The case stems from a 2021 trip-and-fall in which Pamela Whalen, then the fiancée of Lennar homebuyer Brian Whalen, tripped over a utility box while touring a Lennar community. The accident occurred on property not covered by the purchase agreement for Brian's home. Whalen filed a negligence complaint against Lennar and affiliate Greystone Nevada, LLC in September 2022.
Lennar did not demand arbitration until March 2024. Before that, the company filed an answer, demanded a jury trial, exchanged interrogatories and document requests, and required Whalen to submit to three medical examinations under NRCP 35 — conducted by an orthopedic surgeon, a plastic surgeon, and a psychiatrist.
The court adopted a totality-of-the-circumstances standard for waiver. Justice Bell wrote that Lennar's conduct was "significant and unequivocally inconsistent with arbitration."
Permitting arbitration at that stage, Justice Bell wrote, would allow a party "to test the judicial waters, and to do so for as long as he liked, even to the brink of resolution, and then nullify all that has gone before by demanding arbitration."
Lennar argued it could not have waived arbitration because it never filed a dispositive motion. The court rejected that position, holding that waiver "turns on all relevant circumstances" and noting Lennar failed to assert arbitration as an affirmative defense despite a contractual requirement to submit disputes within a reasonable time.
The court also found prejudice to Whalen, reasoning that Lennar likely obtained discovery through the NRCP 35 examinations that would not have been available in arbitration. The opinion left open whether Nevada will eventually abandon the prejudice element, citing the U.S. Supreme Court's abrogation of the federal prejudice requirement in Morgan v. Sundance, Inc.
The district court had denied the motion on different grounds, concluding the claim fell outside the scope of the arbitration clause because the accident occurred off the purchased property. The Nevada Supreme Court held that reasoning was error, observing that the contract contained a delegation clause assigning arbitrability decisions to the arbitrator.
The court remanded the case for further proceedings consistent with the opinion.