Jury Awards Bali Hotel Operator $10.3 Million Verdict
April 2008 – Hospitality Law reported on the firm’s trial win against the Ritz-Carlton Hotel Co. on behalf of client Karang Mas Sejahtera (KMS), owner of the Ritz-Carlton Bali Resort & Spa. The jury awarded KMS more than $10 million.
As reported, “KMS filed the lawsuit against Ritz-Carlton three years ago, when the company began developing the Bulgari Bali Hotel. KMS accused the Ritz of violating its fiduciary duties by operating a competing property in disregard to KMS’s territorial rights and alleged that the Ritz failed to recognize its responsibilities as an agent of the Ritz-Carlton Bali.”
A Greenbelt, Maryland jury found the Ritz breached its amended and restated operating agreement and violated its fiduciary duties to KMS, among other things.
“It doesn’t matter what you call a relationship – if someone is managing your business, your assets, for your benefit and being paid handsomely to do that, they owe you a fiduciary duty,” said firm partner William A. Brewer III. “I think it [the jury verdict] reminded everybody that between a principal and an agent, honest and fact are the touchstone of the relationship.”
D Magazine: Hunt vs. Hunt
March 2008 – D Magazine profiles “the fight inside Dallas’ wealthiest family” in a cover article that chronicles the legal pursuit of Brewer client Al Hill III.
The magazine writes, “Without Al Hill III’s transformation, he might not have had the courage later in life to follow his convictions. Even when it meant accusing his own family of tax evasion and fraud.”
Read the article by clicking here.
Dallas Morning News: Trial Over Voting Sees First Battle
February 18, 2009 – The Dallas Morning News reports that a federal court challenge to the City of Irving’s at-large City Council elections opened with disagreements over data interpretation.
Brewer Storefront represented plaintiff Manuel Benavidez in a voting rights lawsuit against the city, arguing that its at-large voting method effectively denies representation to Hispanics.
Expert David Ely testified that socioeconomic and educational disparities between Irving’s Hispanic and white populations made successful city council campaigns difficult for Hispanics.
“It’s more difficult for candidates from this community to obtain the vote,” Ely said. He said he used 2000 U.S. Census data, 2006 Census estimates and his own projects to develop possible Hispanic voter majority districts.
Dallas Morning News: A Matter of Trust
February 10, 2008 – The Dallas Morning News takes an in-depth look at a family dispute over “two trusts, belonging to Margaret [Hunt Hill] and her late brother Hassie, with an estimated worth of $2 billion to $4 billion.”
As reported, legal actions have “brought the lights up on a sideshow of two so-called magicians – Tom Hunt, the low-key, low-profile trustee of both trusts and Bill Brewer, Al Hill III’s flashy bulldog of a lawyer.”
As reported, “William A. Brewer III has built his legal reputation with scorched-earth tactics that have made him sought after and scorned by Dallas’ rich and famous.”
Read the article “Hunt heirs locked in bitter fight over who should have hands on funds' fortunes,” by clicking here.
Ten Million Dollar Jury Verdict Announced Against The Ritz-Carlton Hotel Company
February 4, 2008 — One of the hospitality industry's most closely-watched trials has ended in victory for a hotel owner against The Ritz-Carlton Hotel Company, LLC ("Ritz-Carlton"). Bickel & Brewer law firm has announced that its client, Karang Mas Sejahtera ("KMS"), owner of the exclusive Ritz-Carlton Bali Resort & Spa ("Ritz-Carlton Bali"), prevailed in a case that may have wide-ranging implications on the manner in which hotel management agreements are interpreted -- and enforced.
On January 25, following a three-week trial, a nine-person jury in the United States District Court in Greenbelt, Maryland, reached a unanimous decision that Ritz-Carlton violated its fiduciary duties to KMS and the Ritz-Carlton Bali. The jury awarded KMS $382,000 in actual damages and $10 million in punitive damages -- $5 million more than KMS had requested. The landmark verdict also allows KMS to pursue millions more in attorneys' fees.
"The jury's decision affirms our client's position — that Ritz-Carlton breached its fiduciary duty from a financial, operational and competitive point of view," says William A. Brewer III, partner at Bickel & Brewer and counsel for KMS. "This case is of vital importance to the hospitality industry, as it further underscores and clarifies the rights, responsibilities and obligations of all parties involved in a hotel management agreement.”
