San Antonio Lease Dispute results in $2.7M Verrdict against hotel

A Bexar County jury decided to award $2.7 million this week to a local restaurant whose owners said they were fraudulently evicted last year from a North Side Drury hotel.

In the lengthy verdict, which is still pending approval from state District Judge Janet Littlejohn, jurors said Drury Southwest Inc. failed to comply with its lease with Louie Ledeaux #1 Inc.

The hotel chain also committed fraud, made a negligent misrepresentation and relied on a “false, misleading or deceptive act or practice” in dealing with the restaurant owners, the jury found Tuesday.

Louie's Hacienda Mexican Restaurant — an offshoot of a Cajun restaurant at The Forum shopping center — operated on the property of a Drury hotel near Loop 410 and Jones Maltsberger Road from December 2007 until March 2008.

Drury was the first to sue, claiming in court documents that the restaurant “closed the doors intending to not reopen.” The hotel asked the court to bar the restaurant from taking anything, other than food, from the premises because Drury was entitled under the lease to keep all improvements.

The restaurant had invested about $400,000 in equipment at the site, it said.

Louie Ledeaux #1 Inc. later filed a countersuit, claiming Drury had failed to mention during the signing of the lease that the Jones Maltsberger exit along Loop 410 was slated for closure. The hotel also said it would build a patio in an area that it did not own, and that the company would be able to add a sign under the Drury marquee, according to the counterclaim.

While the restaurant operators did meet with hotel representatives to discuss an initiative to make the restaurant more profitable, they were never delinquent in rent and never intended to close, they said in court documents.

The jury decided Drury and its lawyers deserved about $112,533 from the restaurant.

But the verdict, if upheld, will make the hotel chain responsible for paying almost $1.3 million for committing fraud and nearly $1.1 million for engaging in a false, misleading or deceptive act or practice. Jurors also awarded the restaurant $286,088 because Drury didn't comply with the lease and another $158,000 in attorney's fees.

Adapted from the Express News