High court denies Venetian’s request to suspend sanctions

Friday, May 11, 2001 | 11:13 a.m.

CARSON CITY -- The Nevada Supreme Court has denied the petition of the Venetian Casino Resort in Las Vegas and its Georgia law firm to suspend sanctions imposed during court hearings over mechanics liens against the hotel-casino.

The high court said Wednesday it did not want to intervene in the case at this point.

Last October Senior District Judge James Brennan imposed $5,000 in sanctions against the Venetian and its law firm of Weinberg, Wheeler, Hudgins, Gunn & Dial for sending improper letters to contractors.

Brennan also ordered this group to pay the legal fees of Lehrer McGovern Bovis Inc., and other claimants involved in building the Venetian.

The Venetian had entered into a contract with Lehrer McGovern Bovis for construction of the hotel-casino for $669 million. The Venetian, in its brief to the Supreme Court, said Bovis was supposed to pay all the costs above that.

But disputes arose over payments to the contractor and subcontractors and the issue is now being sorted out in court.

Brennan's order required the penalties be paid in January. But the Venetian and the law firm sought a stay from the Supreme Court.

David Frederick, attorney for the Venetian, said the sanction order by Brennan stopped it from entering important evidence into the case.

"The sanction order may irreparably prejudice the Venetian and seriously taint the ongoing litigation in District Court as well as adversely affect the public interest by requiring a payment of monetary sanctions that may be ethically improper," Frederick said.

Brennan ordered the $5,000 sanction be paid to the Clark County Law Library, which Frederick said is a violation of the judicial code.

The payment of attorney fees to Bovis amounts to more than $22,000, according to court documents.

The court said, "We have considered the petition, and we are not satisfied that this court's intervention by way of extraordinary relief is warranted."

The decision does not affect a second petition the Venetian currently has pending before the state Supreme Court. In April, the Venetian petitioned the Supreme Court to reassign the lien cases to another judge. Brennan was assigned the lien cases in 1999 by the Supreme Court.

In its petition, the Venetian argued Brennan should not be permitted to continue hearing the case, as he has served as a non-elected judge since 1992. This violates the Nevada constitution, which states that judges must be elected by the voters, and that retired judges may be recalled to service only on a temporary basis, the Venetian said. The Venetian also took issue with Brennan's history, saying he resigned in 1989 from the bench in the face of a federal investigation.

"Can the court 'recall' a judge to unlimited 'active service' when the judge did not 'retire' but resigned from office under controversial circumstances that might cause the voters to replace him as a judge if they had the opportunity to do so?" the Venetian wrote in its petition.

Brennan's office has declined to comment on the Venetian's petition.

Earlier this month, the Supreme Court issued a ruling that stated the Venetian had "set forth issues of arguable merit," though it did not immediately grant the Venetian's request. It gave Bovis until June 2 to file a response to the Venetian's request.

Brennan has already ruled in favor of three lien claimants against the Venetian, awarding them nearly $9 million for labor on the resort. More than 100 liens are pending against the Venetian, totaling about $300 million.