Justices uphold judgment against developer Milam over Hard Rock tower

Aspiring stadium developer Chris Milam is liable for a $1.1 million judgment as the result of a business deal gone bad, the Nevada Supreme Court has ruled.

In a decision dated Wednesday, the court by a 6-1 margin upheld the judgment against Milam, who was accused of lying to business partners about the source of his stake in a proposed $1.2 billion condominium project.

The decision, which resulted from a deal with former Hard Rock Hotel owner Peter Morton, stated Clark County District Judge Mark Denton didn't err when he granted a summary judgment ordering Milam to pay Stealth Holdings, the company of disgruntled investor Harry DeHaan.

"Milam attended the summary judgment hearing, heard Stealth's arguments, and did not oppose Stealth's motion for summary judgment," the majority opinion said.

Justice James Hardesty, the dissenter, agreed with Milam's argument that the judgment was a mistake because the court didn't give Milam an opportunity to oppose it.

"As a result, Milam, a proper person party, did not have an opportunity to be fully heard and cure any deficiencies," Hardesty wrote.

The ruling is the culmination of a bitter lawsuit in which Milam was accused of lying to Morton and others about his source of funds for the project.

According to testimony, Milam told Morton he was investing $10 million of his own money into the deal.

Unbeknownst to Morton, however, Milam got his stake from outsiders such as DeHaan and others.

The source of the money was significant because Morton and bankers involved in the deal wanted the investors to have their own cash at stake.

"Because as a credit issue, we want to have our sponsors have a stake in the projects that we're lending money on," Credit Suisse banker Michael May was quoted in a deposition in the case. "Because we don't want the sponsor to use our money, and if the project fails, walk away and have nothing to lose."

May also said in the transcript that Milam didn't disclose the true source of his stake.

"I asked Mr. Milam if the money was his or it had come from investors," May said according to the transcript. "He said that the money was all his."

When Morton found out, the court records said, he kicked Milam out of the deal. Morton subsequently sold the Hard Rock to Morgans Hotel Group, which built a new tower without Milam's help.

DeHaan had sued Morton and Milam. A jury absolved Morton of wrongdoing, however, after which Denton granted the summary judgment against Milam.

The summary judgment came after Milam had lost the representation of attorneys from two firms for lack of payment.

Milam said when the judgment happened he was unprepared to oppose it and accused DeHaan of tricking him into signing an affidavit that led to the result.

"I did not trick him into signing that affidavit," DeHaan said. "In fact he sent it back once or twice to make changes."

The ruling was in the case Christopher Milam vs. Stealth Holdings, LLC.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-383-0285 .