1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Reliance Hospitality LLC, No. CV-23-00229-PHX-DJH
10 Plaintiff, ORDER
11 v.
12 2930 Waterfront Parkway IN LLC, et al.,
13 Defendants. 14 15 Plaintiff Reliance Hospital LLC (“Plaintiff”) seeks summary judgment on the five 16 breach of contract claims it has brought against Defendants 2930 Waterfront Parkway IN, 17 LLC, Crown South Hill Owners LLC, 500 Mansfield Avenue Owner LLC, 101 Mall 18 Boulevard Owner LLC, and 383 South Center Street Windsor Locks, LLC (collectively, 19 “Defendants”) (Doc. 66). Defendants have not filed a response. (Doc. 69). The Court will 20 grant Plaintiff’s Motion (Doc. 66). 21 I. Background 22 Plaintiff is a hotel management company based in Phoenix, Arizona, overseeing 23 hotels across the country. Under common ownership, Defendants owned multiple hotel 24 properties in various states. Between 2019 and 2022, Defendants agreed to have Plaintiff 25 manage five separate hotel properties. To establish this arrangement, Plaintiff and each 26 Defendant entered into identical Hotel Management Agreements (“HMA”). 27 On February 3, 2023, Plaintiff, believing Defendants to be in violation of the HMAs, 28 brought suit against Defendants. (See Doc. 1). In its Complaint, Plaintiff brought a 1 singular claim of breach of contract and the implied covenant of good faith and fair dealing 2 against each Defendant. (See id. at ¶¶ 34–68). Plaintiff says that each of the Defendants 3 breached their respective HMA by failing to adequately fund their hotels’ operating 4 account sufficient to cover, among other things, the hotel’s payroll, employee benefits, and 5 reimbursement to Plaintiff for out-of-pocket expenses it incurred in the operation of the 6 hotels. (Doc. 66 at 4). Defendants answered the Complaint and later twice amended their 7 Answer, ultimately filing their Second Amended Answer (“SAA”) on January 8, 2024, and 8 affirmatively alleged seven counterclaims against Plaintiff. (See Docs. 7, 20, 39). 9 Defendants’ counsel moved to withdraw from the case, without client consent, in 10 January 2025, on the grounds that Defendants had failed to pay their attorneys’ fees. 11 (Doc. 45). The Court permitted Defendants’ counsel to withdraw and ordered the 12 Defendant LLCs to obtain new counsel by February 10, 2025. (See Doc. 47). Defendants 13 failed to acquire new representation by the February deadline and Plaintiff accordingly 14 filed applications for entry of default against each of the Defendants. (Doc. 53). In light 15 of Defendants’ timely-filed SAA, default was not entered and the Court set the matter for 16 a Status Conference. (Doc. 55). Defendants, however, did not appear at the Status 17 Conference. (Doc. 56). After receiving several chances to respond, the Court dismissed 18 Defendants’ remaining counterclaims on November 5, 2025, for failure to prosecute. 19 (Doc. 72).1 Plaintiff now moves for summary judgment on its breach of contract claims 20 against Defendants.2 21 1 Defendants’ Count V for breach of the HMA was previously dismissed with prejudice on 22 September 16, 2024. (Doc. 41).
