Articles Posted in Nevada Supreme Court

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After a general contractor (Perini) was sued in connection with alleged reinforcing steel defects on commercial construction project, Perini filed a counterclaim against the steel installer (Century) and the company to whom the steel installer assigned its assets (PCS). Century and PCS in turn filed third- and fourth-party complaints against several entities, including the company that provided structural engineering services for the project (Halcrow), alleging negligence, indemnity, contribution, an declaratory relief. Halcrow moved to dismiss the third- and fourth-party complaints, arguing that unintentional tort claims against design professionals in commercial construction projects are barred when the claimant incurs purely economic losses. The district court granted Halcrow's motion. The district court subsequently granted Century's and PCS's motions to amend their complaints to allege a claim for negligent misrepresentation. Halcrow then filed this petition for extraordinary relief. The Supreme Court issued the writ and directed the district court to vacate its order granting PCS and Century leave to amend their third- and fourth-party complaints, holding that, in commercial construction defect litigation, the economic loss doctrine applies to bar claims against design professionals for negligent misrepresentation where the damages alleged are purely economic. View "Halcrow, Inc. v. Dist. Court" on Justia Law

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Respondents were involved in the development and construction of Holcomb Condominiums (Condos). Appellant was the homeowners' association for Condos. Appellant filed, on behalf of itself and all condominium homeowners, a constructional defect complaint against Respondents, alleging a variety of defects and claims for negligence and breach of warranty. The district court dismissed Appellant's complaint as time-barred by the two-year contractual limitations period found in nearly identical arbitration agreements attached to each of the homeowners' purchase contracts. The court also denied as futile Appellant's request to amend its complaint to add causes of action for willful misconduct and fraudulent concealment based on missing roof underlayment, finding that the claim would also be time-barred by the contractual limitations period. The Supreme Court reversed and remanded, holding (1) arbitration agreements containing a reduced limitations period that are attached to and incorporated into purchase contracts are unlawful; (2) the district court erred in finding Appellants' negligence-based claims and breach of warranty claims were time-barred; and (3) because the contractual limitations provision was unenforceable, the district court's denial of the motion to amend on this basis was improper. View "Holcomb Condo. Homeowners' Ass'n v. Stewart Venture, LLC" on Justia Law

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In 2009, Respondents hired a construction company (Company) to construct a shooting range. Respondents paid Company's bills as the construction continued through the summer and fall. By September, Company had billed $48,810. Respondents paid $46,000 by October but then refused to pay anything further. Soon thereafter, Company quit the project, which was largely finished. The range opened for business soon after. At the end of the year, Respondents installed soundproofing to the building. In March 2010, Company recorded its mechanics lien. In August, Company filed a complaint against Respondents seeking to recover $40,000 in damages and costs. The district court held the lien was not timely and was therefore frivolous and ordered the lien released, ruling that the "work of improvement" of constructing the shooting range concluded more than ninety days before Company filed the lien. At issue on appeal was whether the soundproofing constituted a "work of improvement." The Supreme Court affirmed, holding that the district court did not clearly err in finding that the soundproofing was not within the scope of the "work of improvement" or finding that the lien was untimely and frivolous. View "I. Cox Constr. Co. v. CH2 Invs., LLC" on Justia Law

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Petitioner, a developer, helped construct a planned development (the "community"). The community HOA sued the developers, sellers, and builders of the development, including Petitioner, on behalf of the individual homeowners, alleging construction-defect-based claims for breach of implied and express warranties and negligence. Thereafter, the community HOA filed a motion for the district court to determine that its claims satisfied the class action requirements of Nev. R. Civ. P. 23. The district court concluded that the HOA did not need to satisfy the requirements of Rule 23 and thus allowed the action to proceed without conducting a class action analysis. Petitioner sought a writ of mandamus or prohibition, claiming that the district court acted arbitrarily and capriciously by refusing to undertake a class action analysis. The Supreme Court granted Petitioner's petition to the extent that it directed the district court to analyze the Rule 23 factors in this case. In so doing, the Court clarified the application of D.R. Horton v. District Court when a homeowners' association seeks to litigate construction-defect claims on behalf of its members under Nev. Rev. Stat. 116.3102(1)(d). View "Beazer Homes Holding Corp. v. Dist. Court " on Justia Law

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This case arose when debtor Fontainebleau Las Vegas Holdings, LLC filed for bankruptcy while seeking to construct and develop and $2.8 billion hotel-casino resort. The U.S. Bankruptcy Court certified questions to the Nevada Supreme Court relating to the viability of equitable subrogation and the enforceability of contractual subordination against mechanic's lien claimants under Nevada's mechanic's and materialman's lien statutes. The Supreme Court answered (1) the doctrine of equitable subrogation does not apply against mechanic's lien claimants, such that a mortgage incurred after the commencement of work on a project will not succeed to the senior priority position of a preexisting lien satisfied by the mortgagee if intervening mechanics' liens exist; and (2) contractual subordination agreements executed by mechanic's lien claimants purporting to subordinate mechanic's liens prospectively are not enforceable, but mechanic's lien claimants may waive their statutorily protected rights when the precise requirements of Nev. Rev. Stat. 108.2457 are met. View "In re Fontainebleau Las Vegas Holdings, LLC" on Justia Law

