Friday, Sept. 4, 2009 | 2:19 p.m.
CARSON CITY – The Nevada Supreme Court has ruled against a development company being sued for construction defects by four homeowner associations on behalf of their unit owners in Clark County.
The court held that D. R. Horton, Inc., the development company, could not be sued by associations representing the interests of the owners of the individual units.
The construction defects suits were each brought by the homeowner associations of First Light, Dorrell Square, Court Aliante and the High Noon at Arlington Ranch.
The associations sued on behalf of themselves and the owners of the units, which included townhomes and duplexes.
D. R. Horton argued these associations could not represent the individual owners in these suits.
The court said “a homeowners’ association has standing to file a representative action on behalf of its members for constructional defects in individual units of a common-interest community.”
Three of the four unanimous opinions were authored by Chief Justice James Hardesty. The fourth did not identify who wrote the decision.
The court, however, imposed a condition, saying these cases must be handled as class-action suits. Class-action suits are to promote efficiency in the legal system and are to deal with a single wrong.
In the decision on First Light, Hardesty said homeowners often have different claims and “as a practical matter, single-family residence constructional defect cases will rarely be appropriate for class action treatment.”
He wrote: “In other words, because constructional defect cases relate to multiple properties and will typically involve different types of constructional damages, issues concerning causation, defenses and compensation are widely disparate and cannot be determined through the use of generalized proof.
“Rather, individual parties must substantiate their own claims and class action certification is not appropriate,” Hardesty said.
He said the district court must analyze these cases and may revoke the class action certification and require individual trials by the owners.
The court also ruled in a similar case involving the Monarch Estates Homeowners Association, which filed a construction defect suit against Johnson Communities.
Monarch brought suit in 2006 complaining that the concrete masonry unit wall that abuts 35 of the 84 units was defectively constructed.
District Judge Timothy Williams ruled that the homeowners association could not represent the individual owners of the unit.
The court said the association could represent the individual owners and that there were common questions in this case that may appear to satisfy the requirements of a class action suit.
All five cases were returned to the district courts for further action.
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