Sanzaro v. Ardiente Homeowners Assoc. ( 2015 )

 appellants had "not shown by competent evidence any deficiency that
would warrant the relief being sought." This appeal followed.
On appeal, appellants argue that respondents fraudulently
represented to the arbitrator that the amended HOA rules and regulations
were recorded and that respondents otherwise properly notified appellants
that the rules had been amended to prohibit non-service animals from
being in the clubhouse. During the arbitration proceedings, the arbitrator
directed respondents to brief the notice issue. Respondents' letter
addressing the arbitrator's notice concern essentially stated that although
respondents were not in possession of any minutes documenting how or
the exact date when the rule regarding animals in the clubhouse was
changed, the rules were nevertheless properly amended by the board of
directors sometime in October 2006; Respondents further stated that they
sent appellants a welcome letter when they took over management of the
HOA in 2007, the welcome letter invited homeowners to visit respondents'
webpage, and on that webpage was a link to the rules and regulations,
such that appellants were on "constructive notice" of the rule change
regarding dogs, and thus they were properly fined for violating that
amended rule.
Appellants argue that the welcome letter containing the web
address, which, if visited would contain a link to the amended rules, does
not suffice as statutory notice of any rule amendment. They also argue
that before being fined, the only copy of the rules and regulations provided
'The motion to vacate was originally denied on the basis that it was
untimely. Following an appeal, the district court's order was reversed and
remanded for a decision on the merits of the motion to vacate. The
decision on the merits is challenged in this appeal.
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to them was the original 2005 version, containing no restrictions on dogs
in the clubhouse. 2 They further contend that, regardless, the webpage
link was to the original 2005 rules and regulations, even as late as August
2009, when they checked it after receiving the arbitration decision. 3
Respondents did not meaningfully refute these arguments, and they did
not refute in any way the argument that the link led to the original 2005
rules. And when asked to specifically address the notice issue on appeal,
respondents continue to argue that the "sending of this letter with the
Association's website and access was akin to the Association providing to
[appellants] a copy of the governing documents," and respondents still do
not address appellants' argument that even if that were true, the webpage
linked to the original 2005 rules.
Having considered the record and the parties' arguments, we
reverse the district court's order. Although respondents maintain that
they provided appellants with "constructive notice" of the rule amendment
via the welcome letter pointing to the webpage containing a link to the
rules, NRS 116.12065 requires HOAs to notify homeowners of changes to
2 Although the rules and regulations were purportedly amended in
October 2006, it is undisputed that when appellants purchased their home
in November 2007, they were provided with a copy of the original 2005
rules and regulations, which do not ban dogs from the clubhouse. See NRS
116.4109(1), (3).
3 1n opposing the motion to confirm, appellants pointed out that on
August 13, 2009, they sought reconsideration of the August 6, 2009,
arbitration award, based in part on their argument that the link on the
webpage led to the original 2005 rules, and thus the arbitrator's finding of
constructive notice was grounded on a misrepresentation that notice of the
amended rules was provided via the link. Neither respondents nor the
arbitrator substantively addressed this argument.
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the HOA's rules and regulations by mailing or hand delivering "a copy of
the change that was made." See also NRS 116.049. Even if constructive
notice rather than the notice set forth by statute were acceptable, and
even if the welcome letter inviting a visit to the webpage, which contains
an embedded link to the rules, could be considered "constructive notice,"
respondents did not dispute below or on appeal appellants' argument that
as late as August 2009, the webpage's link was to the original rules, which
contained no restriction on dogs in the clubhouse. Thus, there is no
colorable justification for the award, and the error of accepting
respondents' contention that appellants received proper "constructive
notice" of the amended rule despite a lack of authority to support that
constructive notice is acceptable in lieu of statutory notice, or that such
notice was even properly achieved in light of appellants' arguments and
evidence to the contrary, demonstrates a manifest disregard for the law,
warranting reversal. Health Plan of Nev., Inc. v. Rainbow Med., LLC, 120
Nev. 689, 698, 100 P.3d 172, 178 (2004) (noting that confirmation of an
arbitration award is proper if "there is a colorable justification for the
outcome"); Clark Cnty. Sch. Dist. v. Rolling Plains Constr., Inc., 117 Nev.
101, 103-04, 16 P.3d 1079, 1081 (2001) (noting that arbitration awards are
reviewed to determine whether the arbitrator's decision represents a
"manifest disregard for the law," which generally means an error that is
obvious and capable of being readily perceived, or, in other words, a
decision that is arbitrary or capricious), disapproved on other grounds by
Sandy Valley Assocs. v. Sky Ranch Estates Owners Ass'n, 117 Nev. 948, 35
P.3d 964 (2001).
Accordingly, we reverse the district court order denying
appellants' motion to vacate and confirming the arbitration award, and
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remand this matter to the district court with instructions to vacate the
arbitration award.
It is so ORDERED. 4
Saitta
Poem m7
y
,J.
Pickering
cc: Hon. Valorie J. Vega, District Judge
Deborah D. Sanzaro
Michael G. Sanzaro
Lipson Neilson Cole Seltzer & Garin, P.C.
Leach Johnson Song & Gruchow
Eighth District Court Clerk
4 We have considered appellants' other arguments on appeal and
conclude that they do not warrant any additional relief.
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