Wynn sues homeowners in battle for control of D-I association

Grace Leong

Friday, Nov. 3, 2000 | 10:49 a.m.

A legal battle has intensified between two boards fighting to represent the Desert Inn Estates Homeowners Association.

The association's new board members including Steve Wynn and his company Valvino Lamore LLC, were sued Monday by a Desert Inn homeowner, Stephanie Swain.

Wynn then filed a suit in Clark County District Court Thursday against Swain and 14 Desert Inn homeowners.

Wynn's suit disputes the legitimacy of the former board and seeks a court order to stop the defendants from disrupting the association's operations.

Swain had sued three members of the newly-elected association board, Wynn, his wife, Elaine and Desert Inn attorney, Marc Rubenstein, Valvino Lamore and a subsidiary, Desert Inn Improvement Co., alleging Wynn's board was "illegally constituted" and that Desert Inn failed to correct code violations at its residences.

But Valvino disputed the allegations.

Valvino, which said it has "supermajority ownership and voting interest" in the association because it owns 41 lots or 77 percent of 53 Desert Inn Country Club Estate lots, said it held a meeting on Oct. 6 to protect its interest in the property because the then current board refused to acknowledge Valvino's right to vote.

Wynn had offered to buy out all the Desert Inn homeowners to make way for a new casino resort, but some refused to sell. Wynn's Mirage Resorts Inc. was sold to MGM Grand Inc. this year, after which Wynn bought the Desert Inn resort. Wynn is responsible for such Las Vegas landmarks as Bellagio, the Mirage and Treasure Island.

His suit alleged the D-I homeowners' association's management company, Eugene Burger Management Co., sent out timely and complete notices that identified the Oct. 6 meeting's time and place, and included a copy of the agenda indicating a motion to remove the then current board and proposing several bylaw amendments.

Valvino said the old board was removed after 41 of the 53 eligible voting lots voted in favor of the removal. There were allegedly no votes opposing the removal.

The suit, which alleged the former board had been effectively removed, alleged the defendants have conspired to "fraudulently misrepresent themselves as the validly existing board in baseless complaint letters, written on (association) letterhead," to Wynn and to the Clark County Public Response Office on the condition of Valvino's lots.

The suit said the former board also notified Wynn on Oct. 25 it intended to assess fines totalling $4,100 for unspecified violations and has allegedly threatened to assess additional fines every seven days if such violations weren't cured.

Valvino also alleged Allied Security Inc., the Desert Inn's security service, told Eugene Burger that Allied Security will terminate its services on Nov. 18 because the former board allegedly hasn't approved a wage increase in the past 17 months.

The suit also alleged the association's credit was damaged because checks sent to creditors have bounced since the former board allegedly withdrew almost all of the association's funds from its bank account, which total more than $24,000, without explanation.

John Netzorg, Swain's attorney, declined comment on the allegations.