by Arnaud and Naja Girard…….
You know things are bad when an attorney says to you, “I hate lawyers!”
“I do! I truly do!” repeats Michael Halpern who is pacing in his law office above The Lazy Gecko Bar on Key West’s famous Duval Street.
What is one of the most feared attorneys in Key West losing sleep over? Being hunted by a billion-dollar corporation that he believes wants his hotel: the iconic Southernmost House. The “corporation” is Remington Lodging & Hospitality.
What we wanted to know is how the City and our Chief of Police and City Attorney ended up being sued by Remington’s team of lawyers for allegedly “conspiring with Mr. Halpern” to violate the civil rights of Remington’s Southernmost House general manager. Here is the story:
Halpern has been desperately trying to fire Remington despite their 10-year management contract with 25 years “commitment.” “This is how they operate,“ says Mr. Halpern, “They never let you out. And all the while they are raking in the dough, abusing the employees and not taking care of your building!” Mr. Halpern falls back down in his chair. He claims that he has been giving Remington notice to no avail, “They simply keep filling more papers and motions and appeals. By the time this thing is litigated the contract will have expired.”
So, what is one supposed to do?
Well, according to the lawsuit filed last week by Remington’s lawyers, what Mr. Halpern elected to do was enter the hotel after midnight last Wednesday with a group of KWPD officers and forcibly eject Joseph Dantoni, Remington’s Southernmost House general manager, and his employees. When, the next day, Dantoni returned to the hotel and refused to leave he was arrested by city police and taken to jail for trespassing.
The lawsuit claims Mr. Halpern conspired with the Chief of Police and City Attorney, Shawn Smith, to violate Dantoni’s civil rights. Remington also claims that Mr. Halpern stole $277,582 from the hotel bank account and breached their management contract in bad faith while the matter of termination of the contract was still in the process of being litigated in state court.
In the federal complaint Remington argues that Halpern simply wants more money. In 2009, when Remington took over the Southernmost House, gross revenue was $90,498. Remington has steadily brought the revenue up to $2,133,270 . As per the management contract Remington’s incentive fee has also gone up. It was over $342,000 last year .
Remington acknowledges that Halpern kept complaining about the treatment of employees, even flying to California to talk to the President of the company. He apparently created quite a stir in this unprecedented “lecturing” of the CEO on the matter. “How presumptuous of me,” says Halpern, “Me, the peasant from Key West.”
“We can’t have these big companies make the law in Key West. Employees need to be treated well. I’d rather make less money.”
As we are sitting in his office he pulls out a stack of presentation boards with blown-up photographs showing the lack of maintenance at the Southernmost House under Remington’s management. We are getting dizzy. Please Michael tell us you don’t intend to respond to accusations of false arrest and conspiracy with pictures of broken flower pots and peeling door paint. What people want to know is how you convinced the City Attorney to take your side and have that man arrested.
“Oh that’s simple. It’s just the law. Here, take this case law with you.” And Michael Halpern hands us a stack of photocopies. “Knock yourselves out. I too thought I was stuck with Remington in my house. That’s how they get you. In fact, they might be able to sue you for breach of contract but they don’t have the right to force you to keep them on your property.”
We now have spent time reading those cases. It does appear that Mr. Halpern is not the first hotel owner to have ousted the management team in cowboy like fashion.
The courts have found that it’s not enough for a management contract to state that the manager has a (property) “interest “in the hotel. Mere words in a contract don’t create a property interest and without a property interest the manager has no right to remain against the owner’s will. The property interest must be real – not just words in a contract.
“Look it’s simple says the lawyer, “If you have a one year agreement with a maid service that doesn’t mean that the maid can force herself into your house after you’ve told her the deal is over. She might be able to sue you, but I tell you Remington is not going to sue me with my own money while I try to get them out of my hotel!”
BP: What about the money, Michael, that they say you stole?
MH: I did not steal their money. It is the hotel’s money and it is still exclusively used for the hotel’s operating expenses, I just switched it over to another account and now they can’t touch it.
BP: And those court cases are what convinced the city attorney? Is this ‘Duck Tour proof’? [In the Duck Tour case a federal jury awarded $13 Million against the City based on evidence that the City had arrested Duck Tour captains in order to put them out of business and protect competitor, Conch Tour Trains, owned by local businessman Ed Swift. The City eventually settled for $8 Million]
MH: That’s the case.
BP: Let’s hope it works.
MH: Let me ask you this: Why do you think they are not maintaining the house? Why do you think a corporation with 9,000 hotel units uses all of its powers to fight over my 18-room house? Why?
BP: You think they want the house? It’s a trophy property?
MH: And a lot of ego. They are the big guys.
The civil rights case was filed last Friday in Federal Court. The state court case regarding the forcible ejection is due to be heard in Judge Koening’s courtroom next week.