Lennar Comm. Nev., LLC v. Whalen (Civil) — Arbitration Waiver Affirmed

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April 16, 2026 Get Citation Alerts Download PDF Add Note

LENNAR COMM. NEV., LLC v. WHALEN (CIVIL)

Nevada Supreme Court

• Citations: 142 Nev. Adv. Op. No. 29

• Docket Number: 88946

• Opinion

• Authorities (12)

• Cited By (0)

• Summaries (0)

• Similar Cases (5.5K)

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Combined Opinion

142 Nev., Advance Opinion 2

THE SUPREME COURT OF THE STATE OF NEVADA

LENNAR COMMUNITIES NEVADA, No. 88946

LLC, A DOMESTIC LIMITED

LIABILITY COMPANY; AND - .
GREYSTONE NEVADA, LLC, A F | LED ~

FOREIGN LIMITED LIABILITY ?
COMPANY,

Appellants,

Vs.

PAMELA WHALEN, AN INDIVIDUAL,
Respondent.

Appeal from a district court order denying a motion to compel
arbitration. Eighth Judicial District Court, Clark County; Tierra D. Jones,
Judge.

Affirmed.

Newmeyer & Dillion LLP and Aaron D. Lovaas and J. Nathan Owens, Las
Vegas,
for Appellants.

Ryan Alexander, Chtd., and Richard A. Englemann and Ryan Alexander,
Las Vegas,
for Respondent.

BEFORE THE SUPREME COURT, PARRAGUIRRE, BELL, and
STIGLICH, JJ.

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OPINION
By the Court, BELL, J.:

Respondent Pamela Whalen allegedly sustained personal
injuries when she tripped over a utility box located on property owned and
maintained by Appellants Lennar Communities Nevada, LLC, and
Greystone Nevada, LLC (collectively Lennar). Prior to the accident, Pamela
signed an agreement to purchase a home from Lennar. The agreement
included an arbitration clause. After the accident, Pamela sued Lennar,
and Lennar answered the complaint and demanded a jury trial. After 17
months of extensive discovery, Lennar filed a motion to compel arbitration.
The district court denied the motion on the grounds that the dispute is
outside the scope of the arbitration clause, without addressing whether
Lennar had waived its right to arbitration through its actions in the legal
proceeding. Lennar appeals.

We conclude the district court erred by interpreting the scope
of the relevant arbitration clause, as the contract clearly and unmistakably
delegated this question to the arbitrator. We also conclude, however, that
Lennar waived its right to arbitration. Lennar filed an answer, demanded
a jury trial, actively pursued discovery, including three medical
examinations of Pamela under NRCP 35, and even stipulated to continue
the trial to allow for additional discovery. In doing so, Lennar acted
inconsistently with its right to arbitrate. Because the district court
correctly declined to send the case to arbitration, we affirm the district
court's determination, though we do so on the basis of waiver rather than

on contract interpretation grounds.

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FACTS AND PROCEDURAL HISTORY
In 2020, Brian Whalen bought a new house from Lennar (the

Fern Ridge Property). Brian signed a Purchase and Sale Agreement (PSA).
In February 2021, Brian’s fiancée Pamela signed an Amendment to Change
Party to be included as a purchaser. The amendment incorporated the PSA
by reference. Brian and Pamela later married, but Brian is not a party to
this lawsuit.

In the summer of 2021, Pamela toured the same Lennar
community where the Fern Ridge Property was located. A Lennar employee
led the tour. During the tour, Pamela tripped over an open or loose utility
box in the community and sustained injuries. The utility box was not on
the Fern Ridge Property.

Following her injury, Pamela sued Lennar, filing her initial
complaint for negligence on September 13, 2022. With its answer, Lennar
filed a demand for a jury trial. The parties then began extensive discovery.
Lennar filed an initial disclosure of witnesses, documents, and evidence,
followed by nine supplemental disclosures. Both parties issued and
answered interrogatories and requests for the production of documents.
The parties stipulated to extend discovery, resulting in the trial date being
reset. Lennar also filed initial expert disclosures and two supplemental
expert disclosures. In February 2024, Pamela participated in three NRCP
35 medical examinations at Lennar’s request, including examinations by an
orthopedic surgeon, a plastic surgeon, and a psychiatrist. Throughout this
process, Lennar failed to assert the right to arbitrate as an affirmative
defense or otherwise.

