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CIVIL COVER SHEET

Circuit Court of the Seventeenth Judicial Circuit In and for Broward County, Florida

CLERK'S FILING STAMP

Date: ______

Time: ______

Deputy Clerk: ______

Broward County Clerk of Courts

This civil cover sheet is required by Administrative Order and shall be completed and filed at the time of the initial filing of any civil case in the Circuit Court. Failure to file a civil cover sheet may result in the case being placed in suspense until the cover sheet is filed. The information contained herein shall not be used as a substitute for the filing and service of pleadings or other papers as required by law.

SECTION I — CASE INFORMATION

Complex Business Litigation Division:

Yes — This case qualifies for assignment to the Complex Business Litigation Division. The amount in controversy exceeds $75,000 and the matter involves a commercial franchise dispute arising from multiple Franchise License Agreements governing the operation of twenty-two (22) hospitality properties across the State of Florida. The claims encompass breach of contract, fraudulent concealment, civil conspiracy, and declaratory relief, all of which involve complex commercial issues suitable for specialized case management.

(Note: Pursuant to Administrative Order 2019-37-Civ, cases involving business and commercial disputes with amounts in controversy exceeding $75,000, including franchise disputes, may be assigned to the Complex Business Litigation Division upon request or by the Court's own determination.)

SECTION II — PARTY INFORMATION

A. Plaintiff(s). Plaintiff 1:

Counsel for Plaintiff:

B. Defendant(s). Defendant 1:

Defendant 2:

Defendant 3:

SECTION III — TYPE OF CASE / CAUSE OF ACTION

Case Type Category: Circuit Civil

Primary Cause of Action: Breach of Contract

Statutory / Legal Basis: Common law breach of contract under Florida law; additional statutory and common law theories as set forth below.

Nature of Action (check all that apply):

Contract and Indebtedness

Fraud

Declaratory Judgment

Other (Accounting; Civil Conspiracy; Unjust Enrichment)

Negligence

Products Liability

Real Property / Mortgage Foreclosure

Condominium

Eminent Domain

Professional Malpractice

Antitrust / Trade Regulation

Business Governance

Environmental / Toxic Tort

Construction Defect

Mass Tort

Insurance Claims

Other: _____

Causes of Action Alleged (Ten Counts Total):

The Complaint filed contemporaneously herewith sets forth the following ten (10) counts, each arising from and relating to the parties' commercial franchise relationship governed by twenty-two (22) individual Franchise License Agreements (collectively, the "FLA" or "Franchise License Agreements"):

Count I: Breach of Contract — Royalties (FLA § 4.1)

Plaintiff alleges that Defendants Coastal Palms Franchise Holdings LLC failed and refused to pay continuing royalty fees due and owing under Section 4.1 of each of the twenty-two Franchise License Agreements. Section 4.1 requires the franchisee to pay a continuing royalty equal to five percent (5%) of Gross Room Revenue (as defined in FLA § 1.12) on a monthly basis. Plaintiff alleges systematic underpayment through under-reporting of Gross Room Revenue beginning in or about January 2019 and continuing through the date of filing.

Count II: Breach of Contract — Marketing Fund Contributions (FLA § 4.2)

Plaintiff alleges that Defendants Coastal Palms Franchise Holdings LLC failed to remit the required marketing fund contributions as mandated under Section 4.2 of each FLA. Section 4.2 requires monthly contributions equal to two and one-half percent (2.5%) of Gross Room Revenue to the Verimark National Marketing Fund. Plaintiff alleges that Defendant's understatement of Gross Room Revenue resulted in corresponding underpayments to the Marketing Fund.

Count III: Breach of Contract — Technology Fees (FLA § 4.3)

Plaintiff alleges that Defendants Coastal Palms Franchise Holdings LLC failed to pay technology access and integration fees as required under Section 4.3 of each FLA. Section 4.3 mandates payment of a fixed monthly technology fee per guest room, plus variable fees based on reservation system transactions. Plaintiff alleges non-payment and underpayment of such fees across multiple billing periods.

