Aimbridge Hospitality, LLC v. Plaza Resort Atlantic Ocean, LLC

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
AIMBRIDGE HOSPITALITY, LLC, )
)
Plaintiff, )
)
v. ) C.A. No.: N24C-04-151 FWW
)
PLAZA RESORT ATLANTIC OCEAN )
LLC and BLU OCEAN WATERS LLC, )
)
Defendants. )
Submitted: July 15, 2024
Decided: August 26, 2024
Upon Defendants’ Motion to Dismiss,
DENIED.
ORDER
Nicholas Rohrer, Esquire, Lakshmi A. Muthu, Esquire, Michael A. Laukaitis II,
Esquire, YOUNG CONAWAY STARGATT & TAYLOR, LLP, Rodney Square,
1000 North King Street, Wilmington, DE 19801, Attorneys for Plaintiff Aimbridge
Hospitality, LLC; Mark S. Adams, Esquire, Sarah G. Hartman, Esquire, JEFFER
MANGELS BUTLER & MITCHELL LLP, 3 Park Plaza, Suite 1100, Irvine, CA
92614-2592, Of Counsel.
Sean T. O’Kelly, Esquire, O’KELLY & O’ROURKE, LLC, 824 North Market Street,
Suite 1001A Wilmington, DE 19801, Attorney for Defendants Plaza Resort Atlantic
Ocean LLC and Blu Ocean Waters LLC.
WHARTON, J.
This 26th day of August 2024, upon consideration of the Motion to Dismiss
of Defendants Plaza Resort Atlantic Ocean LLC and Blu Ocean Waters LLC
(collectively, “Defendants”),1 the Response of Plaintiff Aimbridge Hospitality, LLC
(“Aimbridge”)2 and Defendants’ Reply,3 it appears to the Court that:
1. All parties to this case are Delaware limited liability companies.4
Aimbridge manages and operates extended stay hotels, also referred to as
condominium hotels.5 Defendants are the joint and several owners of Plaza Resort
& Spa, a condominium hotel located in Daytona Beach, Florida.6
2. On April 12, 2021, Aimbridge and Defendants entered into the
Condominium Hotel Management Agreement (“CHMA”) whereby Aimbridge
would manage Plaza Resort & Spa for an initial term of one year starting on that
date.7 On April 12, 2022, Aimbridge and Defendants entered into the First
Amendment to the CHMA which extended Aimbridge’s management of Plaza
Resort & Spa to September 30, 2022.8
1
Defs.’ Mot. to Dismiss, D.I. 6.
2
Aimbridge’s Resp., D.I. 11.
3
Defs.’ Reply, D.I. 12.
4
Compl. ¶ 2-4.
5
Id. ¶ 2.
6
Id. ¶ 7.
7
Id. ¶ 7-8.
8
Id. ¶ 9.
2
3. On April 23, 2024, Aimbridge filed a two-count complaint against
Defendants with claims for: (1) breach of contract based on the alleged failure and
refusal of Defendants to pay and reimburse Aimbridge for all amounts owed under
Sections 4.2, 4.5, 5.1, 5.2 and 8.1 of the CHMA; and (2) indemnification based on
incurred liabilities, losses, claims, causes, damages, costs and expenses arising out
of and in connection with the management and operation of Plaza Resort & Spa.9
4. On May 21, 2024, Defendants moved to dismiss the complaint for
forum non conveniens.10 Aimbridge responded in opposition on June 21, 2024.11
Defendants replied on July 5, 2024.12
5. Delaware Superior Court Civil Rule 12(b)(3) governs a motion to dismiss
or stay on the basis of forum non conveniens.13 Under Delaware law, the applicable
forum non conveniens test varies based on the proceedings in this Court and the
parties’ litigation history.14 Forum non conveniens is a common law judicially
created doctrine that allows the Court to exercise some control over a foreign
9
Id. at 12-13.
10
Defs.’ Mot. to Dismiss, D.I. 6.
11
Aimbridge’s Resp., D.I. 11.
12
Defs.’ Reply, D.I. 12.
