Court Opinion

ID: 3132447
Source: CourtListenerOpinion
Date Created: 2015-10-19 15:09:07.966021+00
Date Added: 2024-06-11T11:53:53.653837
License: Public Domain

appellants had "not shown by competent evidence any deficiency that
                would warrant the relief being sought." This appeal followed.
                            On appeal, appellants argue that respondents fraudulently
                represented to the arbitrator that the amended HOA rules and regulations
                were recorded and that respondents otherwise properly notified appellants
                that the rules had been amended to prohibit non-service animals from
                being in the clubhouse. During the arbitration proceedings, the arbitrator
                directed respondents to brief the notice issue. Respondents' letter
                addressing the arbitrator's notice concern essentially stated that although
                respondents were not in possession of any minutes documenting how or
                the exact date when the rule regarding animals in the clubhouse was
                changed, the rules were nevertheless properly amended by the board of
                directors sometime in October 2006; Respondents further stated that they
                sent appellants a welcome letter when they took over management of the
                HOA in 2007, the welcome letter invited homeowners to visit respondents'
                webpage, and on that webpage was a link to the rules and regulations,
                such that appellants were on "constructive notice" of the rule change
                regarding dogs, and thus they were properly fined for violating that
                amended rule.
                            Appellants argue that the welcome letter containing the web
                address, which, if visited would contain a link to the amended rules, does
                not suffice as statutory notice of any rule amendment. They also argue
                that before being fined, the only copy of the rules and regulations provided

                      'The motion to vacate was originally denied on the basis that it was
                untimely. Following an appeal, the district court's order was reversed and
                remanded for a decision on the merits of the motion to vacate. The
                decision on the merits is challenged in this appeal.

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                 to them was the original 2005 version, containing no restrictions on dogs
                 in the clubhouse. 2 They further contend that, regardless, the webpage
                 link was to the original 2005 rules and regulations, even as late as August
                 2009, when they checked it after receiving the arbitration decision. 3
                 Respondents did not meaningfully refute these arguments, and they did
                 not refute in any way the argument that the link led to the original 2005
                 rules. And when asked to specifically address the notice issue on appeal,
                 respondents continue to argue that the "sending of this letter with the
                 Association's website and access was akin to the Association providing to
                 [appellants] a copy of the governing documents," and respondents still do
                 not address appellants' argument that even if that were true, the webpage
                 linked to the original 2005 rules.
                              Having considered the record and the parties' arguments, we
                 reverse the district court's order. Although respondents maintain that
                 they provided appellants with "constructive notice" of the rule amendment
                 via the welcome letter pointing to the webpage containing a link to the
                 rules, NRS 116.12065 requires HOAs to notify homeowners of changes to

                       2 Although  the rules and regulations were purportedly amended in
                 October 2006, it is undisputed that when appellants purchased their home
                 in November 2007, they were provided with a copy of the original 2005
                 rules and regulations, which do not ban dogs from the clubhouse. See NRS
                 116.4109(1), (3).

                       3 1n opposing the motion to confirm, appellants pointed out that on
                 August 13, 2009, they sought reconsideration of the August 6, 2009,
                 arbitration award, based in part on their argument that the link on the
                 webpage led to the original 2005 rules, and thus the arbitrator's finding of
                 constructive notice was grounded on a misrepresentation that notice of the
                 amended rules was provided via the link. Neither respondents nor the
                 arbitrator substantively addressed this argument.

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                the HOA's rules and regulations by mailing or hand delivering "a copy of
                the change that was made."    See also NRS 116.049. Even if constructive
                notice rather than the notice set forth by statute were acceptable, and
                even if the welcome letter inviting a visit to the webpage, which contains
                an embedded link to the rules, could be considered "constructive notice,"
                respondents did not dispute below or on appeal appellants' argument that
                as late as August 2009, the webpage's link was to the original rules, which
                contained no restriction on dogs in the clubhouse. Thus, there is no
                colorable justification for the award, and the error of accepting
                respondents' contention that appellants received proper "constructive
                notice" of the amended rule despite a lack of authority to support that
                constructive notice is acceptable in lieu of statutory notice, or that such
                notice was even properly achieved in light of appellants' arguments and
                evidence to the contrary, demonstrates a manifest disregard for the law,
                warranting reversal. Health Plan of Nev., Inc. v. Rainbow Med., LLC, 120
                Nev. 689, 698, 100 P.3d 172, 178 (2004) (noting that confirmation of an
                arbitration award is proper if "there is a colorable justification for the
                outcome"); Clark Cnty. Sch. Dist. v. Rolling Plains Constr., Inc., 117 Nev.
                101, 103-04, 16 P.3d 1079, 1081 (2001) (noting that arbitration awards are
                reviewed to determine whether the arbitrator's decision represents a
                "manifest disregard for the law," which generally means an error that is
                obvious and capable of being readily perceived, or, in other words, a
                decision that is arbitrary or capricious), disapproved on other grounds by
                Sandy Valley Assocs. v. Sky Ranch Estates Owners Ass'n,    117 Nev. 948, 35
                P.3d 964 (2001).
                            Accordingly, we reverse the district court order denying
                appellants' motion to vacate and confirming the arbitration award, and

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                      remand this matter to the district court with instructions to vacate the
                      arbitration award.
                                   It is so ORDERED. 4

                                                                 Saitta

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                                                                                           ,J.
                                                                 Pickering

                      cc:   Hon. Valorie J. Vega, District Judge
                            Deborah D. Sanzaro
                            Michael G. Sanzaro
                            Lipson Neilson Cole Seltzer & Garin, P.C.
                            Leach Johnson Song & Gruchow
                            Eighth District Court Clerk

                            4 We have considered appellants' other arguments on appeal and
                      conclude that they do not warrant any additional relief.

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