Source : law360.com
By : Nathan Hale
Category : Hotel Marketing Companies In Florida
A landmark Miami Beach art deco hotel sued its former marketing company in Florida state court Tuesday for allegedly falling through on its promise to significantly boost the hotel’s occupancy rate after the parties signed a marketing agreement. Southern Property Investment Group LLC, owner of the historic Cadet Hotel on South Beach, has filed claims for, among other things, breach of contract and fraudulent inducement. The hotel owner is seeking damages for the alleged breach as well as a court order forcing AMGW Digital LLC and its president and CEO, Edward De Valle II, to hand over the passwords necessary to modify the hotel’s website. “Mr. De Valle’s work has been an abysmal and colossal failure. He promised the world and delivered a few grains of sand,” the hotel’s lawyer, J. Luis Quintana of Quintana & Associates PA, wrote in a September letter to the defendants, which threatened a lawsuit if AMGW did not return the hotel’s passwords and paid fees. De Valle disputes the claims in the suit, telling Law360 on Thursday that there is no breach of contract because the hotel owner canceled the agreement against the contract terms. De Valle said he and his company are planning to file their own suit over the dispute.
Dr. Vilma Biaggi, who owns and operates the Cadet — described in the lawsuit as a high-end boutique hotel with about 30 rooms, a French restaurant and a spa — says in her complaint that she entered into a digital marketing agreement with AMGW on Jan. 28, based on several assurances and representations that she later found out to be untrue or that AMGW failed to deliver. The defendants pledged that their work would result in a 25 percent increase in occupancy and a higher average daily rate for the Cadet Hotel within six months, the suit alleges. One purported means of achieving these goals was the promise of positive articles about the hotel in key magazines within three months. AMGW also claimed to have extensive resources and staff located in offices around the world and said De Valle had a proven track record and was “one of the world’s 10 best in his field” based on awards listed on the company’s website, the complaint says. “Marketing and positive publicity for the hotel, as with any business, are vital for its survival,” the complaint says. The hotel states it paid AMGW $4,000 a month for its marketing and advertising services, although it notes that the parties’ agreement did not define specific services that were to be performed and says that parol evidence will be needed for clarification. De Valle did provide a written plan to Biaggi in February, laying out a schedule of regular meetings between the hotel and AMGW agents, according to the suit. However, the hotel claims that the plan was not actually carried out.
AMGW instead experienced significant turnover among its personnel assigned to the hotel’s account, making it impossible for AMGW to provide the promised services, the suit claims. The marketing company failed to deliver the kind of press coverage it promised and turned out to not have the offices, staff or resources it claimed, the hotel says. De Valle vehemently refuted Biaggi’s claims. He said that AMGW never made the occupancy promises claimed in the suit, noting they aren’t mentioned anywhere in the contract, and that the hotel actually saw an increase of more than 20 percent in the first four months of 2013 compared with the previous year. He called Biaggi’s claims about his company’s staff and offices completely inaccurate, saying he has more than 160 employees. He provided links to several executives’ online bios and to the company’s Facebook page showing examples of AMGW’s work dating back to 2010. “We’re extremely well qualified people,” he said, adding that Biaggi had treated his staff poorly, including yelling at them, and had sent a representative to harass him at his office. De Valle claimed that Biaggi owes payment for the full term of the contract and has not paid for June, July and August. The text of the contract attached to Biaggi’s complaint says that it is for a minimum six-month term. “She stopped paying when summer season came around,” De Valle said. In her suit, Biaggi says she canceled the agreement on June 2 because of the defendants’ “absolute incompetence.” She claims that De Valle then offered two months of service at no cost to continue the agreement, but he and AMGW again failed to provide the promised services. “I have given you two free months which no other agency would do,” De Valle wrote to Biaggi in a June 15 email he provided to Law360. In that email, De Valle urges her to stay positive and keep with the plan, which he argues has been working despite some admitted struggles with the online component.
“You are judging us based on TWO months we did not seem to deliver to the perfect T but before that, [months] 1, 2 and 3 have been perfect and exactly what we agreed too. Also month 6th and onward are super inline,” he wrote. The hotel, through its attorney, sent its demand letter and formal notice of the contract’s termination on Sept. 16, insisting on the return of its website passwords, which it says AMGW was holding hostage, as well as a refund of all the payments it had made to the defendants, according to the complaint. AMGW and De Valle have refused to meet either of the plaintiff’s requests and instead demanded payment for its services for July and August, which the hotel holds De Valle offered at no cost, the complaint says. In addition to breach of contract and fraudulent inducement, the hotel’s suit also brings counts of conversion for AMGW’s alleged possession of its passwords; and violations of the Florida Deceptive and Unfair Trade Practices Act, Florida laws covering usury and false advertisement. The Cadet Hotel is represented by J. Luis Quintana of Quintana & Associates PA. The defendants are represented by in-house counsel Laura B. Muniz. The case is Southern Property Investment Group LLC v. AMGW Digital LLC et al., case number 2013-32675-CA-01, in the 11th Judicial Circuit Court of the State of Florida.