23 2 In its Complaint, Plaintiff’s five claims are pled as “breach of contract and the implied covenant of good faith and fair dealing” (see Doc. 1 at ¶¶ 34–68). Plaintiff’s Motion for 24 Summary Judgment, however, focuses only on Defendants’ breach of contract and not their breaches of the good faith covenant. Moreover, Plaintiff has not shown evidence of bad 25 faith or that the damages it seeks are separate and distinct from the breach of contract claim. The Court has therefore only considered the merits of Plaintiff’s breach of contract claims 26 and presumed that any affiliated breach of the good faith covenant claims have been abandoned. See Friends of Big Bear Valley v. U.S. Forest Serv., 776 F. Supp. 3d 824, 831 27 n.6 (C.D. Cal. 2025) (“In the Complaint, plaintiff also alleges violations of NEPA based on defendants’ failure to consider scientific evidence about the Project's impact on bald 28 eagles and other species. None of the parties address these allegations in their respective summary judgment motions, and as such they are abandoned.”). 1 II. Legal Standard 2 A court will grant summary judgment if the movant shows there is no genuine 3 dispute of material fact and the movant is entitled to judgment as a matter of law. Fed. R. 4 Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). A factual dispute is 5 genuine when a reasonable jury could return a verdict for the nonmoving party. Anderson 6 v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A court does not weigh evidence to 7 discern the truth of the matter; it only determines whether there is a genuine issue for trial. 8 Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1131 (9th Cir. 1994). A fact is 9 material when identified as such by substantive law. Anderson, 477 U.S. at 248. Only 10 facts that might affect the outcome of a suit under the governing law can preclude an entry 11 of summary judgment. Id. 12 The moving party bears the initial burden of identifying portions of the record, 13 including pleadings, depositions, answers to interrogatories, admissions, and affidavits, 14 that show there is no genuine factual dispute. Celotex, 477 U.S. at 323. Once shown, the 15 burden shifts to the non-moving party, which must sufficiently establish the existence of a 16 genuine dispute as to any material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio 17 Corp., 475 U.S. 574, 585–86 (1986); see also Celotex Corp., 477 U.S. at 324 (holding the 18 nonmoving party bears the burden of production under Rule 56 to “designate specific facts 19 showing that there is a genuine issue for trial”). The evidence of the non-movant is “to be 20 believed, and all justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S. 21 at 255. But if the non-movant identifies “evidence [that] is merely colorable or is not 22 significantly probative, summary judgment may be granted.” Id. at 249–50 23 (citations omitted). “Where the record taken as a whole could not lead a rational trier of 24 fact to find for the nonmoving party, there is no genuine issue for trial.” Ricci v. DeStefano, 25 557 U.S. 557, 586 (2009). 26 “[W]here [] the moving party bears the burden of proof at trial, it must come forward 27 with evidence which would entitle it to a directed verdict if the evidence were 28 uncontroverted at trial.” Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992). The 1 standard for granting summary judgment thus “mirrors the standard for a directed verdict 2 under Federal Rule of Civil Procedure 50(a)[.]” Celotex, 477 U.S. at 323. 3 When a summary judgment motion is unopposed, a district court must “determine 4 whether summary judgment is appropriate—that is, whether the moving party has shown 5 itself to be entitled to judgment as a matter of law.” Leramo v. Premier Anesthesia Med. 6 Group, 2011 WL 2680837, *8 (E.D. Cal. 2011) (quoting Anchorage Assocs. v. V.I. Bd. of 7 Tax Review, 922 F.2d 168, 175 (3rd Cir. 1990)). A district court “cannot base the entry of 8 summary judgment on the mere fact that the motion is unopposed, [] rather [it] must 9 consider the merits of the motion.” Id. (quoting United States v. One Piece of Real 10 Property, etc., 363 F.3d 1099, 1101 (11th Cir. 2004)). A court “need not sua sponte review 11 all of the evidentiary materials on file at the time the motion is granted, but must ensure 12 that the motion itself is supported by evidentiary materials.” Id. (quoting One Piece of 13 Real Property, 363 F.3d at 1101). 