[Vision2020] 050805 LMT: UI Foundation sues firms, lawyers

[Art Deco]

UI Foundation sues firms, lawyers; $25 million suit alleges legal malpractice and breach of fiduciary duty


By DEAN A. FERGUSON
of the Tribune
The University of Idaho Foundation blames its Boise attorneys for $25 million the foundation lost to a botched real estate deal, infamously known as Idaho Place. 

On Friday, the foundation filed a lawsuit against four lawyers and two Boise law firms: Givens Pursley LLP and Elam & Burke, Professional Association. The foundation seeks more than $25 million, as well as interest and legal fees. 

"The foundation instituted an action ... charging the firms with legal malpractice and breach of fiduciary duty while guiding the foundation's involvement in development of the University Place project over a four-year period from 1999 to 2003," reads a foundation press release. 

The 58-page lawsuit alleges both law firms failed to properly advise the foundation as it got deeper into the failed project, which was originally planned as a $136 million satellite campus. 

UI President Robert Hoover and chief financial officer Jerry Wallace both pushed the project, called the "Boise Initiative," according to the lawsuit. Both men have since resigned. 

Former UI Foundation vice president and Givens Pursley lawyer Roy Eiguren figures prominently in the lawsuit's allegations. 

Eiguren, along with fellow Givens Pursley attorneys L. Edward Miller and Franklin G. Lee, represented the UI, the UI Foundation and University Place developer Civic Partners. 

As a foundation director, Eiguren lobbied the State Board of Education to approve a supplemental $600,000 compensation package for former UI President Robert Hoover, notes the lawsuit. 

"Because of the strong relationship between Hoover and Eiguren, and the fact that Eiguren and (L. Edward) Miller gained Hoover's trust, Hoover offered Givens Pursley the opportunity of leading the Boise Initiative effort," the lawsuit reads. 

Even though Givens Pursley filed waivers of conflict of interest, the foundation lawsuit alleges poor representation. At times, the university, the foundation, or Civic Partners had adversarial relationships that should have required an independent party, alleges the lawsuit. 

Among the myriad allegations, the foundation accuses Eiguren of advising the foundation "it had no option but to pay" Civic Partners a $2.5 million contribution for a parking garage. 

"This information was materially inaccurate, because no contractual obligation then existed," reads the lawsuit. 

Attorney Ryan Armbruster and his law firm Elam & Burke of Boise, who functioned as the foundation's primary attorneys, also violated a "standard of care owing to the foundation," according to the lawsuit. 

Armbruster also represented the Capital City Development Corporation, which is Boise's urban renewal agency. The development corporation had an interest in seeing the foundation keep paying developers, according to the lawsuit. 

Armbruster allegedly advised Wallace to agree to a $5.7 million note "without the Foundation Board's prior knowledge or ratification," reads the lawsuit. 

"Armbruster's loyalty to CCDC (the development corporation) prevented him from providing the independent and prudent legal advice the foundation required to assess the (loan agreements)," reads the lawsuit. 

Armbruster has already admitted he violated Idaho Bar Association rules and has been issued a public reprimand. 

Eiguren and Miller also face conflict of interest complaints filed in April by the bar association. 

The Tribune could not reach any of the attorneys or their law firms Saturday evening for comment. 

Eiguren has represented the Lewiston Tribune through his work for the Idaho Allied Dailies newspaper group. 

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Ferguson may be contacted at dferguson at lmtribune.com. 
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