Azure Manor/Rancho de Paz Homeowners Association v. D.R. Horton, Inc.

Filing 35

ORDER denying 26 Motion to Compel; Status Report due by 9/25/2017. The Court ORDERS the parties to schedule and hold a N.R.S. § 40.680 Mediation no later than October 25, 2017. Signed by Magistrate Judge Nancy J. Koppe on 9/25/2017. (Copies have been distributed pursuant to the NEF - JM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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AZURE MANOR/RANCHO DE PAZ
HOMEOWNERS ASSOCIATION

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Plaintiff(s),

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vs.

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D.R. HORTON, INC.,

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Defendant(s).

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Case No. 2:14-cv-02222-JCM-NJK
ORDER
(Docket No. 26)

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Pending before the Court is Defendant D.R. Horton’s motion to compel attendance at mediation.
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Docket No. 26. Plaintiff filed a response in opposition. Docket No. 30. Defendant filed a reply.
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Docket No. 32. For reasons discussed more fully below, the motion is DENIED.
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I. FACTUAL OVERVIEW
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Plaintiff Azure Manor Community’s Homeowner’s Association brings suit in the instant case
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on behalf of the homeowners for alleged construction defects. Docket No. 26 at 3. Defendant
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constructed 103 of the 202 homes in the community. Docket No. 30 at 2. On January 7, 2015,
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Defendant filed a motion to stay litigation, Docket No. 5, and a motion to dismiss, Docket No. 6. The
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Court granted the motion to stay litigation and ordered the parties to complete the pre-litigation
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requirements set forth by Nevada Revised Statute (“N.R.S.”) § 40.647 and N.R.S. § 40.680 (“Chapter
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40 requirements”). Docket No. 19. The Court granted Plaintiff conditional class certification due to the
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complexity of the case and in an effort to allow discovery to proceed. Id. at 4. Therefore, Plaintiff was
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given standing to bring suit on behalf of the class members. Because of the conditional nature of the

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class certification, the Court is preserving “[t]he question of how the action should be classified- class

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action, joinder, consolidated, or otherwise...for consideration after pre-litigation requirements have been

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met.” Id. at 5.

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N.R.S. § 40.647 requires a plaintiff in a construction defect claim to provide the defendant with

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the opportunity to inspect the alleged defect and determine if the defendant will repair the damage or

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proceed with litigation. N.R.S. § 40.680 requires parties to participate in a mediation before

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commencing a construction defect action. As of January 7, 2015, Defendant had not completed the

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N.R.S. § 40.647 inspections and Plaintiff was ordered to provided Defendant the opportunity to inspect

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the homes with the alleged defects. Docket No. 19 at 7. On July 1, 2016, Defendant notified Plaintiff

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that it had completed the inspections in accordance with N.R.S. § 40.680 and the Court’s order. Docket

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No. 31-3 at 2.

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In the parties’ attempts to schedule and conduct the N.R.S. § 40.680 mediation, Defendant

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requested the presence of each of the homeowners of the 64 homes it inspected to attend the mediation

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in the stead of the HOA representative. Docket Nos. 30-6 at 28, 30-14 at 5-6, 30-16 at 2-3. Plaintiff

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nonetheless scheduled a mediation without the presence of the homeowners, knowing Defendant would

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not participate. Docket No. 30-16.

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II. ANALYSIS

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A.

Plaintiff has standing to sue and therefore possesses full settlement authority

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A named plaintiff in a class action has the authority “to decide matters of litigation strategy” on

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behalf of the class throughout the life of an action. Koby v. ARS National Services, Inc., 846 F.3d 1071,

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1077 (9th Cir. 2017). Pre-litigation attempts to resolve a matter include the decision to settle through

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methods of alternative dispute resolution such as mediation, settlement conferences, and early neutral

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evaluations. Id. Courts may grant conditional class certification prior to issuing a final determination

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on the merits, under the appropriate circumstances. Nev. R. Civ. P. 23(c)(1); see White v. Experian Info.

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Solutions, Inc., 803 F. Supp. 2d 1086, 1094 (C.D. Cal. 2011); see also Padan v. West Bus Solutoins,

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LLC, 2016 U.S. Dist. LEXIS 8916, at *5 (D. Nev. Jan. 25, 2016).

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In its requests for the homeowners’ attendance at the mediation, Defendant ignores the Court’s

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order granting Plaintiff standing in direct connection to the obligation to fulfill the Chapter 40

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requirements. Defendant submits that completing the mediation before the Court classifies the action

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“will have been for naught” because the Court will likely deny class certification after a Nev. R. Civ.

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P. 23 analysis. Docket No. 26 at 4. Defendant ignores the Court’s reasoning that it is unable to conduct

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“a meaningful analysis of the Nev. R. Civ. P. 23 requirements....until the parties have conclusively

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fulfilled the pre-litigation procedural requirements of Chapter 40.” Docket No. 19 at 4. By granting

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conditional class certification, the Court found that Plaintiff has standing to sue and to dictate the

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litigation strategy, as well as the required full authority to reach a settlement on behalf of the

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homeowners. Docket No. 19 at 4. Therefore, the Court finds that the individual homeowners are not

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required to be present at the mediation.

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B.

Mediation requirement was not fulfilled

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N.R.S. § 40.680 requires the plaintiff and each party alleged to have caused the construction

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defect to select a mediator, pay for the mediation, and attend the mediation in good faith. Moreover,

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Fed. R. Civ. P. 16(f)(1) permits the Court to issue sanctions when it has determined a party has failed

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to participate in a conference in good faith. Cf. Harden v. Nev. Dep’t of Corr., 2017 U.S. Dist. LEXIS

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148196, at *6 (D. Nev. Sept. 12, 2017) (denying a motion for sanctions based on the good faith efforts

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of the required individuals in attending the meditation). A mediation cannot be considered completed

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if one party does not attend. Id.

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As mentioned above, Plaintiff has the required full settlement authority to participate in a

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mediation on behalf of the homeowners. Defendant told Plaintiff on three separate occasions it would

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not participate in the mediation unless all the homeowners were present (Docket Nos. 30-6 at 28, 30-14

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at 5-6, 30-16 at 2-3). Instead of filing a motion with the Court to ensure Defendant’s required

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attendance, Plaintiff finalized the timing of the mediation, attended the mediation, and submits that the

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mediation as conducted is complete and sufficient. See Alroma, LLC v. Silverleaf Fin., LLC, 2012 U.S.

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Dist. LEXIS 21784 (D. Nev. Feb. 22, 2012) (granting a motion to compel defendant to attend a private

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mediation and mediate in good faith); see also Docket Nos. 30-17 at 2, 30-18 at 2, 30 at 11. Although

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two subcontractors participated in the mediation, Defendant, did not. Docket No. 30-18 at 2. Therefore,

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the Court finds that the N.R.S. § 40.680 mediation has not yet occurred.

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III. CONCLUSION

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For the reasons discussed more fully above, the Court DENIES Defendant’s motion. The

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Court ORDERS the parties to schedule and hold a N.R.S. § 40.680 Mediation no later than October 25,

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2017. The mediation must be attended by Plaintiff and its counsel, Defendant and its counsel, and any

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and all subcontractors and their counsel. No other individuals are required to attend the mediation to

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satisfy the requirements under N.R.S. § 40.680. The parties must inform the Court when the mediation

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has been completed.

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IT IS SO ORDERED.

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DATED: September 25, 2017

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______________________________________
NANCY J. KOPPE
United States Magistrate Judge

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