There has been another postponement in two construction defect cases against Del Webb Communities that have slowly worked their way through the court system for three years.

The suits against Del Webb, a division of Michigan-based Pulte Homes, were filed in 2003 alleging various problems in common areas and with the attached and detached houses.

Hearings related to the cases before District Judge Nancy Saitta were scheduled for this week but were postponed until August. The trial for both cases also is postponed until August.

Since the lawsuits were filed three years ago, there have been wide-reaching changes in construction-defect litigation in Nevada.

The lawsuits were filed just before a state law went into effect that more tightly controls when construction-defect lawsuits can be filed and how they are processed. Because the cases were filed before the change in the law, the Del Webb cases are not affected.

But since 2003, significant cases involving construction defects have been decided by the Nevada Supreme Court that are just now starting to have their impact felt in the lower courts, and in the Del Webb case.

The first of the lawsuits filed against Del Webb claim mismanagement of the Sun City MacDonald Ranch homeowners' association and defects in the community's 322-unit condominium development.

That case is in the settlement stages, and lawyers for the plaintiffs and Del Webb were optimistic that an agreement could be reached.

"We have been in settlement discussion on the HOA case for some time," said Mike Laramie, in-house counsel for Pulte Homes. "We don't have a final resolution, but we continue to be cautiously optimistic that we can reach a settlement."

The second of the lawsuits filed against Del Webb claims that plumbing, roofing, retaining walls and concrete slabs are defective, with alleged defects costing about $30,000 in repairs per home.

The number of houses involved in the lawsuit continues to be a point of contention among the parties.

When the case was first filed, it was certified as a class action, meaning that all 2,200 houses in the Sun City MacDonald Ranch community were involved and by extrapolation that all homes allegedly have defects.

But earlier this year, a decision by the Nevada Supreme Court ruled on both class actions and extrapolation as they relate to construction-defect cases.

In the case, Schuette v. Beazer Homes, the court ruled that it is rare that a class action is appropriate for a single-family defect case. The court also ruled that extrapolation, the practice of testing a percentage of houses for defects and then extrapolating those findings for the entire community, was also not appropriate in most cases.

The ruling was a coup for homebuilders, who have long argued that class-action cases are inappropriate because construction throughout the life of the community is often done by different subcontractors, along with the issue of homeowner maintenance, a common defense for builders.

And not being able to use extrapolation was another win for developers. The latest interpretation means that plaintiffs' lawyers will now likely have to test every home, whether it's five or 2,000, for defects.

And what this means for the Del Webb case is that it was decertified as a class action and went from 2,200 plaintiffs to six. John Stander, attorney with Angius & Terry who is representing the plaintiffs in both cases against Del Webb, has argued against Saitta's interpretation of the Nevada Supreme Court rulings and asked that she reconsider.

After the ruling that decertified the Sun City case, lawyers signed up another 1,017 plaintiffs for the case and have filed a motion to "join" them with the six homeowners. So far, Saitta has ruled against that motion, Stander said. He asked the court to reconsider the issue.

If Saitta ultimately upholds her decision, which she has ruled is in line with the higher court's decision on extrapolation, it could cause a cooling effect on the number of construction-defect cases filed in the future, Stander said.

Mandatory testing of every home is often expensive and destructive and would make it difficult in cases that involve thousands of houses.

"These decisions affect a lot of people," Stander said.

Laramie said Pulte agrees with Saitta's interpretation of the Supreme Court's ruling.

"Extrapolation has been a hotly contested issue in construction-defect litigation for some time," he said. "Again, we agree with the judge's earlier ruling that extrapolation would be improper."

If Saitta continues to rule against Stander and his clients regarding adding the extra plaintiffs to the lawsuit, there is always the option of filing a new or separate lawsuit, but that case would be subject to the changes in Nevada Revised Statute Chapter 40, which in part regulates contruction-defect cases.

Those changes and NRS Chapter 40 were dubbed the "Right to Repair" law that requires notice to builders about alleged defects and gives them a set timeline to repair any defects and gives them a set timeline to repair any defects before a case is filed.

