Court in Nevada Rules Against DR Horton and Johnson Development in Defect Case

Court rules against Vegas developer over home defects

By Cy Ryan (contact)

Friday, Sept. 4, 2009 | 2:19 p.m.

CARSON CITY – The Nevada Supreme Court has ruled against a development company being sued for construction defects by four homeowner associations on behalf of their unit owners in Clark County.

The court held that D. R. Horton, Inc., the development company, could not be sued by associations representing the interests of the owners of the individual units.

The construction defects suits were each brought by the homeowner associations of First Light, Dorrell Square, Court Aliante and the High Noon at Arlington Ranch.

The associations sued on behalf of themselves and the owners of the units, which included townhomes and duplexes.

D. R. Horton argued these associations could not represent the individual owners in these suits.

The court said “a homeowners’ association has standing to file a representative action on behalf of its members for constructional defects in individual units of a common-interest community.”

Three of the four unanimous opinions were authored by Chief Justice James Hardesty. The fourth did not identify who wrote the decision.

The court, however, imposed a condition, saying these cases must be handled as class-action suits. Class-action suits are to promote efficiency in the legal system and are to deal with a single wrong.

In the decision on First Light, Hardesty said homeowners often have different claims and “as a practical matter, single-family residence constructional defect cases will rarely be appropriate for class action treatment.”