Arbitration ordered in veterans home dispute

Friday, May 28, 2004 | 11:16 a.m.

CARSON CITY -- The Nevada Supreme Court Thursday ordered the state to go to arbitration in a dispute with a Las Vegas contractor who was pulled off the job during construction of the Southern Nevada Veterans Home in Boulder City.

Addison Inc. signed a contract with the state Public Works Board in May 1999 to build the veterans home for $14.8 million. After disagreements between the two, the Public Works Board replaced Addison on the job.

Addison asked for arbitration, but the state refused. Addison then sued, alleging the board had breached the contract and was guilty of bad faith. It then sought arbitration, but District Judge Jackie Glass declined the request.

The Supreme Court overturned Glass' decision.

In construction contracts between the state and local governments and builders, the law says there must be a clause permitting arbitration of a dispute. The Public Works Board argued that does not mandate that the cases go to arbitration.

The Supreme Court said the plain meaning of the law was subject to two reasonable interpretations. But it added that the working of the law as a whole as well as the legislative history "demonstrated that the legislature intended the law to mandate binding arbitration."

It also said Addison did not waive its right to arbitration after it filed its district court suit.

Addison maintains in its suit there were numerous flaws and defects in the design performed by Harry Campbell & Associates of Las Vegas. That required a large number of change orders and that resulted in additional work by Addison.

The public works board says Addison hired unqualified supervisors, was guilty of code violations and worker defects during construction of the project.

The nursing home was scheduled to be completed in May 2000 but it wasn't finished until a year later and it was $1 million over budget.