IN THE CIRCUIT COURT OF THE SEVENTEENTH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA
GENERAL JURISDICTION DIVISION
VERIMARK HOSPITALITY GROUP INC., a Delaware corporation,
Plaintiff,
v.
Case No.: 1021-00006
COASTAL PALMS FRANCHISE HOLDINGS LLC, a Florida limited liability company; RANDALL BRECKER, individually; and SUNCOAST ROOM MANAGEMENT INC., a Florida corporation,
Defendants.
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PLAINTIFF'S SECOND REQUEST FOR PRODUCTION OF DOCUMENTS TO DEFENDANT COASTAL PALMS FRANCHISE HOLDINGS LLC
Plaintiff VERIMARK HOSPITALITY GROUP INC. ("Verimark" or "Plaintiff"), by and through its undersigned attorneys, Calderwood & Harkness LLP, 110 SE 6th Street, Suite 2800, Fort Lauderdale, Florida 33301, and pursuant to Florida Rule of Civil Procedure 1.350, hereby propounds this Second Request for Production of Documents upon Defendant COASTAL PALMS FRANCHISE HOLDINGS LLC ("Coastal Palms" or "CPFH"), through its attorneys of record, Whitfield, Barrow & Crane LLP, 1221 Brickell Avenue, Suite 3000, Miami, Florida 33131, Attention: Gabriela Montes, Esq.
Coastal Palms is requested to produce the documents and electronically stored information ("ESI") described in Requests Nos. 1 through 34 below within thirty (30) days of service of this Request, or by such other date as may be agreed upon by the parties or ordered by the Court.
This Second Request for Production is served following the Court's Order dated October 28, 2022 (the Honorable Richard M. Calloway presiding), granting Verimark's Motion to Compel Production of Suncoast Room Management Financial Records (the "October 28 Order"). The October 28 Order directed Coastal Palms to produce all financial records of Suncoast Room Management Inc. ("Suncoast") within twenty-one (21) days. Although Coastal Palms served a Supplemental Production on November 18, 2022, consisting of approximately 312,000 documents (Bates Nos. CPFH-SUP-000001 through CPFH-SUP-312247), Verimark's review of that production has identified additional categories of documents that are responsive to the Court's October 28 Order and relevant to the claims and defenses in this action but that were either not produced or were produced in incomplete form.
Without limiting the foregoing, Verimark's review has revealed, among other things, that: (a) bank records for at least two Suncoast accounts at Ironclad National Bank referenced in previously produced internal memoranda were not included in the Supplemental Production; (b) booking-level data from the website gulfcoastrooms.com was conspicuously absent; (c) OTA settlement statements for at least four properties were missing for multiple calendar years; and (d) financial statements submitted to Ironclad National Bank in connection with the approximately $94 million in first-lien mortgage loans were not produced, despite their direct relevance to the Gross Room Revenue underreporting allegations at the core of this litigation.
All documents shall be produced in accordance with the Joint Stipulation and Order Regarding E-discovery Protocol entered by the Court on June 20, 2022 (the "E-discovery Protocol"), which governs, inter alia, the format of ESI productions (TIFF images with extracted text and metadata fields), de-duplication standards, privilege-log requirements, and clawback provisions under Florida Rule of Civil Procedure 1.285.
DEFINITIONS
The following definitions shall apply throughout this Second Request for Production:
1. "Coastal Palms" or "CPFH" means Defendant Coastal Palms Franchise Holdings LLC, a Florida limited liability company, including its officers, members, managers, employees, agents, representatives, attorneys, accountants, consultants, and any person or entity acting on its behalf or at its direction.
2. "Suncoast" means Suncoast Room Management Inc., a Florida corporation of which Defendant Randall Brecker is the President and sole director. Suncoast collected revenues from direct bookings, walk-in guests, corporate-direct contracts, and the website gulfcoastrooms.com on behalf of or in connection with the franchised hotel properties at issue in this litigation.
3. "Gulf Breeze" means Gulf Breeze Hospitality LLC, a Florida limited liability company and property-level entity that owns and/or operates six (6) Verimark Suites branded hotel properties in Southwest Florida. The Managing Member of Gulf Breeze is Randall Brecker.