Lennar requested that Pamela submit the matter to binding
arbitration for the first time in March 2024. Pamela declined to stipulate

to the arbitration. Lennar then filed a motion to compel, citing the

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arbitration clause within the PSA. The PSA between the parties required
all disputes to first go to mediation and then, if not resolved, to arbitration.
Furthermore, the PSA noted all disputes were to be submitted to arbitration
within a “reasonable time after such Dispute has arisen.” The district court
denied Lennar’s motion to compel arbitration, determining the dispute is

not covered by the arbitration clause. Lennar appeals.
DISCUSSION

The district court reached the correct result when it denied
Lennar’s motion to compel arbitration. We reach this conclusion, however,
on different grounds than the district court. Specifically, although the
district court erred in interpreting the PSA’s scope, we conclude Lennar
waived its right to compel arbitration.

The district court erred in interpreting the scope of the arbitration clause, as
this falls within the purview of the arbitrator

As noted, the district court based its denial of Lennar’s motion
chiefly on its interpretation of the PSA. The district court found that
Pamela injured herself at a place outside the area covered by the PSA.
Thus, the district court found Pamela’s claim was not arbitrable. We
conclude this was error. The district court should not have reached this
question, as the PSA delegated questions of arbitrability to an arbitrator.
When an arbitration agreement under the Federal Arbitration Act clearly
and unmistakably delegates the threshold issue of arbitrability to the
arbitrator, the district court may not interpret the scope of the contract to
determine arbitrability. Uber Techs., Inc. v. Royz, 138 Nev. 690, 694, 517
P.3d 905, 909 (2022). Here, the district court concluded the arbitration
clause in the PSA did not apply to Pamela’s injury because the accident
occurred on property outside of the house subject to the PSA. The

arbitration agreement provided, however, that “[a]ll decisions respecting

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arbitrability of any Dispute shall be decided by the arbitrator(s).” Our
decision in Uber Technologies makes clear the district court should not have
interpreted the scope of the PSA, as the contract clearly and unmistakably
delegates this issue to the arbitrator. Thus, the district court erred when it
considered the scope of the PSA in denying Lennar’s motion to compel
arbitration.

Lennar waived its right to arbitrate this dispute

While the district court resolved the motion to compel
arbitration on improper grounds and did not address Pamela’s argument
about waiver, Pamela urges us to conclude Lennar waived its right to
arbitration. We agree. Because Lennar waived arbitration, we conclude
the district court reached the right result in denying Lennar’s motion,
though for the wrong reason. A district court’s decision regarding a motion
to compel arbitration usually presents mixed questions of law and fact.
Gonski v. Second Jud. Dist. Ct., 126 Nev. 551, 557, 245 P.3d 1164, 1168
(2010), overruled on other grounds by U.S. Home Corp. v. Michael
Ballesteros Tr., 134 Nev. 180, 415 P.3d 32 (2018). Factual findings by the
district court are given deference, but questions of law are reviewed de novo.
Id.

Waiver in the context of compelling arbitration is
presumptively for the courts to decide, absent contractual language clearly
committing the question to the arbitrator. Principal Inus., Inc. v. Harrison,
132 Nev. 9, 11, 366 P.3d 688, 690 (2016). Even though “[w]aiver is generally
a question of fact,” this court may address the issue as a matter of law where
“the determination rests on the legal implications of essentially uncontested
facts.” Nev. Gold & Casinos, Inc. v. Am. Heritage, Inc., 121 Nev. 84, 89, 110
P.3d 481, 484 (2005) (noting that the lack of factual determinations by the

district court did not preclude waiver where the parties did not dispute the

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pertinent facts, including that they incurred costs and “necessarily
disclosed” litigation strategies).

“Waiver is not a favored finding and should not be lightly
inferred.” Harrison, 132 Nev. at 20, 366 P.3d at 696-97. This court has held
waiver exists where a party (1) knows of their right to arbitrate, (2) acts
inconsistently with that right, and (3) prejudices the other party. Nev. Gold,
121 Nev. at 91, 110 P.3d at 485. Lennar’s conduct satisfies all three
elements of this test.

