
                concerns a complaint that in the interim was amended twice. Because of

                      2 Because   mandamus, rather than prohibition, constitutes the proper
                vehicle to challenge the rulings at issue here, we deny Southern
                Highlands' alternative request for a writ of prohibition. See NRS 34.320
                (noting that prohibition relief is available to address proceedings in excess
                of a tribunal's jurisdiction).

SUPREME COURT
         OF
      NEVADA
                                                      4
(0) 1947 A
                   the delay and the current status of the case, we decline to exercise our
                   discretion to review its petition or the merits of the arguments therein. 3
                   See State v. Eighth Judicial Dist. Court, 116 Nev. 127, 134-35, 994 P.2d
692, 697 (2000) (concluding that an eleven-month delay alone precluded
                   consideration of a petition).
                                Addressing Southern Highlands' writ petition will prevent the
                   district court from adjudicating matters that must first be submitted to an
                   arbitrator or mediator, thereby advancing the interests of judicial
                   economy. Cheung, 121 Nev. at 869, 124 P.3d at 552. While we generally
                   review district court orders challenged in a writ petition for an arbitrary
                   or capricious abuse of discretion, we nevertheless review issues of law,
                   including statutory interpretation, de novo, even in the context of a writ
                   petition. Int'l Game Tech., 124 Nev. at 197-98, 179 P.3d at 558-59.
                   Some of the claims in the second amended complaint fall within the scope
                   of NRS 38.310's arbitration and mediation requirement
                                Southern Highlands asserts that all of the claims in the
                   second amended complaint must be dismissed under NRS 38.310 to the
                   extent that they are brought by parties who failed to first submit the
                   claims to an arbitrator or mediator, because the claims all involve the

                         3 As a result, we do not address Prem's argument that NRS 38.310
                   violates the separation of powers doctrine under the Nevada Constitution.
                   Moreover, we note that in asserting its constitutional argument, Prem and
                   the remaining real parties in interest failed to comply with NRAP 44,
                   which requires a party who asserts a constitutional challenge to a statute
                   in a proceeding before this court in which the state is not a party to give
                   written notice to the clerk of this court, so that the clerk can certify the
                   fact to the attorney general. See In re Candelaria, 126 Nev. „ 245
P.3d 518, 522 (2010) (providing that a failure to comply with NR.AP 44 is
                   an independent basis for summarily rejecting a constitutional argument).

SUPREME COURT
        OF
     NEVADA
                                                        5
(0) 1947A    er,
                 interpretation or administration of the CC&Rs and the lien statute, NRS
                 116.3116(2). Prem and the remaining real parties in interest argue that
                 they complied with NRS 38.310 or are not required to comply. They
                 contend that the principle of vicarious exhaustion excuses those parties
                 who did not arbitrate or mediate their claims because Prem arbitrated on
                 their behalf. Prem and the remaining real parties in interest also argue
                 that requiring numerous parties to submit their claims to an arbitrator or
                 mediator is futile.
                             While we disagree with Southern Highlands that any
                 interpretation of NRS 116.3116(2) necessarily involves reference to the
                 CC&Rs and arbitration under NRS 38.310, we agree that NRS 38.310
                 requires the dismissal of some, but not all, of the claims in the second
                 amended complaint. We disagree with Prem and the remaining real
                 parties in interest's contentions that NRS 38.310 was satisfied or that it
                 was futile to adhere to the statute's requirements.
                 NRS 38.310 governs disputes requiring interpretation, application, or
                 enforcement of the CC&Rs
                             Before instituting a civil action requiring the interpretation,
                 application, or enforcement of CC&Rs, the matter must be submitted to
                 arbitration or mediation before the NRED:
                                    1. No civil action based upon a claim
                             relating to:
                                   (a) The    interpretation, application or
                             enforcement of any [CC&Rs] applicable to
                             residential property or any bylaws, rules or
                             regulations adopted by an association; . . .

                             may be commenced in any court in this State
                             unless the action has been submitted to mediation