4. "Savannah Lodging" means Savannah Lodging Partners LLC, a Georgia limited liability company and property-level entity that owns and/or operates four (4) Verimark Suites branded hotel properties in coastal Georgia. The Managing Member of Savannah Lodging is Randall Brecker.
5. "Property-Level Entities" means Gulf Breeze Hospitality LLC, Savannah Lodging Partners LLC, and any other entity (whether a corporation, limited liability company, partnership, trust, or other legal entity) that owns, operates, or manages any of the twenty-two (22) franchised hotel properties operated under the Verimark Suites or Verimark Select brands pursuant to Franchise License Agreements with Verimark.
6. "FLA" or "Franchise License Agreement" means any and all Franchise License Agreements between Verimark (or its predecessors or affiliates) and Coastal Palms (or its Property-Level Entities), including the initial Franchise License Agreement dated June 15, 2007, and extending through the most recent Franchise License Agreement dated September 3, 2019, covering the twenty-two (22) franchised hotel properties (eighteen (18) Verimark Suites properties and four (4) Verimark Select properties), together with all amendments, addenda, riders, side letters, and exhibits thereto.
7. "Gross Room Revenue" or "GRR" means Gross Room Revenue as that term is defined in Section 4.1 of the FLAs, specifically: "all revenues derived from or attributable to the rental of guest rooms at the Hotel, including revenues from any booking channel, direct or indirect, and regardless of the entity collecting such revenue." The term GRR also includes the substantially similar definitions set forth in corresponding sections of any other FLA between the parties.
8. "Relevant Period" means the period from January 1, 2013 through the date of production of documents responsive to this Request.
9. "OTA" or "Online Travel Agency" means any third-party online booking platform through which guest rooms at any of the twenty-two (22) franchised hotel properties were listed, marketed, offered for sale, or booked, including but not limited to Aldermere Technologies, Bramwell Holdings, Drayton Software, Drayton Corporation, Penmark Industries, Northpoint Corporation, Brightmoor Industries, Greaves Group, Larkspur Holdings, and any similar platforms.
10. "Document" or "Documents" shall have the broadest meaning permitted under Florida Rule of Civil Procedure 1.350 and the Joint E-discovery Protocol, and includes all electronically stored information ("ESI"), paper records, communications, writings, drawings, graphs, charts, photographs, sound recordings, images, and other data compilations from which information can be obtained, translated, or processed into reasonably usable form, as well as any tangible things.
11. "Communication" or "Communications" means any exchange of information, whether oral, written, or electronic, between two or more persons, including but not limited to emails, text messages (including SMS and MMS), instant messages (including messages transmitted via Meridian Services Inc., Signal, Meridian Solutions, Northgate Data Systems, or any similar platform), letters, memoranda, notes, voicemail messages, and records of telephone calls.
12. "You" or "Your" means Coastal Palms Franchise Holdings LLC, including its members, managers, officers, employees, agents, representatives, attorneys, accountants, consultants, and any person or entity acting on its behalf or at its direction.
13. "gulfcoastrooms.com" means the unbranded booking website operated by Suncoast Room Management Inc. through which guest rooms at the franchised hotel properties were marketed and booked directly by consumers, bypassing Verimark's central reservation system.
14. "Management Fee" means the twelve percent (12%) fee retained by Suncoast Room Management Inc. on direct-booking revenues (including revenues collected through gulfcoastrooms.com, walk-in bookings, and corporate-direct contracts) before remitting the balance to Property-Level Entities, as reflected in Suncoast's internal accounting records and invoices.
15. "Person" means any natural person, corporation, limited liability company, partnership, joint venture, association, governmental entity, or any other legal or business entity.
16. "Concerning," "relating to," or "regarding" means referring to, describing, evidencing, constituting, reflecting, mentioning, pertaining to, connected with, commenting on, or in any way logically or factually relevant to the subject matter referenced.
INSTRUCTIONS
The following instructions shall apply to each Request set forth herein:
1. Production Format. All documents shall be produced in the format specified in the Joint E-discovery Protocol dated June 20, 2022: TIFF images with extracted text and associated metadata fields, Bates-numbered sequentially, and accompanied by load files compatible with standard litigation-support platforms (e.g., Relativity, Ashgrove Technologies, or Vireo Systems). Native-format production is required for spreadsheets, databases, and other documents for which TIFF imaging would not preserve embedded formulas, calculations, or functionality. Each document shall bear a unique Bates number that does not duplicate any number used in any prior production.