14 III. Discussion 15 To prevail on a breach of contract claim under Arizona law, “a plaintiff must show 16 a contract, a breach of contract, and damages.” Best W. Int’l, Inc. v. Patel, 523 F. Supp. 2d 17 979, 988 (D. Ariz. 2007) (citing Graham v. Asbury, 540 P.2d 656, 657 (Ariz. 1975)). In 18 Arizona, a plaintiff bears the burden of showing contract damages with “reasonable 19 certainty.” Gilmore, 386 P.2d at 82. Reasonable certainty is provided where there is “some 20 reasonable method of computing [the] net loss.” Lininger v. Dine Out Corp., 639 P.2d 350 21 (Ariz. Ct. App. 1981) (citing Irish v. Mountain States Tel. & Tel. Co., 500 P.2d 151, 154 22 (Ariz. 1972)); see also Gilmore v. Cohen, 386 P.2d 81, 82 (Ariz. 1963) (“[T]he evidence 23 must make an ‘approximately accurate estimate’ possible.”) (quoting Martin v. LaFon, 100 24 P.2d 182 (Ariz. 1940)).. 25 In their SAA, Defendants do not dispute the existence or validity of the HMAs. (See 26 Doc. 39 at ¶¶ 35, 42, 49, 56, 63). They further state that the terms of the HMAs speak for 27 themselves. (See id. at ¶¶ 23–29). Therefore, the Court will assess whether Plaintiff has 28 met it burden of establishing breach and its alleged damages with reasonable certainty. 1 A. Count I against 2930 Waterfront Parkway IN, LLC 2 Plaintiff and 2930 Waterfront Parkway IN, LLC (“2930 Waterfront”) entered into 3 its HMA (the “Waterfront HMA”) on June 25, 2020. (Doc. 66-3 at 3). The Waterfront 4 HMA was a 36-month agreement for a hotel property located at 2930 Parkway West Drive, 5 Indianapolis, IN 46214. (Id. at 3, 5). The Waterfront HMA establishes the terms under 6 which Plaintiff would take over the operation, direction, management, and supervision of 7 the above hotel property owned by 2930 Waterfront. (See generally id.). 8 Under the Waterfront HMA, 2930 Waterfront is responsible for “reimbursing 9 [Plaintiff], as part of the Operating Expenses, and shall deposit into the Operating Account, 10 as provided below, the salary, payroll taxes and fringe benefits under the Benefits Plans of 11 all Hotel Personnel for [Plaintiff].” (Id. at 5). 2930 Waterfront is required to provide the 12 funds for these expenses at least seven days prior to Plaintiff’s payroll date. (Id.) The 13 Waterfront HMA further provides that Plaintiff is not liable for any “expenses, debts, 14 liabilities and obligations by reason of its direction, management, supervision and 15 operation of the Hotel on behalf of [2930 Waterfront]” and Plaintiff may reimburse itself 16 from the “Operating Account” for “payroll expense of any employee” who is performing 17 a necessary job function at the Hotel. (Id. at 6–7). Additionally, under the Waterfront 18 HMA, 2930 Waterfront must pay Plaintiff a $2,500.00 monthly management fee, “until 19 which time the hotel opens as a franchised branded hotel[.]” (Id. at 8). 20 Either party was entitled to terminate the Waterfront HMA effective immediately, 21 in the event of the other party’s gross negligence, willful misconduct, or fraud. (Id. at 9). 22 Either party could also terminate the HMA in the event of either party’s failure “to pay the 23 other party any sums as and when they become due hereunder and such failure shall 24 continue for ten (10) days after notice of the failure has been given to the party who has 25 failed to pay these sums.” (Id.) If such an event occurred that was attributable to 2930 26 Waterfront, under the Liquidated Damages provision, Plaintiff is entitled to “all 27 Management Fees prorated to the date of termination” “all Operating Expenses that have 28 not been paid or reimbursed,” and “all other amounts due under this Agreement,” within 1 five days of termination. (Id. at 10). 2 Plaintiff says 2930 Waterfront failed to add sufficient funds to the hotel’s Operating 3 Account from October 22, 2021, to February 20, 2022, which caused Plaintiff to incur out- 4 of-pocket expenses to cover its employees’ payroll, workers’ compensation premiums, and 5 health insurance premiums. (Doc. 66-1 at ¶ 7). Plaintiff’s executive “prepared and sent 6 written notice to 2930 Waterfront informing them that they were in default and gave them 7 10 days’ [sic] to cure.” (Id. at ¶ 8). However, 2930 Waterfront failed to cure, and Plaintiff 8 subsequently terminated the Waterfront HMA, effective March 1, 2022. (Id.) 9 Defendants denied any such breach in their SAA (Doc. 39 at ¶ 37) but has otherwise 10 failed to substantiate their defense. Plaintiff sent Requests for Admission (“RFA”) to 2930 11 Waterfront, stating “[a]dmit that [2930 Waterfront] did not adequately fund the Hotel’s 12 operating expenses as required by the HMA;” “[a]dmit that failing to fund the Hotel’s 13 operating account to cover the Hotel’s operating expenses constitutes a default under the 14 HMA;” and “[a]dmit that [2930 Waterfront] failed to cure [its] default under the HMA 15 despite Reliance providing You with notice and an opportunity to cure the default.” 