Suit: Mayor’s son duped woman in land deal

Dan Kulin

Thursday, Jan. 27, 2005 | 9:39 a.m.

A counter-lawsuit from an elderly woman fighting Louis Palazzo and Ross Goodman, son of Las Vegas Mayor Oscar Goodman, over a piece of downtown land the woman owns, alleges Palazzo and Ross Goodman had inside information they "illicitly received" and then intentionally hid, which showed the woman's property was worth much more than they were offering.

The suit filed by an attorney for Christine Von Sturm also accuses Palazzo and Goodman, who are both attorneys, of taking advantage of an elderly person who did not have the capacity to enter into an agreement to sell her land, and operating from behind a shell corporation, Palco. The suit asks that Palazzo and Goodman, instead of the company, be held personally responsible for any judgments in the case.

The suit seeks at least $40,000 plus attorney's fees.

Palazzo and Goodman did not return telephone messages left Tuesday and Wednesday. Their attorney John Netzorg said he would respond to the allegations through filings with the court and not in the media.

In a response and motion to dismiss the countersuit filed by Netzorg Tuesday, he denies his clients did anything wrong.

The 15-page document filed earlier this month on behalf of Von Sturm, who is in her 80s, is also a response to Palazzo's and Goodman's lawsuit that asks the court to enforce what they say was a binding oral agreement to give them more time to buy Von Sturm's property.

Von Sturm's property at 511 and 515 Las Vegas Boulevard South is on the block between Bonneville and Clark avenues. Her land, which has vacant buildings on it, is in a city redevelopment area, and is between city-owned land and the Boulevard Hotel, in which Palazzo and Goodman have an interest.

The Related Cos. and Sam Cherry, who is the developer of the nearby SoHo Lofts, have submitted a plan to build condominiums on the city-owned property. The plan has not gone to the council for approval yet.

Goodman and Palazzo claim Von Sturm agreed to sell her property to Palco for $1.4 million.

The deal apparently called for Von Sturm to receive a $30,000 deposit within two days of the April 30 agreement. The close of escrow was set for Aug. 9.

Goodman and Palazzo's suit claims that around May 21, they and Von Sturm orally agreed to extend escrow until Jan. 12.

Von Sturm's response and countersuit claims the original agreement was ended when Palazzo and Goodman failed to give Von Sturm the $30,000 deposit within two days of signing the April 30 agreement.

Her attorney David Rivers said that if the court agrees with that claim, then the rest of the suit is moot.

Von Sturm's suit goes on to say that Palazzo and Goodman should have known that Von Sturm "lacked capacity to enter into agreement at the time the agreement was executed."

Ted Cohen, a Beverly Hills, Calif., attorney who has been helping Von Sturm with the case, said attorneys are also required to deal with the highest degree of candor and honesty when dealing with someone who is not an attorney.

Cohen also said that Palazzo and Goodman knew what the plans for the property were, and so knew that it was worth more than what they were offering Von Sturm.

The filings from Palazzo's and Goodman's attorney claims the law prohibiting someone from taking advantage of an elderly person does not apply to a limited liability corporation.

Von Sturm's property is legally owned by C & F Sturm LLC, which she formed with her late husband.

In addition to denying the claims that Palazzo and/or Goodman had illicitly received inside information that would affect the value of the land, their court filings also say that buyer and seller aren't required to share information.

But Rivers said that in this case, Palazzo and Goodman were not dealing on a "level playing field" because they knew information that was not publicly available.

City officials have said Goodman was sent information on July 30 about who submitted offers for the city-owned property next to Von Sturm's. At that time, city rules said such information was not public, but those rules have since been changed and the city releases the names of people or businesses bidding on city property.

Von Sturm's suit says that Palco, Palazzo and Goodman, "knew or should have known that Von Sturm was not in possession of the information which Palco and its principals had illicitly received with respect to the fair market value of the subject property, and nevertheless, intentionally represented a value to Von Sturm and C & F well below the fair market value in an attempt to deprive C & F of ownership of the subject property."

"The acts and omissions of Palco, and its principals, were intentional, malicious, willful and made with the intent of depriving C & F of its valuable rights in the the subject property," the suit says.

The lawsuit does not say how much Von Sturm's property may be worth.

A city spokeswoman said the mayor had no comment because it was "his son's lawsuit."

In the past, mayor Goodman has said he had nothing to do with his son's involvement in the Von Sturm deal.

A hearing on the case is scheduled for this morning. Netzorg said the hearing is being called to address procedural matters related to the timing of depositions and sharing of evidence between the two sides.

Rivers said the hearing is to discuss waiving the requirement for an early disclosure of witnesses and evidence, which, if granted, would allow for depositions to begin soon.

"It won't be a big hearing and it won't affect the lawsuit one way or the other," Rivers said.