Investors lose bid to keep documents related to Inspirada development confidential
CARSON CITY — A group of real estate investors lost their bid Thursday to keep documents sought in a lawsuit over a failed Henderson development project confidential.
The Nevada Supreme Court refused to overturn a lower court order requiring Las Vegas Development Associates and Essex Real Estate Partners, along with other parties, to turn over the documents to KB Home Nevada in a dispute over a $60 million land acquisition deal at the Inspirada development in west Henderson.
The issue before the court was whether the investors were required to turn over what their attorneys said were privileged documents containing legal advice and litigation strategy to KB Home.
The Supreme Court, in a unanimous opinion, said such documents must be turned over if they are used in depositions, just as they must be provided when used in court proceedings.
The documents were referred to by Essex executive George Holman to refresh his memory when he gave a deposition in the case.
Attorneys for KB Home said state law is clear on the subject and requires documents used by a witness for such purposes to be turned over to the opposing side.
Attorneys for the developers said the documents were protected by attorney-client privilege.
“KB Home is entitled to know the contents of those memoranda in order to properly cross-examine Holman as to their accuracy, truthfulness, and their influence on his testimony,” the court said.
The investors have sued KB Home alleging that the company failed to build infrastructure on the Town Center property they purchased, rendering it virtually worthless.
The deal was made in November 2007, just before the real estate bubble collapsed. KB Home has argued that the agreement contained no deadlines for the installation of infrastructure.
The dispute has been on hold awaiting a decision on the document question.
Clark County District Court Judge Mark Denton upheld the release of the documents in 2012.
Some notes and redacted memos were ultimately turned over, but court rulings mandated that all the information be provided.
The developers ultimately appealed to the Supreme Court seeking an order allowing the unshared portions of the documents to remain confidential.
But the Supreme Court, in a unanimous opinion, said such documents must be turned over in depositions as well as in-court hearings.
The court said “we see no reason why writings used to refresh the memory of a witness before or during a deposition should be treated differently than those used by a witness before or at “the trial.”
Building at Inspirada virtually stopped in 2008. The project went into Chapter 11 bankruptcy in 2009; four of its original builders agreed to buy out the project in late 2011.
The master plan for Inspirada envisions homes clustered in seven “villages” ranging in size from 200 to 250 acres each, with a 400-acre town center, to try to create a community feel.
Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Find him on Twitter: @seanw801.
