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Martin v. Hotel and Transportation Consultants, Inc.

United States District Court, D. Hawaii

June 1, 2018

GEORGE MARTIN, M.D., et al. Plaintiffs,


          J. Michael Seabright Chief United States District Judge.


         Plaintiffs George Martin, M.D. (“Martin”), Advances in Cosmetic and Medical Dermatology Hawaii, LLC (“ACMD”), and Excellence in Rheumatology Education, LLC (“EIRE”) (collectively “Plaintiffs”) have filed a multi-count Second Amended Complaint (“SAC”) against Defendants Jose A. Mena (“Mena”) and Hotel and Transportation Consultants, Inc. (“HTC”) (collectively “Defendants”) and others.[1] ECF No. 91. Defendants move to dismiss the SAC for failure to state a claim upon which relief may be granted. ECF No. 95. For the following reasons, the Motion is GRANTED in part and DENIED in part.


         A. Factual Background

         Martin, a dermatologist, and Mena, a meeting planner, formed ACMD “to provide seminars and meetings on topics in cosmetic and medical dermatology.” SAC ¶¶ 9-10. Mena is president of HTC, which was an initial member of ACMD. Id. ¶¶ 5, 9. In approximately 2007-2008, Martin purchased Defendants' interest in ACMD. Id. ¶ 12. The parties, however, continued a business relationship.

         According to the SAC, Plaintiffs and “HTC/Mena” agreed (sometimes in writing but, as is pertinent here, orally)[2] that Mena and/or HTC would continue to provide meeting management services to Plaintiffs in exchange for Plaintiffs' designating them as meeting planners and agents on hotel contracts, entitling Defendants to commissions under those contracts. Id. ¶¶ 13-21. The SAC describes the meeting management services as “including, but not limited to, negotiation of hotel contracts and addenda, managing hotel contracts, ensuring accurate billing, managing attendees' hotel reservations, balancing reserved rooms, and managing the meeting website.” Id. ¶ 13.

         According to the SAC, in reliance on this oral agreement, Plaintiffs contracted to hold meetings in 2017 through 2021 at various resorts. Id. ¶¶ 22-28. Meeting locations include the Wailea Beach Marriott Resort and Spa on Maui, id. ¶ 22, the Grand Wailea Resort Hotel & Spa, also on Maui, id. ¶ 25, The Broadmoor in Colorado, id. ¶ 27, and the Hilton New Orleans Riverside, id.[3] ¶ 28. The contracts for these meetings provide for a 10% commission on room rates to be paid to HTC. Id. ¶¶ 24-28. The SAC alleges that “Defendant HTC was the Agent of Record and meeting planner for Plaintiffs under the contracts with Defendant Marriott, ” id. ¶ 22, and that “Defendant HTC and Defendant Mena were designated meeting planners under the contracts with Defendant GWR, ” id. ¶ 25. “Defendant Mena, as Meeting Planner, would also receive Hilton Honor points for a qualifying event.” Id. ¶ 26.

         Martin and Mena's business relationship apparently soured in about 2016. In March of that year, a dispute arose between them about registration fees for a summer 2016 meeting: “Martin had indicated he no longer would use Defendants HTC/Mena's services for meeting registration, and Defendants HTC/Mena claimed they were entitled to the funds as a cancellation fee.” Id. ¶ 29. That dispute was resolved in Hawaii State court and resulted in a judgment against Defendants. Id. ¶¶ 30-31.

         In the current suit, Plaintiffs allege that Defendants have “mismanaged the negotiations of Plaintiffs' hotel contracts.” Id. ¶ 32. But the gravamen of Plaintiffs' complaint appears to be Defendants' refusal, since July 31, 2016, to provide certain meeting management services, specifically reservation assistance and “the hotel portion of services” for the 2017-2021 meetings. Id. ¶¶ 34-35. According to the SAC, “Defendants HTC/Mena acknowledged having provided the[se] services in the past, but claimed they were ‘gratuitous.'” Id. ¶ 36.

         Plaintiffs allege that they have “had to hire another company . . . to oversee and manage the work that should have been performed by Defendants.” Id. ¶ 37. And they contend, among other things, that they or their new agents are entitled to the commissions and rewards payable under the relevant hotel contracts and/or that they are entitled to damages. See id. at ¶¶ 45, 50, 54, 61, 67, 72, 77 & A-H.

         B. Procedural Background

         Plaintiffs originally filed suit in Hawaii State Court. ECF No. 1-1. The action was removed to this court on March 2, 2017, ECF No. 1, and HTC filed a Counterclaim, ECF No. 11. Plaintiffs filed a first amended complaint, ECF No. 16, in response to GWR's Motion for a more definite statement, ECF No. 10, which GWR then withdrew, ECF No. 31. After Marriott filed a Counterclaim and Crossclaim for Interpleader, ECF No. 40, and GWR filed a Motion for Interpleader Deposit, ECF No. 27, Interpleader Defendants were ordered to deposit all commission funds for their relevant contracts with the court registry, ECF Nos. 52, 55.

         Plaintiffs filed the SAC on February 28, 2018. ECF No. 91. Defendants moved to dismiss on March 14, 2018. ECF No. 95. Plaintiffs filed an Opposition on May 8, 2018, ECF No. 108, and Defendants replied on May 15, 2018, ECF No. 110. A hearing was held on May 29, 2018.


         Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss for “failure to state a claim upon which relief can be granted.” A Rule 12(b)(6) dismissal is proper when there is either a “lack of a cognizable legal theory or the absence of sufficient facts alleged.” UMG Recordings, Inc. v. Shelter CapitalPartners, LLC, 718 F.3d 1006, 1014 ...

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