When the "Right to Repair" law was passed by the Nevada Legislature in 2003 it was hailed as the key to stopping the tide of construction-defect lawsuits that many said was slowly killing the industry.

But three years since that law was passed nothing has changed, many in the construction industry have said. If anything, construction-defect cases haven't decreased since the Right to Repair law was passed.

At least one industry insider said that in spite of the Right to Repair law, construction-defect cases continue to be filed and the numbers continue to increase.

"We don't feel it's really has an impact."

In 2000 — three years before the law was passed — 52 residential and commercial construction-defect cases were filed. In 2001 the number of new cases surged to 69, and by 2003 the number hit 70, according to District Court records.

After receding slightly in 2004 to 64 defect cases filed, the number against jumped in 2005, with 79 cases filed.

By design, the Right to Repair law was never meant to stop lawsuits from being filed; it was supposed to give contractors the right to notification and the chance to repair an alleged problem before a lawsuit is filed.

Steve Hill, who helped lead the charge three years ago to change the law, said that despite the challenges and the lawsuits that continue to be filed, lawsuits are progressing through the system and that court decisions, such as Schuette v. Beazer Homes, continue to change the landscape.

"We still need a better system," he said.

In other news:

• Home Builders Research Inc. reported that there were 4,406 recorded resale transactions in May, bringing the year's total to 19,034, a year-to-year decrease of 4,316 resales, or 18.5 percent.

The median price of a resale in May was $289,000, a year-to-year increase of $19,000, or 7 percent. Dennis Smith, president of Home Builders Research, said the median price of a resale has stayed between $280,000 and $289,000 for the past 11 months. Smith expects the year-to-year appreciation number to fall in June to less than 5 percent, which is more representative of true market demand.

Smith also reported in his monthly newsletter that there were 3,020 recorded new home sales in May, bringing the year's tally to 15,032 new houses sold. That is a year-to-year increase of 1,039 transactions, or 9.5 percent.

In May, there were 404 apartment conversions included in the new-home escrow closings. The number of apartment conversion closings has steadily decreased since a high of 1,017 closings in December, Home builders Research reported.

The median price of a new home in May, including apartment conversions, was $323,030. Without apartment conversions the median new home price was $338,990 — the lowest price that new homes have been in 2006, Home Builders Research reported.

• Harsch Investment Properties, a privately-owned real estate investment company based in Portland, Ore., bought Losee Industrial Park, a 68,829 square-foot multitenant industrial warehouse at 2710 Losee Road and Interstate15 for $4.8 million.

Harsch currently owns and manages over six million square feet of industrial space in the Las Vegas market with another million square feet under development and construction.

• TWC is under construction with the North Buffalo Business Centre, on 2.5 acres at Buffalo Drive just north of the Buffalo/Cheyenne Road. The project includes two 10,000-square-foot single-story buildings. The units are available for sale or lease. The developer is Investment Equity Development.

• Cannery Casino Resorts, which owns the Cannery and operates the Rampart Casino, is planning a new corporate headquarters building at Nigro Development's Desert Canyon, a five-acre, $40 million, mixed-use business park at the I-215 Beltway and Russell Road.

Nigro Construction completed the 16,444-square-foot shell building for Cannery Casino Resorts this month.

• Construction continues on the Shops at Desert Passage, which is being renamed the Miracle Mile Shops. Boulevard Invest, the joint venture of Tri Star Capital and RFR Holding, and owners of The Shops in Desert Passage said the renovation is expected to be completed in 2007.

Miracle Mile Shops, named in part to promote the 1.5 miles of retail space the mall covers, signals the center's transformation from the Moroccan theme to a sleeker, more urbanized and contemporary space. The $50 million makeover will create a more streamlined, clean and modern atmosphere in conjunction with the $200 million renovation and re-branding of the Aladdin Hotel & Casino into the Planet Hollywood Hotel & Casino.

Jennifer Shubinski covers real estate and development for In Business Las Vegas and it's sister publication, the Las Vegas Sun. She can be reached at (702) 259-8832 or by e-mail at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .
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