Factual Background
Michael Kosor, Jr. purchased a home in a new development with a Homeowners Association (“HOA”). The HOA’s bylaws and CC&Rs allow the developer/declarant to appoint three of the HOA’s five board members until after 75% of the units in the development sold. Once the 75% threshold is met, the owners have the right to elect all five members of the board. Kosor believed the developer/declarant refused to relinquish control after selling 75% of the development’s units.
NRS 38.310(1) prohibits a civil action based upon a claim relating to . . .
(a) The interpretation, application or enforcement of any covenants, conditions or restrictions applicable to residential property or any bylaws, rules or regulations adopted by an association;
…
be commenced in any court in this State unless the action has been submitted to mediation or, if the parties agree, has been referred to a program pursuant to the provisions of NRS 38.300 to 38.360, inclusive, and, if the civil action concerns real estate within a planned community subject to the provisions of chapter 116 of NRS or real estate within a condominium hotel subject to the provisions of chapter 116B of NRS, all administrative procedures specified in any covenants, conditions or restrictions applicable to the property or in any bylaws, rules and regulations of an association have been exhausted.
Kosor did not pursue his Chapter 38 right to pre-suit ADR. He sued in District Court, claiming the developer/declarant violated the homeowners’ voting rights by refusing to relinquish control of the three board member seats. The HOA did not move to dismiss based on its Chapter 38 right to insist on pre-suit ADR.
After denial of Kosor’s motion for a temporary restraining order, the HOA’s motion to dismiss, and Kosor’s motion for summary judgment, Kosor asked the court to allow voluntary dismissal of the action without prejudice. The District Court granted the motion with prejudice and awarded the HOA’s request for fees and costs. Kosor appealed the decision, then withdrew the appeal.
When the case returned to the District Court, the HOA moved for additional fees and costs. In response, Kosor—for the first time—moved to dismiss, citing NRS 38.310’s pre-suit ADR requirement. The District Court denied Kosor’s motion, holding that NRS 38.310’s ADR requirement was procedural, that Kosor’s failure to submit his claims to mediation or nonbinding arbitration before asserting them in court did not affect its subject matter jurisdiction. Kosor appealed.
Legal Discussion and Holding
Kosor asked the Supreme Court to determine that because the parties did not comply with NRS 38.310’s pre-suit ADR requirement, the District Court lacked the subject matter jurisdiction needed to decide the case. Kosor argued the ADR requirement is jurisdictional; therefore, the parties’ failure to comply with NRS 38.310 deprived the court of jurisdiction. Kosor further argued that the court must set aside its judgment for fees and costs.
Reviewing the matter de novo, the Supreme Court panel of Justices Pickering, Cadish, and Lee affirmed the District Court. The Court found the statute’s prohibition is a claim-processing rule that promotes the orderly progress of litigation by requiring that parties take certain procedural steps at certain specified times. A claim-processing rule, the Court explained, can be mandatory, meaning it must be enforced if timely and properly raised, but nonetheless nonjurisdictional because it can be forfeited or waived. Because Kosor filed suit without insisting on the ADR requirement first being met, and the HOA failed to object, the parties waived the claims-processing rule.
Kosor v. Southern Highlands Community Association, et. al., 141 Nev. Adv. Op. 34 (June 18, 2025).