Arkansas jury awards West Memphis man’s company $25M in fraud suit over Texas hotel

Ark. man gets $25M award in suit over Texas hotel

LITTLE ROCK, Ark. — InterContinental Hotels Group, owners of Holiday Inn Worldwide, has been ordered by a court to pay $25 million in damages to an Arkansas franchisee for fraud involving a hotel in Texas.

J.O. “Buddy” House of West Memphis, owner of Hotel Associates, claimed in a lawsuit that InterContinental Hotels Group breached its contract and fiduciary duty with his company over a Holiday Inn Hotel and Suites in Wichita Falls, Texas.

House claimed he lost millions of dollars in renovation costs and loss of value during various changes in ownership and personnel at the world’s largest hotel franchiser.

All 12 members of a Crittenden County jury agreed that Hotel Associates was the victim of “deceit,” while 10 jurors agreed that House proved he suffered from promissory estoppel, meaning the hotelier lost money after relying on a broken promise from InterContinental Hotels Group, according to verdict forms filed Friday.

Caroline Sanfilippo, a spokeswoman for InterContinental at its North American headquarters in Atlanta, said Monday that the company “strongly disagrees” with the verdict and was exploring its options, including appeals.

The jury ordered Holiday Hospitality Franchising Inc., an InterContinental company, to pay $13 million in compensatory damages and $12 million in punitive damages to Hotel Associates, according to Tim Dudley, a lawyer for House.

The jury found that $10 million was associated with the sale of the Texas hotel, while $3 million was for renovation and improvement costs to the facility, according to its verdict form.

“It was a long trial, five full days of it, but the jury system worked and we’re very pleased with (the verdict),” House said.

U.K.-based InterContinental Hotels Group has more than 4,200 hotels across nearly 100 countries. The hotel group operates seven brands: InterContinental, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites and Candlewood Suites.

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