Two builders win lien rulings against Venetian resort

David Strow

Monday, Feb. 12, 2001 | 10:59 a.m.

A state judge has awarded two subcontractors $7.5 million to pay for work performed on the construction of the Venetian resort on the Las Vegas Strip.

The rulings, approved last week by Senior District Judge James Brennan, are the second and third mechanics liens cases to be successfully brought against the Venetian. In October, Brennan ordered the Venetian to pay Superior Tile Co. $1.33 million for work performed.

But in an interesting twist, a $2.25 million award to one contractor -- Capitol Builders Hardware -- won't go to the company, but to general contractor Lehrer McGovern Bovis, currently embroiled in a web of lawsuits against the Venetian. In an earlier settlement with Capitol, Bovis acquired the company's lien rights against the Venetian for $1.95 million. Capitol supplied doors and door frames used in the Venetian project.

Since Bovis and the Venetian are suing one another over who is responsible for paying the subcontractors -- and because there are questions over whether Bovis was obligated to help defend the Venetian against the liens -- the $300,000 profit that Bovis would receive on Capitol lien will be placed in trust until the Bovis-Venetian lawsuits are resolved.

Bovis claims it is owed more than $146 million for its work on the resort in its suit against the Venetian, while the Venetian has sued Bovis for more than $50 million in damages, claiming the general contractor mismanaged the project. Both cases are pending.

Also prevailing in its lien case against the Venetian was the Herrick Corp., a provider of structural steel. Saying it had "nothing to do with Herrick's work," the Venetian suspended payment to Herrick in late 1999 because of its dispute with Bovis. Herrick had received $42.7 million before payments were suspended.

Last week, Brennan ruled the Venetian must pay Herrick the extra amount owed, totaling $5.26 million.

All of the awards made to contractors -- which total nearly $9 million so far -- would come from the $470 million in bonds provided by the Venetian to rid the resort of outstanding mechanics liens. Had the Venetian not done this, the contractors could have put the entire resort up for auction to pay their claims.

But none of the three contractors has been paid yet, and it's unlikely they'll be paid soon. The Venetian still has the right to appeal the decisions to the state Supreme Court within 30 days, a move that would probably stay any payment. The Venetian has not appealed yet, but is expected to do so.

A Venetian spokesman declined comment, saying company officials hadn't yet read Brennan's rulings.

Three more lien hearings are scheduled to begin in April. A fourth lien, filed by Wilmar Contracting against Bovis, is awaiting a ruling by the special master appointed to hear the cases.

In all, 110 mechanics liens totaling more than $300 million are awaiting hearings.