Simons v. Starwood Hotels

Full title: GEOFFREY SIMONS AND NANCY SIMONS, Plaintiff(s), v. STARWOOD HOTELS RESORTS…

Court: Supreme Court of the State of New York, New York County

Date published: Sep 8, 2009

2009 N.Y. Slip Op. 32179 (N.Y. Sup. Ct. 2009)

Opinion

110747/2005.

September 8, 2009.

DECISION/ORDER

MARCY S. FRIEDMAN, Judge.

In this action, plaintiff sues for damages allegedly sustained when he slipped and fell on exterior stairs at the Westin Palace Hotel ("Westin") in Madrid, Spain, on July 2, 2004. Defendant Starwood Hotels Resorts Worldwide, Inc. ("Starwood") moves for summary judgment dismissing plaintiff's claims against it.

The standards for summary judgment are well settled. The movant must tender evidence, by proof in admissible form, to establish the cause of action "sufficiently to warrant the court as a matter of law in directing judgment." (CPLR 3212[b]; Zuckerman v City of New York, 49 NY2d 557, 562.) "Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers." (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853.) Once such proof has been offered, to defeat summary judgment "the opposing party must 'show facts sufficient to require a trial of any issue of fact' (CPLR 3212, subd. [b]," (Zuckerman, 49 NY2d at 562.)

The following relevant facts are undisputed: At the time of the accident, plaintiff was staying at the Westin, attending a conference. As plaintiff was exiting the front entrance of the hotel, he slipped and fell on the hotel's front steps. At that time, the Westin was owned by non-party CIGA International Hotels Corporation, SPRL ("Ciga"). Ciga is a wholly-owned fourthtier subsidiary of non-party Starwood CIGA Holdings LLC, which is itself a fourth-tier subsidiary of Starwood. (See Aff. of Todd Matthews [Starwood's Manager, Litigation and Technology] in Support of Motion, ¶ 6.)

In moving for summary judgment, Starwood argues that it did not own or operate the Westin, and that it did not control Ciga as its franchisor and, thus, that it is not vicariously liable for the acts of Ciga.¹ In opposition, plaintiff argues that triable issues of fact exist as to whether Starwood held itself out as Ciga's agent.

1 Starwood further argues that plaintiff cannot demonstrate a basis for piercing the corporate veil. The court need not address this contention, because plaintiff, in opposition to Starwood's motion, does not seek to pierce the corporate veil.

It is well settled that generally "[a] parent corporation will not be held liable for the torts or obligations of a subsidiary unless it can be shown that the parent exercised complete dominion and control over the subsidiary." (Potash v Port Auth. of New York New Jersey, 279 AD2d 562 [2d Dept 2001]. See also Billy v Consolidated Machine Tool Corp., 51 NY2d 152; Garcia v Union Carbide Corp., 176 AD2d 219 [1^st Dept 1991].) Similarly, as between franchisors and franchisees, "[t]he mere existence of a franchise agreement is insufficient to impose vicarious liability on the franchisor for the acts of its franchisee; there must be a showing that the franchisor exercised control over the day-to-day operations of its franchisee." (Martinez v Higher Powered Pizza, Inc., 43 AD3d 670, 671 [1^st Dept 2007]. See Schoenwandt v Jamfro Corp., 261 AD2d 117 [1^st Dept 1999]; Andreula v Steinway Baraqafood Corp., 243 AD2d 596 [2d Dept 1997].)

However, in the absence of such control by the parent/owner or franchisor, or a written principal-agent agreement, an agency relationship by estoppel may be found in circumstances where the acts of the principal are found "to constitute a holding out to the public which would estop them [the principal] from disclaiming responsibility for [the agent's] negligence." (Fogel v Hertz Int'l., Ltd., 141 AD2d 375, 376 [1^st Dept 1988]; Travalja v Maieliano Tours, 213 AD2d 155 [1^st Dept 1995]; Rovinsky v Hispanidad Holidays, Inc., 180 AD2d 673 [2d Dept 1992].) Moreover, "the person dealing with the ostensible agent must have known of and relied upon such acts or omissions; this reliance must be in good faith and in the exercise of reasonable prudence." (2A NY Jur 2d, Agency § 27; Fogel, 141 AD2d at 376.) Where "no written authority of the agent has been proven, questions of agency and of its nature and scope . . . are questions of fact to be submitted to the jury under proper instructions by the court." (Fogel, 141 AD2d at 376 [internal quotation marks and citation omitted]; Time Warner City Cable v Adelphi Univ., 27 AD3d 551 [2d Dept 2006].)

