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Supreme Court Ruling on Side Issue of Long Delayed CityCenter
Litigation Could Get Lawsuit Back on Track

By Steve Green, Las Vegas SunMcClatchy-Tribune Regional News

Oct. 20, 2011--The massive and long-delayed CityCenter construction litigation in Las Vegas could get back on track soon now that the Nevada Supreme Court has resolved a side issue.

The lawsuit arose in March 2010 when Perini Building Co., general contractor for the $8.5 billion complex, sued CityCenter and its developer MGM Resorts International over $491.2 million in unpaid invoices. Perini had also filed liens against CityCenter in its quest to get paid.

CityCenter fired back in court, saying its claims for construction defects at the unfinished and stalled Harmon Hotel more than offset anything it owed Perini. CityCenter is now seeking approval to implode the Harmon -- a request contested by Perini that ultimately may be resolved in the pending CityCenter construction litigation.

The lawsuit grew to include hundreds of subcontractors and their attorneys who were either caught in the middle of the slugfest between the corporate giants or were themselves litigating with each other, CityCenter and Perini over unpaid invoices or allegedly defective or nonconforming work.

By December, Perini's lien against CityCenter had been reduced to about $313 million as CityCenter settled with and paid most of the 223 first-tier subcontractors and the liens over their claims were extinguished.

The lawsuit was put on hold by the Nevada Supreme Court on Jan. 14 so it could rule on an appeal by CityCenter of an order by Clark County District Court Judge Elizabeth Gonzalez disqualifying from the case two CityCenter attorneys and a paralegal.

Perini had complained it was prejudiced when the three members of the CityCenter legal team at the Las Vegas law firm Morris Peterson had accessed 142 documents potentially related to CityCenter. The information was obtained through a discovery database created for an unrelated lawsuit involving Perini and the Queensridge Towers development.

The Supreme Court, in commenting on the incident Wednesday, said the Morris Peterson legal professionals weren't at fault, because a vendor hired to set up the database had failed to follow the established search protocol.

Gonzalez not only disqualified the two attorneys and paralegal but ordered Morris Peterson to screen them from other members of the law firm, including veteran litigator Steve Morris, who were working on the CityCenter case.

The Supreme Court on Wednesday overturned Gonzalez, reiterating that it was not the fault of Morris Peterson that its professionals accessed the documents at issue and that "it does not appear that the information in the allegedly privileged documents will significantly prejudice Perini in the CityCenter litigation."

"CityCenter will suffer prejudice, including an immense financial impact, from the disqualification because the three employees of Morris Peterson have already spent considerable time on the underlying case, which involves complex contractual issues and numerous entities," the court said in its order, adding it was lifting the stay of the lawsuit in Gonzalez's courtroom.

However, as with most things in the CityCenter lawsuit, it's not clear cut when the legal action will resume.

Subcontractors are appealing two more rulings by Gonzalez. In addition, one asked Thursday that the Supreme Court reinstate its stay of proceedings in the main lawsuit until its appeal is resolved.

The court as of late Thursday had not acted on that request.


(c)2011 the Las Vegas Sun (Las Vegas, Nev.)

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