Eden Roc Wins Right to Remove Marriott

MIAMI—Eden Roc Hotel has won the legal right to remove Marriott as manager.
Pryor Cashman LLP successfully argued to a New York appeals court that it should vacate an injunction requiring Eden Roc to accept the hotel management services of Marriott International and its subsidiary, Renaissance Hotel Management Company, LLC.

The appellate court agreed and issued an order on March 26, 2013. “This decision marks the beginning of a new era for Eden Roc, one of the most iconic luxury hotels on Miami Beach,” says Diego Ardid, vice president of Eden Roc LLLP.

According to Pryor Cashman, Marriott argued that its management agreement with Eden Roc could not be terminated by Eden Roc during the full term of that agreement, which could have lasted another 43 years. Although Marriott obtained an injunction from the lower court securing its place as Eden Roc's manager against Eden Roc's wishes, a unanimous panel of the Appellate Division, First Department of New York, agreed with Pryor Cashman that the parties' hotel management contract “is a classic example of a personal services contract that may not be enforced by injunction.”

The dispute has been brewing for over a year. Eden Roc terminated its agreement with Marriott on March 30, 2012, citing a number of defaults. According to Pryor Cashman, Marriott and Renaissance refused to vacate the hotel or acknowledge the agreement's termination. In Oct. 2012, Eden Roc and a team of transition professionals attempted to remove Marriott from the premises and to install in its place Eden Roc Management Company, an affiliated operating unit of the hotel's owner. Marriott resisted and  obtained the injunction preventing its removal.

“This important decision is a vindication of Eden Roc's right to remove Marriott from the hotel, and gives hotel owners across the country legal footing to protect their investments,” says Todd E. Soloway, a partner at Pryor Cashman, LLP who, along with partners Joshua D. Bernstein and William Charron represented Eden Roc. “A hotel manager is barred from commandeering a property against the owner's wishes. Any doubts in that regard have been laid to rest.”

Marriot could not immediately be reached for comment.