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Respondent/cross-appellant Precision Construction, Inc. solicited bids from subcontractors for the design and installation of an early suppression, fast response sprinkler system. Certified Fire Protection, Inc. submitted a bid. Precision notified Certified that it won the bid, and Precision entered into a contract with the owner to complete the project. Certified obtained a copy of the subcontract along with a set of construction plans and sprinkler system specifications. The subcontract’s provisions required Certified to complete the preliminary design drawings of the sprinkler system within two weeks and to obtain a certificate naming Precision as an additional insured. Over the next few weeks, Precision asked Certified several times to sign the subcontract and provide the additional-insured certificate. Certified objected to the subcontract as imposing terms that differed from the bid specifications. It complained that the unanticipated terms changed the scope of work and that it would have to amend its bid accordingly. Certified also took exception to some of the generic contractual provisions, including the additional-insured requirement. Nonetheless, Certified hired specialists to work on the Precision contract, and began work. Precision and Certified communicated several more times about getting the subcontract signed. Eventually Precision terminated its relationship with Certified for refusing to sign the subcontract, for not providing the additional-insured endorsement, and for incorrect designs. At Precision’s request, Certified submitted an itemized billing for the work it had performed; its bill reported costs of $25,185.04, which included design work and permit fees for the project. Precision deemed the costs too high and never paid. Certified placed a mechanic’s lien on the property and sued to recover for its design-related work. Certified’s complaint sought to foreclose the mechanic’s lien and damages for unjust enrichment, quantum meruit, and breach of contract. On appeal, Certified argued that the district court failed to determine whether a contract for the design-only work existed but conceded that the parties never reached agreement on the full design and installation contract. Certified also asserted that the district court erred in concluding that Precision was neither unjustly enriched nor liable to Certified in quantum meruit because Precision did not benefit from the work performed. On cross-appeal, Precision argued that the district court abused its discretion in denying Precision’s motion for attorney fees. Because the Supreme Court agreed with the district court that Certified did not provide sufficient evidence to establish either an implied-in-fact contract or unjust enrichment, the Court affirmed. Additionally, the Court affirmed on cross-appeal the district court’s order denying attorney fees. View "Certified Fire Prot. v. Precision Constr." on Justia Law

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In consolidated appeals, the Supreme Court addressed whether a claim for fraud in the inducement was available when the basis for the claim contradicts the very language of the contract at issue in the parties’ dispute. Upon review of the facts of this case, the Court concluded that when a fraudulent inducement claim contradicts the express terms of the parties’ integrated contract, it fails as a matter of law. Additionally, the Court addressed the propriety of the damages awarded by the jury under a separate claim for breach of contract. The Court affirmed the compensatory damages award in this case, but reversed the punitive damages award, as the Court reversed the finding of fraud on which the punitive damages were based. View "Road & Highway Builders v. N. Nev. Rebar" on Justia Law

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A casino-hotel filed for bankruptcy. Appellant, the administrative agent for a syndicate of lenders that loaned money to the casino's developers, and Respondents, contractors, subcontractors, and suppliers who asserted statutory liens against the property, entered into a dispute over the priority of their respective liens on the property. The Supreme Court accepted questions certified to it from the bankruptcy court regarding the application of contractual subordination, equitable subordination, and equitable subrogation in the context of a mechanic's lien. Appellant moved to strike Respondents' appendix, contending that the included documents contained information beyond the facts certified to the Court by the bankruptcy court. Respondents opposed the motion, arguing that the additional information was necessary for the Court's understanding of the certified legal questions. The Supreme Court granted the motion to strike after determining that Respondents' appendix was filed solely to contradict the certification order and the complaint, holding that while an appendix may be filed to assist the Court in understanding the matter, it may not be used to controvert the facts as stated in the certification order. View "In re Fontainebleau Las Vegas Holdings" on Justia Law

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Appellant, an LLC, purchased an "all-risks" insurance policy for an office building it owned from Insurer. The building was significantly damaged after a general contractor Appellant had hired to renovate the building removed the waterproof membrane on the roof and the building was exposed to substantial rainfall. Insurer denied coverage, concluding that the damage did not result from a covered cause of loss. Appellant sued Insurer, alleging that Insurer breached the insurance policy and denied coverage in bad faith. The district court granted summary judgment in favor of Insurer, concluding that the policy unambiguously excluded from coverage for the damage sustained to the building. The Supreme Court affirmed, holding that the damages sustained by the building were excluded from coverage based on the policy's rain limitation and the contractor's faulty workmanship in repairing the roof. In addition, although the doctrine of efficient proximate cause did not provide relief under the facts of this case, the Court adopted the doctrine of efficient proximate cause in Nevada. View "Fourth St. Place v. Travelers Indem. Co." on Justia Law

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At issue in this extraordinary writ proceeding was whether Nev. Rev. Stat. 11.259(1) compels dismissal where the initial pleading in an action alleging nonresidential construction malpractice was served without filing the attorney affidavit and expert report required by Nev. Rev. Stat. 11.258(1) and (3). The Supreme Court granted the writ, holding that a defective pleading served in violation of section 11.258 is void ab initio and of no legal effect and, thus, cannot be cured by amendment. The Court held that because the initial pleadings served by certain real parties in interest in this case did not include the attorney affidavit and expert report as required by section 11.258, those pleadings were void ab initio, and the district court did not have discretionary authority to allow the parties to amend their pleadings to cure their failure to comply with section 11.258. View "Otak Nevada, L.L.C. v. Dist. Court" on Justia Law