Others Allege Fraud in Palms Place Condo Sale
(Story by Carol Thompson) Two separate lawsuits allege that Palms Place, LLC fraudulently sold condominium units to unsuspecting buyers.
The limited liability company, reportedly owned by George Maloof, constructed a tower with a mix of 600-square-foot studio units and 1,200-square-foot one-bedroom suites in Las Vegas in close proximity to the Palms Casino. There are also reportedly 21 penthouses on the top four floors, ranging in size from 2,000 square feet to 7,000 square feet.
As previously reported by VNN, a California resident had alleged he had been given misinformation and also a lack of information that he had repeatedly requested. He was not the only buyer to make the allegation.
On or about June 17, 2005, Frances Parkton signed documents giving her the option to purchase two condominiums from Palms Place. On June 12, 2008, the agreement was finalized and Parkton purchased the two units for a total of $1,335,395.
In a 2009 lawsuit, Parkton alleged that, over the course of negotiations, Palms Place made various fraudulent representations regarding the units’ potential for rental revenue, expenses, overhead fees, and other information which induced her to purchase the units. Further, Parkton alleged that the units were actually securities masked as real property, hence, were in violation of various securities laws. The California resident had made similar claims.
In a separate 2009 court filing Linda Underwood, Susan Reaume, Omar Sharif, Russell Milko and Earlene Milko filed a class action case against Palms Place. Also citing similar claims, the plaintiffs argued that the agreements to purchase should be void due the vagueness of essential contractual terms of an estimated completion date.
The plaintiffs further argued the agreements contained an arbitration clause with language establishing that Nevada law shall apply and that any arbitration would be conducted under the Dispute Resolution Rules of the American Arbitration Association.
Once in arbitration, Defendant moved to sever Plaintiffs’ purported class action complaint and treat it as separate demands for arbitration. In opposition, Plaintiffs argued that although the agreements are silent as to class arbitration, such group arbitration is permissible on several grounds.
The District Court denied the motion to vacate.
The California resident, who was ordered by the arbitrator to pay an exorbitant amount in legal fees, has recently appealed that decision.
Court records show Parkton filed for bankruptcy protection.
Despite the lawsuits filed alleging fraud, the parties each lost their arbitration cases and were denied remedy by the court, a seeming trend when arbitration clauses are inserted into contracts.
According to a June 18 online story posted on Realty Today, the Palms penthouse of Phillip Maloof, brother of George Maloof, is for sale at a price of $38 million.
(Image | Las Vegas Condomania)