Court Opinion

ID: 2830781
Source: CourtListenerOpinion
Date Created: 2015-08-26 15:07:59.44632+00
Date Added: 2024-06-11T11:31:39.887587
License: Public Domain

expansion or upgrade of the system, but shall be
                              liable for all regular fees for service such as the
                              annual "standby fee" and the meter set fees with
                              each building permit.
                              Five Creek also filed a Declaration of Covenants, Conditions &
                Restrictions (CC & Rs) for the Job's Peak Ranch Community Association
                (the Association). The CC & Rs permitted Five Creek to appoint and
                remove members of the homeowners' association board at its discretion
                until one of the following occurred: (1) 60 days after Five Creek had
                conveyed 75 percent of the units, (2) 5 years after Five Creek stopped
                selling units, (3) 5 years after Five Creek last subjected new property to
                the CC & Rs, or (4) 10 years after the CC & Rs were recorded. Five Creek
                controlled the homeowners' association during most of the Job's Peak
                development.
                              Despite numerous problems with the water quality, the
                County, through the BOC, approved an Agreement for Water System
                Dedication (the Dedication Agreement), which transferred control and
                operation of the Job's Peak Ranch water system from Five Creek to the
                County in December 2005. The County acknowledged that it "had a
                chance to inspect, test and evaluate the system over the past 24 months,
                and ... accept[ed] the [water] system as-is" with certain delineated
                exceptions.
                              Then, in February 2006, the County approved the Fourth
                Amendment to the Development Agreement and adopted the amendment
                by Ordinance 2006-1162. The Fourth Amendment to the Development
                Agreement removed the language entitling the homeowners to access the
                water system without hook-up, expansion, or upgrade costs. The Fourth
                Amendment also added a section permitting the "prospective collection of
                connection fees" for future homeowners.
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                                     Pursuant to the CC & Rs adopted by Five Creek, Five Creek's
                      control period of the homeowners' association ended in May or June 2006,
                      and the Job's Peak residents gained control of the homeowners' association
                      in July 2006. In September 2009, the County adopted Resolution 2009R-
                      063 to alter the water rates and institute connection fees for Job's Peak
                      homeowners. Resolution 2009R-063 raised water rates for all homeowners
                      in Job's Peak and added connection fees for properties whose interests had
                      not vested. The Association responded by filing an Application for Writs of
                      Mandamus and Prohibition or, in the Alternative, Complaint for
                      Declaratory Relief, Injunction, Damages, and Indemnity against Five
                      Creek and the County in October 2009. 1 The Association challenged the
                      adoption of the Fourth Amendment, the Dedication Agreement, and
                      Resolution 2009R-063 through its contract and declaratory relief claims.
                      Alternatively, if those challenges were unsuccessful, it also sought to
                      enforce the Fourth Amendment against the County. The Association also
                      raised claims for negligence, breach of fiduciary duty, accounting,
                      intentional and negligent misrepresentation, and indemnity.
                                     The County and Five Creek both filed motions to dismiss the
                      Association's complaint. In February 2010, the district court entered an
                      order remanding Resolution 2009R-063 back to the County because notice
                      of the resolution was insufficient, and dismissed all of the Association's
                      other claims because they were time barred or because the Association

                            1 Thiscourt previously denied a writ petition filed by the Association
                      approximately 20 days after filing this appeal and which raised virtually
                      the same issues. See Job's Peak Ranch Cmty. Ass'n, Inc. v. Douglas Cnty.,
                      Docket No. 55694 (Order Denying Petition for Writ of Mandamus or
                      Prohibition, April 9, 2010).

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                 lacked standing. This appeal followed. For the reasons set forth below,
                 we affirm in part and reverse in the part the district court's order. 2
                 Standard of review
                             Initially, we note that the district analyzed the County's and
                 Five Creek's motions to dismiss under the incorrect standard of review,
                 articulating the standard for a petition for judicial review rather than a
                 motion to dismiss pursuant to NRCP 12(b)(5). Nevertheless, we have
                 consistently held that
                             [i]n considering an appeal from an order granting
                             a motion to dismiss for failure to state a claim,
                             this court applies a rigorous, de novo standard of
                             review. In our review, we accept the plaintiffns
                             factual allegations as true and then determine
                             whether these allegations are legally sufficient to
                             satisfy the elements of the claim asserted.
                 Pack v. LaTourette, 128 Nev., Adv, Op. 25, 277 P.3d 1246, 1248 (2012)
                 (internal citation omitted).

                       20n appeal, neither the County nor Five Creek challenge the district
                 court's order setting aside Resolution 2009R-063 and remanding it back to
                 the County for insufficient notice. To be sure, Five Creek's answering
                 brief merely joins in the County's answering brief; any reference to the
                 County's arguments encompasses those presumably being made by Five
                 Creek as well.

