Miriam Hayenga, Phoenix Developer, Suing Prominent Zoning Attorney Paul Gilbert Over What She Says Is Botched Legal Work

By Monica Alonzo Fri., Aug. 24 2012 at 8:20 AM

See also: Miriam Hayenga Proves You Can Fight City Hall, After All
See also: Don't Even Think About Fighting City Hall Unless You're a Good Old Boy

Miriam Hayenga celebrated her settlement with the City of Phoenix. Now, she's going after her former attorney.

A few years ago, we told you about Miriam Hayenga and her quest for justice over what she says was bungled legal work from prominent zoning attorney Paul Gilbert.

Sarah Fenske (former New Times columnist who is now the editor at our sister paper the L.A. Weekly) ended her 2009 column with the words 'Stay tuned...'

Nearly three years later, Hayenga, an unlikely developer, is pushing forward with a lawsuit against Gilbert, her former attorney. Depositions are under way in the case that has cost Hayenga millions of dollars -- both out of pocket and in lost potential profits -- and countless hours over nearly a decade.

Gilbert did not return our calls seeking comment.

Hayenga's story is as simple as it is complicated.

It boils down to this: The city gave her bad information about her development rights, and she lost out on an opportunity for a $4.35 million sale. She hired an attorney -- Paul Gilbert, regarded as the top zoning lawyer in the state -- who advised her to go after the man who sold her the land, blaming solely him for his client's inability to now develop it.

Although that was Gilbert's claim, the truth was in easily accessible city records -- documents that Phoenix planning officials and this premier attorney are accused of not bothering to carefully review, if they reviewed them at all.

Hayenga lost her lawsuit against Bob Gosnell, the man who sold her the land, in part because city officials testified under oath that, indeed, it was their screw up. And the real trouncing came when she was ordered to pay more than $300,000 worth of Gosnell's attorney's fees.

Why? Because even after Hayenga's legal team knew -- or should have known -- that it was the city that messed up, they pressed forward with their lawsuit against Gosnell.

Years ticked by, and the focus on going after Gosnell cost her an opportunity to fully go after the city for damages. She had a case, but was faced with a real possibility of it getting tossed out because she didn't file it sooner.

The city argued that an attorney of Gilbert's caliber would have known that she had a case against the city, but said they never filed it. Thus, the statute of limitation had run its course.

She dropped Gilbert and hired another attorney to sue the city. They eventually settled for $2.5 million. She hired yet another attorney to go after Gilbert for steering to make him pay for what she contends is botched legal work and steering her case so poorly.

As Fenske explained in her 2009 articles, Hayenga bought six acres of land in 1997 with a tennis club and the Waterin' Hole restaurant from Bob Gosnell, the master builder of the Pointe communities at South Mountain and Tapatio Cliffs.

Although she tried to breathe life into the property, business wasn't good. And it was just getting worse. She decided to go to Plan B, and started talking to developers.

Based on information she received from Phoenix planning officials -- who assured her several times that she could build up to 120 units on the property -- she worked out a deal with the Hilton to sell the land for $4.35 million.

Three years later, when she was ready to seal the deal, city officials told Hayenga a very different story.

It was around February 2000, when they informed her that she couldn't put 120 units on that property -- in fact, assistant city planner Steven Muenker told her there were almost no units available for that swath of land.

City officials traced the problem back to a cap of 2,147 residential units placed on the Pointe Tapatio back in 1979. And, by the time that Hayenga arrived at City Hall with her plans, most of those units had been used up.

Tags:

beus gilbert, bob gosnell, david leonard, lawsuit, malpractice, miriam hayenga, paul gilbert, phoenix

We Recommend

fairymagic13

That's nothing compared to what Bues Gilbert did to the citizens of Arizona in the Baker V. Motorola case regarding the underground pollution of most of Phoenix's drinking water with TCE! They REALLY fucked over thousands of people who could have had a better life but for these asshats who made mistake after mistake.

http://www.phoenixnewtimes.com/content/printVersion/164145/

Read it for yourself - New Times printed the story about BeausGilbert's malfeasance.

BTW - Talk about "Tort" lawyers - the business to business lawsuits which go on in Maricopa SUperior Court are FAR more wasteful of our taxpayer dollars and business creation activity than any tort suit against a company. These people argue like cats and dogs.

I say let's remove the limitation of liability provisions from the incorporation law and we'll see this fraud and theft by businesses against businesses evaporate. It's another matter when you got your personal finances on the line in running your business and not just some rich investors who are willing to take a loss if you lose a lawsuit.

LegitQuestions

So, let me get this straight. She purchased the land in 1997 for “just under $1 million” (Sara Fenske) and expected to sell it 3 years later for $4.35 million – a 30% three year return. Per Fenske, she planned from the day she bought it to tear it down and build condos as her “exit plan” yet she didn’t do any due diligence, didn’t hire a real estate attorney and didn’t really know the zoning status of the land when she bought. Instead of doing her own due diligence she relied on comments from the seller that were not in the sales contract as either representations or warranties. She did, apparently, NO homework on her acquisition but here it is – everyone else’s fault. Sounds like she was simply ill equipped to play in the development game she was trying to play in. Ultimately it comes down to her fault for not reviewing the city record prior to even purchasing the land.

And now she’s already received more than double what she paid for the proper from the City of Phoenix so she’s not even out any cash (even after taking into account the $300,000 she paid to Gosnell).

Sorry, just having a hard time being empathetic or sympathetic to developers trying to allocate multi-million dollar, double digit annual returns amongst themselves.

Meanwhile Ms. Hayanga has bought and torn down important set of historical community buildings in Flagstaff so that she can grace that community with a new development that includes a Dunkin Donuts, a Chick-fil-A and a third quick-serve restaurant. I’m sure that will add a whole lot of character to what she describes as an “influential corner” in Flagstaff.

Publius

@LegitQuestions . This is what got Arizona in double in the first place. Too much insider playing by developers, their attorney's and that whole industry, and City Council members trying to keep developers and their campaign money in the game. Hayenga wanted to buy , flip, and make a ton of money without doing a thing, and it is everyone elses fault, especially that taxpayers, who did no know they were guaranteeing her profits.