SUPREME COURT
        OF

     NEVADA
                                                       6
(0) 1947A    e
                               or arbitration pursuant to the provisions of NRS
                               38.300 to 38.360, inclusive . . . .
                  NRS 38.310(1) (2009) (amended 2013) (emphases added). Thus, if an
                  action involves ascertaining the meaning of the language in the CC&Rs or
                  "bylaws, rules or regulations," the action is within the scope of NRS
                  38.310's mediation and arbitration requirement.          See Black's Law
                  Dictionary   837 (8th ed. 2004) (defining "interpretation" as "the
                  ascertainment of meaning to be given to words"); see also We The People
                  Nev. ex rel. Angle v. Miller, 124 Nev. 874, 881, 192 P.3d 1166, 1170 (2008)
                  (explaining that this court interprets unambiguous language "in
                  accordance with its plain meaning"). Any action based on such claims that
                  were not arbitrated or mediated must be dismissed: "A court shall dismiss
                  any civil action which is commenced in violation of the provisions of
                  subsection 1." NRS 38.310(2) (2009) (amended 2013).
                               While Southern Highlands asserts that adjudicating the
                  second amended complaint requires looking to the CC&Rs, Prem and the
                  other remaining real parties in interest argue that the district court will
                  look only to Southern Highlands' periodic budget, nothing else, to resolve
                  the claims about Southern Highlands' imposition and collection of
                  assessments. Resolving NRS 38.310's effect on the second amended
                  complaint requires an inquiry into the complaint's substance and the
                  substantive laws relevant to the lien-related allegations and claims
                  asserted. See Nev. Power Co. v. Eighth Judicial Dist. Court, 120 Nev. 948,
                  960, 102 P.3d 578, 586 (2004) (indicating that a complaint is evaluated for
                  its substance).
                               As noted, the claims here are primarily based on the assertion
                  that Southern Highlands is charging Prem, the remaining real parties in
                  interest, and the other class members with items that they are not
SUPREME COURT
         OF
      NEVADA
                                                       7
(0) 194-7A    e
                obligated to pay under NRS 116.3116(2). 4 The first subsection of NRS
                116.3116 provides associations with a statutory lien upon the property for
                unpaid assessments and certain penalties, fines, fees, interest, and other
                charges. 5 NRS 116.3116(1) permits an association's declaration to alter
                which assessments or other charges may form the basis of the statutory
                lien.     See also NRS 116.3102(j)-(n) (2009) (amended 2011). The
                "'[d]eclaration' means any instruments, however denominated, that create
                a common-interest community," which may include the CC&Rs. NRS
                116.037. Thus, the CC&Rs may establish which assessments and charges
                an association is authorized to impose and which imposed assessments
                and charges form the basis of the lien. As a result, where parties dispute
                the validity of the charges imposed or the lien's amount under NRS
                116.3116(1), those questions cannot be resolved without referencing the
                CC&Rs, the declaration, or other governing documents.

                        4 To
                          the extent that Prem and the other owners challenge Southern
                Highlands' ability to impose assessments, fees, or costs, statutes from
                years prior to 2009 might apply. But the resolution of this writ petition
                does not require us to examine Southern Highlands' imposition of
                assessments or other charges. Rather, this writ petition only requires that
                we ascertain whether Prem is challenging the validity or amount of such
                charges. Accordingly, we express no opinion regarding the validity or
                amount of any charges or which version of what statutes might apply to
                determine the validity or amount of the charges.

                        5 Either
                              the 2007 or 2009 version of NRS 116.3116 may apply in the
                underlying case when considering the amounts of the superpriority lien
                and its effect upon this litigation. This question, however, is beyond the
                scope of this writ petition, and we thus decline to address it. The 2009
                changes to NRS 116.3116 are immaterial for the purposes of this writ
                petition, and we thus refer herein to that version of NRS 116.3116.

SUPREME COURT
        OF
     NEVADA
                                                     8
(0) 1947A
                              NRS 116.3116(2)(c) provides that the association's lien has
                  priority over certain other security interests,
                              to the extent of the assessments for common
                              expenses based on the periodic budget adopted by
                              the association pursuant to NRS 116.3115 which
                              would have become due in the absence of
                              acceleration during the 9 months immediately
                              preceding institution of an action to enforce the
                              lien.
                  (Emphasis added.) Southern Highlands argues that in ascertaining the
                  final amount of the lien under NRS 116.3116(2), the district court
                  ultimately must look to the CC&Rs to determine the nature and extent of
                  the assessments. The district court agreed with Prem and the remaining
                  real parties in interest's contention that the determination of the priority
                  and amount of Southern Highlands' liens, as they relate to the second
                  amended complaint's claims, require reference to the periodic budget and
                  not to the CC&Rs.
                              Prem and the remaining real parties in interest's contention
                  oversimplifies the relationship between NRS 116.3116(2) and the
                  remainder of the statutory scheme. As discussed above, the CC&Rs may
                  affect the amount of an assessment. To the extent that the priority
                  language defines the amount of the lien entitled to superpriority based on
                  the assessments for common expenses under a periodic budget, the budget
                  is also a matter that the CC&Rs can affect. Although the budget is
                  defined generally by NRS 116.3115 and NRS 116.31151, both statutes
                  provide that the declaration "[may] impose[ ] more stringent standards"
                  for a budget than the statutory standards. NRS 116.3115(1) (2009)
                  (amended 2011); NRS 116.31151(1) (2009). Thus, the CC&Rs can affect
                  the budget and the assessments for common expenses based on the

SUPREME COURT
      OF
    NEVADA
                                                         9
(0) 1947A agato
                    budget, thereby affecting the amount of the lien entitled to superpriority
                    status under NRS 116.3116(2).
                                  Having concluded that the CC&Rs may affect both the validity
                    and the amount of an association's lien under NRS 116.3116(1) and thus
                    the amount entitled to superpriority under NRS 116.3116(2), we must
                    necessarily conclude that, if a party disputes the association's periodic
                    budget and assessments or the validity or amount of an association's lien,
                    such disputes necessarily involve resort to or interpretation of the
                    association's CC&Rs or other governing documents, which triggers NRS
                    38.310(1) and requires NRED mediation or arbitration prior to civil
                    litigation.   See Hamm v. Arrowcreek Homeowners' Ass'n,        124 Nev. 290,
                    296, 183 P.3d 895, 900 (2008) (holding that where the dispute would
                    require the district court to interpret the CC&Rs, the action must first be
                    submitted to NRED mediation and arbitration). But if the party does not
                    dispute the validity or amount of an association's lien or the monthly
                    assessment derived from the association's periodic budget, then no resort
                    to the CC&Rs is necessary and the matter may proceed in the district
                    court. 6 Cf. id. Thus, in this dispute, we must review whether the district
                    court arbitrarily or capriciously abused its discretion when it concluded
                    that the underlying claims in the amended complaint were not subject to
                    NRED mediation or arbitration under NRS 38.310(1).