16 (Doc. 66-2 at 19–20). The RFAs were sent to 2930 Waterfront on December 20, 2024, 17 but, to date, they have gone unanswered. (Doc. 66-1 at ¶ 5); F. R. Civ. P. 36(a)(3) (failure 18 to timely respond to requests for admission results in automatic admission of the matters 19 requested as Federal Rule of Civil Procedure 36(a) is self-executing). The Court will 20 accordingly construe 2930 Waterfront’s failure to respond as admission of its failure to 21 fund the Operating Account and that such a failure is a breach of the HMA. 22 With regard to damages, Plaintiff has offered the uncontested declaration of Bryan 23 Fish, an executive with Plaintiff, in which Mr. Fish attests that due to 2930 Waterfront’s 24 failure to fund the Operating Account, Plaintiff was unable to reimburse itself and, under 25 the HMA, is owed “$38,275.74 (employee payroll); $1,848.00 (workers’ compensation 26 premiums); and $28,774.32 (health insurance premiums).” (Doc. 66-1 at ¶ 9). Mr. Fish 27 also states that “[b]ecause there were sixteen months left in the initial term of the HMA, 28 2930 Waterfront is liable for Liquidated Damages in the amount of $40,000.00 (i.e., 16 1 months x $2500).” (Id. at ¶ 10). In all, Plaintiff says its damages resulting from 2930 2 Waterfront’s breach are $108,898.06. These amounts are uncontested but reasonably 3 supported and certain. 4 Based on the foregoing facts, Plaintiff has established that there is no factual dispute 5 as to the existence of a contract, 2930 Waterfront’s breach of that contract, and Plaintiff’s 6 resulting damages. Defendants, conversely, have not produced any evidence that 7 demonstrates a disputed issue of material fact, and therefore Plaintiff is entitled to judgment 8 as a matter of law on its breach of contract claim against Defendant 2930 Waterfront. 9 B. Count II against Crown South Hill Owners, LLC 10 Plaintiff and Crown South Hill Owners, LLC (“Crown South”) entered into its HMA 11 (the “Crown HMA”) on August 4, 2021. (Doc. 66-4 at 3). The Crown HMA was a 36- 12 month agreement for a hotel property located at 164 Fort Couch Road, Pittsburgh, PA 13 15241. (Id. at 3, 5). 14 The Crown HMA establishes the terms under which Plaintiff would take over the 15 operation, direction, management, and supervision of the above hotel property owned by 16 Crown South. (See generally id.). 17 In relevant part, under the Crown HMA, Crown South is responsible for 18 “reimbursing [Plaintiff], as part of the Operating Expenses, and shall deposit into the 19 Operating Account, as provided below, the salary, payroll taxes and fringe benefits under 20 the Benefits Plans of all Hotel Personnel for [Plaintiff].” (Id. at 5). Crown South is required 21 to provide the funds for these expenses at least seven days prior to Plaintiff’s payroll date. 22 (Id.) The Crown HMA further provides that Plaintiff is not liable for any “expenses, debts, 23 liabilities and obligations by reason of its direction, management, supervision and 24 operation of the Hotel on behalf of [Crown South]” and Plaintiff may reimburse itself from 25 the “Operating Account” for “payroll expense of any employee” who is performing a 26 necessary job function at the Hotel. (Id. at 6–7). 27 Either party was entitled to terminate the HMA effective immediately, in the event 28 of the other party’s gross negligence, willful misconduct, or fraud. (Id. at 9). Either part 1 could also terminate the HMA in the event of either party’s failure “to pay the other party 2 any sums as and when they become due hereunder and such failure shall continue for ten 3 (10) days after notice of the failure has been given to the party who has failed to pay these 4 sums.” (Id.) If such an event occurred that was attributable to Crown South, Plaintiff is 5 entitled to “all Management Fees prorated to the date of termination” “all Operating 6 Expenses that have not been paid or reimbursed,” and “all other amounts due under this 7 Agreement,” within five days of termination. (Id. at 10). 