2. Organization. Documents shall be produced either as they are kept in the ordinary course of business or organized and labeled to correspond to the categories in each numbered Request. If documents are produced as kept in the ordinary course of business, the producing party shall identify the custodian and the folder or file path from which the document was collected.
3. Privilege Log. If any document responsive to any Request herein is withheld in whole or in part on the basis of attorney-client privilege, work-product protection, or any other privilege or immunity from disclosure, Coastal Palms shall provide a privilege log in compliance with Florida Rule of Civil Procedure 1.280(b)(6) and Section 7 of the Joint E-discovery Protocol. The privilege log shall identify, for each withheld document: (a) the Bates number range (if partially redacted) or a unique identification number; (b) the date of the document; (c) the author or sender; (d) all recipients (including "cc" and "bcc" recipients); (e) the type of document (e.g., email, memorandum, letter); (f) the general subject matter of the document, described with sufficient specificity to allow assessment of the privilege claim; and (g) the specific privilege or protection asserted.
4. Lost or Destroyed Documents. If any document responsive to any Request herein has been lost, destroyed, discarded, overwritten, or is otherwise unavailable for production, Coastal Palms shall: (a) identify the document with as much specificity as possible; (b) describe the document's contents; (c) state the date on which the document was lost, destroyed, or became unavailable; (d) identify the person(s) responsible for the loss or destruction; and (e) explain all circumstances surrounding the loss or destruction, including whether the loss or destruction occurred before or after Coastal Palms's obligation to preserve documents arose.
5. Continuing Obligation. This Request is continuing in nature pursuant to Florida Rule of Civil Procedure 1.280(e). Coastal Palms is under a continuing obligation to supplement its responses and production promptly upon discovering any additional responsive documents or information.
6. Independent Construction. Each Request shall be construed independently of every other Request and shall not be limited by reference to any other Request. A document responsive to more than one Request need only be produced once, provided that it is identified as responsive to each applicable Request.
7. Scope of Possession, Custody, or Control. Production shall include all responsive documents in the possession, custody, or control of Coastal Palms, its Property-Level Entities (including Gulf Breeze Hospitality LLC and Savannah Lodging Partners LLC), Suncoast Room Management Inc., Randall Brecker (to the extent acting in his capacity as an officer, member, manager, or agent of any of the foregoing entities), and any other affiliate, subsidiary, parent, agent, or representative of Coastal Palms. This instruction is consistent with and does not limit the scope of the Court's October 28, 2022 Order.
8. Time Period. Unless otherwise specified in a particular Request, each Request covers the Relevant Period (January 1, 2013 through the date of production).
9. Singular / Plural; Conjunctive / Disjunctive. The singular shall include the plural, and the plural shall include the singular. The terms "and" and "or" shall be construed both conjunctively and disjunctively so as to bring within the scope of each Request all documents that might otherwise be construed as outside its scope.
10. Prior Productions. To the extent any documents responsive to this Second Request for Production were included in the initial production (approximately 84,000 documents, Bates Nos. CPFH-000001 through CPFH-084312) or the November 18, 2022 Supplemental Production (approximately 312,000 documents, Bates Nos. CPFH-SUP-000001 through CPFH-SUP-312247), such documents need not be re-produced, provided that Coastal Palms identifies by Bates number the previously produced documents responsive to each Request.
REQUESTS FOR PRODUCTION
CATEGORY A: SUNCOAST ROOM MANAGEMENT INC. — FINANCIAL RECORDS
REQUEST NO. 1:
All bank statements, deposit slips, wire transfer records, and ACH transaction records for every bank account held by or in the name of Suncoast Room Management Inc. for the Relevant Period, including but not limited to all checking accounts, savings accounts, money market accounts, and escrow accounts maintained at Ironclad National Bank, and any other financial institution at which Suncoast Room Management Inc. held an account at any time during the Relevant Period. This Request includes, without limitation, all monthly or periodic account statements, cancelled checks (front and back images), deposit ticket details (including the composition of each deposit), records of incoming and outgoing wire transfers (including sender/recipient information, reference numbers, and amounts), and records of all ACH debits and credits.