Count IV: Breach of Implied Covenant of Good Faith and Fair Dealing

Plaintiff alleges that Defendants' deliberate scheme to understate Gross Room Revenue and divert operating income through affiliated entities constitutes a breach of the implied covenant of good faith and fair dealing inherent in each FLA. Plaintiff alleges that Defendants' conduct was designed to deprive Plaintiff of the benefits it reasonably expected to receive under the Franchise License Agreements, including the full and accurate payment of all fees, royalties, and contributions.

Count V: Fraudulent Concealment

Plaintiff alleges that Defendants knowingly and intentionally concealed material facts regarding the actual Gross Room Revenue generated at the twenty-two franchised properties, including by maintaining dual sets of accounting records, misclassifying room revenue as non-reportable ancillary income, and channeling room receipts through Defendant Suncoast Room Management Inc. to evade fee calculations. Plaintiff alleges that such concealment was undertaken with the intent to deceive Plaintiff and to induce Plaintiff to accept understated financial reports as accurate.

Count VI: Negligent Misrepresentation

In the alternative to Count V, Plaintiff alleges that Defendants negligently supplied false information to Plaintiff in the form of monthly revenue reports, annual financial statements, and audit responses that materially understated the Gross Room Revenue at the franchised properties. Plaintiff alleges that it justifiably relied on such representations in calculating fees, assessing brand performance, and making business decisions regarding the franchise relationship.

Count VII: Unjust Enrichment (Alternative)

As an alternative theory of recovery, Plaintiff alleges that Defendants Coastal Palms Franchise Holdings LLC and Suncoast Room Management Inc. were unjustly enriched by retaining revenues, fees, and profits properly attributable to Plaintiff under the terms of the franchise relationship. Plaintiff alleges that it would be inequitable and unconscionable for Defendants to retain the benefits conferred upon them by Plaintiff's brand, reservation systems, loyalty programs, marketing efforts, and operational support without making full and accurate payment therefor.

Count VIII: Declaratory Judgment — FLA Termination

Plaintiff seeks a declaratory judgment pursuant to Chapter 86, Florida Statutes, declaring that (a) Defendants' breaches of the Franchise License Agreements constitute material defaults entitling Plaintiff to terminate each of the twenty-two FLAs; (b) Plaintiff is entitled to exercise its termination rights under FLA § 15.1 upon the provision of written notice; and (c) the liquidated damages provisions of FLA § 15.3 are enforceable and applicable upon such termination. This claim presents a bona fide, actual, and present controversy regarding the parties' respective rights and obligations under the FLAs.

Count IX: Accounting

Plaintiff seeks an equitable accounting of all revenues, income, receipts, and financial transactions associated with the operation of the twenty-two franchised properties for the period from January 1, 2019 through the present. Plaintiff alleges that Defendants' books and records are within Defendants' exclusive custody and control, and that Plaintiff is unable to determine the full extent of its damages without a complete and transparent accounting of all financial activity at the properties.

Count X: Civil Conspiracy (Against Randall Brecker and Suncoast Room Management Inc.)

Plaintiff alleges that Defendants Randall Brecker and Suncoast Room Management Inc., acting in concert with Defendant Coastal Palms Franchise Holdings LLC, entered into an agreement and combination to defraud Plaintiff by systematically diverting revenue from the franchised properties through Suncoast Room Management Inc. in order to reduce the Gross Room Revenue reported to Plaintiff, thereby reducing fee obligations owed under the FLAs. Plaintiff alleges that overt acts were committed in furtherance of the conspiracy, resulting in damages to Plaintiff.

SECTION IV — RELATED CASES

Are there any related cases pending in this Court or any other court?

Yes

If yes, provide case number(s) and court(s): N/A

Prior or Pending Cases Involving the Same Parties or Same Subject Matter:

At the time of filing, Plaintiff's counsel has conducted a reasonable inquiry and is not aware of any prior or pending cases in the Circuit Court of the Seventeenth Judicial Circuit, or in any other Florida state or federal court, involving the same parties or the same subject matter as the instant action. Counsel certifies that no duplicative filings have been made.

