In re CityCenter Constr. & Lien Litig

129 Nev., Advance Opinion 70
IN THE SUPREME COURT OF THE STATE OF NEVADA
IN RE: CITYCENTER CONSTRUCTION No. 61130
AND LIEN MASTER LITIGATION.
THE CONVERSE PROFESSIONAL
GROUP, D/B/A CONVERSE
CONSULTANTS,
Petitioner, FILED
vs.
THE EIGHTH JUDICIAL DISTRICT OCT 0 3 2013
COURT OF THE STATE OF NEVADA,
IN AND FOR THE COUNTY OF
CLARK; AND THE HONORABLE
ELIZABETH GOFF GONZALEZ,
DISTRICT JUDGE,
Respondents,
and
CENTURY STEEL, INC., AND PACIFIC
COAST STEEL,
Real Parties in Interest.
Original petition for a writ of mandamus challenging a district
court order denying petitioner's motion to dismiss real parties in interest's
third- and fourth-party complaints.
Petition granted.
Wilson Elser Moskowitz Edelman & Dicker, LLP, and Michael M.
Edwards and J. Scott Burris, Las Vegas,
for Petitioner.
Hutchison & Steffen, LLC, and Michael K. Wall, L. Kristopher Rath, and
Cynthia G. Milanowski, Las Vegas; Koeller, Nebeker, Carlson & Haluck,
LLP, and Megan K. Dorsey and Robert C. Carlson, Las Vegas,
for Real Party in Interest Century Steel, Inc.
/.3 -0.? 9957
Gordon & Rees, LLP, and Robert E. Schumacher, Las Vegas; Procopio,
Cory, Hargreaves & Savitch, LLP, and Scott R. Omohundro, Craig A.
Ramseyer, and Timothy E. Salter, San Diego, California,
for Real Party in Interest Pacific Coast Steel.
BEFORE THE COURT EN BANC. 1
OPINION
By the Court, SAITTA, J.:
"[Tin an action involving nonresidential construction," the
complainant's attorney "shall file [an affidavit and expert report]
concurrently with the service of the first pleading." NRS 11.258(1); see
NRS 11.258(3). An "[a]ction involving nonresidential construction"
concerns the construction (and related activities) of a nonresidential
building and is against a "design professional." NRS 11.2565(1). The
district court "shall dismiss [the] action" if NRS 11.258 is violated. NRS
11.259(1). In Otak Nevada, L.L.C. v. Eighth Judicial District Court, 127
Nev. , 260 P.3d 408 (2011), we held that an amended pleading must be
dismissed when it followed an initial pleading that was void ab initio—of
no legal effect—because it was filed without the affidavit and expert report
required by NRS 11.258. Id. at „ 260 P.3d at 409, 411-12.
Petitioner Converse Professional Group relied on Otak in filing
motions to dismiss amended complaints that real parties in interest
1 The Honorable Kristina Pickering, Chief Justice, and the Honorable
Ron D. Parraguirre, Justice, voluntarily recused themselves from
participation in the decision of this matter.
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Century Steel, Inc., and Pacific Coast Steel (PCS) filed against it. Century
and PCS were subcontractors whose work Converse had inspected. After
being brought into commercial construction litigation as defendants,
Century and PCS filed third- and fourth-party complaints and amended
complaints against Converse to recover damages that allegedly arose from
the deficient performance of its services. Converse filed motions to
dismiss the amended complaints. It asserted that it was a design
professional and that the initial pleadings were void ab initio and could
not be cured by the amended pleadings because Century and PCS failed to
file the attorney affidavit and expert report that NRS 11.258 requires for
actions involving nonresidential construction. After expressing concern
that NRS 11.259(1) may require dismissing the entire litigation, the
district court denied the motions.