13
Arrowood Indem. Co. v. AmerisourceBergen Corp., 2023 WL 2726924, at *7
(Del. Super. Ct. Mar. 30, 2023).
14
In re CVS Opioid Ins. Litig., 2022 WL 3330427, at *3 (Del. Super. Aug. 12,
2022) (citing Aranda v. Philip Morris USA Inc., 183 A.3d 1245, 1250-51 (Del.
2018)).
3
plaintiff’s access to a forum in Delaware.15 The decision whether to grant dismissal
lies in the sound discretion of the trial court. Generally, on motions to dismiss, the
Court accepts the complaint's well-pleaded facts as true and draws all reasonable
inferences in the plaintiff's favor.16 When, however, the motion to dismiss is one
based on forum non conveniens, “this Court exercises its sound discretion when
making findings of fact and drawing conclusions therefrom” by using “an orderly
and logical deductive process.”17
6. “A motion raising forum non conveniens is a request that a court
possessing both personal and subject matter jurisdiction over an action nevertheless
declines to hear it.”18 Whether to grant relief via forum non conveniens is left to the
trial court's discretion.19 The factors the Court considers in the exercise of its
discretion are: (1) the relative ease of access to proof; (2) the availability of
compulsory process for witnesses; (3) the possibility of the view of the premises; (4)
whether the controversy is dependent upon the application of Delaware law which
the courts of this state more properly should decide than those of another
15
Ison v. E.I. DuPont de Nemours & Co., Inc. 729 A.2d 832, 849 (Del. 1999).
16
Id. at *4 (Del. Super. Aug. 12, 2022) (citing Olenik v. Lodzinski, 208 A.3d 704,
714 (Del. 2019)).
17
Id. (citing Williams Gas Supply Co. v. Apache Corp., 594 A.2d 34, 37 (Del.
1991)).
18
GXP Cap., LLC v. Argonaut Mfg. Servs., Inc., 234 A.3d 1186, 1193 (Del. Super.
2020), aff'd, appeal dismissed, 253 A.3d 93 (Del. 2021).
19
GXP Cap., LLC v. Argonaut Mfg. Servs., Inc., 253 A.3d 93, 97 (Del. 2021)
(“GXP Cap. II”).
4
jurisdiction; (5) the pendency or nonpendency of a similar action or actions in
another jurisdiction; and (6) all other practical problems that would make the trial of
the case easy, expeditious, and inexpensive.20 These factors are well known in
shorthand fashion as the Cryo-Maid factors.21
7. When the Delaware action is the only action filed, the Court applies the
overwhelming hardship standard.22 In such a case, a motion to dismiss relying on
the doctrine of forum non conveniens is granted only in the rare case where undue,
overwhelming hardship and inconvenience truly is visited on the protesting
defendant hailed here.23 Indeed, Delaware courts are “hesitant to grant [relief] based
on forum non conveniens, and the doctrine is not a vehicle by which the Court should
determine [merely] which forum would be most convenient for the parties.”24 A
plaintiff’s choice of forum should not be defeated except where the defendant
establishes, based on the foregoing factors, overwhelming hardship and
inconvenience.25 The Court “must focus on whether the defendant has demonstrated
with particularity, ... that litigating in Delaware would result in an overwhelming
20
Martinez v E.I. DuPont de Nemours & Co., 86 A.3d 1102, 1104 (Del. 2014)
(citing Gen. Foods Corp. v. Cryo-Maid, Inc. 198 A. 2d 681, 684 (Del. 1964)).
21
Id.22
Id. at 1037 (citation omitted).
23
BCORE Timber EC Owner LP v. Qorvo US, Inc., 2023 WL 2985250, at *2 (Del.
Super. Ct. Apr. 18, 2023).
24
Id. (citations omitted).
