1059 Lakeshore Boulevard LLC v. Pulver

[2] 3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA 5 * * * 6 1059 LAKESHORE BOULEVARD LLC, Case No. 3:21-cv-00097-MMD-CLB 7 Plaintiff, ORDER v. [8] GARY PULVER dba PULVER 9 CONSTRUCTION COMPANY, et al., 10 Defendants. [11] 12 I. SUMMARY 13 This action arises from the construction of a private residence in Incline Village, 14 Nevada. Plaintiff 1059 Lakeshore Boulevard LLC alleges that Defendant A&E Architects, 15 P.C., failed to work with the skill and care ordinarily rendered by similar architects in the 16 area, which resulted in the defective construction of the residence.1 (ECF No. 1-1 at 7-9.) 17 Before the Court is Defendant’s motion to dismiss Plaintiff’s first amended complaint 18 (“FAC”).2 (ECF no. 10 (“Motion”).) Defendant argues the FAC is void ab initio because 19 Plaintiff failed to attach a certificate of merit pursuant to NRS § 40.6884 and therefore 20 must be dismissed. Because the Court is persuaded that the single claim in the FAC is 21 subject to Chapter 40 of the Nevada Revised Statutes, the Court agrees with Defendant 22 and will therefore grant the Motion. Moreover, because the FAC was void ab initio, the 23 Court is without authority to grant leave to amend. The Court will therefore deny Intervenor 24 Gary Pulver’s motion to intervene (ECF No. 26) as moot. [25] 26 1Although Gary A. Pulver dba Pulver Construction Company, Cruz Construction Company, and Reno Tahoe Geo Associates, Inc., are all named Defendants in the 27 caption of the FAC, there is a single claim alleged against only A&E Architects, P.C., and Does 1-100. (ECF No. 1-1.) For the purposes of this order, “Defendant” refers solely to 28 A&E Architects, P.C. 2 The following facts are adapted from the FAC. Plaintiff is a Nevada LLC managed 3 by Barry and Anna Kane. (ECF No. 1-1 at 3.) In 2015, Plaintiff contracted with Defendant 4 to design plans for the construction of a custom residence near the north shore of Lake 5 Tahoe, located at 1059 Lakeshore Drive (the “Residence”). (Id. at 4.) After construction 6 was substantially completed, Plaintiff had a contractor evaluate the new Residence to 7 ensure that it was in compliance with local governmental agencies’ Best Management 8 Practices prior to winter. (Id. at 5.) During that evaluation, the contractor noted that several 9 features of the drainage system were either “improperly installed” or “missing entirely.” 10 (Id.) Plaintiff concluded that the plans for the Residence “failed to properly account for 11 drainage of surface, subsurface, and/or groundwater that could infiltrate the useable 12 interior space.” (Id.) 13 Plaintiff filed suit in Nevada state district court. (ECF No. 1-2.) In its original 14 complaint, Plaintiff alleged the following claims: (1) breach of oral contract against general 15 contractor Pulver Construction; (2) breach of written contract against Defendant; (3) 16 negligent misrepresentation against Defendant and engineering firm Reno Tahoe Geo 17 Associates, Inc.; and (4) fraudulent concealment against Pulver Construction and 18 subcontractor Cruz Construction. (Id.) Plaintiff attached the written agreement (“Architect 19 Agreement”) it entered into with Defendant. (Id. at 21-32.) Plaintiff then filed the FAC, 20 which asserted a single claim for breach of contract against Defendant, again attaching 21 the Architect Agreement. (ECF No. 1-1.) Defendant removed to this Court (ECF No. 1) 22 and now moves to dismiss the FAC (ECF No. 10.) 23 III. LEGAL STANDARD 24 A court may dismiss a plaintiff’s complaint for “failure to state a claim upon which 25 relief can be granted.” Fed. R. Civ. P. 12(b)(6). A properly pleaded complaint must provide 26 “a short and plain statement of the claim showing that the pleader is entitled to relief.” 27 Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While 28 Rule 8 does not require detailed factual allegations, it demands more than “labels and 2 Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555 ). “Factual allegations 3 must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555 . Thus, to 4 survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a 5 claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 6 U.S. at 570). 