Converse brings this petition for a writ of mandamus to
compel the dismissal of the amended pleadings. We conclude that
Century's and PCS's initial causes of action brought actions that were
within the scope of NRS 11.2565(1)'s definition of an action involving
nonresidential construction. As a result, because their pleadings
identified Converse's services that implicated the practice of professional
engineering, see NRS 625.050(1)(a), their pleadings were against a design
professional, see NRS 11.2565(2)(b), thereby subjecting them to NRS
11.258's attorney affidavit and expert report requirements. We further
conclude that the Otak court correctly construed NRS 11.259(1) as
requiring the dismissal of an amended pleading—not an entire action—
that followed an initial pleading that was filed without adhering to NRS
11.258. Thus, the district court must dismiss the amended pleadings
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against Converse as they were void ab initio for their failure to comply
with NRS 11.258. Accordingly, we grant Converse's petition.
FACTS AND PROCEDURAL HISTORY
Century, and its successor in interest PCS, subcontracted to
perform the steel installation on a new building, the Harmon Tower,
which was to be part of a large-scale, mixed-use development in Las Vegas
known as CityCenter. Converse was hired by the project's owner to render
third-party quality control and assurance inspections. According to
Century's and PCS's pleadings, Converse's services included inspecting
their work for quality assurance and compliance with construction plans
and specifications.
After alleged defects were discovered in the Harmon Tower,
construction stopped, and litigation between the project's owner, general
contractor, and subcontractors began. Century and PCS filed third- and
fourth-party complaints against Converse for contribution and/or
indemnity allegedly warranted by Converse's negligent inspection work.
When these claims were dismissed, Century and PCS were granted leave
to file amended complaints against Converse alleging negligent and
intentional misrepresentation, contribution, and equitable indemnity.
Century and PCS did not file an affidavit or expert report regarding the
basis for their claims when the initial complaints or the amended
complaints were served. In response, Converse moved to dismiss the
amended pleadings pursuant to NRS 11.259(1), arguing that Century and
PCS failed to file the attorney affidavit and expert report with their initial
complaints, as is required by NRS 11.258 for actions against design
professionals involving nonresidential construction.
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During a hearing on the motions, the district court expressed
its concern that if it agreed with Converse's position, then NRS 11.259(1)
may require dismissing the entire action, including pleadings by parties
other than Century and PCS. Relying on Otak—where only an amended
pleading was dismissed because the initial complainant violated NRS
11.258—Converse argued that only Century's and PCS's amended
pleadings must be dismissed. See Otak, 127 at , 260 P.3d at 411-12.
The district court summarily denied Converse's motions, and this petition
for a writ of mandamus followed.
DISCUSSION
"A writ of mandamus is available to compel the performance of
an act that the law requires . . . or to control an arbitrary or capricious
exercise of discretion." Int'l Game Tech., Inc. v. Second Judicial Dist.
Court, 124 Nev. 193, 197, 179 P.3d 556, 558 (2008); see NRS 34.160. Here,
Converse argues that the law requires that Century's and PCS's amended
pleadings be dismissed as a result of their failure to file the NRS 11.258
attorney affidavit and expert report at the time the initial complaints were
served. Because the determination of this issue is not fact-bound and
involves unsettled issues of law that will likely recur, and because
resolving this issue at this early stage of the underlying litigation
promotes judicial economy, our consideration of Converse's writ petition is
warranted. See NRS 34.330 (providing that a writ of mandamus is
available only when no adequate legal remedy exists); Buckwalter v.
Eighth Judicial Dist. Court, 126 Nev. , , 234 P.3d 920, 921 (2010)
(recognizing that we may consider a petition for writ relief contesting the
denial of a motion to dismiss when "the issue is not fact-bound and
involves an unsettled and potentially significant, recurring question of
5
law"); Int? Game Tech., 124 Nev. at 197-98, 179 P.3d at 558-59 (noting
that the right to appeal from a final judgment is not always an adequate
legal remedy that bars writ relief, such as when a case , is at an early point
in litigation and writ relief advances judicial economy).
The amended pleadings must be dismissed
Resolving the issues raised in this writ petition requires our
de novo review of the statutes that govern actions involving nonresidential
construction. See Washoe Med. Ctr. v. Second Judicial Dist. Court, 122
Nev. 1298, 1302, 148 P.3d 790, 792 (2006) (providing that de novo review
applies to issues of law such as statutory interpretation). The ultimate
goal of interpreting statutes is to effectuate the Legislature's intent.
