Small victory for Sun City Summerlin residents: Builder fined for no-shows

By Brian Eckhouse (contact)

Tuesday, Feb. 12, 2008 | 2 a.m.

With a smirk and a slight laugh, District Judge Elizabeth Gonzalez reasoned Monday that she couldn’t quite toss Del Webb — one of the nation’s largest development companies — in jail.

Not that more than 1,200 homeowners in the Sun City Summerlin community, who are suing the company for what they allege is shoddy construction, would have protested such a measure.

Instead, a handful of them had the pleasure of watching Gonzalez slap Del Webb with a fine of more than $5,500 for disobeying another judge’s order that all requisite representatives of that company and its insurance carrier appear at a mandatory three-day settlement conference last week — a conference the developer had sought. The $5,500 is an accumulation of the homeowners’ legal bills over that period, the cost of a hired mediator and a $500 fine.

At one point in the hourlong hearing, Del Webb attorney Robert Carlson tried to convince Gonzalez that the court order for the settlement conference “might be vague.”

Gonzalez rejected that argument outright; there was no need to review the order’s language. Del Webb, she noted wryly, had drafted the order.

Her reprimand appeared to embarrass representatives of Del Webb and insurance giant Travelers presumably not for the amount of the fine — it’s a pittance for the multibillion-dollar companies — but for the seriousness of such a penalty, which is rare in business-related suits. Both companies’ attorneys refused to comment on Gonzalez’s decision.

The judge said Del Webb’s failure to negotiate in good faith wasted three days for her, the 25 homeowners who were asked to be in attendance, and their attorneys. The homeowners had been bused from Summerlin to downtown Las Vegas for the settlement talks, which remain stalemated despite the plaintiffs’ willingness to considerably lower the amount sought, from $150 million to $85 million.

“Why ask me to schedule three days if no settlement was intended to be reached?” Gonzalez said.

A settlement would have ended a yearslong dispute between the parties and spared the judicial system a plodding trial that is expected to last more than six months. The jury selection process began more than two weeks ago and has yet to be completed. It is to resume today.

Attorneys for Del Webb and Travelers contended they did not willfully disobey the court: One insurance representative was attending his father’s funeral in Nebraska while another is on maternity leave in California. Dan Krieger of Travelers described the overlap as a confluence of unexpected events.

“Substitute carrier representatives” were in attendance instead, the attorneys noted in a court filing Monday. But Gonzalez decided none of these surrogates had the “willful authority” to sanction a multimillion-dollar settlement. Indeed, Krieger said only a committee — not one person — could make such a decision, though “mechanisms” for such an action are in place.

The four homeowners in the audience declined to comment afterward, though their smiles couldn’t be stifled.

Gonzalez’s decision probably has no bearing on the just-under-way trial, but it certainly was a small victory for the homeowners against a corporate giant.

Score one for the little guy.