A New York Supreme Court jury has found that Starwood Hotels & Resorts Worldwide, Inc.’s former lawyers, LeBoeuf, Lamb, Greene & MacRae, committed malpractice in the Firm’s mishandling of the 1999 Woodley Road Case (2660 Woodley Road Joint Venture et al. v. ITT Sheraton Corporation, et al (“Woodley Road”)).
Starwood has long argued that LeBoeuf’s negligence is the reason that the company sustained the substantial negative verdict in the Woodley Road case. The New York jury found that LeBoeuf was negligent in a number of ways in its defense of the Woodley Road case and that LeBoeuf’s negligence was the cause of the Woodley Road jury’s award of punitive damages. In Woodley Road, the owners of the Sheraton Washington Hotel claimed that Sheraton, as managing agent, was improperly operating a purchasing program at the hotel – a program that, in fact, provided the owners with substantial discounts. The verdict, among other things, requires that LeBoeuf pay the punitive damages award. While the exact amount of damages awarded to Starwood may vary based on the outcome of the Company’s pending appeal of the Woodley Road decision, right now the effective amount awarded to Starwood is approximately $21 million.
“We have long maintained that the Woodley Road ruling was the result of bad lawyering, not bad behavior on the part of Sheraton,” said Kenneth Siegel, Starwood’s Executive Vice President and General Counsel. “The fact that the case was precedent setting in the industry, and may have led to other similar lawsuits, made our case against LeBoeuf all that much more important. We are pleased with the jury’s decision and feel vindicated.”
