Brewer Client Prevails in Key Round of Legal Dispute with Virgin Hotels, Lawsuit Proceeds to Trial Next Month
January 24, 2022 – Brewer, Attorneys & Counselors announced that its clients, 250 Fourth Development L.P., Paradigm Hotels Group, LLC, et al. (“Hotel Owner”), prevailed in a key round of its closely-watched dispute with Virgin Hotels San Francisco (“Virgin Hotels”) – paving the way for trial.
In a decision, dated January 21, 2022, the Superior Court of the State of California, County of San Francisco, denied Virgin Hotels’ plea to escape trial on the Hotel Owner’s claims of breach of fiduciary duties by Virgin Hotels. The brand had argued, as to its own complaint, that there existed no triable issue of material fact pertaining to Hotel Owner’s duties under the Hotel Management Agreement (“HMA”) related to the termination provisions. Specifically, the brand argued that Hotel Owner’s only method for termination was to be found with the HMA and that Hotel Owner did not comply.
The Court agreed with the Hotel Owner that contrary to the brand’s arguments, there was evidence sufficient for a jury to conclude that various provisions of the HMA were waived by the parties during the business relationship. Specifically, the Court held that there is a triable issue of material fact concerning Hotel Owner’s allegations that the brand waived all termination related provisions, including a provision Virgin Hotels argued required written notice of termination, rather than notices sent in electronic format. The Court denied Virgin Hotels’ motion and held that the brand did not submit sufficient evidence to disprove the claims and that it failed to meet its evidentiary burden. This ruling sets the stage for trial proceedings to begin on February 7, 2022.
It has been well chronicled that the Virgin brand is struggling to establish its promised national hotel brand, with properties open in only five locations. In 2010, the brand announced plans to operate up to 25 hotels within seven years. The Hotel Owner’s San Francisco property opened with great fanfare in 2019 under the Virgin name, but currently remains closed.
“In our clients’ view, this prized hotel asset fell victim to false promises, fraud and mismanagement,” says William A. Brewer III, partner at Brewer and counsel to 250 Fourth Development, L.P. “They believe that not only has Virgin Hotels failed to deliver on the ‘brand’ it promised, it mismanaged the San Francisco property in an effort to boost its own bottom line. Our clients look forward to this trial.”
The underlying legal dispute began on May 6, 2020, when Virgin Hotels filed a lawsuit alleging the Hotel Owner’s termination of the HMA on April 8, 2020, violated that agreement. On July 16, 2020, the Hotel Owner filed its Original Cross-Complaint in the Superior Court of the State of California, County of San Francisco. A month later, on August 19, 2020, the Hotel Owner filed its First Amended Cross-Complaint, alleging that Virgin Hotels made misrepresentations to Hotel Owner by, among other things, knowingly overstating Hotel gross revenues to inflate its management fee and misrepresenting bonus amounts due to Hotel employees. As a result, the Hotel Owner claims the loss of tens of millions of dollars in unrealized hotel profits and the lost value of the property.
In total, the Hotel Owner asserts five causes of action against Virgin Hotels, including breach of contract and fraud. Virgin Hotels demurred, or moved to dismiss, the claims. On October 30, 2020, the court entered an order overruling the demurer in its entirety, vindicating each and every one of the Hotel Owner’s claims. In so doing, the court noted that the First Amended Cross-Complaint “adequately pleads constructive fraud.”
In November 2021, the court overruled Virgin Hotels’ attempts to avoid having to face Hotel Owner’s claims against Virgin Hotels for damages done to the project before the Hotel Owner terminated the management agreement. The court also denied Virgin Hotels’ efforts to freeze more than $2 million of Hotel Owner’s property. After failing to obtain dismissal of Hotel Owner’s claims, Virgin Hotels filed an application for a writ of attachment on Hotel Owner’s property – to secure what Virgin Hotels claimed was over $2 million in expenses that Virgin Hotels had either paid or was owed to third parties. The court denied this request in its entirety.
Brewer Anti-SLAPP Expert Analysis Article Published by Law360
On January 12, 2022, Law360 published an expert analysis piece written by Brewer Partner William Brewer and Associate Will Brewer titled, “Ruling Confirms Causation is Key Under NY Anti-SLAPP Law.”
The article states, “Threats of litigation initiated for the purpose of censoring, intimidating, or punishing a person for exercising their First Amendment rights have prompted many jurisdictions to pass laws targeting strategic litigation against public participation, otherwise known as anti-SLAPP statutes.”
The article discusses how the Hon. Nancy Bannon of the New York Supreme Court recently considered and dismissed an anti-SLAPP counterclaim in a dispute between Howard M. Meyers and and LEG Q LLC (“LEG Q”) in RSR Corp. et al. v. LEG Q LLC et al., Index No. 650342/2019 (N.Y. Sup. Ct.).
