Keystone Wins $80M Judgment Against Host Hotels
- Mar 11, 2010
March 10, 2010
By Allison Landa, News Editor
After four years of litigation and a five-week trial, a jury has awarded Keystone-Texas Property Holding Corp. a more than $80 million judgment against Host Hotels and Resorts L.P., formerly known as Host Marriott, L.P., as well as its subsidiary HMC Hotel Properties II L.P.
The lawsuit was centered on the San Antonio Rivercenter Mall and the attached Rivercenter Marriott. Keystone, which owned both properties, entered negotiations in 2005 to sell them. Ten days before the Marriott hotel parcel closed, Host Marriott notified Keystone that it was in default under the parties’ lease agreement and first needed to separately negotiate with HMC for the sale of the property at a fair market value acceptable to both HMC and Host Marriott.
Host Marriott then sought an injection to bar Keystone from selling the property, alleging claims of breach of contract. This resulted in Keystone being unable to close the transaction, though the injunction was eventually denied. Keystone then filed counterclaims against Host Marriott and HMC, with the eventual trial centered on interpretation of the lease language highlighted in Host Marriott’s demand letter.
Keystone was awarded $34.3 million in compensatory damages for its tortious interference claim and $39 million for its claim on slander of title. It was also awarded $5 million in punitive damages against Host Marriott and $2.5 million in punitive damages against HMC.
“I believe the jury spent weeks evaluating the evidence and ultimately they arrived at the only possible conclusion,” J. Michael Ellis of Crouch & Ramey, LLP, who with Cole Ramey served as lead trial counsel for Keystone, told CPE. “I am satisfied with the jury’s verdict and appreciative of their diligence and hard work throughout the process.”