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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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 DISTRICT OF NEVADA 10 11 AZURE MANOR/RANCHO DE PAZ HOMEOWNERS ASSOCIATION 12 Plaintiff(s), 13 vs. 14 D.R. HORTON, INC., 15 Defendant(s). ) ) ) ) ) ) ) ) ) ) ) Case No. 2:14-cv-02222-JCM-NJK ORDER (Docket No. 26) 16 Pending before the Court is Defendant D.R. Horton’s motion to compel attendance at mediation. 17 Docket No. 26. Plaintiff filed a response in opposition. Docket No. 30. Defendant filed a reply. 18 Docket No. 32. For reasons discussed more fully below, the motion is DENIED. 19 I. FACTUAL OVERVIEW 20 Plaintiff Azure Manor Community’s Homeowner’s Association brings suit in the instant case 21 on behalf of the homeowners for alleged construction defects. Docket No. 26 at 3. Defendant 22 constructed 103 of the 202 homes in the community. Docket No. 30 at 2. On January 7, 2015, 23 Defendant filed a motion to stay litigation, Docket No. 5, and a motion to dismiss, Docket No. 6. The 24 Court granted the motion to stay litigation and ordered the parties to complete the pre-litigation 25 requirements set forth by Nevada Revised Statute (“N.R.S.”) § 40.647 and N.R.S. § 40.680 (“Chapter 26 40 requirements”). Docket No. 19. The Court granted Plaintiff conditional class certification due to the 27 complexity of the case and in an effort to allow discovery to proceed. Id. at 4. Therefore, Plaintiff was 28 1 given standing to bring suit on behalf of the class members. Because of the conditional nature of the 2 class certification, the Court is preserving “[t]he question of how the action should be classified- class 3 action, joinder, consolidated, or otherwise...for consideration after pre-litigation requirements have been 4 met.” Id. at 5. 5 N.R.S. § 40.647 requires a plaintiff in a construction defect claim to provide the defendant with 6 the opportunity to inspect the alleged defect and determine if the defendant will repair the damage or 7 proceed with litigation. N.R.S. § 40.680 requires parties to participate in a mediation before 8 commencing a construction defect action. As of January 7, 2015, Defendant had not completed the 9 N.R.S. § 40.647 inspections and Plaintiff was ordered to provided Defendant the opportunity to inspect 10 the homes with the alleged defects. Docket No. 19 at 7. On July 1, 2016, Defendant notified Plaintiff 11 that it had completed the inspections in accordance with N.R.S. § 40.680 and the Court’s order. Docket 12 No. 31-3 at 2. 13 In the parties’ attempts to schedule and conduct the N.R.S. § 40.680 mediation, Defendant 14 requested the presence of each of the homeowners of the 64 homes it inspected to attend the mediation 15 in the stead of the HOA representative. Docket Nos. 30-6 at 28, 30-14 at 5-6, 30-16 at 2-3. Plaintiff 16 nonetheless scheduled a mediation without the presence of the homeowners, knowing Defendant would 17 not participate. Docket No. 30-16. 18 II. ANALYSIS 19 A. Plaintiff has standing to sue and therefore possesses full settlement authority 20 A named plaintiff in a class action has the authority “to decide matters of litigation strategy” on 21 behalf of the class throughout the life of an action. Koby v. ARS National Services, Inc., 846 F.3d 1071, 22 1077 (9th Cir. 2017). Pre-litigation attempts to resolve a matter include the decision to settle through 23 methods of alternative dispute resolution such as mediation, settlement conferences, and early neutral 24 evaluations. Id. Courts may grant conditional class certification prior to issuing a final determination 25 on the merits, under the appropriate circumstances. Nev. R. Civ. P. 23(c)(1); see White v. Experian Info. 26 Solutions, Inc., 803 F. Supp. 2d 1086, 1094 (C.D. Cal. 2011); see also Padan v. West Bus Solutoins, 27 28 2 1 LLC, 2016 U.S. Dist. LEXIS 8916, at *5 (D. Nev. Jan. 25, 2016). 2 In its requests for the homeowners’ attendance at the mediation, Defendant ignores the Court’s 3 order granting Plaintiff standing in direct connection to the obligation to fulfill the Chapter 40 4 requirements. Defendant submits that completing the mediation before the Court classifies the action 5 “will have been for naught” because the Court will likely deny class certification after a Nev. R. Civ. 6 P. 23 analysis. Docket No. 26 at 4. Defendant ignores the Court’s reasoning that it is unable to conduct 7 “a meaningful analysis of the Nev. R. Civ. P. 23 requirements....until the parties have conclusively 8 fulfilled the pre-litigation procedural requirements of Chapter 40.” Docket No. 19 at 4. By granting 9 conditional class certification, the Court found that Plaintiff has standing to sue and to dictate the 10 litigation strategy, as well as the required full authority to reach a settlement on behalf of the 11 homeowners. Docket No. 19 at 4. Therefore, the Court finds that the individual homeowners are not 12 required to be present at the mediation. 13 B. Mediation requirement was not fulfilled 14 N.R.S. § 40.680 requires the plaintiff and each party alleged to have caused the construction 15 defect to select a mediator, pay for the mediation, and attend the mediation in good faith. Moreover, 16 Fed. R. Civ. P. 16(f)(1) permits the Court to issue sanctions when it has determined a party has failed 17 to participate in a conference in good faith. Cf. Harden v. Nev. Dep’t of Corr., 2017 U.S. Dist. LEXIS 18 148196, at *6 (D. Nev. Sept. 12, 2017) (denying a motion for sanctions based on the good faith efforts 19 of the required individuals in attending the meditation). A mediation cannot be considered completed 20 if one party does not attend. Id. 21 As mentioned above, Plaintiff has the required full settlement authority to participate in a 22 mediation on behalf of the homeowners. Defendant told Plaintiff on three separate occasions it would 23 not participate in the mediation unless all the homeowners were present (Docket Nos. 30-6 at 28, 30-14 24 at 5-6, 30-16 at 2-3). Instead of filing a motion with the Court to ensure Defendant’s required 25 attendance, Plaintiff finalized the timing of the mediation, attended the mediation, and submits that the 26 mediation as conducted is complete and sufficient. See Alroma, LLC v. Silverleaf Fin., LLC, 2012 U.S. 27 28 3 1 Dist. LEXIS 21784 (D. Nev. Feb. 22, 2012) (granting a motion to compel defendant to attend a private 2 mediation and mediate in good faith); see also Docket Nos. 30-17 at 2, 30-18 at 2, 30 at 11. Although 3 two subcontractors participated in the mediation, Defendant, did not. Docket No. 30-18 at 2. Therefore, 4 the Court finds that the N.R.S. § 40.680 mediation has not yet occurred. 5 III. CONCLUSION 6 For the reasons discussed more fully above, the Court DENIES Defendant’s motion. The 7 Court ORDERS the parties to schedule and hold a N.R.S. § 40.680 Mediation no later than October 25, 8 2017. The mediation must be attended by Plaintiff and its counsel, Defendant and its counsel, and any 9 and all subcontractors and their counsel. No other individuals are required to attend the mediation to 10 satisfy the requirements under N.R.S. § 40.680. The parties must inform the Court when the mediation 11 has been completed. 12 IT IS SO ORDERED. 13 DATED: September 25, 2017 14 15 ______________________________________ NANCY J. KOPPE United States Magistrate Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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