BUSINESSMAN David Hood will appeal the jury’s verdict, which found him liable for $160,250 in a breach of lease lawsuit, according to one of his attorneys, Bob O’Connor.
O’Connor also clarified that “there were two claims in the lawsuit — a minor one for about $150,000 in back rent, and the major claim based on bad faith for $3.6 million in damages.”
“The jury ruled in favor of Mr. Hood’s company on the major claim for $3.6 million, awarding nothing on that claim,” O’Connor said. “The jury interpreted ambiguous language in the lease agreement in favor of [the plaintiff] Mr. [Hideaki] Sawada’s company on the minor claim and awarded him about $160,000 in back rent,” the lawyer added.
“Mr. Hood is happy about this jury verdict,” O’Connor said, but “he is going to appeal…the jury verdict on the minor claim because he believes the Supreme Court will find that the lease language was unambiguous, and no rent was owed.”
O’Connor, one of the island’s well-known lawyers, came out of retirement just four days before the trial began on Jan. 22 to assist attorney Stephen Nutting in representing Hood in the lawsuit, Variety learned.
Represented by attorneys Colin Thompson and Janet King, Sawada sued Hood over a lease dispute for a proposed boutique hotel in Garapan.
After the trial, Thompson told Variety, “Mr. Sawada won all the claims that he brought. He had two claims won, for breach of contract and one for breach of the duty of good faith and fair dealing.”
“The jury found Mr. Hood breached the contract and awarded…$160,250 for breach of contract. The jury also found Mr. Hood and his company breached the duty of good faith and fair dealing but did not award any damages on that claim,” Thompson added.
Superior Court Presiding Judge Roberto C. Naraja presided over the trial.
The dispute stemmed from a 2016 lease for the second floor of May Ten Building in Garapan owned by Sawada, where Hood planned to develop an 18-room boutique hotel.
Central to the dispute is the interpretation of a handwritten clause by Hood in the lease that stated: “Lease is subject to a successful Permit & Construction Bid. Bright Star LLC can cancel the lease anytime until these items are complete and approved by Bright Star LLC.”
A breach of lease agreement complaint was filed by Magic International Corporation, owned and operated by Sawada, against Hood and Bright Star.
Magic International asked the court to issue a judgment for rent in the amount of $142,500, representing rent due for the period from Feb. 1, 2017, to Aug. 30, 2018, plus interest.
Moreover, the plaintiff sought an award of $18,000 for late charges due to the defendant’s failure to pay all unpaid rent within 10 days, in addition to regular rent and a security deposit in the amount of $20,000. In addition, the plaintiff asked for damages and for attorney’s fees, litigation costs and other fees.
In his complaint, Sawada stated that Hood breached the lease agreement by failing to pay rent, delaying the project’s progress, and causing significant financial harm.
Bright Star and Hood have denied the allegations in the complaint and filed a counterclaim against Sawada.
Hood said “the lease never took effect, and defendants never took possession of the property because conditions subsequent went unmet, and no obligation related to the lease such as the right to quiet enjoyment in Bright Star’s construction and operation of the hotel ever arose.”
Bright Star sought the return of the $40,000 security deposit, along with an award for attorney’s fees and costs.