REQUEST NO. 2:
All general ledgers, trial balances, journal entries, subsidiary ledgers, and chart-of-accounts documentation maintained by or on behalf of Suncoast Room Management Inc. for the Relevant Period. This Request includes both summary-level and detailed transaction-level records, and encompasses general ledger entries in any accounting software or platform (including, without limitation, Drayton Health IT, Sage, Fenmore Software, or any other accounting system used by Suncoast), together with any exported data files, reports, or printouts derived therefrom.
REQUEST NO. 3:
All invoices, billing statements, fee schedules, payment records, and remittance advices reflecting the twelve percent (12%) Management Fee charged by Suncoast Room Management Inc. to any Property-Level Entity or to Coastal Palms for the Relevant Period. This Request includes, without limitation, all documents showing the calculation of the Management Fee for each property and for each calendar month, including the underlying revenue figures upon which the Management Fee was computed, any adjustments or credits applied, and the net amount remitted by Suncoast to the applicable Property-Level Entity after deduction of the Management Fee.
REQUEST NO. 4:
All federal and state tax returns, including all schedules, attachments, worksheets, and Schedules K-1, filed by or on behalf of Suncoast Room Management Inc. for tax years 2013 through 2021. This Request includes all Forms 1120 (or 1120-S, if applicable), all state corporate income/franchise tax returns filed in the State of Florida and any other state, and any amended returns or extensions filed during the Relevant Period.
REQUEST NO. 5:
All financial statements, whether audited, reviewed, compiled, or unaudited, prepared for, by, or on behalf of Suncoast Room Management Inc. for the Relevant Period. This Request includes, without limitation, all balance sheets, income statements (statements of profit and loss), statements of cash flows, statements of changes in equity, and any accompanying notes, footnotes, management discussion, or supplementary schedules. This Request also includes any draft or preliminary versions of such financial statements.
REQUEST NO. 6:
All documents reflecting, evidencing, or relating to the formation, capitalization, ownership, and governance of Suncoast Room Management Inc., including but not limited to: articles of incorporation and any amendments thereto; bylaws and any amendments thereto; corporate resolutions (whether of the board of directors or shareholders); shareholder agreements; subscription agreements; stock certificates or stock ledger entries; operating agreements (if the entity was at any time structured as an LLC); minutes of all meetings of the board of directors and shareholders; and written consents in lieu of meetings, for the Relevant Period or at any time prior thereto to the extent such documents remain in effect during the Relevant Period.
REQUEST NO. 7:
All documents reflecting, evidencing, or relating to any inter-company transfers, loans, advances, capital contributions, distributions, dividends, management fees (other than the 12% Management Fee identified in Request No. 3), reimbursements, or other payments of any kind between Suncoast Room Management Inc. and Coastal Palms Franchise Holdings LLC, Gulf Breeze Hospitality LLC, Savannah Lodging Partners LLC, or any other Property-Level Entity for the Relevant Period. This Request includes, without limitation, all promissory notes, loan agreements, repayment schedules, wire transfer instructions, journal entries recording inter-company transactions, and any board or member resolutions authorizing such transactions.
REQUEST NO. 8:
All engagement letters, audit reports, compilation reports, review reports, management letters, internal control assessments, and all correspondence (including emails) between Suncoast Room Management Inc. and any accounting firm, bookkeeping service, tax preparer, or financial advisor for the Relevant Period. This Request includes, without limitation, all communications with any such firm or service regarding the preparation of financial statements, the recording of revenues, the classification of inter-company transactions, or the preparation of tax returns for Suncoast.
CATEGORY B: GULFCOASTROOMS.COM — BOOKING DATA AND WEBSITE OPERATIONS
REQUEST NO. 9:
All booking logs, reservation records, confirmation records, cancellation records, and transaction data generated from, captured by, or stored in connection with the website gulfcoastrooms.com for the Relevant Period. For each booking, the production shall include, to the extent available: the guest name (or, if privacy concerns require, an anonymized unique guest identifier consistent with the parties' Protective Order), the confirmation number, the check-in date, the check-out date, the property name and location, the room type, the room rate (nightly and total), all additional charges (including resort fees, parking fees, or incidental charges), the total charges, the payment method, the payment amount, and any cancellation or modification history.