8 Plaintiff says Crown South failed to add sufficient funds to the hotel’s Operating 9 Account during the Crown HMA’s term, which required Plaintiff to incur out-of-pocket 10 expenses to cover its employees’ health insurance premiums in the amount of $20,888.98. 11 (Doc. 66-1 at ¶ 11). Crown South then “sought to terminate the Crown South Agreement 12 without triggering Liquidated Damages, which [Plaintiff] permitted them to do so long as 13 Crown South reimbursed [Plaintiff] for its out-of-pocket expenses.” (Id. at ¶ 12). The 14 Crown HMA was terminated in October 2022, but Crown South refused to reimburse 15 Plaintiff for the health insurance premiums. (Id. at ¶ 13). 16 Defendants denied that it breached the HMA by failing to pay for the health 17 insurance premiums (Doc. 39 at ¶ 44) but has failed to substantiate its defense. Moreover, 18 Plaintiff sent an RFA to Crown South, asking Crown South to “[a]dmit that [Crown South] 19 did not adequately fund the Hotel’s operating expenses as required by the HMA” and 20 “[a]dmit that failing to fund the Hotel’s operating account to cover the Hotel’s operating 21 expenses constitutes a default under the HMA.” (Doc. 66-2 at 24). The RFAs were sent 22 to Crown South on December 20, 2024, but the admissions have since gone unanswered. 23 (Doc. 66-1 at ¶ 5); Fed. R. Civ. P. 36(a)(3). Consequently, Crown South has admitted to 24 its failure to fund the Operating Account and that such a failure is a breach of the HMA. 25 Due to Crown South’s failure to fund the Operating Account, Mr. Fish says Plaintiff 26 was unable to reimburse itself for the employees’ health insurance premiums and is owed 27 $20,888.98. (Doc. 66-1 at ¶ 13). 28 Based on the foregoing facts, Plaintiff has established that there is no factual dispute 1 as to the existence of a contract, Crown South’s breach of that contract, or Plaintiff’s 2 resulting damages. Defendants, conversely, have not produced any evidence that 3 demonstrates a disputed issue of material fact, and therefore Plaintiff is entitled to judgment 4 as a matter of law on its breach of contract claim against Defendant Crown South. 5 C. Count III against 500 Mansfield Avenue Owner, LLC 6 Plaintiff and 500 Mansfield Avenue Owner, LLC (“500 Mansfield”) entered into its 7 HMA (the “Mansfield HMA”) on June 21, 2021. (Doc. 66-5 at 3). The Mansfield HMA 8 was a 36-month agreement for a hotel property located at 500 Mansfield Avenue, 9 Pittsburgh, PA 15205. (Id. at 3, 5). The Mansfield HMA establishes the terms under which 10 Plaintiff would take over the operation, direction, management, and supervision of the 11 above hotel property owned by 500 Mansfield. (See generally id.). 12 Under the Mansfield HMA, 500 Mansfield is responsible for “reimbursing 13 [Plaintiff], as part of the Operating Expenses, and shall deposit into the Operating Account, 14 as provided below, the salary, payroll taxes and fringe benefits under the Benefits Plans of 15 all Hotel Personnel for [Plaintiff].” (Id. at 5). 500 Mansfield is required to provide the 16 funds for these expenses at least seven days prior to Plaintiff’s payroll date. (Id.) The 17 Mansfield HMA further provides that Plaintiff is not liable for any “expenses, debts, 18 liabilities and obligations by reason of its direction, management, supervision and 19 operation of the Hotel on behalf of [500 Mansfield]” and Plaintiff may reimburse itself 20 from the “Operating Account” for “payroll expense of any employee” who is performing 21 a necessary job function at the Hotel. (Id. at 6–7). 22 Either party was entitled to terminate the HMA effective immediately, in the event 23 of the other party’s gross negligence, willful misconduct, or fraud. (Id. at 9). Either part 24 could also terminate the HMA in the event of either party’s failure “to pay the other party 25 any sums as and when they become due hereunder and such failure shall continue for ten 26 (10) days after notice of the failure has been given to the party who has failed to pay these 27 sums.” (Id.) If such an event occurred that was attributable to 500 Mansfield, Plaintiff is 28 entitled to “all Management Fees prorated to the date of termination” “all Operating 1 Expenses that have not been paid or reimbursed,” and “all other amounts due under this 2 Agreement,” within five days of termination. (Id. at 10). 