Judge consolidates mass of liens facing Venetian

Gary Thompson

Wednesday, Sept. 8, 1999 | 11:06 a.m.

District Judge Mark Gibbons agreed to consolidate hundreds of mechanics liens filed against the Venetian and its general contractor into a single case Tuesday and vowed to push for a quick resolution to the problem.

"If I could resolve it tomorrow, I'd resolve it tomorrow," Gibbons told lawyers for the Venetian, Lehrer McGovern Bovis Inc. and more than a dozen trade contractors who allege they haven't been paid for work on the $1.5 billion hotel-casino on the Las Vegas Strip.

Venetian and Bovis executives blame each other for failing to pay scores of subcontractors who, as of Tuesday, had filed more than 375 liens claiming they are owed more than $300 million. Included in the total are $145 million of liens Bovis filed against the Venetian.

In granting an uncontested motion to consolidate the liens into a single case, Gibbons acknowledged that the massive numbers involved warrant designating the litigation a complex case.

"The courts might have to set murderers free if they don't get a speedy trial, so it's a real issue," the judge said. As a complex, multiparticipant case, the Venetian litigation has the potential to clog the state's courts, tieing up several judges unless trial procedures are streamlined. Criminal defendants whose own hearings are delayed could be freed without trial.

Gibbons said he would be "willing to work at night and on weekends as a settlement judge" to help resolve disputes between some lien claimants who'd like to avoid a trial.

But he's asking the state Supreme Court to clear the way for appointment of one of the state's three senior judges to preside over the ultimate trial on a full-time basis. Gibbons also has named Floyd Hale as a special master to expedite discovery. Discovery is a legal process in which opposing sides disclose evidence they will offer to prove their version of the case.

"I know from reading the newspaper there have been political efforts to get this resolved," Gibbons said, referring to recent meetings between subcontractors and County Commissioner Erin Kenny and Congresswoman Shelley Berkley.

"The one group that can resolve this is the courts, and we absolutely intend to do that," he said. "We want to move as quickly as possible, but we'll need a team effort to do that."

One of the first issues will be for attorneys to submit a detailed matrix of the outstanding liens, so Hale and Gibbons can delineate the actual number and total dollar amount by eliminating duplicate claims.

Gibbons said the intent expressed by attorneys for the Venetian and Bovis to "bond around" liens might prompt lien claimants to demand hearings within 30 days, which "could cause chaos in the courts."

Venetian lawyer Kevin Stolworthy and Richard Scotti, who represents Bovis, said their clients want to "bond around" all liens within 45 days, which would forestall foreclosure on the hotel-casino.

The practice allows Venetian and Bovis to buy bonds, usually for 1 to 30 cents on the dollar. The bonding company posts a cash bond of 1.5 times the amounts claimed, ensuring that if the judge grants the claims, the money is there to pay them.

Under state law, claimants whose liens have been bonded around can demand a hearing on their claims within 30 days. Stolworthy said he believes the law is unconstitutional because it might prevent his client from pursuing all its legal remedies.

But subcontractor attorney Richard Peel argued that many claimants agreed to be bonded around largely because of the law, and urged an expedited trial.

The next hearing on the case is scheduled for 9 a.m. Sept. 22.

Venetian officials have said they don't owe the lien claimants any money, asserting the resort's "guaranteed-maximum-price" contract with Bovis absolves them of any responsibility to pay the contractors. Bovis has said it complied with the GMP contract and any cost overruns were a result of changes in the scope of the project requested by Venetian owner Sheldon Adelson.