REQUEST NO. 10:
All documents reflecting, evidencing, or relating to the design, creation, development, hosting, maintenance, and operation of the website gulfcoastrooms.com, including but not limited to: domain name registration records (including WHOIS records or registrar account records); hosting agreements with any web-hosting provider; content management system ("CMS") configuration files and records; web-development and web-design contracts or agreements with any third-party developer; software licensing agreements; payment-gateway agreements (e.g., with Kestrel Group, Square, Ashford Corporation, Westmark Data Systems, or any other payment processor); SSL/TLS certificate records; and administrative access logs reflecting all individuals who had login credentials or administrative privileges to modify the website or access its backend data.
REQUEST NO. 11:
All revenue reports, settlement statements, payment-processor statements, and accounting summaries generated from or reflecting revenue derived from gulfcoastrooms.com bookings for the Relevant Period. This Request requires that such documents be organized by property and by calendar month to the extent such organization is possible or exists in the ordinary course of business. This Request includes all daily, weekly, monthly, or annual revenue summaries, whether generated automatically by the website's booking engine, by a payment processor, or prepared manually by Suncoast personnel.
REQUEST NO. 12:
All marketing materials, advertising agreements, search-engine optimization ("SEO") contracts, paid-search agreements (including Strathmore Systems, Northgate Solutions, or any similar pay-per-click platform), paid-media agreements, social-media marketing agreements, display-advertising agreements, affiliate-marketing agreements, and any other contracts or agreements relating to the promotion, advertising, or marketing of gulfcoastrooms.com for the Relevant Period. This Request also includes all invoices, payment records, and performance reports (e.g., click-through rates, impressions, conversion data) associated with any such marketing activities.
REQUEST NO. 13:
All communications (including emails, text messages, instant messages, and any other form of written or electronic communication) between or among Randall Brecker, Theresa Brecker, Nolan Prescott, any Coastal Palms employee, any Suncoast employee, and any third-party web developer, hosting provider, payment processor, or marketing vendor concerning the website gulfcoastrooms.com for the Relevant Period. This Request includes, without limitation, communications concerning the website's design, functionality, booking capabilities, revenue handling, revenue reporting, and any discussions about whether revenues generated through gulfcoastrooms.com would be reported to Verimark as GRR.
REQUEST NO. 14:
All documents reflecting the disposition, allocation, distribution, and reporting of revenues collected through gulfcoastrooms.com for the Relevant Period, including but not limited to all records showing: (a) the total amount of revenue collected through gulfcoastrooms.com for each property and each calendar month; (b) the portion of such revenue retained by Suncoast Room Management Inc. as a Management Fee; (c) the portion of such revenue remitted to Property-Level Entities (and the timing and method of such remittance); (d) the portion of such revenue, if any, that was reported to Verimark as GRR; and (e) any documents reflecting a decision, instruction, or practice to exclude gulfcoastrooms.com revenues from GRR reports submitted to Verimark.
CATEGORY C: OTA (ONLINE TRAVEL AGENCY) AGREEMENTS AND REVENUE DATA
REQUEST NO. 15:
All contracts, agreements, addenda, amendments, rate sheets, rate plans, pricing schedules, and correspondence between Coastal Palms, Suncoast, any Property-Level Entity, or any person acting on their behalf, and any OTA for the Relevant Period. This Request includes, without limitation, all net-rate agreements (under which the OTA pays the hotel a discounted rate and marks up the rate to the consumer), merchant-model agreements, agency-model agreements, opaque-channel agreements, and commission-rate schedules. This Request also includes all documents reflecting the terms and conditions governing the OTA relationship, including payment terms, cancellation policies, rate-parity requirements, and any exclusivity or preferred-partner arrangements.
REQUEST NO. 16:
All monthly or periodic OTA revenue reports, settlement statements, remittance advices, and payment records received by Coastal Palms, Suncoast, or any Property-Level Entity from any OTA for the Relevant Period. This Request requires that such documents be organized by property to the extent such organization is possible. This Request includes all statements from OTA extranets or partner portals reflecting reservation-level detail, gross booking value, net payments, commissions withheld, and adjustments.