3 Plaintiff says during the term of the Mansfield HMA, 500 Mansfield failed to add 4 sufficient funds to the hotel’s Operating Account, which required Plaintiff to incur out-of- 5 pocket expenses to cover its employees’ health insurance premiums in the amount of 6 $49,563.06. (Doc. 66-1 at ¶ 14). 500 Mansfield then “sought to terminate the [Mansfield 7 HMA] without triggering Liquidated Damages, which [Plaintiff] permitted them to do so 8 long as 500 Mansfield reimbursed [Plaintiff] for its out-of-pocket expenses.” (Id. at ¶ 15). 9 The Mansfield HMA was terminated in October 2022, but 500 Mansfield refused to 10 reimburse Plaintiff for the health insurance premiums. (Id. at ¶ 13). 11 Defendants have again failed to offer any evidence supporting the disavowal of the 12 contractual breach. (Doc. 39 at ¶ 51). Plaintiff sent an RFA to 500 Mansfield, stating 13 “[a]dmit that [500 Mansfield] did not adequately fund the Hotel’s operating expenses as 14 required by the HMA” and “[a]dmit that failing to fund the Hotel’s operating account to 15 cover the Hotel’s operating expenses constitutes a default under the HMA.” (Doc. 66-2 at 16 14–15). The RFA was sent to 500 Mansfield on December 20, 2024, but, to date, it has 17 gone unanswered. (Doc. 66-1 at ¶ 5); Fed. R. Civ. P. 36(a)(3). The Court consequently 18 finds that 500 Mansfield has admitted to its failure to fund the Operating Account and that 19 such a failure is a breach of the HMA. 20 Due to 500 Mansfield’s failure to fund the Operating Account, Mr. Fish avers that 21 Plaintiff was unable to reimburse itself for the employees’ health insurance premiums and 22 is owed $49,563.06. (Doc. 66-1 at ¶ 16). 23 Based on the foregoing facts, Plaintiff has established that there is no factual dispute 24 as to the existence of a contract, 500 Mansfield’s breach of that contract, or Plaintiff’s 25 resulting damages. Defendants, conversely, have not produced any evidence that 26 demonstrates a disputed issue of material fact, and therefore Plaintiff is entitled to judgment 27 as a matter of law on its breach of contract claim against Defendant 500 Mansfield. 28 / / / 1 D. Count IV against 101 Mall Boulevard Owner, LLC 2 Plaintiff and 101 Mall Boulevard Owners, LLC (“101 Mall”) entered into its HMA 3 (the “Mall HMA”) on January 15, 2020. (Doc. 66-6 at 3). The Mall HMA was a 36-month 4 agreement for a hotel property located at 101 Mall Blvd., Monroeville, PA 15146. (Id. at 5 3, 5). 6 The Mall HMA establishes the terms under which Plaintiff would take over the 7 operation, direction, management, and supervision of the above hotel property owned by 8 101 Mall. (See generally id.). 9 The Mall HMA provides that 101 Mall is responsible for “reimbursing [Plaintiff], 10 as part of the Operating Expenses, and shall deposit into the Operating Account, as 11 provided below, the salary, payroll taxes and fringe benefits under the Benefits Plans of all 12 Hotel Personnel for [Plaintiff].” (Id. at 5). 101 Mall is required to provide the funds for 13 these expenses at least seven days prior to Plaintiff’s payroll date. (Id.) The Mall HMA 14 further provides that Plaintiff is not liable for any “expenses, debts, liabilities and 15 obligations by reason of its direction, management, supervision and operation of the Hotel 16 on behalf of [101 Mall]” and Plaintiff may reimburse itself from the “Operating Account” 17 for “payroll expense of any employee” who is performing a necessary job function at the 18 Hotel. (Id. at 6–7). Additionally, 101 Mall must pay Plaintiff a monthly management fee 19 of $5,000.00 or 2.5% total hotel revenue, whichever is greater. (Id. at 8). 20 Either party could terminate the HMA in the event of either party’s failure “to pay 21 the other party any sums as and when they become due hereunder and such failure shall 22 continue for ten (10) days after notice of the failure has been given to the party who has 23 failed to pay these sums.” (Id. at 9). If such an event occurred that was attributable to 101 24 Mall, Plaintiff is entitled to “all Management Fees prorated to the date of termination,” “all 25 Operating Expenses that have not been paid or reimbursed,” and “all other amounts due 26 under this Agreement,” within five days of termination. (Id. at 10). 