Viacom Must Face Hotel Suit Over Nickelodeon Deal With Marriott
July 12, 2011, 12:24 AM EDTBy Joel Rosenblatt
July 12 (Bloomberg) -- Viacom Inc., the owner of cable networks, must face a lawsuit accusing it of violating its contract with Family Suites Resort LLC by licensing the Nickelodeon brand to Marriott International Inc.
New York Supreme Court Judge Barbara A. Kapnick in Manhattan denied Viacom’s request to dismiss the suit, in which Family Suites accuses Viacom of improperly entering a “Nickelodeon Getaway” branding deal with Marriott for hotels in Florida.
The lawsuit, seeking as much as $180 million in damages, is based on breach-of-contract and fraud claims, as well as claims for legal expenses. Kapnick dismissed the fraud claim, ruling it duplicates the contract claim. The first and third claims of the complaint -- the breach-of-contract and legal-expenses claims -- are “severed and continued,” Kapnick ruled.
MTV Networks, a unit of Viacom and a defendant in the suit, “has not shown conclusively that its interpretation of the agreement is the only reasonable one,” Kapnick wrote, referring to the breach-of-contract claim and denying Viacom’s motion to dismiss it.
The judge ordered New York-based Viacom to respond to the remaining claims within 20 days of her July 7 order.
Kapnick rejected an argument that Viacom is violating a provision of the contract giving Family Suites exclusive rights to run a Nickelodeon-themed hotel within 150 miles of its Nickelodeon Suites Hotel in Orlando, Florida. Viacom began the Getaway program last June at Marriott hotels in Miami and Naples, Florida, and has since added one in Fort Lauderdale, Family Suites said.
150 Miles
The locations “are all more than 150 miles from Orlando,” Kapnick wrote in her order, and as such don’t violate the agreement.
“The ruling affirms what we have believed all along --that Viacom should be taken to trial for breaching its contract and entering into arrangements that directly compete with our property,” William A. Brewer III, a lawyer for Family Suites, said yesterday in an e-mailed statement.
David Bittler, a spokesman for Nickelodeon, didn’t immediately return phone and e-mail messages seeking comment after regular business hours yesterday.
The case is Family Suites Resort LLC v. Viacom International Inc., 650489/2010, Supreme Court of the State of New York, New York County (Manhattan).
--With assistance from Don Jeffrey in New York. Editors: Michael Hytha, Joe Schneider
To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
