Starwood to Pursue Malpractice Suit

WHITE PLAINS, N.Y.—(BUSINESS WIRE)—Nov. 25, 2002—A decision last week by the Supreme Court of the State of New York further validates Starwood Hotels & Resorts Worldwide, Inc.`s (NYSE: HOT) contention that the negative ruling against Sheraton Hotels & Resorts in the 1995 Woodley Road Case resulted from gross mishandling of Starwood`s case by its former attorneys, LeBoeuf, Lamb, Greene & MacRae.


The Honorable Ira Gammerman denied LeBoeuf`s motion to dismiss Starwood`s complaint allowing Starwood to proceed to discovery and trial in its malpractice suit against the law firm.


Starwood has argued that LeBoeuf is the reason that Sheraton sustained the negative verdict in the 2660 Woodley Road Joint Venture et al. v. ITT Sheraton Corporation, et al (“Woodley Road”) case. In Woodley Road, the owners of the Sheraton Washington Hotel claimed that Sheraton, as managing agent, was improperly operating a purchasing program at the hotel - a program that, in fact, provided the owners with substantial discounts. Starwood contends that LeBoeuf`s malpractice caused the jury to award $50 million to the Plaintiff hotel owners (which was later reduced to $39 million), and also caused Sheraton to lose on its counterclaims - from which LeBoeuf had advised that Sheraton would recover millions of dollars from the hotel owners.


In his conclusion in denying LeBoeuf`s motion to dismiss, Judge Gammerman stated, “It seems to me that there`s enough in the papers at this stage to conclude that the plaintiff (Starwood) might establish that but for the negligence of the defendant some or all of the damages awarded would have been avoided.”


Judge Gammerman has not only permitted Starwood to pursue actual damages but has also determined that Starwood is eligible to pursue punitive damages against LeBoeuf. He wrote, “...there are allegations here that the law firm intentionally abandoned a defense in order to avoid being charged with its own misconduct and therefore placed its interest, its own interest ahead of those of its clients to a substantial detriment of the client.”
“We`re obviously very pleased with the Court`s decision,” said Kenneth Siegel, Starwood`s Executive Vice President and General Counsel. “We have long maintained that the Woodley Road ruling was the result of bad lawyering, not bad behavior on the part of Starwood. We look forward to pursuing this case vigorously and telling the true story.”

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Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with more than 750 properties in more than 80 countries and 110,000 employees at its owned and managed properties. With internationally renowned brands, Starwood is a fully integrated owner, operator and franchisor of hotels and resorts including: St. Regis, The Luxury Collection, Sheraton, Westin, Four Points by Sheraton, W brands, as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, please visit www.starwood.com


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