Judge Ronnie Abrams
Under a Preopening Services Agreement BMC-The Benchmark Company (Benchmark) was to provide certain services to V3 prior to the opening of its Brooklyn hotel, to be operated by Benchmark under their Hotel Management Agreement. A July 2012 settlement agreement purported to release V3 from claims over severance payments for Benchmark employees after V3 purportedly breached the Feb. 17 agreements by selling the hotel and terminating the agreements. Despite dismissing Benchmark’s claim of breach of the implied duty of good faith, district court denied the parties’ motions for summary judgment as to the agreements’ breach. The settlement did not affect Benchmark’s claims for damages and lost profits over the Preopening Agreement’s alleged breach. Also, circumstantial evidence supported an inference that V3′s decision that the hotel was not economically viable was not made in good faith. Further finding the Management Agreement ambiguous, the court concluded that because disputed factual issues precluded a finding that V3 made a good faith decision about the hotel’s viability, an issue existed whether the Management Agreement was automatically terminated by the Preopening Agreement’s effective termination.