REQUEST NO. 17:
All internal documents, spreadsheets, workpapers, accounting records, memoranda, or email communications reflecting the methodology by which Coastal Palms, Suncoast, or any Property-Level Entity classified, categorized, recorded, or reported OTA revenues for the Relevant Period. This Request includes, without limitation, any documents reflecting: (a) the classification of net-rate OTA payments as "commissions receivable," "net revenue," or any similar designation; (b) any practice of netting OTA commissions or fees against GRR before reporting GRR to Verimark; (c) any analysis or discussion of whether OTA revenues should be included in or excluded from GRR as defined in the FLAs; and (d) any instructions or directives from Randall Brecker, Nolan Prescott, or any other person concerning the treatment of OTA revenues for GRR purposes.
REQUEST NO. 18:
All communications (including emails, text messages, and instant messages) between or among any Coastal Palms, Suncoast, or Property-Level Entity employee, officer, member, manager, or agent and any OTA representative, account manager, or support contact concerning the reporting, reconciliation, payment, or adjustment of OTA revenues for the Relevant Period. This Request includes, without limitation, all communications concerning disputed reservations, chargebacks, rate discrepancies, commission adjustments, and any discussions about the volume or method of OTA bookings at the franchised hotel properties.
REQUEST NO. 19:
All documents reflecting the gross revenue (i.e., total revenue before any OTA commissions, fees, markups, or deductions) generated through OTA channels at each of the twenty-two (22) franchised hotel properties for the Relevant Period. This Request includes, without limitation, property management system ("PMS") data exports, revenue manager reports, daily pickup reports, and any other records showing the gross room rate charged to the guest for OTA bookings, as distinguished from the net amount received by the hotel after OTA commissions or fees.
REQUEST NO. 20:
All documents reflecting the commissions, fees, markups, or other amounts paid to, retained by, or withheld by any OTA in connection with bookings at the twenty-two (22) franchised hotel properties for the Relevant Period. This Request includes, without limitation, all commission statements, fee schedules, debit memos, and any reconciliation documents showing the difference between the gross booking value and the net payment received by the hotel or Property-Level Entity.
REQUEST NO. 21:
All internal accounting policies, procedures, guidelines, directives, memoranda, training materials, or written instructions concerning the treatment of OTA revenues for purposes of GRR calculation and reporting to Verimark. This Request covers the Relevant Period and includes any documents that were in effect at any time during the Relevant Period, whether or not they were subsequently revised, superseded, or rescinded.
CATEGORY D: DIRECT-BOOKING CORPORATE CONTRACTS AND WALK-IN REVENUE
REQUEST NO. 22:
All corporate-direct contracts, negotiated-rate agreements, government-rate agreements (including GSA and state-contract rates), group-booking agreements, crew-rate agreements, long-term stay agreements, and any other agreement or arrangement entered into by Coastal Palms, Suncoast, or any Property-Level Entity for the Relevant Period under which guest rooms at any of the twenty-two (22) franchised hotel properties were booked, reserved, or contracted for outside of Verimark's central reservation system ("CRS"). This Request includes all rate letters, request-for-proposal responses, and informal or verbal agreements to the extent they are memorialized in any document or communication.
REQUEST NO. 23:
All booking records, reservation records, folio records, and revenue reports for walk-in guests (i.e., guests who arrived at the hotel and booked a room directly at the front desk without a prior reservation through Verimark's central reservation system or an OTA) at each of the twenty-two (22) franchised hotel properties for the Relevant Period. This Request includes, without limitation, all PMS records reflecting a reservation source code or channel code of "walk-in," "front desk," "FD," "direct," or any substantially similar designation.
REQUEST NO. 24:
All documents reflecting cash payments received for guest-room rentals at any of the twenty-two (22) franchised hotel properties for the Relevant Period. This Request includes, without limitation, all cash receipt logs, petty cash records, cash drawer reconciliation reports, daily cash drop reports, daily revenue summaries reflecting cash collections, bank deposit records (including deposit slips identifying cash deposits), and any PMS records reflecting payment by cash.
REQUEST NO. 25:
All documents reflecting, evidencing, or relating to the routing, channeling, or allocation of direct-booking revenues — whether from corporate-direct contracts, walk-in guests, gulfcoastrooms.com bookings, or any other non-Verimark-CRS booking channel — to Suncoast Room Management Inc. rather than to the Property-Level Entity or to Coastal Palms for purposes of GRR reporting to Verimark. This Request includes, without limitation, all accounting entries, journal vouchers, internal memoranda, email communications, and written instructions reflecting or directing the flow of such revenues through Suncoast and any decision or practice to exclude such revenues from GRR calculations reported to Verimark.