Cromer v. Wilson, 126 Nev. , 225 P.3d 788, 790 (2010). We
interpret clear and unambiguous statutes based on their plain meaning.
Id. But when a statute is ambiguous, we consult other sources, such as
legislative history, reason, and policy to identify and give effect to the
Legislature's intent. State, Div. of Ins. v. State Farm Mut. Auto. Ins. Co.,
116 Nev. 290, 294, 995 P.2d 482, 485 (2000).
For actions "involving nonresidential construction," NRS
11.258 requires the complainant's attorney to file, when the first pleading
is served, an affidavit and expert report attesting to a reasonable basis for
the action. 2 NRS 11.258(1), (3). If the attorney fails to do so, then the
district court "shall dismiss [the] action." NRS 11.259(1); see Otak Nev.,
L.L.C. v. Eighth Judicial Dist. Court, 127 Nev. „ 260 P.3d 408, 411
NRS 11.258(2) provides for a late-filed affidavit under certain
2
circumstances not applicable to this case.
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(2011). An action "involving nonresidential construction" is defined, in
pertinent part, as an action "against a design professional" that pertains
to the "design, construction, manufacture, repair or landscaping" of a
nonresidential building. NRS 11.2565(1).
Thus, as Converse asserts, because Century and PCS did not
submit an NRS 11.258 attorney affidavit and expert report concurrently
with the initial pleadings, the amended pleadings against Converse must
be dismissed if Converse is a design professional and the claims against it
contained in the initial pleadings involved the design, construction,
manufacture, repair, or landscaping of the Harmon Tower, which
concededly is a new nonresidential building. See Otak, 127 Nev. at ,
260 P.3d at 411-12. Century and PCS argue that Converse is not a design
professional and that their initial pleadings did not involve the design,
construction, or manufacture of the Harmon Tower but, rather, involved
Converse's deficient performance and representations about its
inspections. We now address whether Century's and PCS's initial
pleadings constituted actions "involving nonresidential construction"
requiring them to comply with the requirements of NRS 11.258.
Century's and PCS's initial pleadings involved the construction of a
nonresidential building
Under NRS 11.2565(1), an "'[a]ction involving nonresidential
construction' is
an action that:
(a) Is commenced against a design
professional; and
(b) Involves the design, construction,
manufacture, repair or landscaping of a •
nonresidential building or structure . . . .
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The term includes, without limitation, an action
for professional negligence.
NRS 11.2565's definition of an action involving nonresidential
construction is expansive; the claims do not have to be directly based on
the design, construction, or manufacture of a nonresidential building, but
merely "involve[ ]" those activities. Id. Hence, an action involving
nonresidential construction includes any cause of action against a design
professional that concerns the construction of a nonresidential building.
Construction of a building involves inspection of the ongoing construction
activity, and claims that a quality control and assurance inspector made
misrepresentations about the construction's quality or was at fault for
defective conditions concern the construction of the building. Thus,
Century's and PCS's claims within their initial pleadings against
Converse "[i]nvolve[d]" the construction of a nonresidential building. But
in order to conclude that they brought actions involving nonresidential
construction that triggered NRS 11.258's requirements, Converse must
also have been a design professional.
Converse is a design professional
A design professional is someone who holds "a professional
license or certificate issued pursuant to chapter 623 [Architecture, Interior
Design and Residential Design], 623A [Landscape Architects] or 625
[Professional Engineers and Land Surveyors] of NRS or a person primarily
engaged in the practice of professional engineering, land surveying,
architecture or landscape architecture." NRS 11.2565(2)(b). Relevant
here, "[t] he practice of professional engineering' includes, but is not
limited to . . . [a]ny professional service which involves the application of
engineering principles and data, such as. . . consultation, investigation,
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evaluation, planning and design, or responsible supervision of
construction. . . wherein the public welfare or the safeguarding of life,
health or property is concerned. . . ." NRS 625.050(1)(a). It also includes
services that are "necessary to the planning, progress and completion of
any engineering project or to the performance of any engineering service."
NRS 625.050(1)(b).