The authors write, “If this ruling is any indication of how New York courts will interpret the anti-SLAPP claim in the future, counsel should take note that, at the motion to dismiss stage, an anti-SLAPP claim need not have in hand any judicial finding regarding the nature of a purportedly SLAPP lawsuit; allegations will suffice.”
The authors add, “Moreover, in light of this decision, the breadth of what constitutes a communication in connection with the ‘public interest’—reaching matters that are not purely private as between the parties—cannot be overstated.”
To read more, click here.
Firm Adds Professionals to Dallas Office
January 10, 2022 - Brewer, Attorneys & Counselors recently announced the hiring of three new employees in the Dallas office.
Cory Ford joined the office as an associate. He received his Juris Doctor degree from the University of Miami School of Law and his bachelor’s degree in political science with a minor in business from Southern Methodist University. Prior to joining Brewer, Mr. Ford was a litigation associate at an AmLaw 100 firm representing national business entities in complex commercial disputes and catastrophic loss scenarios. During law school, he interned in the chambers of Chief Magistrate Judge John O’Sullivan in the U.S. District Court for the Southern District of Florida.
Brett Beaver joined the office as a consultant. He previously worked as a lead accountant for Pioneer Natural Resources in Irving and also previously was a senior auditor for Deloitte & Touche LLP in Fort Worth. He received a master’s degree in accounting from Texas Christian University (TCU) and a bachelor’s degree in sports management from Texas A&M University.
Randee Rogers joined the firm as a senior legal analyst. She previously worked as a senior litigation paralegal for Brackett & Ellis, P.C. Prior to that, she was a contract specialist and in-house paralegal for BNSF Railway. She received a paralegal certificate from the University of North Texas.
International Public Policy Forum Announces Top 32 Teams
January 3, 2022 - The Brewer Foundation / New York University International Public Policy Forum (IPPF) today announced the teams that will advance into the Top 32 round of the 2021-22 competition. Advancing teams will continue to debate the topic, "Resolved: On balance, the hegemony of the United States dollar is detrimental to the world economy."
Founded in 2001 by the Brewer Foundation, the IPPF is the first and only competition that gives students around the world the opportunity to engage in written and oral debates on issues of public policy. The contest is jointly administered by the Brewer Foundation and New York University, and available to all high school students for free.
The IPPF begins annually in October, as teams submit a 2,800-word qualifying round essay either affirming or negating the IPPF topic. Judges evaluate each essay, and the top 64 teams advance into a single-elimination, written debate competition.
In the top 64 round, schools volleyed papers back and forth via e-mail. Judges reviewed the essays in the order they were presented (affirmative constructive, negative constructive, affirmative rebuttal, negative rebuttal) and selected the advancing teams. The process will begin anew as the "Top 32" teams compete for their chance to advance to the "Sweet 16" round.
In March, the "Elite 8" teams will be announced. These teams win all-expenses-paid trips to New York City to compete during IPPF Finals Weekend, which begins April 29, 2022. During the finals, teams supplement their written advocacy with oral argumentation. The IPPF World Champion is awarded a $10,000 grand prize.
To view the list of advancing teams, click here.
Brewer Foundation Future Leaders Programs Hosts Holiday Gathering
On December 11, the Brewer Foundation Future Leaders Program (FLP) hosted a holiday gathering for its students and faculty at The Episcopal School of Dallas. In addition to enjoying a meal and gift exchange, students spoke with FLP Founder William A. Brewer III about their goals and plans for the future.
Founded in 2001, the FLP provides academic resources and leadership training to deserving students from the Dallas Independent School District (DISD). FLP classes are offered after school on the campuses of the program’s private school partners – The Hockaday School, St. Mark’s School of Texas, Greenhill School, and Episcopal School of Dallas. This public-private partnership is the only one of its kind in the state.
Brewer Foundation Announces 9/11 Memorial Lights Artwork, Participates in Video Tribute
New York, New York…November 24, 2021 – The Brewer Foundation announced that a special art project it commissioned to commemorate the 20th Anniversary of 9/11 will soon be on display at the 9/11 Memorial & Museum.
The sculpture piece, “YZKAR,” is a pair of bronze-cast lights created by artist Tobi Kahn from the last known pieces of steel recovered from Ground Zero in New York. The steel pieces were provided to the artist by The Port Authority/Metropolitan Transit Authority (MTA), in coordination with NYU President Emeritus John Sexton. The memorial lights were previously displayed at the Grey Art Gallery at New York University. YZKAR will be on view at the museum in early 2022.
A video celebrating this historic project can be viewed here: https://www.911memorial.org/connect/blog/gift-lights-tobi-kahns-yzkar.
“The memorial lights offer a tribute to the people whose lives we lost that day – and also represents a promise to never forget them,” says Brewer Foundation Chairman William A. Brewer III. “Working with Mr. Kahn and the many others who made this vision a reality, we believe this art inspires reflection and hope for generations to come.”
