A law firm from Phoenix is the defendant of a lawsuit filed by the developer of CityNorth, claiming that the actions taken by the law firm put the developer out of business. The developer, Northeast Phoenix Partners, is a subsidiary of Klutznick Co. Northeast Phoenix Partners also had the development rights for the 5,700 acre Desert Ridge development in the northeast section of the city.
In a lawsuit with Gray Development Group earlier in 2012, Northeast Phoenix Partners, lost both Desert Ridge and CityNorth. The lawsuit was filed against Gammage & Burnham was filed last week. Gammage & Burnham was the law firm working with Northeast Phoenix Partners but it advised Gray regarding how it should continue in its efforts to increase residential density on Desert Ridge parcels just north of Desert Ridge Marketplace. According to the lawsuit, Gammage provided Northeast Phoenix Partners with advice that conflicted advice given to Gray and told them to oppose the efforts of Gray.
“Defendants (Gammage), who were Plaintiffs’ (NPP’s) lawyers, led their own clients into a legal business disaster,” the lawsuit reads. “Defendants’ advice to Plaintiffs amounted to professional negligence and resulted in a $110million judgment against NPP, which drove plaintiffs out of business.”
In July of 2010, the judgment was handed down in the case that started back in January of 2007. Gray won the judgment and the CityNorth master developer rights were awarded to Gray. During the same time frame, from August 2007 to January 2010, Lisa Hauser, an attorney from Gammage, was representing Northeast Phoenix Partners when the company tried to retain a $94.7 million parking agreement with the city of Phoenix.
During the case, neither side disclosed the relationship between Gammage and Northeast Phoenix Partners. The lawsuit filed recently claims that Gammage was working on the Desert Ridge project by drawing plans from the start of the project. According to Andrew Everroad, the attorney for Gammage, the lawsuit is “an attempt to shift blame for a disastrous jury verdict in a case where none of the parties were represented by Gammage & Burnham.” He said that Gammage helped both sides “in understanding the rules established by the city of Phoenix for developing property within Desert Ridge. Such concurrent representation of multiple clients in interpreting governmental regulations is common for lawyers. The case has no merit, and we will defend it vigorously.”
Everroad works for a different law firm, not Gammage. Northeast Phoenix Partners is asking for the full value of ‘lost profits’ and the money lost in the lawsuit with Gray.