REQUEST NO. 26:
All property management system ("PMS") data for each of the twenty-two (22) franchised hotel properties for the Relevant Period, including reservation-level detail. For each reservation, the production shall include, to the extent available in the PMS: reservation confirmation number, reservation source or channel code, guest name (or anonymized identifier), check-in date, check-out date, room number, room type, room rate (nightly and total), all incidental and ancillary charges, total revenue, payment method, payment amount, and any notes or comments attached to the reservation. This Request is limited to PMS data not already produced in prior productions, but Coastal Palms shall identify by Bates number any previously produced PMS data it contends is responsive to this Request.
REQUEST NO. 27:
All communications (including emails, text messages, instant messages, and any other written or electronic communications) between or among Randall Brecker, any property general manager, any front-desk manager, any assistant general manager, any revenue manager, any director of sales, or any controller at the twenty-two (22) franchised hotel properties concerning the handling, processing, booking, recording, or reporting of walk-in guests, corporate-direct guests, or any guests booked outside of Verimark's central reservation system for the Relevant Period. This Request includes, without limitation, communications concerning the use of specific reservation source codes, the routing of revenues to Suncoast, and any instructions regarding what information to include or exclude from reports submitted to Verimark.
REQUEST NO. 28:
All training materials, standard operating procedures ("SOPs"), policy manuals, written instructions, email directives, or memoranda provided to front-desk staff, reservation agents, night auditors, controllers, or any other hotel personnel at any of the twenty-two (22) franchised hotel properties concerning: (a) the use of Suncoast Room Management Inc. or gulfcoastrooms.com as a booking channel; (b) the processing of reservations received through Suncoast or gulfcoastrooms.com in the property management system; (c) the handling of walk-in guests or corporate-direct guests; or (d) the exclusion or omission of any revenue category, booking channel, or revenue stream from GRR reports submitted to Verimark. This Request covers the Relevant Period and includes any such materials that were in effect at any time during the Relevant Period.
CATEGORY E: GRR REPORTING AND RECONCILIATION
REQUEST NO. 29:
All monthly GRR reports, supporting workpapers, backup schedules, reconciliation documents, and any attachments or exhibits submitted by or on behalf of Coastal Palms or any Property-Level Entity to Verimark for each of the twenty-two (22) franchised hotel properties for the Relevant Period, to the extent such documents have not already been produced as part of the initial production (approximately 84,000 documents, Bates Nos. CPFH-000001 through CPFH-084312) or the November 18, 2022 Supplemental Production (approximately 312,000 documents, Bates Nos. CPFH-SUP-000001 through CPFH-SUP-312247). If Coastal Palms contends that all such documents have been produced, it shall so state and identify the responsive documents by Bates number range. This Request also includes any drafts of monthly GRR reports that differ from the final versions submitted to Verimark.
REQUEST NO. 30:
All internal documents, spreadsheets, workpapers, reconciliation schedules, or communications reflecting any comparison, reconciliation, or variance analysis between: (a) total room revenue recorded in property-level accounting systems, PMS reports, or bank records (including Suncoast-collected revenue from all channels) and (b) the GRR figures reported to Verimark for each of the twenty-two (22) franchised hotel properties for the Relevant Period. This Request includes, without limitation, any documents identifying or quantifying the difference between total room revenue actually collected and the GRR figures reported to Verimark, and any documents reflecting discussions, analyses, or decisions about such variances.
REQUEST NO. 31:
All communications (including emails, text messages, instant messages, and any other written or electronic communications) between or among Randall Brecker, Theresa Brecker, Nolan Prescott, Janet Kerrigan, any controller, any property-level accountant, any regional director, or any other Coastal Palms or Suncoast employee or agent concerning the calculation, preparation, review, approval, or submission of monthly GRR reports to Verimark for the Relevant Period. This Request includes, without limitation, all communications concerning: (a) what revenue items to include or exclude from GRR; (b) any concerns, questions, or disagreements about GRR calculations; (c) any instructions or directives about how to report GRR; and (d) any discussions about Verimark's inquiries, audits, or requests for information about GRR.