Filed more than three years ago, this lawsuit has become one of the nation’s most high-profile disputes between a hotel management company and individual hotel owner. The case centers around the development and opening of the Bulgari Bali Hotel, which began operation in September 2006, just three miles from the KMS property. KMS demonstrated that Ritz-Carlton violated its fiduciary duties by operating that competing property in disregard of KMS’ territorial rights and failing to recognize its responsibilities as an agent of the Ritz-Carlton Bali. The Bulgari Bali, which is managed by Ritz-Carlton, is the first resort in the upstart Bulgari Hotels & Resorts chain, a joint venture between Marriott International (Ritz-Carlton’s parent company) and high-fashion Italian jeweler Bulgari SpA.
The Bulgari Bali Hotel opened under Ritz-Carlton management despite concerns from KMS that the luxury hotel would violate the territorial exclusivity provision KMS held with Ritz-Carlton. Among several other claims, KMS alleged that the Bulgari property was benefiting from the use of the Ritz-Carlton brand name in its marketing and promotion — all in direct violation of the operating agreement between the KMS and Ritz-Carlton.
“At the end of the day, we proved that our client suffered a material breach of loyalty,” says James S. Renard, partner at Bickel & Brewer who joined Brewer as counsel for KMS. “We alleged — and the jury emphatically agreed — that Ritz-Carlton was bound by a contractual obligation not to use the Ritz-Carlton name and brand to operate another hotel on the Indonesian Island of Bali without our client’s consent.”
Brewer says this jury verdict may be a seminal moment for the hospitality industry. His law firm has been involved in many of them over the past several decades, representing a wide range of internationally-known hotel franchisors, management companies, owners, developers and investors. As an example, Bickel & Brewer successfully argued Woolley v. Embassy Suites, Inc., the case in which the court held that hotel management agreements are agency agreements and, as such, are always terminable at the option of the owner. In 1999, Bickel & Brewer extended Woolley by establishing that a franchise agreement may also create an agency relationship between the franchisor and the hotel owner.
“This case is like the Woolley cases in that it has the potential to change the industry’s legal landscape,” Renard says. “This jury verdict compels the industry to look more closely at management agreements — and evaluate the manner in which they are interpreted by all involved parties.”
Victory for Starwood Hotels & Resorts in Multi-Million Dollar Dispute
January 1, 2008 – American Lawyer Media profiled firm Partner William A. Brewer III and the firm’s successful defense of Starwood Hotels & Resorts Worldwide, Inc. against claims relating to its ownership and management of two Westin hotels, one in Chicago and the other in San Franscisco.
As explained in the article, “Victory for Starwood Hotels & Resorts in Multi-Million Dollar Dispute,” $200 million was at stake but also something even bigger – failure could result in “scores of other hotel owners who might join together to file a class action on a similar claim…”
According to the article, “After a 17-month arbitration process and a two-week trial, Starwood in 2006 soundly defeated its opponent on every claim. The victory reaffirmed [the firms’] position as one of the leading hospitality litigation firms in the world. Because of the potential for other lawsuits should the company settle or lose, the case was a quintessential ‘bet-the-company’ lawsuit,” Brewer said.
Dallas Morning News: Hunt Family Embroiled in Trust Lawsuit
November 9, 2007 – The Dallas Morning News reports on a lawsuit by firm client Albert Hill III, the first great-grandson of H.L. Hunt, against the trustees for two family trust funds, alleging mismanagement of about $3 billion in assets.
The article, titled “Hunt Family Embroiled in Trust Lawsuit,” describes the creation of several family trusts and claims from Hill III that he “became a direct beneficiary of the trust when his father, Mr. Albert Hill Jr. ‘disclaimed’ most of his interests in the Margaret Hunt trust March 22, 2005.”
“Al Hill III didn’t sue his father until after his father sued him and said he was not the beneficiary of these trusts, fired him from the family business and filed documents in probate court that made certain claims that would oust Al and his grandchildren from any interests in these trusts,” said William Brewer, attorney for Albert Hill III.
Dallas Morning News: Suit Calls Irving’s At-Large System Unfair to Hispanics
November 7, 2007 – The Dallas Morning News reports that a federal voting rights lawsuit filed against the city of Irving, Texas, and its nine city council members alleged that the at-large voting system effectively denied representation to Hispanics.
The lawsuit requested that the court declare that the at-large election system violated the Voting Rights Act of 1965 and requested the development of a new system of electing the city council. The article referred to discussions about creating single-member districts.
Attorney Bill Brewer of Brewer Storefront represented plaintiff Manuel Benavidez, who twice ran unsuccessfully for the Irving City Council. Brewer said the city was the best place to “start the debate.”
“This is the body that is most directly involved in municipal affairs across the board,” Brewer said.
He added that Hispanics should determine at least some council seats in a city where more than one-third of the population is Hispanic.
"You would have an enriched community if you had different points of view at the table debating matters of municipal policy and municipal affairs,” Brewer said.