                          6 In this regard, NRS 116.3116(2) gives a specified portion of the
                    association's lien priority over NRS 116.3116(2)(b) security interests. If no
                    challenge is brought to the association's budget or assessments or the
                    validity or amount of its lien, then tabulating the statutorily mandated
                    superpriority amount, or determining the statutory effect of the various
                    lien priorities subsequent to a foreclosure, would generally not involve
                    interpreting the CC&Rs.

SUPREME COURT
        OF
     NEVADA
                                                         10
(0) 1947A    ger)
                      The second amended complaint included claims that are premised on
                      NRS 116.3116(2) and, thus, involve the interpretation of the CC&Rs
                            Here, the second amended complaint includes the following
                causes of action: (1) declaratory relief concerning Southern Highlands'
                liens under NRS Chapter 116, (2) "[b]reach of NRS 116.3116(2)," (3)
                negligence per se, (4) injunctive relief, (5) negligent misrepresentation,
                and (6) conversion. In addition, it included allegations that Southern
                Highlands made "excessive demands . . . for claimed assessment[s]" and
                "false demands, improper liens and improper collection and retention of
                assessments," the result of which was the collection of lien amounts that
                exceeded the amounts permitted by NRS 116.3116. These allegations
                were incorporated into each claim. Although Prem and the remaining real
                parties in interest assert in their answer to the writ petition that their
                primary contention questions whether an association may assess more
                than the NRS 116.3116(2) superpriority lien amount after a first deed of
                trust on the property has been foreclosed, it appears that their second
                amended complaint contains additional assertions about the validity and
                amount of the assessments.
                            For example, the requested declarations concerning the
                validity and amount of the "claimed liens" and Southern Highlands'
                budget involve interpreting the CC&Rs, subjecting them to NRS 38.310's
                mediation or arbitration requirement. The requested declarations which
                only concern statutes and other authorities, however, are not subject to
                MRS 38.310's mediation and arbitration requirement. 7

                       7 Our recent opinion in SFR Investments Pool 1, LLC v. U.S. Bank,
                N.A., 130 Nev. , 334 P.3d 408 (2014), addresses some of the issues
                relating to these requests for declaratory relief.

SUPREME COURT
       OF
    NEVADA
                                                    11
(0 1947A
                             The remaining claims seek damages or relief relating to
                 alleged "Unlawful Lien Amounts" or Southern Highlands' "false" or
                 "improper" demands and receipt thereof, which purportedly violated NRS
                 116.3116(2). These claims not only dispute superpriority amounts and
                 whether the remaining amounts have been foreclosed, but they also attack
                 the validity of the assessments, collection fees, and other charges forming
                 the basis of Southern Highlands' liens. These claims thus involve a
                 determination of what the proper lien amounts were. Since lien amounts
                 may be affected by the CC&Rs, NRS 38.310 requires these claims to be
                 mediated or arbitrated before they are brought in district court.
                             Accordingly, with the exception of the declaratory relief claims
                 that concerned authorities beyond the CC&Rs and their relationship to
                 Southern Highlands' liens, the causes of action in the second amended
                 complaint involve the interpretation of Southern Highlands' CC&Rs. Such
                 claims are within NRS 38.310's arbitration or mediation requirement.
                 Thus, inasmuch as these claims were brought on behalf of parties who did
                 not submit them to an arbitrator or mediator, unless an exception applies,
                 NRS 38.310 precludes the district court's consideration of these claims as
                 they pertain to those parties, and these claims must be dismissed.
                 NRS 38.310 was violated
                             Having concluded that NRS 38.310 bars various claims in the
                 second amended complaint if they are unmediated and unarbitrated, we
                 now turn to Prem and the remaining real parties in interest's contention
                 that they have fulfilled or are excused from fulfilling NRS 38.310's
                 requirement because (1) Prem submitted all of the claims on behalf of
                 itself and the class to an arbitrator, (2) Prem vicariously exhausted the
                 class members' duty to arbitrate or mediate their claims pursuant to NRS