27 Plaintiff says 101 Mall failed to add sufficient funds to the hotel’s Operating 28 Account during the Mall HMA’s term, which caused Plaintiff to incur out-of-pocket 1 expenses to cover its employees’ payroll, workers’ compensation premiums, direct deposit 2 liability, and health insurance premiums. (Doc. 66-1 at ¶ 17). Plaintiff’s executive 3 “provided 101 Mall with written notice of its default and 10 days’ opportunity to cure.” 4 (Id. at ¶ 18). However, 101 Mall failed to cure, and Plaintiff subsequently terminated the 5 Mall HMA, effective March 1, 2022. 6 Defendants initially denied any such breach in their SAA. (Doc. 39 at ¶ 58). But 7 Plaintiff later sent an RFA to 101 Mall, asking 101 Mall to admit “[a]dmit that [101 Mall] 8 did not adequately fund the Hotel’s operating expenses as required by the HMA” and 9 “[a]dmit that failing to fund the Hotel’s operating account to cover the Hotel’s operating 10 expenses constitutes a default under the HMA,” 101 Mall failed to timely respond. 11 (Doc. 66-2 at 4; Doc. 66-1 at ¶ 5). Thus, 101 Mall has admitted to its failure to fund the 12 Operating Account and that such a failure is a breach of the HMA. 13 Because of 101 Mall’s failure to fund the Operating Account, Mr. Fish says Plaintiff 14 was unable to reimburse itself and, under the HMA, is owed: “payroll ($152,669.16); 15 workers’ compensation premiums ($39,230.99); [and] direct deposit liability ($4,203.01).” 16 (Doc. 66-1 at ¶ 17).3 Plaintiff is also requesting liquidated damages from the Management 17 Fee owed under the HMA. (Doc. 66 at 10). Although Plaintiff does not support this claim 18 in its Declaration, its liquidated damages are readily ascertainable based on the HMA’s 19 terms and the above-established facts about the HMA’s termination. Because there were 20 ten months left in the Mall HMA’s initial term upon termination, 101 Mall is liable for 21 Liquidated Damages in the amount of $50,000.00 (10 months x $5000). In all, Plaintiff’s 22 damages resulting from 101 Mall’s breach are $246,103.16. 23 Thus, Plaintiff has established that there is no factual dispute as to the existence of
24 3 Plaintiff states that it also incurred expenses for health insurance premiums (Doc. 66-1 at ¶ 17), and it states in its Motion that it incurred expenses for employee health insurance 25 premiums in the amount of $39,230.99. (Doc. 66 at 10). Plaintiff does not, however, establish its damages for health insurance premiums in its Declaration. (See Doc. 66-1 at 26 ¶ 17). Moreover, in the Declaration, $39,230.99 is the amount claimed for workers’ compensation premiums. As this has been established by sworn statement, the Court finds 27 that Plaintiff’s workers’ compensation premium damages have been established as a fact, but its health insurance damages under the 101 Mall HMA have not. The Court will 28 disregard the amounts claimed by Plaintiff’s counsel in its Motion and adhere to the damages asserted in the Declaration. 1 a contract, 101 Mall’s breach of that contract, or Plaintiff’s resulting damages. Defendants, 2 conversely, have not produced any evidence that demonstrates a disputed issue of material 3 fact, and therefore Plaintiff is entitled to judgment as a matter of law on its breach of 4 contract claim against Defendant 101 Mall. 5 E. Count V against 383 South Center St. Windsor Locks, LLC 6 Plaintiff and 383 South Center St. Windsor Locks, LLC (“383 South”) entered into 7 its HMA (the “South HMA”) on December 17, 2019. (Doc. 66-7 at 3). The South HMA 8 was a 36-month agreement for a hotel property located at 383 S. Center Street, Windsor 9 Locks, CT, 06096. (Id. at 3, 5). 10 The South HMA establishes the terms under which Plaintiff would take over the 11 operation, direction, management, and supervision of the above hotel property owned by 12 383 South. (See generally id.). 13 Under the South HMA, 383 South is responsible for “reimbursing [Plaintiff], as part 14 of the Operating Expenses, and shall deposit into the Operating Account, as provided 15 below, the salary, payroll taxes and fringe benefits under the Benefits Plans of all Hotel 16 Personnel for [Plaintiff].” (Id. at 5). 383 South is required to provide the funds for these 17 expenses at least seven days prior to Plaintiff’s payroll date. (Id.) The South HMA further 18 provides that Plaintiff is not liable for any “expenses, debts, liabilities and obligations by 19 reason of its direction, management, supervision and operation of the Hotel on behalf of 20 [383 South]” and Plaintiff may reimburse itself from the “Operating Account” for “payroll 21 expense of any employee” who is performing a necessary job function at the Hotel. (Id. at 22 6–7). Additionally, under the South HMA, 383 South must pay Plaintiff a $2,500.00 23 monthly management fee, “till hotels opens [sic] as a Ramada.” (Id. at 8). 