REQUEST NO. 32:
All documents reflecting, evidencing, or relating to the two hundred fourteen (214) guest rooms added without notice to Verimark across four (4) of the franchised hotel properties, including but not limited to: renovation plans, construction contracts, building permits, certificates of occupancy, room-inventory certifications, property improvement plans ("PIPs"), updated room counts, floor plans, occupancy reports reflecting the increased room count, revenue reports reflecting income from the additional rooms, and any communications between Coastal Palms, Suncoast, any Property-Level Entity, or Randall Brecker and Verimark, any lender, any brand inspector, any governmental authority, or any other party regarding the addition of such rooms. This Request covers the period from the earliest date on which planning for any such room addition commenced through the date of production.
CATEGORY F: FINANCIAL STATEMENTS SUBMITTED TO IRONCLAD NATIONAL BANK
REQUEST NO. 33:
All financial statements, revenue reports, operating statements, rent rolls, occupancy reports, STR (Penmark Enterprises) reports, and any other financial or operational information submitted by Coastal Palms, Suncoast, any Property-Level Entity, or any person acting on their behalf to Ironclad National Bank (or any other lender, loan servicer, or special servicer) in connection with the approximately $94 million in first-lien mortgage loans secured by eighteen (18) of the twenty-two (22) franchised hotel properties for the Relevant Period. This Request specifically seeks documents that reflect total revenues (including Suncoast-collected revenues from all channels) to the extent that the revenue figures reported to the lender differ from or exceed the GRR figures reported to Verimark during the same period. This Request includes all quarterly and annual financial reporting packages, borrower's certificates, and any supporting schedules or exhibits.
REQUEST NO. 34:
All loan agreements, promissory notes, deeds of trust, mortgages, security agreements, guaranty agreements, financial covenants, debt-service-coverage-ratio ("DSCR") calculations, compliance certificates, borrower's certifications, and any correspondence between Coastal Palms or any Property-Level Entity and Ironclad National Bank (or any other lender, loan servicer, or special servicer) for the Relevant Period, to the extent such documents contain: (a) revenue figures, revenue definitions, or financial reporting obligations that are relevant to or bear upon the calculation of GRR as defined in the FLAs; (b) representations about the revenue, income, or financial condition of any of the franchised hotel properties; or (c) any covenants requiring the borrower to report total revenue, net operating income, or similar financial metrics that may encompass revenues collected by Suncoast or through gulfcoastrooms.com.
CERTIFICATION
Respectfully submitted this 28th day of November, 2022.
CALDERWOOD & HARKNESS LLP Attorneys for Plaintiff Verimark Hospitality Group Inc. 110 SE 6th Street, Suite 2800 Fort Lauderdale, Florida 33301 Telephone: (954) 761-8200 Facsimile: (954) 761-8201
Email: ynakamura@calderwoodharkness.com
By: ________
Yuki Nakamura, Esq. Florida Bar No. 0119644
Priya Anand, Esq. Florida Bar No. 0087451 panand@calderwoodharkness.com
Douglas Carmichael, Esq. Florida Bar No. 0093217 dcarmichael@calderwoodharkness.com
Carlos Espinoza, Esq. Florida Bar No. 0128903 cespinoza@calderwoodharkness.com
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on November 28, 2022, a true and correct copy of the foregoing Plaintiff's Second Request for Production of Documents to Defendant Coastal Palms Franchise Holdings LLC was served via electronic mail and U.S. Mail, postage prepaid, upon the following:
Gabriela Montes, Esq. Nathan Whitfield III, Esq. Ethan Doyle, Esq. WHITFIELD, BARROW & CRANE LLP 1221 Brickell Avenue, Suite 3000 Miami, Florida 33131 Telephone: (305) 579-4400 Facsimile: (305) 579-4401
Email: gmontes@whitfieldbarrow.com
Email: nwhitfield@whitfieldbarrow.com
Email: edoyle@whitfieldbarrow.com
Counsel for Defendants Coastal Palms Franchise Holdings LLC, Randall Brecker, and Suncoast Room Management Inc.
By: ________
Yuki Nakamura, Esq. Florida Bar No. 0119644