Miami lawsuit follows ouster of hotel management company

By Pankaj Ladhar of Manos • Alwine P.L.

Given the vibrant economic climate and recreational opportunities in Miami, there are many luxury hotels to serve visitors to the area. Of course some of them are better appointed and managed than others. But one hotel management company was taken completely by surprise earlier this year when they were cast out by the owner of the hotel for alleged poor performance. After kicking the management company out, the owners installed a new management company to run the hotel.

But the former management company claims that the ouster was a complete surprise and has initiated commercial litigation alleging breach of contract by the owner. They specifically claim that they were never given written notice of any perceived problems nor any opportunity to correct any issues. The former management company also claims that the actions of the owner damaged their reputation.

For its part, the new management company that was brought in to run the hotel does not seem interested in having any part in the dispute. Instead, in public statements they have focused on potential improvements and renovations to the property, including a revamping a restaurant that has up till now only been available for private functions.

The details of this conflict will have to be sorted out through the lawsuit or some process of arbitration. But in many cases, there is narrow distinction between motives when one party to contract accuses the other of failure to perform. It may be that they have a good faith belief that the there has been a failure and that the only path forward is to terminate the relationship. In other cases, the accusations of failure to perform are more perfunctory and while still potentially defensible, are actually a means of negating a contract that they feel no longer best serves their interests.

Source: The Miami Herald, “As lawsuit looms, Miami’s Setai hotel moves forward,” May 16, 2012