First, Lennar knew of its right to arbitrate. The PSA originated
with Lennar and its counsel. Moreover, a Lennar representative signed the
PSA alongside Pamela. Accordingly, we conclude Lennar had knowledge of
the right to arbitration.

Next, Lennar acted inconsistently with its right to arbitrate. A
party acts inconsistently with the right to arbitrate by actively litigating
the “same legal and factual issues as those the party now wants to
arbitrate.” Harrison, 132 Nev. at 21, 366 P.3d at 697 (quoting Doctor’s
Assocs., Inc. v. Distajo, 107 F.3d 126, 133 (2d Cir. 1997)). Other jurisdictions
have employed a_ totality-of-the-circumstances analysis to determine
whether a party utilized “litigation machinery.” See Natl Fownd. for Cancer
Rsch. v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 775 (D.C. Cir. 1987). In
this vein, courts have found a party waived arbitration when it filed
pleadings, submitted a motion to dismiss, and waited two years to move for
arbitration. See Van Ness Townhouses v. Mar Indus. Corp., 862 F.2d 754,
759 (9th Cir. 1988). Although this court has not expressly adopted the
totality-of-the-circumstances analysis, we have implicitly applied it. In
Harrison, for instance, this court concluded a payday loan company had

waived arbitration with respect to class action fraud claims by borrowers

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because the lender had previously obtained default judgments on the
underlying collection claims against the borrowers in justice court. 132
Nev. at 22, 366 P.3d at 697. Reviewing all the pertinent circumstances and
observing the lender had actively litigated the collection claims, we
concluded the lender had also waived arbitration on any other “integrally
related” claims. Id.

We now take this opportunity to expressly hold that courts
should consider the totality of the circumstances when evaluating whether
a party has already litigated an issue it subsequently seeks to arbitrate.
Under the totality of the circumstances, Lennar actively litigated this case
prior to arbitration. First, Lennar substantially utilized the district court’s
discovery mechanisms that are normally featured in litigation, not
arbitration. Indeed, Lennar’s actions here were significant and
unequivocally inconsistent with arbitration. At the case’s outset, Lennar
filed an answer and demanded a jury trial. After this jury demand, Lennar
engaged in substantial discovery, including making numerous initial and
supplemental disclosures and issuing and answering various
interrogatories and requests for the production of documents. Lennar also
conducted three NRCP 35 medical examinations of Pamela. During this
time, Lennar made no assertion of its right to arbitrate under the PSA,
despite the PSA’s requirement that a dispute between the parties be
submitted to arbitration within a reasonable time after the dispute arose.
Only after Lennar obtained written discovery and the results of the NRCP
35 examinations did Lennar filed its motion to compel arbitration.

We also consider Lennar’s 17-month delay in seeking
arbitration. Even if such an extended passage of time could conceivably be

excusable, waiver is unavoidable when the party moving for arbitration

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engages 1n conduct contrary to the arbitration process. Lennar argues that
it did not file any dispositive motions prior to moving to compel arbitration
and, therefore, it has not acted inconsistently with its right to arbitrate.
Lennar does not cite any authority for the proposition that a finding of
waiver must be predicated upon the filing of a dispositive motion. Instead,
courts should consider the totality of the circumstances to determine
whether a party actively litigated an issue it subsequently seeks to
arbitrate. Here, Lennar repeatedly utilized court mechanisms to a
substantial degree and conducted multiple medical examinations. Lennar
also failed to request arbitration until 17 months into litigation. Asa result,
the totality of the circumstances indicates Lennar acted inconsistently with
its right to arbitrate.

Third, Lennar prejudiced Pamela. This Court has previously
determined prejudice to the party opposing arbitration is the primary focus
in considering whether the right to arbitrate has been waived. Nev. Gold,
121 Nev. at 90, 110 P.3d at 485. We acknowledge that this focus on
prejudice stems from federal caselaw that has since been abrogated. See id.
(adopting test set forth in Kelly v. Golden, 352 F.3d 344, 349 (8th Cir. 2003)):
Morgan v. Sundance, Inc., 596 U.S. 411, 419 (2022) (concluding prejudice
was not a factor within the traditional federal waiver analysis and
abrogating, in part, Kelly v. Golden). No party argues against the continued
use of the prejudice factor under Nevada law, however, and thus based on
our precedent, we will address the issue of prejudice to an opposing party
within a waiver analysis. See, e.g., Jenkins v. Ford Motor Co., 425 So. 3d
1011, 1020-21 (Miss. Ct. App. 2025) (“While it appears to this Court that
the United States Supreme Court has indeed eliminated the prejudice