                        In addition, the parties do not challenge the district court's ruling on
                 the Association's second claim for relief: a writ of mandamus prohibiting
                 the County from enforcing the water rates. The parties also do not
                 challenge the district court's order finding that the Association has
                 representational standing for its units' owners under NRS 116.3102(1)(d).
                 Therefore, we do not discuss these issues further in this order. Las Vegas
                 Metro. Police Dep't v. Coregis Ins. Co., 127 Nev., Adv. Op. 47, 256 P.3d 958,
                 961 n.2 (2011) ("Because [the appellant] failed to provide any argument or
                 citation to authority on the issues. . . , we will not address these issues.").

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                The district court correctly analyzed whether the Association timely filed to
                set aside Resolution 2009R-063
                              The district court analyzed several statutes in determining
                whether the Association had timely challenged Resolution 2009R-063,
                including portions of NRS Chapters 244, 271, 278, and 318. After
                conducting its analysis, the district court correctly concluded that the
                more specific statute controls and applied NRS Chapter 318, which
                pertains to rate schedules for services provided by a county-operated
                water system. Under NRS 318.199(6), a party wishing to challenge a
                resolution adopted by a county board has 30 days from the resolution's
                effective date to commence an action to set aside the resolution. And in
                this instance, the County adopted Resolution 2009R-063 on September 3,
                2009, to alter the water rates and institute connection fees for Job's Peak
                homeowners, and the resolution became effective on October 1, 2009. The
                Association filed its complaint on October 5, 2009, well within the 30-day
                period to challenge a change in water rates.           See NRS 318.199(6).
                Accordingly, we agree with the district court that the Association's
                challenge to the resolution establishing the new water rates was timely.
                The district court incorrectly dismissed the Association's remaining claims
                as untimely under NRS 278.0235 and NRS 11.190
                      NRS 278.0235
                              The district court broadly concluded that the Association's
                challenges to the County's adoptions of the Development Agreement, its
                amendments, and the Dedication Agreement were untimely under NRS
                278.0235, without considering the impact of NRS 278.0205(1). 3 Under

                      3 The
                          Legislature amended certain subsections in NRS 278.0205 and
                278.0235 during the 2015 legislative session. S.B. 66, 78th Leg. (Nev.
                                                                continued on next page...
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                       NRS 278.0205(1), "[t]he agreement for development of land may be
                       amended or cancelled, in whole or in part, by mutual consent of the parties
                       to the agreement or their successors in interest . ." (Emphasis added.)
                       The term successor in interest is not defined in the statute or in the
                       Development Agreement. We have previously held that a successor in
                       interest is "one who has acquired legal title by deed from a vendor." Title
                       Ins. & Trust Co. v. Chicago Title Ins. Co., 97 Nev. 523, 526, 634 P.2d 1216,
                       1218 (1981); see also Black's Law Dictionary 1431 (6th ed. 1990) (defining
                       "[s]uccessor in interest" as "[o]ne who follows another in ownership or
                       control of property").
                                   According to the terms of the Development Agreement, the
                       "agreement may be amended by the parties by an agreement in writing
                       executed by OWNER and adopted by the COUNTY as an ordinance in
                       compliance with Nevada Revised Statutes." The Development Agreement
                       defines "OWNER" as Five Creek and "all its officers and agents and other
                       persons or entities or association [including successors in interest] which
                       hold any legal or equitable interest in the real property."
                                    Under the Development Agreement, Job's Peak Ranch
                       homeowners who purchased property from Five Creek are successors in
                       interest. NRS 278.0205(1) expressly requires the consent of Five Creek's
                       successors in interest for any amendments to land development
                       agreements. It is unclear from the record whether the homeowners
                       purchased lots from Five Creek prior to the adoption of the Dedication

                       ...continued
                       2015). Any discussion in this order related to these statutes refers to the
                       statutes in effect at the time of the cause of action.

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                 Agreement and/or the Fourth Amendment. 4 And nothing in the record
                 demonstrates that the County provided any evidence that it obtained the
                 consent of any homeowners who had purchased property and had vested
                 rights, but had not given consent, prior to amending the Development
                 Agreement, thus, violating NRS 278.0205(1). Without consent, the
                 Dedication Agreement and the Fourth Amendment would be invalid as to
                 those homeowners. Because a material issue of fact remains
                 undetermined, we remand this matter to the district court for further
                 exploration of this issue.
                               Moreover, pursuant to NRS 278.0235, any action seeking
                 judicial review of a governing body's decision regarding a land
                 development issue "authorized by NRS 278.010 to 278.630, inclusive,"
                 must be brought within 25 days after notice of the final decision has been
                 filed with the clerk of the governing body. Accordingly, without the
                 "mutual consent" required by NRS 278.0205(1), NRS 278.0235's 25-day
                 limitations period for judicial review would not apply because any
                 governmental action on the Dedication Agreement and the Fourth
                 Amendment would be invalid and not "authorized by NRS 278.010 to NRS
                 278.630," as it relates to those non-consenting homeowners with vested
                 rights in the Development Agreement.
                       NRS 11.190
                               The district court also dismissed the Association's negligence,
                 misrepresentation, fraud, breach of fiduciary duty, accounting, and
                 indemnity claims, stating that they were barred by NRS 11.190's statutes

                       4 The Association purports to represent approximately 55 Job's Peak
                 Ranch lot owners; however, it fails to clarify when each of those
                 individuals became lot owners.

