Because it appears that we may get dragged kicking and screaming into filing a lawsuit against the Cosmopolitan Resort and Casino I thought I should take a look at all the documents that have been piling up in my inbox over the past two years. Having been reluctantly dragged into a lawsuit once before I would rather have my left testicle gnawed off by rabid piranhas than participate in another one. But since it appears that push may be coming to shove I decided I should take a closer look at what is going on. What I am finding is rather disturbing.
Here are the facts:
1. The original delivery date for the condos was supposed to be on or before January 1, 2009, so they are more than two years behind schedule. This fact alone should entitle any purchaser to rescind their purchase contract under Nevada law and receive a full refund of their deposit plus accrued interest.
2. The construction delay was due in part to difficulties resulting from having to pump ground water out of the subterranean garage. I'm still a little unclear about how they could not have known the water was there and taken it into account in their construction schedule, but the salient fact is that the Cosmo did not disclose that the water was there even after it (apparently) flooded the excavation. In fact, I'm looking at the property report that was given to us when we signed the purchase agreement and it specifically says, "... no drainage ... is necessary to render the [building] useful ..." That sure looks like a smoking gun to me.
3. The Cosmo settled a class-action lawsuit last December, releasing over 1600 purchasers from their contracts (for 75 cents on the dollar -- 66 once the lawyers took their cut). That left about 200 buyers, including us, who opted out of the class action for one reason or another. I spent eight months trying unsuccessfully to get the Cosmo to tell me what they were going to do with the now-unsold units. As I mentioned in my earlier post, there were only three possibilities: try to re-sell the units, let them sit vacant, or turn them into hotel rooms. If they turned them into hotel rooms that would give all the remaining owners the contractual right to rescind our purchases, which is pretty much what happened.
4. Despite the fact that at the time we had opted out of the class action and not yet rescinding our contract (because the final subdivision map was not yet available) we did not receive an invitation to the Cosmo's grand opening. (We did, however, receive an email solicitation to reserve a room at the Cosmo for the New Year's celebration for $5000.) Not that the Cosmo had any obligation to do so, but this did not exactly leave us with a warm fuzzy feeling that the Cosmo considered us valued customers.
There's actually a lot more, but I want to save some for next time. I have a notion this is going to become quite the little saga.
Here's the thing: what could possibly be the Cosmo's motive for doing these things? I honestly find myself at a loss. I can only think of three possibilities:
1. They're stupid. They're heading for a train wreck, but they don't realize it. That doesn't seem very likely.
2. This is a ploy to intimidate as many buyers as possible to settle for less than the full amount of their deposits before push comes to shove and a judge reads them the riot act. That doesn't seem likely either. The Cosmo actually extended the class action settlement right up to the point where they had to prepare the final subdivision map, at which point they withdrew it. If they wanted people to take the settlement, why withdraw it now?
3. They know something we (and our lawyers) don't.
It is this third possibility that has me a little concerned. On the merits, our position is a slam-dunk. We have at least three different grounds on which we are legally entitled to a full refund of our deposit (the delay, non-disclosure of the drainage problem, and the changes to the subdivision map). If this goes to court and we win, we will also be legally entitled to recover attorney's fees. Our attorney is confident enough in the merits of the case to take it on contingency. Win or lose, this isn't going to cost us a dime. So what does the Cosmo possibly hope to gain from this?
My worry is not that the Cosmo's lawyers are going to pull a legal rabbit out of a hat and cite some obscure legal precedent that will undermine our position. I've vetted our lawyers well enough to be very confident that that is not going to happen. But I'm not so sanguine about the possibility of getting a harsh lesson in how the world really works here. The Cosmo is owned by Deutsche Bank, a very large and very powerful multinational corporation (with, apparently, a somewhat unsavory history), and this is Las Vegas. I'm not sure I would bet my entire life savings that the rule of law is going to carry the day.
If you live in Las Vegas (do I have any readers in Vegas?) you should be worried. You have a lot more at stake here than we do. Contrary to the PR, not everything that happens in Vegas stays in Vegas. If Deutsche Bank somehow manages to manipulate the legal system and steamroll us, people will find out. And the next time they think about doing business in Vegas, they'll think twice.