Each piece includes a vessel to hold a memorial light. The two pillars in each piece represent the Twin Towers, and the pieces are designed to be lit to commemorate the lives of the many people who were lost on 9/11. An upright, vertical piece represents individual lives lost and the second piece, which extends like an embrace, represents the communal loss.
“I want to thank all who made this work possible, including the Brewer Foundation,” says Kahn. “This work is based on what is the last known artifact from hallowed Ground Zero, honoring our collective sense of loss from the events of that day. This is among the most personal and meaningful projects in which I have ever been involved.”
In collaboration with Mr. Kahn, the Brewer Foundation will sponsor an educational curriculum around the pieces and the project, serving as a catalyst for conversation about the events of 9/11. A lecture series will be offered to the NYU community. The Brewer Foundation will also host an educational program for students from the Brewer Foundation Future Leaders Program, an academic and leadership development program that lights a path to college for students from Dallas’s urban community.
About The Brewer Foundation
The Brewer Foundation is a 501(c)(3) private foundation funded by the support of the Brewer Storefront; the generosity of the law firm Brewer, Attorneys & Counselors; and donor contributions. The Foundation supports a broad range of community initiatives, with a special emphasis on a growing array of educational programs. Among these are the Future Leaders Program (FLP), an academic and leadership development program that benefits minority youth, and the Brewer Foundation/New York University International Public Policy Forum (IPPF), a global debate contest for high school students. The Foundation has also partnered with leaders in numerous sectors to grow and support its mission.
About Tobi Kahn
Tobi Kahn is a painter and sculptor whose work has been shown in over 40 solo exhibitions and over 60 museum and group shows since he was selected as one of nine artists to be included in the 1985 Guggenheim Museum exhibition, New Horizons in American Art. Works by Kahn are in major museum, corporate, and private collections. For thirty years, Kahn has been steadfast in the pursuit of his distinct vision and persistent in his commitment to the redemptive possibilities of art.
New York Law Journal: NRA Files Motion to Dismiss New York AG's Lawsuit for Dissolution
On September 16, 2021, The New York Law Journal and other media outlets reported that firm client the National Rifle Association of America (NRA) has filed a Motion to Dismiss the New York Attorney General's (NYAG) Amended Complaint, filed on August 16, 2021. The Motion to Dismiss claims that the NYAG seeks to dissolve the NRA in an effort to "silence the constitutionally guaranteed political speech of its 5 million members."
“Since taking office in 2019, the Attorney General has ignored evidence that dissolution is improper and that the NRA Board of Directors acted appropriately at all times,” William Brewer, counsel to the NRA, told the Journal. “The NRA will continue to confront this partisan attack—in the interest of its members and the Second Amendment freedom for which they stand.”
The NYAG's office initially filed its dissolution lawsuit in August 2020, claiming that the NRA misused funds for the personal gain of its top executives. In its Motion to Dismiss, the NRA argues that "[e]ven if the allegations against current and former executives are taken as true (as they must be, for purposes of this Motion), the NRA and its Board would be the victims of the alleged wrongdoing—not perpetrators."
The Motion to Dismiss also notes that a "federal bankruptcy court found after a review of voluminous evidence, that the NRA has undertaken a sustained effort to improve its internal compliance procedures and is in position to continue fulfilling its mission."
“The Texas federal court expressly concluded that the NRA is well-placed to continue improving governance and internal controls and to fulfill its mission, as it has since its whistleblowers came forward,” Brewer wrote. “These findings comprehensively undermine the NYAG’s contrived narrative of an organization rife with corruption that is unable to reform itself and that must, therefore, be dissolved.”
William Brewer Recognized by Best Lawyers
August 19, 2021 – Brewer, Attorneys & Counselors announced that Partner William Brewer received recognition in the 28th edition of “The Best Lawyers in America.”
Brewer is recognized for professional excellence in the area of commercial litigation in New York and Dallas. Brewer has been recognized annually in this category since 2007. Best Lawyers is known as the oldest and most respected peer review publication in the legal profession. First published in 1983, Best Lawyers aims to reflect the consensus opinion of leading lawyers about their peers’ professional abilities within the same geographical area and legal practice area.
The recognition process begins with a nomination, followed by peer review, analysis of feedback, eligibility feedback, and then announcement of results. As part of the peer review voting stage, ballots are distributed to listed lawyers. Best Lawyers asks voters the question, “If you were unable to take a case yourself, how likely would you be to refer it to this nominee?” Nominees are then given a 1-5 rating, with space to leave comments.
As part of the eligibility check, the Best Lawyers editorial staff reviews votes and comments. Selected lawyers are checked to make sure they are in good standing with the ethics committee of their state bar.