Related Proceedings:

There are no pending arbitration proceedings, administrative actions, or regulatory proceedings known to Plaintiff's counsel that involve the parties or subject matter of this case as of the date of filing.

SECTION V — AMOUNT IN CONTROVERSY / DAMAGES CLAIMED

Amount in Controversy: $150,000,000.00 (One Hundred Fifty Million Dollars and No Cents)

Basis for Amount in Controversy:

The total amount in controversy is computed as the aggregate of the following categories of damages, each of which is supported by detailed allegations in the Complaint:

1. Underpaid Royalties, Marketing Fund Contributions, and Technology Fees:

The Complaint alleges that, across twenty-two (22) franchised hotel properties and over a period of approximately thirty-eight (38) months (from January 2019 through February 2022), Defendants systematically understated Gross Room Revenue and failed to remit the full amount of royalties under FLA § 4.1, marketing fund contributions under FLA § 4.2, and technology fees under FLA § 4.3. Based upon Plaintiff's analysis of available financial data, industry benchmarking, and preliminary forensic review of property-level revenue records obtained through Plaintiff's limited audit rights under FLA § 6.2, the estimated aggregate shortfall in fee payments across all twenty-two properties is:

$16,095,000.00

2. Contractual Late-Payment Interest:

Pursuant to FLA § 4.7, any amounts not paid when due shall bear interest at the rate of one and one-half percent (1.5%) per month, compounded monthly, from the date such payment was due until the date of actual payment. Applying this contractual interest rate to the estimated underpayments over the relevant time periods for each of the twenty-two properties, the accrued contractual late-payment interest through the date of filing is estimated at:

$28,400,000.00

3. Liquidated Damages Upon Termination (FLA § 15.3):

Pursuant to FLA § 15.3, in the event of termination of a Franchise License Agreement due to franchisee default, the franchisee shall pay to the franchisor, as liquidated damages and not as a penalty, an amount equal to three times (3×) the trailing-twelve-month royalties attributable to the terminated property. This provision applies to each of the twenty-two properties independently. Based upon Plaintiff's calculation of actual (corrected) Gross Room Revenue for the twelve-month period preceding the anticipated termination date, the aggregate liquidated damages across all twenty-two properties is estimated at:

$105,500,000.00

4. Summary of Damages:

The total amount in controversy is stated as approximately $150,000,000.00 for purposes of this Civil Cover Sheet. The actual damages sought may increase or decrease based upon the results of discovery, including the accounting sought in Count IX, and the forensic examination of Defendants' books and records.

Plaintiff further reserves the right to seek prejudgment interest on all amounts awarded, attorneys' fees and costs as provided under FLA § 17.4 (prevailing party fee-shifting provision), and such other and further relief as the Court deems just and equitable.

Jury Trial Demanded:

Yes — Plaintiff demands trial by jury on all issues so triable, as stated in the Complaint.

Injunctive or Declaratory Relief Sought:

Yes — Plaintiff seeks declaratory relief in Count VIII of the Complaint, requesting that the Court enter a declaratory judgment pursuant to Chapter 86, Florida Statutes, determining Plaintiff's right to terminate the twenty-two Franchise License Agreements for material default and confirming the enforceability of the liquidated damages provisions of FLA § 15.3. Plaintiff also seeks an equitable accounting in Count IX.

SECTION VI — VENUE AND JURISDICTION

Basis for Venue in Broward County, Florida:

Venue in Broward County is proper and mandatory pursuant to the exclusive forum selection clause contained in Section 18.1 of each of the twenty-two Franchise License Agreements. Section 18.1 provides, in relevant part:

"Any action or proceeding arising out of or relating to this Agreement, or the breach, termination, or validity thereof, shall be brought exclusively in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida, or the United States District Court for the Southern District of Florida, Fort Lauderdale Division. The parties hereby irrevocably consent to the jurisdiction and venue of such courts and waive any objection based on forum non conveniens or any other basis."

