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City Center files emergency appeal to Nevada Supreme Court

Posted by: on Mon, Oct 29, 2012

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By Tim O’Reiley
Posted: Oct. 26, 2012 | 2:03 a.m.
As its attorneys had foreshadowed, CityCenter filed on Thursday an emergency appeal to the Nevada Supreme Court of a lower court decision that could seriously cripple its attempt win more than $300 million in damages concerning the unfinished Harmon hotel.

After a July hearing, Clark County District Judge Elizabeth Gonzalez ruled that CityCenter, the $8.5 billion Strip complex managed and half-owned by MGM Resorts International, could not use a technique called extrapolation when making its case to a jury. Extrapolation, much like political polling, uses a sample to predict the entire outcome, in this instance how many key structural elements contain defects.

CityCenter engineers tested 397 locations, concluding that all but one contained some sort of flaw such as misplaced or missing reinforcement steel. However, this covers only 27 percent of the elements; without extrapolation, that would cap what CityCenter could win from a jury at roughly $80 million.

CityCenter attributes the flaws to shoddy workmanship. General contractor Perini Building Co. has admitted to some mistakes and offered to fix them, but had argued that most defects resulted from poor blueprints and not its work.

Gonzalez found that CityCenter had not picked its sample randomly, a way of ensuring they accurately reflect the condition of the 1,072 untested parts of the 26-story Harmon. Contractors contended that CityCenter skewed its tests to make them look bad.

However, wrote CityCenter attorney Steve Morris in the appeal, “Nevada law contains no requirement that a tested sample must be chosen by random selection” in order to allow extrapolation.

It wants a Nevada Supreme Court ruling before it begins new testing, a process that could cost millions of dollars and delay a Harmon trial for months.

However, at a previous hearing, Perini attorney George Ogilvie III said that if CityCenter appealed this issue, he would appeal a different ruling from the July hearing that allowed the implosion of the empty Harmon.

CityCenter has opted to conduct further tests but reserved the right to a separate appeal of conditions attached by Gonzalez. At a Thursday hearing, the judge said she would file a final ruling on the matter on Monday.

Also on Thursday, Perini was turned down on a request to have CityCenter patch up the test sites, where concrete was knocked away to expose the insides of columns and walls. Ogilvie said that Perini’s consulting engineer, John A. Martin & Associates, determined that more destructive testing could impair the Harmon’s safety.

CityCenter has already concluded that the defects make it unsafe and in danger of collapsing in a serious earthquake.

Contact reporter Tim O’Reiley at or 702-387-5290.