SUPREME COURT
        OF
     NEVADA
                                                      12
(0) 1947A    e
                   38.310, and (3) administrative exhaustion of the class members' claims
                   was futile. We disagree.
                         Prem did not actually submit the class's claims
                               The contention that the plaintiffs other than Prem, including
                   the class, actually submitted their claims for arbitration because Prem
                   attempted to present class claims to the arbitrator is premised on a loose
                   and unconventional construction of the term "submit." The term "submit"
                   means "[go end the presentation of further evidence in (a case) and tender
                   a legal position for decision." Black's Law Dictionary 1466 (8th ed. 2004).
                   Thus, the term "submitted," as it appears in NRS 38.310, requires a party
                   to do more than file a claim with an arbitrator or mediator. It requires a
                   party to present its claim to the arbitrator or meditator for a resolution.
                               Here, the record shows that when Prem attempted to bring
                   claims on behalf of others in a class by means of a motion for class
                   certification, the arbitrator denied the motion and refused to rule on the
                   merits of the claims as they pertained to parties other than Prem.
                   Therefore, the claims as they related to parties other than Prem were not
                   submitted to the arbitrator and the arbitration only concerned the claims
                   as they were submitted on behalf of Prem. Thus, when Prem submitted
                   its claims for resolution by the arbitrator, it did not fulfill NRS 38.310's
                   requirement on behalf of others.
                         Prem did not vicariously exhaust •the remaining real parties in
                         interest's or the class's claims
                               The second argument is that Prem, by arbitrating its own
                   claims, vicariously fulfilled the remaining real parties in interest's and the
                   class members' duty to mediate or arbitrate their claims. To support this
                   contention, Prem and the remaining real parties in interest proffer cases

SUPREME COURT
        OF
     NEVADA
                                                         13
(0) 1947A    era
                which concern two circumstances in which vicarious exhaustion can occur.
                However, neither circumstance is present here.
                            Outside of circumstances that authorize vicarious exhaustion,
                individualized exhaustion of administrative remedies is generally
                required.   See Arctic Slope Native Ass'n v. Sebelius,   583 F.3d 785, 794
                (Fed. Cir. 2009) (holding that except in limited circumstances "the [United
                States] Supreme Court and the lower courts have held that a party that
                has not exhausted administrative remedies is not eligible to be a class
                member"). In addition, vicarious exhaustion is not allowed when a statute
                requires individual parties to exhaust administrative remedies.    See U.S.
                Xpress, Inc. v. N.M. Taxation & Revenue Dep't,    136 P.3d 999, 1003 (N.M.
                2006) (refusing to allow vicarious exhaustion under a statute whose plain
                meaning required individual plaintiffs to exhaust administrative
                remedies); see also Pourier v. S.D. Dep't of Revenue & Regulation, 778
N.W.2d 602, 605-06 (S.D. 2010) (holding that a statute requiring an
                individual taxpayer seeking relief to complete administrative remedies
                precludes the application of vicarious exhaustion).
                            The first circumstance that Prem and the remaining real
                parties in interest identify is when a party shares "a community of
                interest" with a party who has exhausted its administrative remedies.
                Leff v. City of Monterey Park,   267 Cal. Rptr. 343, 348 (Ct. App. 1990)
                (internal quotations omitted). California appellate courts have applied the
                "community of interest" standard when the parties challenge an agency's
                decision and when the parties' interests on the disputed issue are
                identical. Friends of Mammoth v. Bd. of Supervisors, 502 P.2d 1049, 1062-
                63 (Cal. 1972) (allowing vicarious exhaustion in the context of a challenge
                to the grant of a land use permit), disapproved of on other grounds by

SUPREME COURT
        OF
     NEVADA
                                                     14
(CZ I947A
                          Kowis u. Howard, 838 P.2d 250, 254 (Cal. 1992); see Tarkington v. Cal.
                          Unemployment Ins. Appeals Bd., 92 Cal. Rptr. 3d 131, 143 (Ct. App. 2009)
                          (allowing vicarious exhaustion for union members in a dispute about
                          whether they were eligible for unemployment benefits during a labor
                          lockout); Leff, 267 Cal. Rptr. at 347-48 (allowing vicarious exhaustion in
                          the context of a challenge to the grant of a land use permit).
                                        The second circumstance is when a statute contemplates post-
                          administrative-procedure class actions and thus excuses class members
                          from pursuing administrative remedies. For example, Title VII of the
                          Civil Rights Act of 1964 and the Washington State Tort Claims Act
                          authorize vicarious exhaustion of administrative remedies.        Albemarle
                          Paper Co. v. Moody, 422 U.S. 405, 414 n.8 (1975) (holding that the Civil
                          Rights Act of 1964's legislative history demonstrates an intent to allow
                          vicarious exhaustion); Foster v. Gueory, 655 F.2d 1319, 1323 (D.C. Cir.
                          1981) (allowing vicarious exhaustion in a claim brought pursuant to the
                          Civil Rights Act of 1964); Oatis v. Crown Zellerbach Corp., 398 F.2d 496,
                          498-99 (5th Cir. 1968) (allowing the same); Oda v. State, 44 P.3d 8, 12
                          (Wash. Ct. App. 2002) (holding that the Washington State Tort Claims
                          Act's administrative notice requirement allows for class action claims to be
                          brought on behalf of parties who did not exhaust administrative
                          remedies). Thus, vicarious exhaustion may occur if the parties' interests
                          with regard to the challenged issue are identical or if otherwise authorized
                          by statute.
                                        Because of NRS 38.310's plain language, neither circumstance
                          is present here. As we explained above, NRS 38.310(1) prohibits the
                          commencement of any "civil action based upon a claim relating to. . . [t]he
                          interpretation, application or enforcement of any [CC&Rs]" if the claim is