Each of the twenty-two FLAs contains this identical forum selection provision, which was freely negotiated and agreed to by both parties as a material term of the franchise relationship. Accordingly, venue in Broward County is both proper and contractually mandated.

Governing Law:

Section 18.2 of each FLA provides that the Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard to conflicts of law principles. All claims asserted in the Complaint arise under Florida common law and Florida statutory law.

Subject Matter Jurisdiction:

The Circuit Court of the Seventeenth Judicial Circuit has subject matter jurisdiction over this action pursuant to Article V, Section 5(b) of the Florida Constitution and Section 26.012, Florida Statutes, as the amount in controversy exceeds $30,000.00, exclusive of interest, costs, and attorneys' fees.

SECTION VII — CERTIFICATION AND ATTORNEY SIGNATURE

I, the undersigned attorney of record, hereby certify that the information provided on this Civil Cover Sheet is accurate and complete to the best of my knowledge, information, and belief, formed after a reasonable inquiry. I further certify that this Civil Cover Sheet is being filed contemporaneously with the Complaint and Summons in the above-captioned matter.

I understand that the filing of this Civil Cover Sheet does not constitute a waiver of any rights, claims, or defenses, and that the information contained herein is provided for administrative and case management purposes only.

CALDERWOOD & HARKNESS LLP

By: ________

Priya Anand, Esq. Florida Bar No. 0087451 110 SE 6th Street, Suite 2800 Fort Lauderdale, FL 33301 Telephone: (954) 761-3200 Facsimile: (954) 761-3201

Email: panand@calderwoodharkness.com

Secondary Email: litigation-service@calderwoodharkness.com

Counsel for Plaintiff, Verimark Hospitality Group Inc.

Date: March 7, 2022

SECTION VIII — FOR CLERK'S USE ONLY

The section below is reserved for use by the Clerk of the Circuit Court of the Seventeenth Judicial Circuit, Broward County, Florida. This section shall not be completed by the filing party or counsel.

Coastal Palms Franchise Holdings LLC — c/o Garrison Registered Agents LLC, 100 S. Ashley Drive, Suite 600, Tampa, FL 33602

Randall Brecker (individually) — Naples, FL (personal address per service records)

Suncoast Room Management Inc. — Naples, FL (corporate address per Florida Division of Corporations records)

NOTICE: This Civil Cover Sheet and the information contained herein do not replace or supplement the filing and service of pleadings or other papers as required by the Florida Rules of Civil Procedure. The Clerk of Court shall not refuse to accept for filing any pleading or paper solely because of the absence of a civil cover sheet; however, the filing party may be directed to file a cover sheet before the case is processed for assignment.

Administrative Order No. 2019-37-Civ, Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida.

Field	Entry
Case Number:	1021-00006
Judge Assigned:	To be assigned at filing
Date Filed:	March 7, 2022
Division:	Circuit Civil
Field	Entry
Full Legal Name:	Verimark Hospitality Group Inc.
Address:	2400 East Las Olas Boulevard, Suite 3100, Fort Lauderdale, FL 33301
Entity Type:	Corporation
State of Incorporation:	Delaware
Principal Place of Business:	Fort Lauderdale, Florida
Federal Employer ID No.:	On file with counsel
Field	Entry
Law Firm:	Calderwood & Harkness LLP
Attorney of Record:	Priya Anand, Esq.
Florida Bar No.:	0087451
Address:	110 SE 6th Street, Suite 2800, Fort Lauderdale, FL 33301
Telephone:	(954) 761-3200
Facsimile:	(954) 761-3201
Email:	panand@calderwoodharkness.com
Secondary Email:	litigation-service@calderwoodharkness.com
Field	Entry
Full Legal Name:	Coastal Palms Franchise Holdings LLC
Address:	9500 Gulf Shore Drive, Suite 450, Naples, FL 34108
Entity Type:	Limited Liability Company

