Thursday, Aug. 9, 2001 | 10:54 a.m.
A dispute over a $7.8 million change order has led to a lawsuit between the developer of the Park Towers At Hughes Center luxury condominiums in Las Vegas and its contractor, J.A. Jones Construction Co.
High Rise JV LLC, developer of the $120 million project headed by Irwin Molasky and Steve Wynn, filed a lawsuit Monday in U.S. District Court to reduce what it called an excessive $18.9 million lien filed July 19 against the 84-unit property by J.A. Jones.
Prompting the suit were concerns the lien could cloud the title to many multi-million dollar condominiums that have been sold, prevent conveyances of title to recently sold condominiums and affect the sale of the remaining unsold units.
The property, which comprises two 20-story towers and is located just east of the Las Vegas Strip, has sold some 76 units to date and its first residents moved into the property in March.
High Rise took legal action after a meeting initially scheduled Tuesday to resolve its dispute with Jones was cancelled after Jones filed an arbitration claim and the $18.9 million lien on the property. The lien comprised $2 million for alleged delays, $5.8 million in adjustments to allowances, $2.5 million in outstanding requests for change orders, $3 million in subcontractor liens and a $5.6 million alleged balance due.
Sparking the dispute is Jones' claim on June 18 for a $7.8 million change order. The change order included a $2 million claim that High Rise said allegedly wasn't explained, and $5.8 million for "cost overruns for various subcontractor allowances."
Jones, according to the developer, had claimed it was forced to use certain subcontractors that Jones said failed to meet its requirements, causing Jones to exceed allowances for certain work. High Rise said it had agreed to provide additional funds to address the cost overruns but said this was capped at not more than $100,000. Jones, however, allegedly demanded $5.8 million.
But the developer said Nevada law doesn't allow a party to claim a lien for amounts above and beyond the balance due on a contract and that most of the lien's components including delay damages aren't lienable under Nevada law.
High Rise seeks court approval to reduce the amount of Jones' lien to $3.2 million, which it said is the current balance due on the contract.
The suit said Jones, which was to have completed the project by November, allegedly fell behind schedule after construction began in August 1999 and failed to get an extension of time to complete construction. The contractor was also accused of refusing to make corrections and has now allegedly abandoned the project.
The suit said Jones represented the building as being 100 percent complete since April 13. But High Rise said Jones has only one employee at the construction site even though "several hundred punch list items (corrections) have been outstanding for more than 90 days."
John Naylor, High Rise's attorney, said High Rise hasn't yet issued a certificate of completion because Jones "hasn't responded to a list of High Rise's list of cleanup items that need to be taken care of."
J.A. Jones President John Bond had earlier disputed those claims, saying the contractor has complied with High Rise's instructions and that it had changed several design plans late in the process that led to more work and a higher cost of development.
Steve Luquire, Jones' spokesman, declined to comment on the specifics of the lawsuit, but said the arbitration claim was "justifiable and recoverable."