SUPREME COURT
        OF
     NEVADA
                                                                15
(0) I947A    14   :0444
                 not mediated or arbitrated. NRS 38.310(1) (2009) (amended 2013).
                 Furthermore, this statute states that "[a] court shall dismiss any civil
                 action which is commenced in violation of the provisions of subsection 1."
                 NRS 38.310(2) (2009) (amended 2013). In a statute, 'shall" is mandatory
                 unless the statute demands a different construction to carry out the clear
                 intent of the legislature." Leyva v. Nat'l Default Servicing Corp., 127 Nev.
                         , 255 P.3d 1275, 1279 (2011) (quoting State of Nev. Emps. Ass'n v.
                 Daines, 108 Nev. 15, 19, 824 P.2d 276, 278 (1992)).
                             "NRS 38.310 expresses Nevada's public policy favoring
                 arbitration of disputes involving the interpretation and enforcement of
                 CC&Rs." Hamm v. Arrowcreek Homeowners' Ass'n, 124 Nev. 290, 299, 183
P.3d 895, 902 (2008). Therefore, this statute's use of the term "shall"
                 establishes a mandatory requirement that each CC&R-based claim be
                 mediated or arbitrated and prevents district courts from considering an
                 unmediated and unarbitrated CC&R-based claim. 8 Because it does not
                 authorize any exception to its mediation or arbitration requirement, NRS
                 38.310's language precludes the theories of vicarious exhaustion proffered

                       8 Though  the dissent identifies a potentially meritorious policy issue
                 relating to the efficiency and practicality of requiring each member of a
                 potential class to arbitrate its CC&R-based claims before joining a class-
                 action lawsuit, we cannot interpret NRS 38.310 to adopt the dissent's
                 preferred policy because such a holding would require a deviation from
                 NRS 38.310's plain meaning. See Williams v. United Parcel Servs., 129
Nev. 302 P.3d 1144, 1148 (2013) (refusing to deviate from the
                 plain meaning of a statute and rejecting arguments that would require the
                 court to read additional language into the statute); see also Diamond v.
                 Swick, 117 Nev. 671, 677, 28 P.3d 1087, 1090 (2001) (observing that "[this
                 court's] business does not include filling in alleged legislative omissions
                 based on conjecture as to what the legislature would or should have done"
                 (internal quotations omitted)).

SUPREME COURT
        OF
     NEVADA
                                                      16
(0) 1947A    e
                   by Prem and the remaining real parties in interest. Therefore, Prem's
                   completion of arbitration does not vicariously apply to the class's claims.
                   As a result, the remaining real parties in interest and class members who
                   did not submit their claims for mediation or arbitration did not comply
                   with NRS 38.310. Thus, the district court erred by not dismissing the
                   claims brought by and on behalf of those who did not fulfill MRS 38.310's
                   mediation or arbitration requirement.
                         Administrative exhaustion of the remaining real parties in interest's
                         or the class's claims was not futile
                               The third argument is that the remaining real parties in
                   interest's and the class members' claims are excused from NRS 38.310's
                   administrative exhaustion requirement because administrative
                   adjudication of their claims would be futile. Prem and the remaining real
                   parties in interest contend that arbitration is futile because an arbitrator
                   declined to hear their class claims on the purported grounds that he
                   lacked jurisdiction. They argue that NRED arbitration is inadequate
                   because there are not enough arbitrators to resolve the class members'
                   claims quickly enough to allow them to participate in a class action.
                               When an attempt to exhaust administrative remedies would
                   be futile or the administrative process is inadequate, a party may be
                   excused from a requirement to exhaust an administrative remedy.
                   Malecon Tobacco, LLC v. State ex rel. Dep't of Taxation, 118 Nev. 837, 839,
                   59 P.3d 474, 476 (2002) (holding that administrative exhaustion is not
                   required when it is futile); see also Fernandez v. Chertoff, 471 F.3d 45, 58
                   (2d Cir. 2006) (holding that administrative exhaustion may be excused if
                   "the agency cannot provide effective relief'). Though Prem and the
                   remaining real parties in interest treat them as a single concept, futility
                   and inadequacy are separate exceptions to the administrative exhaustion
SUPREME COURT
        OF
     NEVADA
                                                        17
(0) 1947A    at*
                requirement. Randolph-Sheppard Vendors of Am. v. Weinberger, 795 F.2d
90, 107 (D.C. Cir. 1986). Futility occurs when "the agency will almost
                certainly deny any relief either because it has a preconceived position on,
                or lacks jurisdiction over, the matter."    Id. Inadequacy occurs when "the
                agency has expressed a willingness to act, but the relief it will provide
                through its action will not be sufficient to right the wrong." Id.
                             NRCP 23 provides a right for parties to pursue claims in
                district court as a class. NRCP 23(a)-(b). This right "is a procedural right
                only, ancillary to the litigation of substantive claims." Deposit Guar. Nat'l
                Bank of Jackson, Miss. v. Roper, 445 U.S. 326, 332 (1980) (holding that the
                analogous FRCP 23 does not establish a substantive claim or right); see
                also Vanguard Piping Sys., Inc. v. Eighth Judicial Dist. Court, 129 Nev.
                         , 309 P.3d 1017, 1020 (2013) (stating that "federal cases
                interpreting [an analogous Federal Rule of Civil Procedure] are strong
                persuasive authority") (internal quotations omitted)). Because class
                actions are a procedural device and because a plaintiff has discretion
                about whether to use this device, class actions do not affect jurisdiction.
                See Vaile v. Eighth Judicial Dist. Court, 118 Nev. 262, 275, 44 P.3d 506,
                515 (2002) (holding that "[p]arties may not confer jurisdiction upon the
                court by their consent when jurisdiction does not otherwise exist"). Thus,
                a party's decision to use or forego this procedural right does not change a
                court's subject matter jurisdiction over its claim.
                             Since a party's use of a procedural device does not alter a
                court's subject matter jurisdiction, Prem's attempt to submit claims as a
                class action does not affect an NRED arbitrator's ability to hear the
                individual claims. Thus, the arbitrator's order disclaiming jurisdiction in
                this case does not actually reflect a lack of jurisdiction or establish futility

