Contractor sues Fontainebleau over firing, says it’s owed money

Thursday, May 14, 2009 | 3:20 p.m.

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More headlines from the Vegas gaming industry

Even as the Fontainebleau resort presses its breach of contract lawsuit against lenders, a contractor is asserting similar claims against Fontainebleau.

CCCS International of Ladson, S.C., sued Fontainebleau in U.S. District Court in Las Vegas on Tuesday, saying the Las Vegas development hired it to fix problems and it did so -- but was fired when it discovered fraud on the part of Fontainebleau and overcharges by its contractors and suppliers.

CCCS also says it hasn't been paid all that it's owed.

Fontainebleau denied the allegations Thursday.

"This is a brazen attempt to extract an unwarranted payment from Fontainebleau," resort spokesman Dave Satterfield said. "CCCS was fired in March 2009 for failing to appropriately perform its duties. The contract allowed us to fire them at will.

"We believe CCCS's allegations of wrongdoing are unfounded, Fontainebleau always strives to run its business responsibly and we have been conducting a review of the allegations by CCCS -- just as we do when anyone makes an allegation of wrongdoing," he added.

CCCS said it was contacted last summer and was told by Fontainebleau officials "the project was severely over budget and Fontainebleau was in need of a construction manager able to provide cost management and auditing services to recover prior unnecessary overpayments."

But, CCCS alleged, Fontainebleau failed to disclose it did not have adequate financing to pay CCCS for its services.

The suit alleges Fontainebleau failed to adequately design, supervise, coordinate, plan and schedule all of the work at the project, causing significant delays, disruptions and hardship on many of the subcontractors, consultants and employees. CCCS claims Fontainebleau wrongfully terminated its contract after it discovered Fontainebleau's "fraudulent billing practices and inappropriate payment methods."

CCCS maintains it discovered more than $40 million in overpayments during just a few months on the job and was well on its way to discovering the benchmark of $130 million in contractor/supplier overcharges when it was removed from the project.

"However, and despite receiving these significant benefits, Fontainebleau has refused to pay CCCS the agreed to compensation," charged CCCS, which maintains it's owed more than $1 million.

The suit was filed by attorneys William Urga and Mindy Fisher of the Las Vegas law firm Jolley Urga Wirth Woodbury & Standish; along with a Michigan law firm.

Discussion: 3 comments so far…

By bdover

5/14/09 at 6:09 p.m.

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This is your typical dispute where the union loafers and their companies drive up the cost of everything, and that results in massive change order requests. In order to keep the project working, the owner has signed off on many of these change orders, and now the banks are saying "Whoa". It's really a mess, because architects and structural engineers are usually the root cause of the problem. They allow half done plans and specifications to be issued prematurely, and then the s*it hits the fan down the road. Like the Harmon up the street. This situation won't be solved anytime soon, as I've heard that subcontractors are pulling their trailers off the job. So someone will have to pay for "remobilization". Let alone retraining the business agents buddies to reman the job. Quite a problem....
By manfromuncle1

5/15/09 at 1:16 a.m.

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This mess reminds me of the documentary on pbs.org called "The Madoff Affair". There's a lot of blame going around for the Bernie Madoff ponzi that blew up. Investors are suing the "feeder funds" (the mutual fund managers who invested their clients' money with Bernie) such as Fairfield Greenwich. The feeder funds are suing Bernie. Everybody is blaming the SEC. One fund manager who is being sued is suing her accountants for not discovering the fraud. I'm sure that the accountants will say that it's not necessarily their responsibility to uncover fraud
as independent auditors.
By safemike1

5/16/09 at 5:49 a.m.

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""This is a brazen attempt to extract an unwarranted payment from Fontainebleau," resort spokesman Dave Satterfield said"

That's funny. They said the same thing at the fountainbleau in Miami when they didn't pay their contractors for that job as well. Gee, I think I am seeing a pattern here.

I am a very small contractor and am in the process of starting court litigation against them for non payment. Only problem is, I am in a long line of those who didn't get paid.