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Park v. Hyatt Corp.

June 30, 2006

JOHN PARK ET AL., PLAINTIFFS,
v.
HYATT CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Richard W. Roberts United States District Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs John Park, Philip Park, and After Six Entertainment, Inc. sued defendant Hyatt Corporation ("Hyatt") asserting contract and tort claims, violations of the D.C. Human Rights Act ("DCHRA") and federal civil rights statutes, and claims of "discrimination" and punitive damages. Hyatt moves to dismiss all but plaintiffs' breach of contract claim, and moves for leave to file counterclaims against plaintiffs. Plaintiffs have alleged sufficient facts to state contract and tort claims and violations of the DCHRA and federal civil rights statutes, and Hyatt's motion to dimiss will be denied with respect to those claims. The "discrimination" claim is duplicative and will be dismissed, and the punitive damages claim will be treated as part of a prayer for relief and not as a cause of action. Because Hyatt seeks to add counterclaims arising from the same transaction or occurrence and plaintiffs have demonstrated no prejudice to them, Hyatt's motion for leave to file counterclaims will be granted.

BACKGROUND

Plaintiffs allege that they entered into a signed agreement with the Hyatt Regency Washington on Capitol Hill in December 2004, authorizing plaintiffs to use the Hyatt's facilities for a New Year's Eve party that year in exchange for a fee. (Compl. ¶ 5.) Plaintiffs state that they planned to charge attendees a fee to attend the party and also charge them for food and alcoholic beverages, and that Hyatt knew of these plans. (Id. ¶ 6.) The festivities did not go according to plan. According to plaintiffs, Hyatt intentionally sabotaged plaintiffs' event by failing to provide the size room for the buffet dinner that previously had been represented to plaintiffs, failing to provide a sufficient amount of food for the buffet dinner, failing to place wine on the dinner tables at the buffet dinner, ending the buffet an hour early, locking plaintiffs and party attendees out of their hotel rooms, failing to provide adequate security, and being rude and condescending to plaintiffs. (Id. ¶¶ 10-13, 15, 17.) In addition, plaintiffs contend that Hyatt "unilaterally raised the price of premium drinks at plaintiffs' event but charged less for drinks sold by the Hyatt[,]" creating "an incentive for the attendees at plaintiffs' event to buy drinks from the Hyatt rather tha[n] buy them at plaintiffs' event." (Id. ¶ 8.) Plaintiffs John Park and Philip Park are Korean Americans, and the party was attended overwhelmingly by persons of Asian descent. (See id. ¶¶ 14, 16; Pls. Opp'n to Hyatt's Mot. to Dismiss at 1.)

Plaintiffs filed their complaint in D.C. Superior Court in December 2005, alleging breach of contract, tortious interference with contract, negligent infliction of emotional distress, intentional infliction of emotional distress, violations of the DCHRA and federal civil rights statutes, discrimination, and punitive damages. Plaintiffs allege pecuniary loss, loss of reputation, loss of good will, severe emotional distress and other losses. (Compl. ¶¶ 22, 28, 34.) Hyatt answered the complaint without stating any compulsory counterclaims, and removed the case to this court in February 2006. Hyatt now moves to dismiss all but plaintiffs' breach of contract claim*fn1 and requests leave to file counterclaims. Plaintiffs oppose both motions.

DISCUSSION

"A Rule 12(b)(6) motion is intended to test the legal sufficiency of the complaint. But the complaint need only set forth a short and plain statement of the claim, giving the defendant fair notice of the claim and the grounds upon which it rests. Such simplified notice pleading is made possible by the liberal opportunity for discovery and the other pretrial procedures established by the Rules to disclose more precisely the basis of both claim and defense and to define more narrowly the disputed facts and issues. In light of these liberal pleading requirements, a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Kingman Park Civic Ass'n v. Williams, 348 F.3d 1033, 1040 (D.C. Cir. 2003) (citations and internal quotation marks omitted).

In considering a Rule 12(b)(6) motion, a court must accept all the allegations in a plaintiff's complaint as true and construe them in the light most favorable to the plaintiff. Jungquist v. Sheikh Sultan Bin Khalifa Al Nahyan, 115 F.3d 1020, 1027 (D.C. Cir. 1997). "Dismissal under Rule 12(b)(6) is proper when, taking the material allegations of the complaint as admitted, and construing them in plaintiff['s] favor, the court finds that the plaintiff[] ha[s] failed to allege all the material elements of [his] cause of action." Weyrich v. The New Republic, Inc., 235 F.3d 617, 623 (D.C. Cir. 2001) (internal quotation marks and citations omitted) (quoting Taylor v. FDIC, 132 F.3d 753, 761 (D.C. Cir. 1997)).

I. TORTIOUS INTERFERENCE WITH CONTRACT

In the District of Columbia, in order to state a claim for tortious interference with contract, a plaintiff must allege (1) the existence of a contract between the plaintiff and a third party, (2) knowledge of the contract by the defendant, (3) intentional procurement by the defendant of a breach of contract; and (4) damages resulting from the breach. See Casco Marina Dev., L.L.C. v. D.C. Redevelopment Land Agency, 834 A.2d 77, 83 (D.C. 2003); see also Restatement (Second) of Torts §§ 766-66C (1979).

Plaintiffs sufficiently, if inartfully, state a claim for tortious interference with contract. Plaintiffs' allegations can be read fairly to assert that a contract existed between plaintiffs and the attendees, whereby attendees paid a fee and agreed to purchase premium drinks in exchange for being able to attend the plaintiffs' New Year's Eve party with various services to be provided by plaintiffs. (See Compl. ¶¶ 6, 24-25.) Plaintiffs also assert knowledge of the contract by Hyatt, intentional procurement of a breach by Hyatt, and damages from the procured breach in the form of lost profits and loss of reputation among other things. (See Compl. ¶¶ 8-9, 24-28.)

Nonetheless, Hyatt argues that plaintiffs' claim for tortious interference with contract fails to state a claim because it does not allege damages resulting from the breach allegedly induced by Hyatt. Moreover, Hyatt contends that plaintiffs' claim fails because the complaint alleges that Hyatt procured a breach by the plaintiffs and not a third party. In other words, "[p]laintiffs appear to allege that they were damaged by their own breach of contract, which was allegedly procured by the Defendant. This is insufficient to state a claim for tortuous [sic] interference with contract as a matter of law." (Hyatt's Mem. of P. & A. in Supp. of Mot. to Dismiss ("Hyatt's Mot. to Dismiss") at 3.)

Hyatt's arguments are unpersuasive. First, plaintiffs do allege lost profits resulting from the attendees' alleged breach of contract in purchasing drinks directly from the hotel and not plaintiffs. Moreover, plaintiffs allege loss of reputation from plaintiffs' own inability to perform on its contract with attendees due to Hyatt's tortious interference. Second, a plaintiff may recover for tortious interference with contract if the defendant forces the plaintiff to breach a contract with a third party. See Restatement (Second) of Torts ยง 766A (1979) ("One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person, by preventing the other from performing the contract or causing his performance to be more expensive or burdensome, is subject ...


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