To determine whether Converse is a design professional, we
accept the allegations within Century's and PCS's pleadings as true. See
Buzz Stew, L.L.C. v. City of N. Las Vegas, 124 Nev. 224, 227-28, 181 P.3d
670, 672 (2008) (providing that, in reviewing an order that pertains to a
motion to dismiss, we accept the nonmoving party's factual allegations in
the complaint as true). PCS alleged that Converse was required to inspect
the steel work for irregularities and deficiencies and make certain that the
installation of the steel comported with construction plans and
specifications. Century alleged that Converse's services included, but was
not limited to, inspections of the steel, conducting tension tests, and
quality assurance services. Both of their amended pleadings referenced
the agreement that governed Converse's services, under which Converse
was responsible for the sampling and testing of materials as they were
being installed and the performance of tensile strength tests on the steel,
which involves engineering principles to determine how the steel responds
to various amounts of stress. 3 These services implicate the practice of
3Although we generally do not consider matters outside the pleading
in reviewing an order denying a motion to dismiss, see Witherow v. State,
Bd. of Parole Comm'rs, 123 Nev. 305, 307-08, 167 P.3d 408, 409 (2007), in
this matter, where the pleadings explicitly referred to the agreement that
continued on next page . . .
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professional engineering as they involve the observation and supervision
of a portion of the Harmon Tower's construction. By virtue of engaging in
the practice of engineering, as gleaned from the services that were
identified in Century's and PCS's pleadings, Converse is a design
professional.
Century's and PCS's initial pleadings brought actions
involving nonresidential construction against Converse, a design
professional, which required Century and PCS to comply with NRS
11.258's attorney affidavit and expert report requirements. Their failure
to comply with these requirements rendered their initial pleadings against
Converse void ab initio and, therefore, not subject to cure by amendment.
See Otak, 127 Nev. at , 260 P.3d at 411-12.
. . . continued
governed Converse's services, the agreement is within the scope of our
review. See Beddall v. State St. Bank & Trust Co., 137 F.3d 12, 16-17 (1st
Cir. 1998) (providing that, with respect to a motion to dismiss, the district
court could consider an agreement that the complaint discussed, that was
in the record, and that the parties did not contest as being unauthentic);
Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994) ("[D]ocuments whose
contents are alleged in a complaint and whose authenticity no party
questions, but which are not physically attached to the pleading, may be
considered in ruling on a Rule 12(b)(6) motion to dismiss."), overruled on
other grounds by Galbraith v. Cnty. of Santa Clara, 307 F.3d 1119, 1125-
26 (9th Cir. 2002); Greene v. Eighth Judicial Dist. Court, 115 Nev. 391,
393, 990 P.2d 184, 185 (1999) (providing that federal court interpretations
of the Federal Rules of Civil Procedure are persuasive authority). Also,
PCS contests that Converse's appendices that accompany the petition
include documents that were not before the district court. The issues in
this petition limit our review to the pleadings and the agreement
governing Converse's services, which were before the district court.
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NRS 11.259(1) and the dismissal of Century's and PCS's amended
pleadings
NRS 11.259(1) provides that the district court "shall dismiss
an action involving nonresidential construction" where the complainant
fails to comply with NRS 11.258's attorney affidavit and expert report
requirements. In this matter, the disagreement between the district court
and Converse about the meaning of the term "action" in NRS 11.259(1)
reveals an ambiguity. The district court appears to have concluded that
an entire case must be dismissed under NRS 11.259(1) based on a strict
reading of the term "action," which has been defined by this court in a
different context as "includ[ing] the original claim and any crossclaims,
counterclaims, and third-party claims." United Ass'n of Journeymen &
Apprentices of the Plumbing & Pipe Fitting Indus. v. Manson, 105 Nev.
816, 820, 783 P.2d 955, 957 (1989) (discussing NRCP 41(e)'s language
giving parties five years to bring an action to trial). Suggesting another
reasonable, less restrictive interpretation of the term, in Otak we applied
NRS 11.259(1) to require the dismissal of an amended third-party
complaint only because the first complaint was void ab initio and thus
could not be amended. See Otak, 127 Nev. at , 260 P.3d at 409, 411-12.