24 Either part could also terminate the HMA in the event of either party’s failure “to 25 pay the other party any sums as and when they become due hereunder and such failure 26 shall continue for ten (10) days after notice of the failure has been given to the party who 27 has failed to pay these sums.” (Id. at 9). If such an event occurred that was attributable to 28 383 South, Plaintiff is entitled to “all Management Fees prorated to the date of termination” 1 “all Operating Expenses that have not been paid or reimbursed,” and “all other amounts 2 due under this Agreement,” within five days of termination. (Id. at 10). 3 Plaintiff says 383 South failed to add sufficient funds to the hotel’s Operating 4 Account during the South HMA’s term, which forced Plaintiff to incur out-of-pocket 5 expenses to cover its employees’ payroll and health insurance premiums. (Doc. 66-1 at 6 ¶ 19). Plaintiff “provided 383 South with written notice of its default and 10 days’ 7 opportunity to cure.” (Id. at ¶ 20). However, 383 South failed to cure, and Plaintiff 8 subsequently terminated the South HMA, effective March 1, 2022. 9 Defendants initially denied any such breach in their SAA. (Doc. 39 at ¶ 65). But 10 Plaintiff’s December 20, 2024, RFA to 383 South asking it to “[a]dmit that [383 South] did 11 not adequately fund the Hotel’s operating expenses as required by the HMA” and “[a]dmit 12 that failing to fund the Hotel’s operating account to cover the Hotel’s operating expenses 13 constitutes a default under the HMA” went unanswered. (Doc. 66-2 at 9; Doc. 66-1 at ¶ 5). 14 Consequently, 383 South has admitted to its failure to fund the Operating Account and that 15 such a failure is a breach of the HMA. 16 Because of 383 South’s failure to fund the Operating Account, Mr. Fish says 17 Plaintiff was unable to reimburse itself and, under the HMA, is owed: “payroll 18 ($70,408.03) and health insurance premiums ($24,452.71).” (Doc. 66-1 at ¶ 19). Plaintiff 19 is also requesting its liquidated damages from the Management Fee owed under the HMA. 20 (Doc. 66 at 10). Although Plaintiff does not support this claim in its Declaration, its 21 liquidated damages are ascertainable based on the HMA’s terms and the above established 22 facts about the HMA’s termination. Because there were nine months left in the South 23 HMA’s initial term upon termination, 383 South is liable for Liquidated Damages in the 24 amount of $22,500.00 (9 months x $2,500). In all, Plaintiff’s damages resulting from 383 25 South’s breach are $117,360.74. 26 Based on the foregoing facts, Plaintiff has established that there is no factual dispute 27 as to the existence of a contract, 383 South’s breach of that contract, and Plaintiff’s 28 resulting damages. Defendants, conversely, have not produced any evidence that 1 || demonstrates a disputed issue of material fact, and therefore Plaintiff is entitled to judgment 2|| matter of law on its breach of contract claim against Defendant 383 South. 3 In sum, Plaintiff has demonstrated that it is entitled to summary judgment on each 4|| ofits claims for breach of contract. 5 Accordingly, 6 IT IS ORDERED that Plaintiff's Motion for Summary Judgment (Doc. 66) is 7\| GRANTED. The Clerk of Court is kindly directed to enter judgment and close this matter 8 || as follows: 9 e judgment in favor of Plaintiff in the amount of $108,898.06 against 10 Defendant 2930 Waterfront Parkway IN, LLC; 11 e judgment in favor of Plaintiff in the amount of $20,888.98 against Defendant 12 Crown South Hill Owners, LLC; 13 e judgment in favor of Plaintiff in the amount of $49,563.06 against Defendant 14 500 Mansfield Avenue Owner, LLC; 15 e judgment in favor of Plaintiff in the amount of $246,103.16 against 16 Defendant 101 Mall Boulevard Owner, LLC; and 17 e judgment in favor of Plaintiff in the amount of $117,360.74 against 18 Defendant 383 South Center St. Windsor Locks, LLC. 19 IT IS FURTHER ORDERED that Plaintiff is awarded post-judgment interest at || the applicable federal rate pursuant to 28 U.S.C. 1961 (a). 21 IT IS FINALLY ORDERED that Plaintiff may file a motion for costs and attorneys’ fees within fourteen (14) days of the entry of this Order pursuant to the HMAs □□ and A.R.S. §12-341.01. 24 Dated this 24th day of February, 2026. 25 . Ja — 26 bz Diangt United States District Judge 28
-15-