Closing arguments made in dispute over timeshare work

After four months of legal sparring and sometimes painfully technical testimony, the dispute over the construction of the former PH Towers Westgate time share tower wound up as something of a draw.

In closing arguments Tuesday in Clark County District Court, developer Westgate Resorts claimed it is owed $10.2 million for a lengthy catalog of shoddy work and instances of padding the bill by general contractor Tutor-Saliba Corp., a unit of giant Tutor Perini Corp. On the other hand, Tutor-Saliba presented a bill for $11 million, not including interest, for work done but not paid for.

Clark County District Judge Elizabeth Gonzalez promised a ruling by the end of next week after hearing witnesses for 57 days render opinions about plumbing, tile grout, concrete pours and what could be claimed as an expense under section 7.7.3 of the construction contract. Originally planned to end by Thanksgiving, the trial turned out to be the longest of Gonzalez’s eight years on the bench.

While such detail is typical for construction litigation, the case was unusual because of the tower’s role in the movie “Queen of Versailles.” Billed as a documentary when it was released last year, the reality TV-style movie peered into the big-dollar lifestyle of Westgate chairman and CEO David Siegel and his wife, Jackie.

In one scene, he boasted how the sign atop the 52-story, 1,201-unit tower had the largest letters of any property on the Strip. However, as the company faced a cash flow crunch during the recession, the movie focused on the tower as the largest financial problem.

After spending $600 million on the tower, Westgate was pressured by lenders to sell the building in November 2011 as part of a balance sheet restructuring. The property at 80 E. Harmon Ave. has since been reflagged as a Hilton Grand Vacations.

Initially, Westgate attorneys had expected to call Siegel as a witness to give an overview of the project and how the company’s fortunes have rebounded in the last year. But this was scrubbed as both sides bumped up against the limit of 100 hours that each side faced in presenting their cases; both were down to a half hour on Tuesday.

Much of the case, said Tutor-Saliba attorney George Ogilvie III, boiled down to how treat certain parts of the project that had to be redone. For example, the concrete pool deck cracked excessively. Tutor-Saliba experts attributed this to a design that did not include expansion cracks like the one built into sidewalks, while Westgate blamed in on sloppy installation of a hard foam layer under the concrete.

In fact, the term expansion joints came up frequently in other contexts, including the spacing the floor tiles in the lobby.

“I think everyone in this case will be happy after this trial is over if they never, ever, ever again hear about the term expansion joints,” said Peter Brown, another Tutor-Saliba attorney.

On another level, Tutor-Saliba argued that it was entitled to payment even for work that had to be done over. “Westgate essentially bought the project for $531 million,” said Ogilvie, referring to the maximum price under the contract. “It only paid $522 million,” and also got the work finished on time.

As a result, he said, all of the bills were within bounds and Tutor-Saliba even deserved a share of the savings.

Ground was broken in early 2007, with the grand opening in December 2009.

But Westgate attorney Robert Schumacher contended that the contract only allowed legitimate costs plus a 6 percent contractor’s fee and did not act as a license to get paid for everything up to the maximum, especially to fix mistakes.

“There were savings, get this, savings, because Tutor failed to follow the plans and specifications,” Schumacher said, in his rendering of Tutor-Saliba’s legal argument. “This is nonsense.”

Contact reporter Tim O’Reiley at
toreiley@reviewjournal.com or 702-387-5290.