Dominion Federal Savings & Loan Association and Penthouse International Ltd. continue their bitter legal sparring over the McLean-based thrift's efforts to overturn a potentially crippling $129 million court judgment.

In pleadings filed recently in U.S. District Court in New York, Penthouse attorneys sought to discredit new evidence that Dominion Federal said warrants setting aside the verdict and holding a new trial.

The attorneys denied charges that they had concealed critical information from Dominion Federal and said that the association's demand for a new trial is "utterly baseless."

Judge Kevin Thomas Duffy is expected to rule shortly on the request by Dominion Federal.

Dominion Federal was stunned last summer when Duffy ruled that the thrift was to blame for scuttling Penthouse's Atlantic City casino when it backed out of an agreement to head a $97 million loan consortium for the project.

Duffy ordered the S&L and its Washington law firm to pay Penthouse $129 million in damages.

If upheld on appeal, the judgment would in all likelihood deal a fatal blow to Dominion Federal, a fast-growing association with a net worth of roughly $70 million and total assets of $1.7 billion.

Last month, however, Dominion Federal moved to set aside the verdict.

In doing so, it revealed that at the same time Penthouse International was accusing Dominion Federal of torpedoing the casino deal, the magazine's publisher, Robert C. Guccione, in another lawsuit was blaming Abscam investigators for much the same thing.

Dominion Federal said Penthouse hid this second lawsuit from from the S&L's attorneys during the information-gathering process of their own case, depriving the association of a major defense against Penthouse's allegations.

Dominion Federal said Guccione's suit against the government contradicted Penthouse's claims against the S&L.

Guccione claimed in his lawsuit against the government that during the Abscam investigation of influence-peddling on Capitol Hill, a federal informant spread false rumors about him, damaging his ability to raise money to build the casino.

The suit has been dismissed, but Guccione is appealing.

In their reply to Dominion's allegations, Penthouse attorneys said there was nothing inconsistent about Guccione's claims against the government and the Penthouse lawsuit against Dominion Federal.

In the Abscam case, Guccione sought to recover losses arising from his failure to have the casino up and running between 1980 and 1983 -- which was the fault of the Abscam agent, according to Penthouse attorneys.

By contrast, they added, Penthouse was awarded damages from Dominion Federal for wrongdoing after 1984.

Attorneys for Penthouse said the record shows that "none of the components of the damages sought in the Abscam case duplicated those sought and recovered in the Dominion case."

The attorneys also said that the accusation that they deliberately concealed the existence of the Abscam case "is no less specious."

Dominion Federal officials themselves testified in the trial that they were generally aware of the Abscam situation, Penthouse attorneys pointed out, adding that they fully responded to the S&L's discovery request for information.

Dominion Federal attorneys, in their reply to Penthouse, repeated their contention that a new trial should be held. They said Guccione never made clear in the two cases that the claims for damages were for two different periods.

Had they known about Guccione's lawsuit against the government, Dominion Federal attorneys said they would have argued that Guccione himself had said that the government -- not Dominion Federal -- was responsible for his failure to obtain financing for the casino.

They said that a "substantial portion of {Penthouse's} papers is nothing more than a smoke screen designed to distract the Court from the precise nature of the new evidence.