7 In Iqbal, the Supreme Court clarified the two-step approach district courts are to 8 apply when considering motions to dismiss. First, a district court must accept as true all 9 well-pleaded factual allegations in the complaint; however, legal conclusions are not 10 entitled to the assumption of truth. See id. at 678. Mere recitals of the elements of a cause 11 of action, supported only by conclusory statements, do not suffice. See id. Second, a 12 district court must consider whether the factual allegations in the complaint allege a 13 plausible claim for relief. See id. at 679. A claim is facially plausible when the plaintiff’s 14 complaint alleges facts that allow a court to draw a reasonable inference that the 15 defendant is liable for the alleged misconduct. See id. at 678. Where the complaint does 16 not permit the Court to infer more than the mere possibility of misconduct, the complaint 17 has “alleged—but it has not show[n]—that the pleader is entitled to relief.” Id. at 679 18 (alteration in original) (internal quotation marks and citation omitted). That is insufficient. 19 When the claims in a complaint have not crossed the line from conceivable to plausible, 20 the complaint must be dismissed. See Twombly, 550 U.S. at 570 . 21 IV. DISCUSSION 22 Defendant argues that Plaintiff’s FAC is void ab initio because it did not attach the 23 merit certification required by Nevada law. (ECF No. 10.) Plaintiff contends that because 24 its claim is not governed by Chapter 40 of the Nevada Revised Statutes, it was not 25 required to attach the merit certification. As explained below, the Court finds that a merit 26 certification was required and will therefore grant Defendant’s Motion. 27 /// 28 /// 2 Chapter 40 of the Nevada Revised Statutes governs, in relevant part, actions 3 resulting from constructional defect. See NRS §§ 40.600-40.695. “Constructional defect” 4 is defined as: 5 a defect in the design, construction, manufacture, repair or landscaping of a new residence . . . and includes, without limitation, the design 6 construction, manufacture, repair or landscaping of a new residence . . . (1) which presents an unreasonable risk of injury to a person or 7 property; or (2) which is not completed in a good and workmanlike manner and 8 proximately causes physical damage to the residence, an appurtenance or the real property to which the residence. [9] 10 NRS § 40.615. Notably, the statute includes both defects which pose an “unreasonable 11 risk” of harm to either person or property, as well as damage that has already occurred. 12 Moreover, Nevada is one of several states that requires a merit certification when 13 bringing construction defect suits against certain construction professionals. Per NRS § 14 40.6884(1): 15 in an action governed by NRS 40.600 to 40.695, inclusive, that is commenced against a design professional or a person primarily engaged in 16 the practice of professional engineering, land surveying, architecture or landscape architecture, including, without limitation for professional 17 negligence, the attorney for the complainant shall file an affidavit with the court concurrently with the service of the first pleading in the action stating 18 that the attorney: (a) Has reviewed the facts of the case; 19 (b) Has consulted with an expert: (c) Reasonably believes the expert who was consulted is 20 knowledgeable in the relevant discipline involved in the action; and (d) Has concluded on the basis of the attorney’s review and the 21 consultation with the expert that the action has a reasonable basis in law and fact. [22] 23 In addition to the attorney’s affidavit, the attorney must attach a report from the expert 24 consulted by the attorney that includes, among other materials, “[a] statement that the 25 expert has concluded that there is a reasonable basis for filing the action.” See NRS § 26 40.6884(3). If extenuating circumstances exist, the attorney may file the complaint with 27 an affidavit explaining that the requisite consultation and report are forthcoming. See NRS 28 § 40.6884(2). 2 The parties do not dispute that failing to comply with NRS § 40.6884 in a Chapter 3 40 suit requires dismissal without prejudice, nor that the requirements of the statute apply 4 whether the Chapter 40 suit is brought in federal or state court. (ECF No. 16 at 4.) 5 However, Plaintiff contends that it was not required to comply with NRS § 40.6884 6 because its breach of contract claim is not “governed by NRS 40.600 to 40.695.” (Id. at 7 1-2.) The Court disagrees. 