LV developer sued by bonding company

Phil Levine

Tuesday, April 18, 2000 | 9:59 a.m.

American Motorist Insurance Co. filed suit in federal court against Las Vegas- based contractor Robert V. Jones Corp. seeking protection from claims against bonds the company posted for several projects on behalf of Jones and its subsidiaries.

Kurt Faux, the attorney representing the Chicago-based insurance firm, said American Motorist is seeking protection "for claims that may be made against a number of bonds issued" on behalf of the contractor.

In the lawsuit, the company also seeks to prevent Jones and its subsidiaries from "selling, transferring, disposing, pledging, encumbering or liening assets and properties" until sufficient collateral is posted.

"We don't have a definitive amount just yet, as we don't know the total claims (against the bonds) we may be facing," Faux said.

"What we really want at this point is to have the court enforce the indemnity agreements in place."

In the lawsuit, American Motorist alleges Jones and its subsidiaries "breached the agreement(s) by failing to post the collateral as required."

Jones is listed as the general partner in several partnerships listed in the suit including Nellis Investment Co., Canyon Creek North Limited Partnership, the Sanctuary Limited Partnership, Red Bluffs Limited Partnership and Iron Horse Limited Partnership.

A Jones spokesman could not be reached for comment.

In February, the Nevada State Contractors Board revoked four contracting licenses issued to Jones and its affiliates Robert Jones Co., Sun Valley Plumbing and Mechanical and RVJC Electrical, and fined the company $65,000.

In revoking the licenses, the board alleged substandard workmanship, willful or deliberate failure to pay, failure to establish financial responsibility and failure to comply with regulations of the board.

In its suit, American Motorist alleges 12 instances where Jones and its subsidiaries violated the indemnity agreements.

In one instance, American Motorist alleges that Jones failed to "timely complete" the Canyon Creek North Unit 1 and Unit 2 projects in Las Vegas.

The suit states that as a result of the failure to build Unit 1, "the City of Las Vegas made a claim against the subdivision performance bond in the amount of $378,387.61."

American Motorist alleges that Jones failed to respond to prior requests to post collateral to cover that claim, and a possible future claim against the project's delayed second unit.

Faux said the next step in the process will be a court request for a restraining order against Jones and its subsidiaries, as well as seeking enforcement of the existing indemnity agreements.