One of Nevada’s leading law firms not only enabled a criminal conspiracy but also participated in it, according to District Judge Mark Denton.
Kummer Kaempfer Bonner Renshaw and Ferrario was so negligent it enabled contractor Leon Benzer to cheat a homeowners association out of $8 million.
On Tuesday, Denton ordered the law firm now known as Kaempfer Crowell to pay $3.1 million to the Vistana Condominium Owners Association. The judgment is nearly $2.4 million; the rest is interest.
“The judgment could exceed $4 million after costs and attorneys’ fees are added,” said Vistana attorney Richard Haskin, although that’s up to the judge.
Denton’s findings of negligence and breach of duty against Kummer Kaempfer were plentiful and brutal.
Among the worst:
■ A young attorney named Brian Jones wasn’t supervised and allowed ballot stuffing in a HOA election.
■ The FBI told the law firm it was investigating Jones in connection with election irregularities, but no one at the firm informed Vistana.
■ The law firm represented both sides in suspicious HOA elections, a clear conflict of interest.
This civil case is part of massive litigation that started in 2008 involving Benzer, then-owner of Silver Lining Construction. A separate federal criminal investigation found Benzer, now serving time, and other schemers packed the Vistana board and other HOA boards with conspirators through rigged elections, then had those conspirators vote to initiate construction defect lawsuits against builders. The legal work and repairs were farmed out to Benzer and his buddies.
Vistana board members were suspicious, so a decision was made to hire a supposedly independent law firm to oversee elections.
One of Kummer Kaempfer’s partners, Bob Gronauer, was a friend of Benzer’s, and his firm was chosen in 2006.
“Had KKBRF properly performed its function as a neutral third party for the 2006 and 2007 elections, the pilfering of the $8 million to be used by Vistana to repair the construction defects would likely have been avoided,” Denton wrote.
Gronauer testified he didn’t know anything about HOA elections or laws, so he assigned Jones to oversee the elections.
Jones had just been admitted to the Nevada bar. He had one job: Protect the ballots.
But he testified that he thought Benzer, his fixer Ralph Priola and Vistana were one and the same. So he let Priola have access to the ballot boxes in the law firm’s office.
Priola rigged the elections. Benzer profited.
What’s missing from the opinion? The names of the attorneys who were told Jones was being investigated by the FBI yet didn’t inform Vistana. That’s bad lawyering.
The law firm tried to blame Jones, but Denton rejected that defense, deciding the firm was liable for Jones’ actions and had been negligent and breached its duty to Vistana.
Mark Ferrario now works for Greenberg Traurig but represented his former law firm during the trial. He does not think the case will have any impact on the reputation of the new firm, because the people involved no longer work there.
Haskin disagreed, noting that Gronauer is now the managing partner in the new firm and was criticized by the judge for failing to supervise Jones.
“This is a highly unusual case in the way a major law firm got tied up in a criminal enterprise,” Haskin said.
Not exactly a reputation enhancer, in my mind.
Jane Ann Morrison’s column runs Thursdays in the Nevada section. Contact her at email@example.com or 702-383-0275. Follow @janeannmorrison on Twitter.