Venetian gains some ground in lien case

Thursday, Feb. 28, 2002 | 11:02 a.m.

CARSON CITY -- The Nevada Supreme Court has rejected the petition of the Venetian Casino Resort to remove Senior District Judge James Brennan and a special master from handling more than $300 million in construction liens against the Las Vegas Strip resort.

The court, however, said Brennan gave special master Erika Pike Turner too much authority to review the validity of the claims. It also said Brennan applied the wrong standard in reviewing the recommendations of Turner.

A dispute over cost arose during construction between the Venetian and contractor Lehrer McGovern Bovis Inc. and about 100 subcontractors. Mechanic's liens were filed against the property and the case ended up in court.

After it got under way, the Venetian, unhappy with the decisions, filed a petition to remove Brennan and Turner.

At oral arguments before the court last year, attorneys for the Venetian said Brennan should be disqualified because he is a senior judge now and not elected by the people. In addition, it objected to Turner on grounds she had a conflict of interest against the Venetian and that she was making decisions in excess of her authority.

The Supreme Court issued its decision Wednesday giving each side a partial victory.

It dismissed the petition to remove Brennan and Turner. But it ordered Brennan to change the way he conducted hearings on the recommendations of Turner.

And it restricted Turner to making recommendations only on the amount owed on the lien and not the validity of the claim. The judge, not a special master, should determine the validity, the court said.

Brennan, said the court, had been accepting the recommendations of the special master on issues of law. The judge, said the court, should hold new hearings on whether these claims were legitimate.

It said, "the District Court manifestly abused its discretion in applying the incorrect standard of review."

The court ruled, however, the Venetian waived its right to object to the hearings already conducted by Turner because it filed its petition too late. Turner had conducted four days of hearings involving claims for more than $1 million.

The court said the Venetian waited eight months after Turner's appointment to lodge an objection.

The hotel-casino complained that Turner worked for the law firm of Gordon and Silver, which had clients with an indirect interest in the case.

The court said only one client had an interest in the lien hearings. And the law firm has agreed to discontinue representing that party.

The court permitted Turner to continue hearings and said if the Venetian believes there is a conflict, it must raise its objection in a timely manner.

Justice Deborah Agosti wrote a dissenting opinion saying that Judge Brennan should have handled the case himself and not appointed a special master. Brennan, said Agosti, was appointed to help the district courts in Clark County with their caseload.

Now he has turned over a good portion of the case to a master and Agosti said "This is certainly a misuse of resources."