Because "action" for NRS 11.259 purposes could be reasonably read either
way, it is ambiguous. See McKay v. Bd. of Supervisors of Carson City, 102
Nev. 644, 649, 730 P.2d 438, 442 (1986) (providing that a statute is
ambiguous if it is "capable of being understood in two or more senses by
reasonably informed persons").
Although we often rely on legislative history to resolve
statutory ambiguity, State, Div. of Ins. v. State Farm Mut. Auto. Ins. Co.,
116 Nev. 290, 294, 995 P.2d 482, 485 (2000), the legislative history behind
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NRS 11.259(1) does not clarify what the Legislature meant in requiring
the dismissal of an "action." Thus, we resort to other rules of statutory
construction. See Cromer v. Wilson, 126 Nev. , , 225 P.3d 788, 790
(2010).
We interpret statutes to "conform[ ] to reason and public
policy." Great Basin Water Network v. State Eng'r, 126 Nev. „ 234
P.3d 912, 918 (2010). In so doing, we avoid interpretations that lead to
absurd results. City Plan Dev., Inc. v. Office of Labor Comm'r, 121 Nev.
419, 435, 117 F'.3d 182, 192 (2005). "Whenever possible, [we] will
interpret a rule or statute in harmony with other rules or statutes." State
Farm, 116 Nev. at 295, 995 P.2d at 486 (concluding that a statutory
ambiguity may be resolved by referring to related statutes); Allianz Ins.
Co. v. Gagnon, 109 Nev. 990, 993, 860 P.2d 720, 723 (1993); see also 2B
Norman J. Singer & J.D. Shambie Singer, Sutherland Statutory
Construction § 51:1, at 183 (7th ed. 2012) ("[S]tatutes dealing with the
same subject as the one being construed. . . are. . . [an] aid. . . [for]
interpretation.").
In this instance, considering the way in which the Legislature
uses the term "action" in conjunction with other relevant statutes reveals
that the term is used synonymously with "pleading." Under NRS
11.258(3)(e), the required expert report must include "[a] statement that
the expert has concluded that there is a reasonable basis for filing the
action." (Emphasis added.) Other provisions in NRS 11.258 use the verb
"filing" with the term "action." See NRS 11.258(2), (4). The Nevada Rules
of Civil Procedure, however, do not provide for the filing of an action.
Instead, they provide for the filing of a complaint, which is a pleading, to
initiate an action. NRCP 3; NRCP 7(a). Hence, the term "action" in NRS
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11.258 and NRS 11.259 is used in a fashion that is synonymous with
"pleading."
Moreover, when litigation includes several parties' pleadings,
it is unreasonable to dismiss all the parties' pleadings because two parties
filed void complaints. Doing so hinders judicial economy by precluding
resolution of the causes of action within the pleadings that are free of
procedural or substantive defects. We refuse to construe NRS 11.259(1) in
a way that reaches this result. As gleaned from the statutory language,
the apparent intent of NRS 11.259(1) and NRS 11.258 is to advance
judicial economy and prevent frivolous suits against design professionals
by requiring a complaint to include an expert report and attorney affidavit
regarding the suit's reasonable basis. In light of this intent, we conclude
that the Otak court correctly applied NRS 11.259(1) to require the
dismissal of a pleading—not the entire action. Otak Nev., L.L.C. v. Eighth
Judicial Dist. Court, 127 Nev. , „ 260 P.3d 408, 409, 411-12
(2011). Accordingly, the district court must dismiss Century's and PCS's
amended pleadings that pertain to Converse because their initial
pleadings against Converse were void ab initio and of no legal effect for
the lack of the attorney affidavit and expert report required by NRS
11.258.
CONCLUSION
We grant Converse's petition for a writ of mandamus to
compel the dismissal of the amended pleadings. We direct the clerk of this
court to issue a writ of mandamus that instructs the district court to
vacate its orders denying Converse's motions to dismiss Century's and
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PCS's amended pleadings and to grant these motions by dismissing the
amended pleadings that pertain to Converse. 4
J.
Saitta
We concur:
Hardesty
Douglas
Cherry
4 1n light of our disposition, we need not address the additional
issues that Converse raises in its petition that were premised on the
initial pleadings not being deemed void ab initio. Additionally, we have
considered the parties' remaining contentions and conclude that they lack
merit.
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