I have previously discussed a malpractice case brought against a consultant for failing to identify that a site had been part of a bombing range. The latest installment in this category of inadequate due diligence involves a lawsuit against a law firm.
In this case, a developer is seeking $10MM in damaged from a law firm for negligently performing environmental due diligence on property the plaintiff intended to develop into a residential community.
In 2006, Coves of the Highland Community Development District formed an investment group to purchase a 324-acre property in eastern Louisiana and retained McGlinchey Stafford PLLC to organize the development entity and secure $7.7 million in bond financing. Coves used the bond to pay McGlinchey and install infrastructure on the property, including streets, water lines and a sewage treatment plant, and was poised to offer residential lots for sale, the suit alleges.
In March 2009, the U.S. Army Corps of Engineers placed a notice in a local newspaper about its investigation of unexploded ordnance on the former Hammond Bombing and Gunnery Range which had been used by World War 2 bomber pilots used for bombing and gunnery practice. According to the complaint, the newspaper notice was the first inkling the investors had about the bombing range, even though the Corps had begun an investigation into the site as far back as 1995, the suit alleges.
In April 2009, the Tangipahoa Parish engineer told Coves that no further development would be permitted until the unexploded ordnance was completely cleaned up, the complaint claims. In June, the Corps had issued its final site inspection report, concluding that the Coves property was conclusively within the boundaries of the bombing range and would need further investigation. no longer able to sell lots on the property, Coves defaulted on its bonds, according to the complaint.
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