Antongiovanni Obtains Appellate Victory for Hotel Client

Michael Antongiovanni, who served as co-counsel to a New York City hotel, recently obtained an appellate victory, affirming an award of summary judgment that he had obtained for the hotel against a Caribbean resort for a breach of a license agreement. The lower court found, among other things, that the resort had breached the parties’ license agreement by removing the hotel’s brand from the resort and failing to pay licensing fees, amounting to millions of dollars. The lower court also dismissed the resort’s claim for an alleged breach of the implied covenant of good faith and fair dealing.

On appeal, the appellate court found that the lower court correctly dismissed the resort’s claim that the hotel breached the implied covenant by not maintaining its brand as a first-class hotel, thereby relieving the resort of its obligation to continue to comply with the license agreement. The appellate court noted that the lower court correctly considered pre-contractual communications whereby the resort unsuccessfully sought to include such a covenant as a term of the license agreement. As such term was rejected pre-contract, it could not later form the basis of an implied covenant of the license agreement.

The appellate division concluded that such communications were admissible in evidence because they were business negotiations and not, as the resort argued, inadmissible settlement communications. Accordingly, the appellate division affirmed the lower court’s decision that the resort breached the license agreement and that a hearing should proceed to determine the damages sustained by the hotel.