Wednesday, June 4, 2003 | 11:12 a.m.
The legal wrangling between the Venetian resort and its general contractor will continue for some time in the aftermath of a Clark County District Court jury's award Tuesday of $44.2 million to the contractor.
Jurors awarded London-based Lehrer McGovern Bovis Inc. damages for breach of contract on Tuesday, but Bovis has filed a separate suit in Clark County District Court against the insurance company that covered it during construction of the Venetian and has named the casino as a defendant in that case as well.
Bovis filed suit last month against American International Group (AIG), New York; Lexington Insurance Co., Boston; and Venetian Casino Resort. The suit accuses the insurers of a "contractual breach of implied covenant of good faith and fair dealing" by representing both Bovis and the Venetian with insurance policies and taking the Venetian's side when litigation began in the recently concluded trial.
The suit also accuses the defendants of breach of fiduciary duty, violation of the Nevada Unfair Practices Act and civil conspiracy.
The suit said AIG has been Bovis' primary provider of commercial general liability insurance policies for years. In March 1999, the company purchased an architects and engineers professional liability errors and omissions policy through AIG's Lexington Insurance subsidiary.
Meanwhile, in 1997, the Venetian, through its Las Vegas Sands Inc. holding company, purchased a commercial umbrella policy from AIG through its National Union Fire Insurance Co. subsidiary in Pittsburgh.
In August 1999, Bovis filed liens on the Venetian project when it wasn't paid and both companies sued each other for breach of contract.
The new suit alleges, "AIG ultimately sided with the Venetian and adopted the Venetian's litigation position and theories."
Bovis said not only did that put its company at further financial risk, but the Venetian also signed a protection agreement with the insurer that provided "a return of a portion of its premium payment if the judgment against Venetian stays under $20 million."
"Thus, the protection agreement provides substantial direct financial incentives to both Venetian and AIG to reduce and preclude (Bovis') recovery in the Venetian litigation and to maximize affirmative claims against (Bovis) by Venetian," the suit says.
The suit did not specify the amount of damages sought.
Attorneys representing Bovis in the case could not be reached for comment on whether the outcome of the jury verdict Tuesday would affect the suit against the insurers.
A representative of Lexington Insurance and AIG today said the company has a policy of not commenting on pending litigation.
In an unrelated matter that also is indicative that the Bovis-Venetian fight is likely to continue, Venetian officials issued a statement Tuesday saying the company would explore appeal options after Senior Court Judge James Brennan enters the verdict in the case June 17.
"Notwithstanding the jury's significant reduction in (Bovis') claims, Venetian is disappointed by the verdict and believes that it is unsupported by the evidence and incorrect as a matter of law," said David Friedman, assistant to the chairman of the board of Venetian in a statement issued Tuesday afternoon.
"We are considering our appeal rights in both federal and state court, post-trial motions and the finality of the verdict in light of ongoing arbitration proceedings in which (Bovis) and Venetian are still resolving cost and schedule issues related to the construction," he said.
Neither Bovis nor the Venetian got the amounts they sought in their respective suits.
Bovis had sought $97.2 million for work it did on the resort but said it wasn't paid for. The Venetian wanted $201.4 million from Bovis because the construction was not completed on time and for construction defects.
The jury of four men and four women, which deliberated for about 2 1/2 weeks to conclude the longest civil jury trial in state history, ended up awarding Bovis $44.3 million and the Venetian $2.3 million.
Attorneys explained that if those amounts are affirmed by the judge June 17, payment would be "netted out." Part of the amount awarded by the jury includes $5.7 million contract balance that had been anticipated so attorneys said the Venetian would wind up paying an additional $36.3 million.
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