Appellate court tosses out judgment against Marriott

A lower court enforced a Bahamian judgment against Marriott arising from a failed marina project

Jan.January 03, 2016 02:00 PM

The Third District Court of Appeal overturned a lower court’s enforcement of a $7.5 million Bahamian court judgment against Marriott International Inc.  in connection with a failed marina project.

The plaintiff, Pittsburgh-based American Bridge Bahamas Ltd., had won a breach-of-contract case in the Bahamas against Marriott, then successfully sued in Miami-Dade Circuit Court to enforce the judgment.

But the Third District Court of Appeal overturned the circuit court’s enforcement of the $7.5 million judgment against Marriott for breach of contract and an award of punitive damages for two other claims.

The appellate judges found that American Bridge failed to  prove the existence of a joint venture among Marriott, Lehman Brothers and Gencom Group, which contracted with American Bridge to build a 300-slip marina at the Ritz-Carlton Rose Island resort.

American Bridge acknowledged the parties never formalized the joint venture but claimed they shared control over the day-to-day operations of the marina project. The appellate judges found no evidence of shared control.

The appellate panel also reversed claims that Marriott committed fraud by inducing American Bridge to enter into a marina construction contract by misrepresenting the availability of project financing.

The Bahamian court entered a judgment in 2010 against Ritz-Carlton Rose Island Hotel Co. Ltd. (RCRI) , a Bahamian company that Marriott formed in 2005. Lehman Brothers and Gencom later acquired a 75 percent stake in RCRI.

RCRI signed a $32.5 million contract with American Bridge for the marina, and construction began in 2007. But after Lehman Brothers went bankrupt the following year, RCRI could no longer fund the project and asked American Bridge to stop construction.

A Miami-Dade jury found in 2014 that a joint venture existed between Marriott and Gencom and decided RCRI was the agent of the joint venture. Miami-Dade Circuit Judge Marc Schumacher issued a final judgment in the case that made Marriott liable for the Bahamian judgment against RCRI. [Daily Business Review] — Mike Seemuth


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