element, we must follow current Mississippi Supreme Court precedent and,

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therefore, address prejudice out of an abundance of caution.”). Prejudice to
a party exists (1) when the parties use discovery not available in arbitration,
(2) when they litigate substantial issues on the merits, or (3) when
compelling arbitration would require a duplication of efforts. Nev. Gold,
121 Nev. at 90-91, 110 P.3d at 485.

We conclude Lennar’s actions satisfy the first and third prongs
of the test for prejudice. First, it is not clear that Lennar would have been
able to conduct the full extent of the three NRCP 35 examinations in
arbitration. In fact, it is not clear that Lennar would have been able to
conduct any such examinations at all. We have not yet determined whether
an arbitrator has authority under NRS 38.233 to order a party to submit to
an NRCP 35 medical examination, and we need not address this question
here. Generally, “a party to arbitration has no legal right to prehearing
discovery,” and “discovery is the exception, not the norm.” 21 Williston on
Contracts § 57:97. Where discovery is permitted in arbitration, its scope is
“not coextensive with that which occurs in the course of civil litigation
under ...rules of civil procedure.” Jd. Here, Lennar conducted not just
one, but three examinations under NRCP 35. Given that it is unclear
whether even a single NRCP 35 examination would be permitted in
arbitration, it is even more unlikely that an arbitrator would permit
multiple examinations. In other words, Lennar’s utilization of the three
NRCP 35 examinations enabled it to obtain discovery that may not have
been available in arbitration.

Next, arbitration at this stage, after 17 months of active
litigation, would require a duplication of efforts. This court has previously
concluded that allowing arbitration after 18 months of “vigorous litigation”

cee

would permit a party to “‘test[ ] the judicial waters, and to do so for as long

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as he liked, even to the... brink of resolution, and then nullify[ ] all that
has gone before by demanding arbitration.” Nev. Gold, 121 Nev. at 91, 110
P.3d at 485 (quoting Uwaydah v. Van Wert Cnty. Hosp., 246 F. Supp. 2d
808, 814 (N.D. Ohio 2002)). We conclude Lennar’s actions are similar to
those in Nevada Gold, where a party belatedly filed a motion to compel
arbitration on the “eve of trial.” Jd. Here, it is clear that submitting this
case to arbitration at this point, after the parties have engaged in 17 months
of litigation, would unquestionably require a duplication of the parties’
efforts.

Because Lennar has likely obtained discovery unavailable in
arbitration and going to arbitration at this point would require the parties
to duplicate the efforts they have already expended in litigating this case,
Lennar has prejudiced Pamela. Therefore, because Lennar (1) knew of its
right to arbitrate, (2) acted inconsistently with this right, and (3) prejudiced
Pamela, we conclude Lennar waived its right to arbitrate this dispute.
Though the district court improperly proceeded to interpret the arbitration
clause’s scope, we nonetheless affirm its ultimate determination. See
Saavedra-Sandoval v. Wal-Mart Stores, Inc., 126 Nev. 592, 599, 245 P.3d
1198, 1202 (2010) (this court affirms the district court’s ruling “ifthe district
court reached the correct result, even if for the wrong reason”). As we
conclude the district court reached the proper result in denying Lennar’s
motion to compel arbitration, we need not consider the parties’ arguments

concerning the statute of limitations.

CONCLUSION
We hold that a party who delays seeking arbitration and avails

itself of the discovery process may be deemed to have waived its right to
arbitrate, notwithstanding the absence of any dispositive motions in the

case, if the totality of the circumstances demonstrate the party actively

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litigated an issue it subsequently seeks to arbitrate. Lennar’s 17-month
delay and litigation conduct, taken together, constitute waiver. The district
court reached the correct result in denying Lennar’s motion to compel.
Accordingly, we affirm the judgment of the district court and remand this

case for further proceedings consistent with this opinion.

Bell
W neur:
S > J.
Parraguirre
Stiglich
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