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

• Court: Superior Court of Delaware
• Decided: August 26, 2024
• Docket: N24C-04-151 FWW
• Status: Published

Opinion

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.