Tulsa law firm sues MCZ Development Corp. for fraud after representing Kialegee Tribal Town in its quest for a casino
BY SUSAN HYLTON World Staff Writer
Saturday, August 04, 2012
8/04/12 at 7:23 AM
Read previous stories and key documents about the Kialegees’ planned casino.
A local law firm that withdrew its representation of the Kialegee Tribal Town, its town king and Florence Development Partners LLC because it has not been paid is now suing a Chicago real estate developer that is behind the stymied casino development in Broken Arrow for fraud.
Feldman, Franden, Woodard & Farris made the civil complaint in U.S. District Court this week against the MCZ Development Corp., James Haft and Michael Lerner, who are both listed as officers and/or directors of MCZ and residents of Illinois. Haft is also an attorney.
The amount allegedly owed is around $100,000. The firm is also seeking $500,000 in punitive damages.
"No payment was ever made in connection with this 'shell game,' " the firm alleges.
The firm served as co-counsel with Washington, D.C., attorney Dennis Whittlesey at an injunction hearing requested by Oklahoma Attorney General Scott Pruitt.
Chief U.S. District Judge Gregory Frizzell granted the injunction May 18, ruling that the Kialegees do not have jurisdiction to build a casino at the site, which is a Creek Nation allotment owned by Marcella Giles and her sister Wynema Capps.
The local firm alleges that "Haft and Lerner secretly harbored the intention to attempt to shift responsibility for attorney's fees to Florence Development Partners, an entity formed for purposes of the Broken Arrow casino project and evidently without assets independent of that project."
Giles, Capps and the Henderson, Nev.-based Golden Canyon Partners LLC make up the Florence Development group.
The law firm alleges that MCZ's "fraudulent alteration was concealed from plaintiff and is being used as a sham to avoid liability."
Court filings state that MCZ is the development entity that would be paying for the defendants' legal fees and that the law firm planned to send monthly bills to MCZ.
Haft sent an email to law firm partner Joe Farris saying a signed engagement agreement was attached, but it wasn't, according to court filings. The firm now believes this omission was intentional, the filings indicate.
Farris told Haft in an email that the engagement agreement wasn't attached and asked whether it was OK to send the first bill through email. Haft indicated that the fee arrangement was acceptable, according to the filings.
The firm maintains that despite its extensive work on the case, which included preparing motions, discovery and a three-day hearing, it has not received any payment from MCZ or any other entity despite demands for payment.
In one of the last demands for payment on July 17, the firm asserts, Haft finally forwarded the engagement agreement, but it had been altered. Haft and MCZ had been crossed out, and Florence Development Partners was hand-written in its place.
In a July 18 email from Haft to Farris, Haft said the engagement letter was signed by Lerner, manager of Golden Canyon Partners LLC, in its capacity as manager of Florence.
"Any responsibility for the bill is Florence's alone," Haft said in the email.
Farris responded in an email to Haft:
"Well then, you just guaranteed a suit against the individuals as well as MCZ for fraud as well as (for breach of contract and recovery of earnings). Nice doing business with you, Mr. Haft," Farris wrote.
Haft then responded: "Then expect a counterclaim for malpractice."
Haft could not be reached Friday.
MCZ's website indicates it has real estate developments in at least nine states, including the Flamingo condominiums in South Beach, Fla. News accounts indicate that the company has been named in connection with a series of foreclosure actions on residential and commercial developments.
Original Print Headline: Law firm sues developer for fraud over BA casino work
Susan Hylton 918-581-8381
Joe Farris: His firm is seeking $600,000 from MCZ Development Corp.