25
Id.5
hardship.”26 The overwhelming hardship standard, while not preclusive, is a
stringent standard that holds defendants seeking to deprive a plaintiff of his chosen
forum to an appropriately high standard.27 That standard is met ‘“only in the rare
case in which the combination and weight of the factors to be considered balance
overwhelmingly in favor of the defendant.”’28
8. Defendants address the Cryo-Maid factors29 in their Motion to
Dismiss.30 They argue that: (1) none of the witnesses with knowledge pertinent to
this dispute are located in Delaware; (2) the bulk of witnesses are located in Daytona
Beach, Florida; (3) many of these witnesses are non-parties and cannot be compelled
to appear in Delaware; and (4) documents pertaining to the subject dispute (e.g.,
accounting records) are all located in Florida.31 They point out that non-party
witnesses, the bulk of whom are in Florida, cannot be compelled to appear for trial
in Delaware but such witnesses can be compelled to appear in Florida.32 Further,
26
BCORE Timber EC Owner LP, 2023 WL 2985250, at *3 (citing Mar-Land
Indus. Contractors, Inc. v. Caribbean Petroleum Ref., L.P., 777 A.2d 774, 779
(Del. 2001).
27
Id., at 1105.
28
Id. (quoting Kolber v. Holyoke Shares, Inc. 213 A.2d 444 (Del. 1965)).
29
Gen. Foods Corp. v. Cryo–Maid, Inc., 198 A.2d 681, 684 (Del.1964); accord
Gramercy Emerging Mkts. Fund v. Allied Irish Banks, P.L.C., 173 A.3d 1033,
1036-37 (Del. 2017).
30
Defs.’ Mot. to Dismiss, D.I. 6.
31
Id. at 3-4.
32
Id.
6
neither Aimbridge nor Defendants have any material connection to Delaware other
than being organized under Delaware law.33 And, the CHMA’s choice-of-law clause
designates that Florida law governs this dispute.34 Defendants argue that there is no
reason for this Court to interpret Florida law when a Florida court can do so. 35 The
Defendants state their intent to bring their own claim against Aimbridge and assert
that litigation in Delaware will cause greater time and expense than in Florida.36 The
only Cryo-Maid factor that “holds little weight” in their favor, in their opinion, is
the possibility of a view of the Plaza Resort & Spa.37 Defendants summarize that
“[t]here is no practical reason why a contractual dispute, governed by Florida law,
concerning a Florida hotel, where substantially all of the witnesses are located in
Florida, should be litigated in Delaware.”38
9. Aimbridge responds that Defendants have failed to meet their high
burden to establish that they will face overwhelming hardship and inconvenience by
litigating in Delaware.39 Aimbridge contends that this action should remain in its
chosen forum - Delaware.40 It argues that Defendants have not made a particularized
33
Id.
34
Id. at 5.
35
Id.
36
Id. at 5-6.
37
Id.
38
Id. at 6.
39
Aimbridge’s Resp. at 3, D.I. 11.
40
Id. at 1.
7
showing that evidence cannot be brought or otherwise produced in Delaware.41
Aimbridge recognizes that Defendants identified certain potential witnesses in the
Declaration attached to the Motion to Dismiss, however, they “have not identified
the substance of the witnesses’ testimony, which witnesses are not subject to
compulsory process in Delaware, or which, if any, of these witnesses are unwilling
to testify in Delaware.”42 Additionally, Aimbridge argues that: (1) Defendants will
not face hardship if this Court applies Florida law because it is fully capable of
applying the law of other jurisdictions;43 (2) the fact that no related action is pending
in another jurisdiction weighs significantly against granting a motion to dismiss on
forum non conveniens grounds;44 and (3) Defendants cite no authority for the
proposition that a contemplated future claim provides support for dismissal on the
basis of forum non conveniens.45 Aimbridge agrees with Defendants that an
inspection of the premises in this matter is inconsequential.46
10. Defendants reply that the Declaration submitted with the Motion to
Dismiss sets forth the names of potential witnesses, their titles/roles on behalf of
Plaza Resort & Spa and the respective subject matter of their potential testimony.47
41
Id. at 3.
42
Id. at 4-5.
43
Id. at 6.
44
Id.
45
Id.
46
Id.
47
Defs.’ Reply at 1-2, D.I. 12.
