As a frequent traveler into Nevada, I often notice how well designed and constructed the rockery walls are below the Somersett housing project, between Somersett and I-80. Apparently, at least according to the Somersett Owners Association (SOA), looks can be deceiving.

SOMERSETT HOUSING PROJECT IN RENO

In early 2006, Q & D Construction hired Parsons Bros. Rockeries, Inc. to construct more than 13 miles of rockery walls to support the project’s terraced lots. The rockery walls portion of the development was completed in December 2006, after which the project engineer signed off noting the walls were built in accordance with the plans and building code. Approximately 3,700 housing units have been built to date.

The expected lifespan of the rockery walls was around 50 years, but some began failing as early as 2011. After two walls collapsed on the same day in February 2017, SOA hired consultants who determined some of the walls were “globally unstable” and not all were constructed according to plans and specs.

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SUE WITHIN SIX YEARS OF COMPLETION

In 2017, SOA brought suit against the Somersett developer and other parties involved with the rockery wall construction for negligence, breach of warranties and bad faith. i.e., the usual. The defendants moved for summary judgment, a pretrial maneuver, on the ground that the six-year statute of repose (like a statute of limitations) in NRS 11.202 required that a construction defect action be filed within six years after substantial completion of the rockery wall portion of the Somersett project. Recall the walls were completed in 2006. The lawsuit was filed in 2017, about 11 years later.

SUBSTANTIAL COMPLETION

The trial court ruled in favor of the defendants. SOA appealed. The Nevada Supreme Court, en banc, upheld that decision.

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The Supreme Court essentially concluded that under any definition of substantial completion, such as the definition endorsed by the American Institute of Architects, the rockery walls were completed more than six years before the lawsuit was filed.

As the court wrote: “Here SOA failed to offer anything beyond gossamer threads of whimsy, speculation, and conjecture” to support its argument that plaintiffs commenced this action within that six-year period. Absent a showing of intentional fraud, suit within six years of substantial completion is necessary. SOA loses. Even the 2019 version of NRS 11.202 which extends the six-year deadline to 10 years, would not have helped the Association.

Jim Porter is an attorney with Porter Simon licensed in California and Nevada, with offices in Truckee and Tahoe City, California, and Reno, Nevada. Jim’s practice areas include: real estate, development, construction, business, HOAs, contracts, personal injury, accidents, mediation and other transactional matters. He may be reached at porter@portersimon.com or http://www.portersimon.com