SUPREME COURT
        OF
     NEVADA
                                                       18
(0) 194Th
                 for two reasons. First, the arbitrator incorrectly relied on NRS 38.255(3)
                 to conclude that he may not hear class claims. Because this statute
                 governs court-annexed arbitration and not NRED arbitration,             see NRS
                 38.250(1), the rule does not govern an NRED arbitrator's ability to hear
                 the class claims. An NRED arbitrator may still hear each class members'
                 claims on an individual basis. Second, a statute or administrative rule
                 preventing the use of class actions only limits the procedure and not the
                 substance of the claims brought before the arbitrator.    See Roper, 445 U.S.
                 at 332. Therefore, a procedural bar to the use of class action claims does
                 not change the subject matter jurisdiction of an arbitrator.
                             Similarly, because a class action is a procedural device that is
                 ancillary to substantive claims, it is not a type of claim or relief.    See id.
                 Therefore, any limitation on the use of a class action would not prevent
                 consideration of a claim that is properly brought or relief based on the
                 claim.
                             An NEED arbitrator has authority to adjudicate claims
                 relating to the "interpretation, application or enforcement of any
                 [CC&Rs]." NRS 38.310(1) (2009) (amended 2013). Therefore, an NRED
                 arbitrator is authorized to hear and to grant relief based on the remaining
                 real parties in interest's claims and the class members' claims which
                 involve the interpretation of CC&Rs. The fact that the procedural limits
                 on arbitration may prevent the litigants from arbitrating as a class does
                 not deprive the arbitrator of jurisdiction or preclude the arbitrator from
                 granting the requested relief. As a result, administrative exhaustion is
                 not futile and the administrative process is not inadequate because NRED
                 arbitrators can resolve the claims brought by the remaining real parties in
                 interest and the claims brought on behalf of the class members.

SUPREME COURT
        OF
     NEVADA
                                                       19
(0) 1947A    e
                Conclusion
                             Accordingly, we grant in part and deny in part Southern
                Highlands' petition and deny Prem's petition. We direct the clerk of this
                court to issue a writ of mandamus that instructs the district court to (1)
                vacate its order denying Southern Highlands' motion to dismiss the claims
                in the second amended complaint; (2) determine who among the parties
                submitted their claims to an arbitrator or meditator under NRS 38.310;
                and (3) dismiss the claims identified herein that are brought by parties
                who have not submitted their claims to arbitration under NRS 38.310,
                without prejudice to the ability of those parties to submit their claims to
                arbitration before bringing the claim again or to file an amended
                complaint that does not challenge the validity or amount of Southern
                Highlands' liens or the monthly assessment derived from its periodic
                budget.

                                                   Gibbons
                                                            )09-724L,           C.J.

                                                                                  J.

                                                                                  J.

                                                                                  J.

                                                   Saitta
SUPREME COURT
        OF
     NEVADA
                                                    20
(0) 1947A
                 cc: Hon. Susan Scann, District Judge
                      Adams Law Group
                      Brownstein Hyatt Farber Schreck, LLP/Las Vegas
                      Eighth District Court Clerk

SUPREME COURT
        OF
     NEVADA
                                                  21
(0) 1947A    e
                 HARDESTY, J., with whom CHERRY, J., agrees, dissenting:
                             I would allow the class action to proceed, as Prem, by
                 arbitrating its claim, has vicariously exhausted the remaining real parties
                 in interest's and putative class members' arbitration or mediation
                 remedies prerequisite to filing a civil action. In making this
                 determination, I disagree with the majority's characterization of the
                 vicarious exhaustion doctrine and their conclusion that NRS 38.310
                 precludes any application of that doctrine.
                             The exhaustion doctrine provides agencies with an
                 opportunity to defend or correct their actions, discuss legal issues with
                 claimants, and otherwise attempt to settle controversies out of court.
                 Mesagate Homeowners' Ass'n u. City of Fernley, 124 Nev. 1092, 1099, 194
P.3d 1248, 1252-53 (2008). But there are circumstances where this policy
                 is not implicated and thus need not be a barrier to court access. For
                 example, in multi-party litigation or class actions where all claims are so
                 similar that a decision on any one of them can be imputed to all, there is
                 no need for each plaintiff to separately exhaust remedies or for the same
                 legal question to be repeatedly brought and decided. In such situations,
                 courts have repeatedly ruled that one plaintiff may exhaust
                 administrative remedies on behalf of other plaintiffs.     See, e.g., Foster v.
                 Gueory, 655 F.2d 1319, 1322-23 (D.C. Cir. 1981); Phillips v. Klassen, 502
F.2d 362, 369 (D.C. Cir. 1974); Friends of Mammoth v. Bd. of Supervisors,
                 502 P.2d 1049, 1062-63 (Cal. 1972), disapproved of on other grounds by
                 Kowis v. Howard,      838 P.2d 250 (Cal. 1992);          Tarkington v. Cal.
                 Unemployment Ins. Appeals Bd., 92 Cal. Rptr. 3d 131, 143 (Ct. App. 2009);
                 Leff v. City of Monterey Park,   267 Cal. Rptr. 343, 348 (Ct. App. 1990).
SUPREME COURT
        OF
     NEVADA

