Judge orders law firm to pay $3.1M to condo association for negligence enabling contractor fraud
A Nevada judge has ordered a law firm to pay $2.4 million in damages and $700,000 in interest to a homeowners association for failing to supervise an associate who enabled contractor fraud.
The law firm, Kummer Kaempfer Bonner Renshaw and Ferrario, is now known as Kaempfer Crowell, the Las Vegas Review-Journal reports.
Judge Mark Denton said the law firm failed to supervise a first-year associate who allowed ballot stuffing in HOA elections at the Vistana Condominium Owners Association. The new HOA members took control of the board and awarded construction contracts to a company that defrauded Vistana out of $8 million, Denton said.
The FBI told Kummer Kaempfer it was investigating the associate, but no one informed Vistana, Denton said. The judge also faulted the law firm for representing both sides in the suspicious elections.
The law firm had argued it wasn’t liable for the actions of the associate.
Several homeowners’ associations were defrauded in the scheme to take over HOA boards and award lucrative construction contracts to a company owned by Leon Benzer, who is serving 15½ years in prison for his role in the fraud. A lawyer not associated with Kummer Kaempfer, Nancy Quon, also was accused of participating in the scheme. She killed herself in 2012.
Vistana previously obtained a $6 million settlement from the Quon estate and about $700,000 from other sources. Kummer Kaempfer had argued that any damages it is forced to pay should be reduced by the amount of those recoveries.
