In the final frontier of a decade-long legal saga, lawyers spent hours Wednesday arguing over whether a Las Vegas law firm that oversaw a homeowners association’s 2006 board election should be held liable for millions of dollars bilked from homeowners by criminal players who rigged the election.
The arguments, delivered in a Clark County courtroom filled with condo owners, represented the Vistana Homeowner Association’s last chance to persuade a judge that the law firm’s negligence led to a corrupt takeover that cost homeowners millions in sham building repair contracts. The contracts were awarded to a construction company owned by Leon Benzer, the ringleader of the scheme who also had a seat on the board.
Benzer is serving a 15-year prison sentence. His criminal partner, construction defect attorney Nancy Quon, killed herself as federal investigators were zeroing in on her role. The Vistana HOA previously reached a $6 million settlement with Quon’s estate. Now, they’re seeking $7 million from the law firm, Kummer Kaempfer Bonner Renshaw and Ferrario.
Judge Mark Denton heard closing arguments Wednesday in the civil case Vistana filed against the Kummer Kaempfer firm, which since has changed its name to Kaempfer Crowe.
In 2006, the Vistana HOA hired the law firm to protect the integrity of its fall election amid homeowner concerns about corruption. At the time, Benzer and Quon were in the midst of infiltrating the HOA — using straw buyers and handpicking cronies to take majority control of the five-member board.
Testimony at trial revealed that Benzer, a board member at the time, had an existing relationship with a senior partner at the firm. Only one lawyer at the firm, first-year associate Brian Jones, was charged in the fraud scheme. In pleading guilty to wire fraud, he admitted to allowing Benzer’s puppets to stuff ballots at the law office.
“They were supposed to be looking out for their client, they were supposed to be neutral,” plaintiff attorney Victor Luke, a partner at Gibbs Gidden, said of the firm. “Instead they hitched their wagon to Leon Benzer.”
The law firm’s negligence led to a board that did not reflect the will or interests of the majority of homeowners.
“Nothing Kummer Kaempfer did amounted to concealment,” said Mark Ferrario, an attorney for Kaempfer Crowe who is representing the firm. He suggested culpability was limited to Jones, who since left the firm.
“This was an elaborate scheme and Kummer Kaempfer was a small part of it,” Ferrario said. He told the judge that even if he finds the firm liable for negligence, he should not award $7 million to the Vistana HOA.
The parties agreed that $7 million is the maximum amount Vistana can claim in damages. Ferrario argued that even the $6 million settlement with the Quon estate — as well as other funds Vistana has received as compensation for its losses — should offset the $7 million.
Vistana counters that the association was defrauded of roughly $20 million, and the $7 million only represents the amount for which the law firm can be found liable.
Denton said he would take the matter under consideration and inform the parties when he reaches a decision.
Contact Jenny Wilson at email@example.com or 702-384-8710. Follow @jennydwilson on Twitter.