(0) 1947A    e
                 Moreover, where all similarly situated plaintiffs have claims that would
                 generate the same discussion and the agency has already utilized its
                 opportunity to address and resolve the issue out of court, it would be
                 inefficient to require all plaintiffs to exhaust their administrative
                 remedies before proceeding to the courts.     Tarkington, 92 Cal. Rptr. 3d at
                 143; Local 186, International Pulp, Sulphite and Paper Mill Workers v.
                 Minn. Mining & Mfg. Co., 304 F. Supp. 1284, 1289 (N.D. Ind. 1969). Here,
                 where the real parties in interest, putative class members, and Prem
                 share the same legal question, applying the vicarious exhaustion doctrine
                 would speed efficient litigation without depriving Southern Highlands of
                 its opportunity to settle the legal questions out of court as it has already
                 taken and discarded that opportunity.
                             Moreover, this result would not run afoul of NRS 38.310.
                 Southern Highlands argues, and the majority agrees, that this statute
                 unambiguously requires each class member to exhaust his or her
                 administrative remedies as a prerequisite to participating in a class
                 action. On this point, law from other jurisdictions is instructive in
                 illustrating that such is not the case.
                             In federal courts, vicarious exhaustion is generally applied in
                 class action situations unless the requirement at issue is jurisdictional.
                 Compare Blackmon-Malloy v. U.S. Capitol Police Bd., 575 F.3d 699, 704-
                 05 (D.C. Cir. 2009), with Oatis v. Crown Zellerbach Corp., 398 F.2d 496,
                 498-99 (5th Cir. 1968). In Blackmon-Malloy, the court held that if a
                 requirement is jurisdictional each plaintiff must fulfill the requirement
                 prior to bringing civil suit; otherwise, the court is without subject matter
                 jurisdiction over the case. 575 F.3d at 704-05. However, the Blackmon-
                 Malloy court and other federal courts have repeatedly held that for a

SUPREME COURT
        OF
     NEVADA
                                                           2
(0) 1947A    e
                 requirement to be jurisdictional such intent must be clearly expressed
                 through strong language within the statute itself, and that absent such
                 language courts should presume the requirement is not jurisdictional.      Id.;
                 see Arbaugh v. Y&H Corp.,      546 U.S. 500, 515-16 (2006); Chen v. Bell-
                 Smith,   768 F. Supp. 2d 121, 148-50 (D.C. Cir. 2011);                Solis v.
                 Communications Workers, 766 F. Supp. 2d 84, 97 (D.C. Cir. 2011). In
                 Blackmon-Malloy, for example, the statute under review, which was held
                 to be jurisdictional, was titled "{jurisdiction" and expressly stated that the
                 district court only had jurisdiction if the employee had first completed
                 counseling in accordance with the statute. 575 F.3d at 705.
                             Although many courts at the state level have not thoroughly
                 addressed the question of whether administrative remedies prerequisite to
                 a civil action are jurisdictional in nature, some jurisdictions have analyzed
                 the language of a particular state statute in determining whether a
                 statutory requirement applies to all plaintiffs. In Arizona Department of
                 Revenue v. Dougherty, the Arizona Supreme Court held that where the tax
                 code required that "each claim for refund" meet certain prerequisites, but
                 did not specifically require each taxpayer in a class action to complete the
                 requirements, vicarious exhaustion was permissible so long as a class
                 representative had met the requirements. 29 P.3d 862, 866-67 (Ariz.
                 2001) (emphasis omitted) (internal quotations omitted). Conversely, in
                 U.S. Xpress, Inc. v. New Mexico Taxation & Revenue Department,             the
                 statute at issue expressly mandated that "the taxpayer" take certain steps
                 prerequisite to litigating a claim, and therefore, the New Mexico Supreme
                 Court held that vicarious exhaustion of the requirement was not possible
                 as the statute expressly required each class member to meet the
                 requirements. 136 P.3d 999, 1002-03 (N.M. 2006) (internal quotations