8
They argue that it is self-evident that various third parties over whom Defendants do
not have control (i.e., outside accountants, former employees) would not likely travel
from Florida to Delaware to testify voluntarily.48 Lastly, Defendants point out that
while evidence can be produced digitally, the bulk of evidence in this case is located
in Florida and no such evidence exists in Delaware.49
11. Applying the Cryo-Maid factors through the prism of the undue
hardship test, the Court concludes that this case is not one of those rare cases where
undue, overwhelming hardship and inconvenience truly is visited on Defendants
here. First, regarding the ease of access of proof, Defendants fail to show that the
potential witnesses and documents cannot be brought or otherwise produced in
Delaware. In a similar discussion on both the first and second Cryo-Maid factors,
Defendants appear to conflate this showing with the idea that certain non-party
witnesses cannot be compelled to testify in Delaware. Nonetheless, because
defendants “fail to make a particularized showing that witnesses, documents, or
other evidence necessary to defend the allegations contained in ... [the] complaint
cannot be brought to or otherwise produced in Delaware,” this factor does not weigh
in favor of Defendants.50
48
Id. at 2.
49
Id.
50
Pena v. Cooper Tire & Rubber Co., 2009 WL 847414, at *6 (Del. Super. Ct. Mar.
31, 2009) (citing Mar-Land Indus. Contractors, Inc., 777 A.2d at 781).
9
12. Second, regarding the availability of compulsory process of witnesses,
Defendants discuss the Courts’ inability to compel certain potential witness to testify
in Delaware. As previously stated, each party to this case is a Delaware limited-
liability corporation. “Delaware has compulsory power to issue subpoenas to
directors, officers, and managing agents of a Delaware corporation.”51 As to the
other potential witnesses in this case, the Court notes that “although it would be more
convenient for Florida witnesses to give testimony in Florida, they could testify in
Delaware by deposition or appear here voluntarily[.]”52 The Court does not find that
Defendants have displayed overwhelming hardship and inconvenience on this factor.
13. Third, regarding the possibility of a view of the premises, all parties
appear to agree as to the unimportance of this factor to the dispute. The Court does
not find that this factor weighs in favor of dismissal.
14. Fourth, regarding the applicability of Delaware law, Defendants point
to the choice-of-law clause in the CHMA, which states: “This Agreement shall be
construed, both as to its validity and as to the performance of the parties, in
accordance with the laws of the State of Florida without reference to its conflict of
laws provisions.”53 The Court agrees that Florida law governs this dispute. Still,
51
1 Oak Priv. Equity Venture Cap. Ltd. v. Twitter, Inc., 2015 WL 7776758, at *8
(Del. Super. Ct. Nov. 20, 2015) (citing Hamilton Partners, L.P. v. Englard, 11 A.3d
1180, 1214-1215 (Del. Ch. 2010).
52
Berger v. Intelident Sols., Inc., 906 A.2d 134, 136-137 (Del. 2006).
53
Defs.’ Mot. to Dismiss, Ex. A at 21, D.I. 6.
10
“[t]he application of foreign law is not sufficient to warrant dismissal under the
doctrine of forum non conveniens.”54 And “Delaware courts often decide legal issues
– even unsettled ones – under the law of other jurisdictions.”55 Defendants have not
persuaded the Court on this factor.
15. Fifth, regarding the pendency of a similar action in another jurisdiction,
Defendants suggest a potential future claim against Aimbridge in Florida. But, there
is no actual related action pending there. The absence of a pending action elsewhere
“is an important, if not controlling, consideration.”56 “If not dispositive, this fact
weighs heavily against dismissal.”57
16. Sixth, regarding other practical considerations, Defendants merely
assert that litigating this case in Delaware will cause greater time and expense than
if the case were to be litigated in Florida. In the absence of a more detailed
explanation, the Court is not persuaded by Defendants’ assertion that this factor
favors dismissal in any significant way.
54
Taylor v. LSI Logic Corp., 689 A.2d 1196, 1200 (Del. 1997).
55
Berger, 906 A.2d at 137.
56
Pena, 2009 WL 847414, at *7 (citation omitted).
57
Id.11
THEREFORE, the Motion to Dismiss of Defendants Plaza Resort Atlantic
Ocean LLC and Blu Ocean Waters LLC is DENIED.
IT IS SO ORDERED.
/s/ Ferris W. Wharton
Ferris W. Wharton, J.
12