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August 22, 2014

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Homeowners sue attorneys over settlement of case over construction defects

Desert Shores Racquet Club Homeowners Association sued several California and Las Vegas law firms and attorneys, alleging they fraudulently altered the settlement terms of a $4 million construction defect suit and misrepresented its value to the plaintiffs.

A Clark County District Court suit said Desert Shores hired the defendants, who filed a civil action on Nov. 21, 1996, against Burgheer Pacific Inc., and its subcontractors for construction defect claims of more than $16 million on the Desert Shores Racquet Club.

The defendants include both Las Vegas legal firms Woodburn & Wedge; and James Driggs, Walch, Santoro, Kearney, Johnson & Thompson; and their owner John E. Leach; California law firms Silldorf, Duignan & Eisenberg; Silldorf, Burdman, Duignan & Eisenberg and Silldorf, Shinnick & Duignan and their co-owners Howard J. Silldorf, Lawrence D. Duignan, Deborah M. Kornheiser and Kimberly J. Wind.

Also named are California insurance loss consultant Lizardi & Associates and its owner Rudy Lizardi; and California and Nevada legal firms Schofield & Associates; Schofield & Grant and their owners Paul H. Schofield and Roger J. Grant.

The suit said the Silldorf firms, which were acting as lead counsel and the Schofield firms as local counsel, abused Desert Shore's trust and confidence by allegedly hiding the true value of a settlement agreement until it was too late for the plaintiff to protect its rights in its suit with Burgheer Pacific.

Desert Shores said the defendants allegedly deceived its board members into signing the settlement agreement, which they thought was worth $4 million, but which in fact was only a $1.5 million "cash only" settlement.

The homeowners association alleged the defendants told them on Nov. 20, 1997, they had obtained an offer of a $4 million settlement from Burgheer Pacific. The terms included a $1.5 million cash settlement to be paid by Burgheer's three insurance carriers.

Desert Shores said the defendants allegedly said it would also receive other valuable rights worth $2.5 million.

Desert Shores alleged the defendants began renegotiations allegedly without its knowledge between January through March 1998 and deleted essential terms of the $4 million settlement. The homeowners association alleged it was tricked into signing the agreement because the board members allegedly weren't informed of such changes and also lacked the capacity to comprehend the legal impact of the modifications made to the settlement.

The association alleged the defendants not only failed to follow its instructions and accept the $4 million settlement offer it ordered, but they also lacked the financial resources to meet the obligations they undertook in representing the association.

Desert Shores said the defendants had offered to make cash advances to the homeowners association of 50 percent of litigation costs up to $100,000 and then 100 percent of costs over $100,000 including expert and consultant fees.

But one of the defendants, Roger Grant, disputed this allegation. "The law firms did advance nearly all costs of litigation in construction defect and personal injury cases."

"And Nevada revised statutes provide the homeowners association must have the majority vote of homeowners to proceed with the lawsuit and Desert Shores violated the statutes by filing suit against us prior to getting the vote," he said. "We're moving to dismiss the suit on those grounds."

Paul Schofield declined comment. The other defendants could not be reached for comment.

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