SUPREME COURT
       OF
    NEVADA
                                                       3
0) 1947T    ze
                 omitted). The Supreme Court of South Dakota likewise held that
                 vicarious exhaustion was impermissible where the statute expressly
                 required each "taxpayer seeking recovery" to follow procedure.   Pourier v.
                 S.D. Dep't of Revenue and Regulation,    778 N.W.2d 602, 605 (S.D. 2010)
                 (emphasis omitted) (internal quotations omitted). While this area of law
                 remains unsettled, these cases nevertheless provide a framework for
                 determining this question.
                             Here, the issue is whether each real party in interest and each
                 putative class member must fulfill the requirements of NRS 38.310 before
                 the class action may proceed. NRS 38.310 is titled "Limitations on
                 commencement of certain civil actions," and states:
                                    1. No civil action based upon a claim
                             relating to:
                                    (a) The interpretation,    application or
                             enforcement of any covenants, conditions or
                             restrictions applicable to residential property or
                             any bylaws, rules or regulations adopted by an
                             association; or
                                   (b) The procedures used for increasing,
                             decreasing or imposing additional assessments
                             upon residential property,
                            may be commenced in any court in this State
                            unless the action has been submitted to mediation
                            or, if the parties agree, has been referred to a
                            program pursuant to the provisions of NRS 38.300
                            to 38.360, inclusive, and, if the civil action
                            concerns real estate within a planned community
                            subject to the provisions of chapter 116 of NRS or
                            real estate within a condominium hotel subject to
                            the provisions of chapter 116B of NRS, all
                            administrative procedures specified in any
                            covenants, conditions or restrictions applicable to
                            the property or in any bylaws, rules and
                            regulations of an association have been exhausted.
SUPREME COURT
        OF
     NEVADA
                                                      4
(0) 1947A    e
                                   2. A court shall dismiss any civil action
                             which is commenced in violation of the provisions
                             of subsection 1.
                             The statute expressly precludes "a claim" from being brought
                 "unless the action" was first submitted to alternative dispute resolution
                 and, if the action implicates NRS Chapter 116, administrative procedures
                 have been exhausted. NRS 38.310(1) (emphasis added). Neither in the
                 title nor in the text does the statute state that such actions are required
                 before the court may have jurisdiction or that the requirements are
                 jurisdictional in nature. Moreover, the statute never refers to the
                 person(s) bringing the action, but instead refers to requirements that must
                 be satisfied as to "(the] claim" or "the action" before it may proceed to
                 court. Thus, on its face, the statute does not require that each plaintiff
                 and class member exhaust his or her administrative remedies before
                 bringing a class action. Rather, a fair reading of the statute suggests that
                 so long as administrative remedies have been exhausted as to that claim,
                 the court may hear the case.
                             Furthermore, NRS 116.4117(1), a provision referenced by NRS
                 38.310(1), states that "any person or class of persons suffering actual
                 damages. . . may bring a civil action for damages or other appropriate
                 relief," subject to NRS 38.310. (Emphasis added.) This language seems to
                 contemPlate class actions, and, unlike NRS 38.310, refers to a "person or
                 class of persons" while NRS 38.310 refers only to a "claim" or "action."
                 This further suggests that the Legislature did not intend NRS 38.310's
                 requirements to extend to each class member and that vicarious
                 exhaustion by a class representative is possible, as NRS 116.4117(1) both
                 contemplates class actions and implies that the Legislature would have
                 used more specific language to impart NRS 33.310's requirement on

SUPREME COURT
        OF
     NEVADA
                                                      5
03) 1947A    e
                individual class members had it wished to do so. Because the majority's
                reading of NRS 30.310 undermines if not eliminates any realistic
                possibility of a class action, that holding is contrary to NRS 116.4117(1).
                Given that statutes should be construed as a whole and in harmony with
                one another, the majority's conclusions also run counter to well-
                established legal canon. See Canarelli v. Eighth Judicial Dist, Court, 127
                Nev. „ 265 P.3d 673, 677 (2011); Buclavalter u. Eighth Judicial
                Dist. Court, 126 Nev. 200, 202, 234 P.3d 920, 922 (2010); see also Antonin
                Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal
                Texts 167-69, 180-82 (2012).
                            Here, Prem brought the claim on behalf of itself and all class
                members. Prem attempted to submit the class action to arbitration and,
                when that failed, Prem individually proceeded through arbitration and
                then brought the class action to court. Given that Pram's claims are
                representative of the legal questions common to the class as a whole and
                that Prem exhausted its administrative remedies, vicarious exhaustion
                should apply to allow the class action to proceed.' Moreover, allowing
                such actions to proceed presents little danger of claims circumventing the
                administrative process because, prior to certifying the class, the court
                must evaluate the commonality and typicality of the claims of the
                individual class members so that only those members whose claims mirror

                      'There may be some hesitancy to apply the doctrine of vicarious
                exhaustion as the facts of this case do not fall squarely under
                administrative law. The parties do not question whether this case is truly
                administrative in nature, and I do not consider whether the doctrine of
                vicarious exhaustion is inapplicable to cases arguably falling outside of
                administrative law.

SUPREME COURT
        OF
     NEVADA
                                                     6
.01 1947A
                        the claims of the class representative(s) will fall within the class. To hold
                        otherwise only serves, as a practical matter, to preclude the possibility of a
                        class action lawsuit against homeowners' associations and would therefore
                        increase litigation and impede—if not prohibit—access to the courts. Such
                        a result turns the policy behind the exhaustion of remedies doctrine on its
                        head. It is cases such as this, where a large class of plaintiffs share a
                        common interest in resolving a narrow legal question, that the vicarious
                        exhaustion doctrine would seem to best serve public policy and judicial
                        economy.
                                    Accordingly, I dissent.

                                                                                          .   J.
                                                              Hardesty

                        I concur:

                                                        J.

SUPREME COURT
        OF
     NEVADA
                                                               7
(0) Ig47A