8 “It is well established that when the statute’s language is plain, the sole function of 9 the courts—at least where the disposition required by the text is not absurd—is to enforce 10 it according to its terms.” Lamie v. U.S. Trustee, 540 U.S. 526, 534 (2004). Although 11 Plaintiff refers to its claim as “breach of contract,” it is clearly alleging a claim for 12 professional negligence which is expressly covered by NRS § 40.6884. The FAC alleges 13 that Defendant breached the Architect Agreement “by failing to render the professional 14 services set forth in the Architect Agreement consistent with the professional skill and 15 care ordinarily provided by architects practicing in the same or similar locality under the 16 same or similar circumstances.” (ECF No. 1-1 at 8.) Plaintiff goes on to allege that the 17 plans for the Residence “are defective and/or not in compliance with applicable building 18 codes and ordinances,” which required Plaintiff “to perform works of repair, restoration, 19 and/or construction to portions of the Project and Property to prevent property damage to 20 the Property and/or to restore portions thereof to their proper condition.” (Id. at 8-9.) 21 Plaintiff’s attempts to distinguish its claim from a typical construction defect suit are 22 not persuasive. In its opposition to Defendant’s Motion, Plaintiff argues that defects 23 alleged in the FAC are not “constructional defects” as defined by Chapter 40 because 24 they have not caused any physical damage to the Residence. (ECF No. 16 at 2.) First, 25 Chapter 40 does not only apply to defects which have already caused harm, but also 26 applies to defects which pose an unreasonable risk of injury to persons or property. See 27 NRS § 40.615(1). Plaintiff’s argument that it was required to make repairs to “prevent 28 possible property damage” and to “comply with building codes and ordinances” fall within 2 interpreted Chapter 40 provisions “broadly” when determining whether a claim triggers 3 the requirements of NRS § 40.6884. See, e.g., LaFrieda v. Black Eagle Consulting, Inc., 4 Case No. 62284, 2014 WL 3784255 , at *4 (Nev. Jul. 30, 2014) (finding § 40.6884 applied 5 to a negligent misrepresentation claim “because this claim arose out of [the defendant’s] 6 role in the construction and later inspection of [the plaintiff’s] home”) (unpublished 7 decision). 8 Plaintiff’s use of case law in which the Nevada Supreme Court has found Chapter 9 40 does not apply is inapposite. (ECF No. 16 at 6-9.) Both cases Plaintiff cites to interpret 10 whether the properties in question are “new residences” pursuant to NRS § 40.615. See 11 Pankopf v. Peterson, 175 P.3d 910, 912-13 (Nev. 2008) (“Given that the residence in this 12 case has not been completed, it cannot constitute a ‘new residence’ for the purposes of 13 NRS Chapter 40.”); Westpark Owners’ Association v. Eighth Judicial Dist. Court ex rel. 14 Cnty. of Clark, 167 P.3d 421 (Nev. 2007) (“[A] residence is ‘new’ only if it is a product of 15 original construction that has been unoccupied as a dwelling from the completion of its 16 construction to the point of sale.”); see also ANSE, Inc. v. Dist. Ct., 192 P.3d 738 (Nev. 17 2008) (elaborating on the definition of “new residence” in Westpark). Here, there is no 18 dispute that the Residence is newly constructed or that it is finished. Accordingly, the 19 Nevada Supreme Court’s reasoning in Pankopf and Westpark does nothing to advance 20 Plaintiff’s argument that the allegedly defective work Defendant performed is not a 21 “construction defect” within the meaning of Chapter 40. 22 Because Plaintiff asserts that Defendant’s negligent work resulted in defective 23 construction, it was required to attach an attorney affidavit certifying compliance with the 24 mandate of NRS § 40.6884 and an expert report explaining the merits of Plaintiff’s claim. 25 Plaintiff did not supply the requisite attachments. Thus, the FAC is void ab initio and must 26 be dismissed. The Court is further without authority to permit leave to amend. Finally, 27 because the FAC is dismissed without prejudice but without leave to amend, Pulver’s 28 motion to intervene will be denied as moot. |) V. CONCLUSION 2 The Court notes that the parties made several arguments and cited to several 3 || cases not discussed above. The Court has reviewed these arguments and cases and 4 || determines that they do not warrant discussion as they do not affect the outcome of the 5 || motion before the Court. 6 It is therefore ordered that Defendant's motion to dismiss (ECF No. 10) is granted. 7 || Plaintiffs first amended complaint is dismissed without prejudice, but without leave to 8 || amend. 9 It is further ordered that Pulver’s motion to intervene (ECF No. 26) is denied as 10 || moot. 11 The Clerk of Court is directed to close this case. 12 DATED THIS 13" Day of October 2021. 14 fo MIRANDA M. DU 15 CHIEF UNITED STATES DISTRICT JUDGE