Here, Starwood submits undisputed evidence that there is no written agreement between it and Ciga (see Matthews Aff., at ¶¶ 2-4, 6), and that the Westin's management agreement was between Ciga and non-party Westin International Services Company. (Id. at ¶ 7.) This evidence is sufficient to demonstrate that Starwood did not own, operate, or manage the hotel. Moreover, it demonstrates that Starwood did not exert complete control over the daily operations of the hotel so as to hold it liable as Ciga's franchisor. (See Schoenwandt, 261 AD2d at 117; Andreula, 243 AD2d at 596.) Accordingly, Starwood makes a prima facie showing that as Ciga's indirect owner, it is not liable to plaintiff for Ciga's alleged negligence.

In opposition, however, plaintiff raises a triable issue of fact as to whether Starwood held itself out as the owner or operator of the hotel. Plaintiff submits evidence that Starwood's website stated that it owned the Westin; that the Westin's website had Starwood's banner at the bottom; and that, prior to the conference, plaintiff referred to a Starwood directory that listed the Westin as a Starwood hotel. (P.'s Aff. in Opp. at ¶¶ 6-13.) This evidence raises a triable issue of fact as to whether the nature and content of these advertisements and web listings constituted a holding out to the public of Starwood's ownership of the hotel that would estop Starwood from disclaiming responsibility for Ciga's negligence. (See Fogel, 141 AD2d at 376.) Moreover, plaintiff, who was an officer of a conference management company, attests that he only attended conferences at hotels which he believed he would use in connection with his business; that he prefers to work with hotels managed by "American companies" because such hotels more closely match the expectations of his clientele; and that he chose to attend the conference at the Westin mainly on the ground that it was owned by Starwood. (See P.'s Aff. in Opp., ¶¶ 5, 16.) Plaintiff thus raises a triable issue of fact as to whether he justifiably relied on the representations made by Starwood on its website in deciding to attend the conference at the Westin. (See Fogel, 141 AD2d at 376.)

Starwood further argues that the instant action should be governed by the laws of Spain, and that it was not negligent under Spanish law. Assuming arguendo that Spanish law will govern this action, defendant fails to demonstrate as a matter of law that it was not negligent. Defendant submits the affidavit of an architect, Pedro Utrilla, attesting that the steps of the hotel were in compliance with the requirements of Spanish law. Defendant also submits the affidavit of an attorney, Miguel Torres, attesting that Spanish law would not impose liability on defendant because the condition of the steps was open and obvious. However, these affidavits are wholly conclusory, and merely categorize the authorities on which the experts rely without annexing the authorities. The affidavits fail to establish that the handrails were not required by Spanish codes, that the handrails were not a contributing cause of plaintiff's accident, and that an open and obvious defect would constitute an absolute bar to liability under Spanish law, rather than a basis for a finding of comparative negligence as it would under the law of this Department. (See e.g. Garcia v Mack-Cali Realty Corp., 52 AD3d 420 [1^st Dept 2008].) The affidavits also fail to set forth the factual bases for the expert's opinions, and are therefore insufficient to eliminate triable issues of fact as to defendant's negligence. (See Machado v Clinton Hous. Dev. Co., 20 AD3d 307 [1^st Dept 2005].)

It is accordingly hereby ORDERED that defendant Starwood's motion for summary judgment is denied; and it is further

ORDERED that the parties are directed to appear for a preliminary conference, including a settlement conference, in Part 57 of this court on Thursday, October 8, 2009 at 2:30 p.m. The parties shall appear on that date with counsel, or be available by telephone, and counsel shall be authorized and prepared to discuss settlement of the instant action pursuant to New York Rules of Court 22 NYCRR § 202.12(c)(5) and Local Rule 1 of the Rules of the Justices of New York County Supreme Court.

This constitutes the decision and order of the court.