Red Bull Associates v. Best Western Intern., Inc., 88 Civ. 752 (WK).
| Citation | 686 F. Supp. 447 |
| Decision Date | 03 June 1988 |
| Docket Number | No. 88 Civ. 752 (WK).,88 Civ. 752 (WK). |
| Parties | RED BULL ASSOCIATES, Gordon Weiss and Murray Weiss, Plaintiffs, v. BEST WESTERN INTERNATIONAL, INC., Defendant. |
| Court | U.S. District Court — Southern District of New York |
Lewis M. Steel, Steel Bellman & Levine, P.C., New York City, Richard F. Bellman, Miriam F. Clark, on brief, for plaintiffs.
Franz S. Leichter, Wachtell, Manheim & Grouf, New York City, Jeffrey R. Herrmann, Andrew M. Manshel, Margaret K. Suib, of counsel, for defendant.
Plaintiffs, owners and operators of a motor hotel known as the Red Bull Motor Inn ("Inn") allege that defendant Best Western International, Inc. ("Best Western") expelled the Inn from membership in and affiliation with Best Western for racially discriminatory reasons, in violation of the federal Fair Housing Law, 42 U.S.C. § 3601, et seq., the Public Accommodations Law, 42 U.S.C. § 2000a-1, et seq., and 42 U.S.C. §§ 1981 and 1982. Plaintiffs contend that the Inn was terminated solely because it was providing lodging to black and Hispanic homeless persons under contract with a local welfare department. Plaintiffs seek a preliminary injunction pursuant to Fed.R.Civ.P. 65 preventing Best Western from taking steps to effectuate termination of the membership agreement with the Inn (including compelling the Inn to remove Best Western signs and logos, and denying the Inn the right to participate in the Best Western reservation system) as well as actual and exemplary damages, costs and attorneys fees. Before us now is defendant's motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(3) or to transfer pursuant to 28 U.S.C. § 1404(a) based upon a clause in the Inn's membership agreement with Best Western selecting the state and federal courts of Arizona as the forum for resolution of any disputes between the parties. For reasons which follow, we decline to enforce the forum selection clause and therefore deny the motion.
Plaintiff Red Bull Associates ("Red Bull") is a limited partnership formed for the purpose of owning and operating the Inn, a 145-unit motel located in Poughkeepsie, New York. Plaintiffs Gordon Weiss and Murray Weiss are its principal owners; Gordon Weiss ("Weiss") supervises the Inn's day-to-day operations. Defendant Best Western is an Arizona non-profit corporation which provides its member hotels with services including use of Best Western's name, logo, emblems and registered marks, participation in a guest referral system and a computer reservation system, and listing in an annual travel guide. The Inn became affiliated with Best Western in 1978. Red Bull purchased the Inn in October 1979, and thereafter entered into annual membership agreements with Best Western.
In 1985, Best Western required all existing members, including plaintiffs, to sign a new Membership Application and Agreement ("Agreement"). The Agreement, signed on September 4, 1985 provides in pertinent part:
In 1986 and 1987, Weiss signed certification forms continuing the Inn's membership for the 1987 and 1988 years. These certifications incorporated all of the terms of the Agreement.
Each Best Western member is inspected for maintenance and housekeeping at least twice a year by one of defendant's field representatives. A score of less than 800 out of a possible 1,000 results in the property being placed on probationary status and reinspected within 90 days. A second failing rating is considered grounds for termination. In addition, grounds for termination exist if a property receives two failing marks within a twelve month period or three such ratings within a twenty four month period. Defendant's rules provide for a final pretermination inspection, and if the score is below 800 points, termination proceedings go forward.
The circumstances giving rise to plaintiffs' contentions began when the Inn entered into a contract with the Westchester Department of Social Services in "approximately April 1986." Affidavit of Gordon Weiss dated February 16, 1988 ("Weiss Aff.") ¶ 5. Under that contract, the Inn was to provide rooms on a long-term basis to be used as temporary housing for homeless families. During the relevant time period, 35 of the Inn's 145 rooms were involved in the long-term rental. Since the inception of the program, approximately 80% of the homeless persons occupying the leased rooms have been black or Hispanic. The Inn had previously rented a block of rooms on a long term basis to the International Business Machines Corporation.
The Inn's membership with Best Western was terminated on November 24, 1987. In the preceding 20 months, the Inn was subject to five inspections by two different inspectors, Richard Byrne and Les Hammond. Plaintiffs failed four of these inspections and passed one. The results of those inspections are tabulated as follows:
Date Inspector Score
March 17, 1986 Byrne 690 (failing)
June 28, 1986 Byrne 699 (failing)
September 30, 1986 Byrne 886 (passing)
May 19, 1987 Hammond 635 (failing)
August 20, 1987 Hammond 677 (failing)
Following Hammond's two poor grades, the Inn's membership was terminated. Defendant claims that the disaffiliation was due to the Inn's inability to meet Best Western's housekeeping and maintenance standards. Plaintiffs contend that their property complied with Best Western's objective criteria, but that inspector Hammond gave them low marks because of his hostility to the race of the homeless families. While plaintiffs admit they have had quality control problems in the past, they contend that the deficiencies Byrne noted in early 1986 have been corrected, as evidenced by the passing mark obtained from Byrne in September 1986, several months after the black and Hispanic families had begun occupying the leased rooms.
Plaintiffs have submitted evidence in the form of both documents and affidavits to support their charge of racial bias. The documents consist of Hammond's two reports, which itemize his findings and list the number of points deducted for each deficiency noted. Both reports were mailed to plaintiffs following Hammond's visit. Neither report made reference to the homeless families. However, at the time each report was written, Hammond also prepared an evaluative summary entitled "Remarks" containing extensive comments about the presence of these families. Weiss states that the Remarks were not sent to him along with the rest of Hammond's reports.1
In his April 19, 1987 Remarks, Hammond declares:
The Remarks for August 20, 1987 contain these observations concerning the rooms used by the minority tenants:
In addition to the documents, plaintiffs have submitted two affidavits asserting that Hammond made negative comments concerning the presence of minority tenants during the May 19 visit. Specifically, Weiss states in his affidavit that Hammond remarked, "That looks terrible" with reference to a group of black children playing outdoors on the Inn's grounds and a group of black women sitting on lawn chairs (Weiss Aff. at ¶ 9). Weiss also relates that Hammond "expressed the view that the presence of these Social Services people was not conducive to a proper atmosphere in a hotel" (Id. at ¶ 10). Weiss further recounts that during the course of the inspection, Hammond pointed to a black family seated on the lawn and asked who they were. Weiss responded that they were guests affiliated with IBM Corporation (Id. at ¶ 11).
The Inn's manager, Sally Hallett, accompanied Hammond during the ...
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