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                 of limitations. While we agree with the district court's dismissal of the
                 Association's claims for breach of fiduciary duty and misrepresentation,
                 we disagree that the Association's remaining claims were statutorily
                 barred.
                              "In determining whether a statute of limitations has run
                 against an action, the time must be computed from the day the cause of
                 action accrued. A cause of action 'accrues' when a suit may be maintained
                 thereon." Clark v. Robison, 113 Nev. 949, 951, 944 P.2d 788, 789 (1997)
                 (internal citation omitted). If the facts giving rise to the cause of action
                 are matters of public record then "Nile public record gave notice sufficient
                 to start the statute of limitations running."   Cumming v. San Bernardino
                 Redev. Agency, 125 Cal. Rptr. 2d 42, 46 (Ct. App. 2002); see also Allen v.
                 Webb, 87 Nev. 261, 272, 485 P.2d 677, 684 (1971) (Gunderson, J.,
                 concurring) (concluding that, where a written document regarding real
                 property was not properly recorded, there was not proper notice of the
                 conveyance of that property so as to trigger the statute of limitations
                 period on a quiet title action).
                              The following dates are pertinent to this discussion: the
                 Dedication Agreement was recorded on December 20, 2005; the County
                 published notice of its intentions regarding the Fourth Amendment on
                 January 11, 2006, and recorded the amendment on March 3, 2006; and
                 Five Creek's control of the Association ended on July 22, 2006, when the
                 homeowners elected a new board for the Association. The Association filed
                 its claims on October 5, 2009. Based on these dates, we determine that
                 the Association's causes of action accrued on the following dates: (1) the
                 claims against the County and Five Creek for declaratory relief and
                 specific performance accrued on December 20, 2005, when the County

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                accepted the water system under the Dedication Agreement; (2) the claim
                against the County for breach of contract accrued on March 3, 2006, when
                the County recorded the Fourth Amendment; (3) the claims against the
                County for negligence in accepting the Dedication Agreement accrued on
                December 20, 2005, when the agreement was recorded; (4) the claim
                against Five Creek for breach of fiduciary duty while in control of the
                Association accrued at the latest on July 22, 2006; (5) the claim against
                Five Creek and the County for accounting while Five Creek was in control
                of the Association accrued upon adoption of Resolution No. 2009R-063 in
                September 2009, when the Association would become aware that possibly
                not all funds "were expended for the benefit" of the water system; (6) the
                claims against the County and Five Creek for intentional and negligent
                misrepresentation accrued on March 3, 2006, when the Fourth
                Amendment was recorded and dispelled any reasonable belief that the
                homeowners' water rates would not be increased; and (7) the claim against
                the County and Five Creek for either "express or implied duty to
                indemnify" homeowners would accrue when the Fourth Amendment was
                recorded on March 3, 2006.
                            Pursuant to NRS 11.190, the Association's claims have the
                following periods of limitation: (1) claims for declaratory relief and specific
                performance based on breach of a written contract expire after six years,
                NRS 11.190(1)(b); (2) similarly, claims for breach of contract expire after
                six years, NRS 11.190(1)(b); (3) claims for negligence based on breach of a
                written contract expire after six years, NRS 11.190(1)(b); (4) claims for
                breach of fiduciary duty expire after three years, NRS 11.190(3)(d); (5)
                claims for accounting based on an underlying breach of contract claim
                expire after six years, NRS 11.190(1)(b); (6) claims for misrepresentation

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                or fraud expire after three years, NRS 11.190(3)(d); and (7) equitable
                claims for express indemnity expire after six years, NRS 11.190(1)(b), and
                claims for implied indemnity expire after four years, NRS 11.190(2)(c).
                Thus, we conclude that the district court correctly concluded that the
                Association's claims for breach of fiduciary duty and misrepresentation,
                filed on October 5, 2009, were barred by the three-year statute of
                limitations for those causes of action, which expired on July 22, 2009, and
                March 3, 2009, respectively. The district court erroneously concluded,
                however, that the Association's remaining claims were statutorily barred,
                as they were subject to four and six year limitations periods that had not
                yet expired at the time the Association filed its claims. 5
                              For the reasons set forth above, we ORDER the judgment of
                the district court AFFIRMED IN PART AND REVERSED IN PART AND
                REMANDED to the district court for further proceedings consistent with
                this order.

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                cc: Ninth Judicial District Court, Department 2

                      5 The Association also argues that the district court erred in
                dismissing its claims to enforce the Development Agreement and its
                amendments because it was a third-party beneficiary to the agreements.
                Because we agree with the district court's finding that the Association has
                representational standing under then-existing NRS 116.3102(1)(d), we
                determine that this argument is moot.

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                      James Georgeson, Settlement Judge
                      Kelly R. Chase
                      Thorndal Armstrong Delk Balkenbush & Eisinger/Reno
                      Douglas County District Attorney/Minden
                      Minden Lawyers, LLC
                      Douglas County Clerk

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