State of Formation:	Florida
Registered Agent:	Garrison Registered Agents LLC
Registered Agent Address:	100 S. Ashley Drive, Suite 600, Tampa, FL 33602
Capacity:	Primary defendant in all counts (Counts I through X)
Field	Entry
Full Legal Name:	Randall Brecker (individually)
Address:	Naples, FL (personal residential address per service records on file with the Clerk)
Entity Type:	Individual
Capacity:	Individual defendant named in Count X (Civil Conspiracy). Mr. Brecker is alleged to be the managing member and principal of Coastal Palms Franchise Holdings LLC, who personally directed and participated in the tortious conduct giving rise to the civil conspiracy claim.
Field	Entry
Full Legal Name:	Suncoast Room Management Inc.
Address:	Naples, FL (corporate address per Florida Division of Corporations records)
Entity Type:	Corporation
State of Incorporation:	Florida
Capacity:	Defendant in Count VII (Unjust Enrichment — alternative) and Count X (Civil Conspiracy). Suncoast Room Management Inc. is alleged to have been utilized by Defendant Brecker to siphon revenues, management fees, and operational income from properties subject to the Franchise License Agreements in order to circumvent royalty and fee payment obligations owed to Plaintiff.
Category	Estimated Amount
Underpaid Royalties, Marketing Fund Contributions, and Technology Fees	$16,095,000.00
Contractual Late-Payment Interest (FLA § 4.7, 1.5%/month compounded)	$28,400,000.00
Liquidated Damages Upon Termination (FLA § 15.3, 3× trailing royalties, 22 properties)	$105,500,000.00
Total Estimated Amount in Controversy	$149,995,000.00
Clerk's Notation	Entry
Filing Fee Paid:	Yes No
Filing Fee Amount:	$ ____
Method of Payment:	Check Credit Card Cash E-Filing Portal
Receipt No.:	____

Case Assignment / Division:	____
Assigned Judge:	Hon. Richard M. Calloway, Circuit Judge
Complex Business Litigation Division Assignment:	Assigned Not Assigned

Summons Issued To:

Clerk's Notation	Entry
Summons Issuance Confirmed:	Yes No
Date Summons Issued:	____
Process Server Designated:	____
Deputy Clerk Initials:	____
Date Processed:	____

CIVIL COVER SHEET
Circuit Court of the Seventeenth Judicial Circuit In and for Broward County, Florida
CLERK'S FILING STAMP
Date: ______
Time: ______
Deputy Clerk: ______
Broward County Clerk of Courts
This civil cover sheet is required by Administrative Order and shall be completed and filed at the time of the initial filing of any civil case in the Circuit Court. Failure to file a civil cover sheet may result in the case being placed in suspense until the cover sheet is filed. The information contained herein shall not be used as a substitute for the filing and service of pleadings or other papers as required by law.
SECTION I — CASE INFORMATION
Complex Business Litigation Division:
Yes — This case qualifies for assignment to the Complex Business Litigation Division. The amount in controversy exceeds $75,000 and the matter involves a commercial franchise dispute arising from multiple Franchise License Agreements governing the operation of twenty-two (22) hospitality properties across the State of Florida. The claims encompass breach of contract, fraudulent concealment, civil conspiracy, and declaratory relief, all of which involve complex commercial issues suitable for specialized case management.
No
(Note: Pursuant to Administrative Order 2019-37-Civ, cases involving business and commercial disputes with amounts in controversy exceeding $75,000, including franchise disputes, may be assigned to the Complex Business Litigation Division upon request or by the Court's own determination.)
SECTION II — PARTY INFORMATION
A. Plaintiff(s).  Plaintiff 1:
Counsel for Plaintiff:
B. Defendant(s).  Defendant 1:
Defendant 2:
Defendant 3:
SECTION III — TYPE OF CASE / CAUSE OF ACTION
Case Type Category: Circuit Civil
Primary Cause of Action: Breach of Contract
Statutory / Legal Basis: Common law breach of contract under Florida law; additional statutory and common law theories as set forth below.
Nature of Action (check all that apply):
Contract and Indebtedness
Fraud
Declaratory Judgment
Other (Accounting; Civil Conspiracy; Unjust Enrichment)
Negligence
Products Liability
Real Property / Mortgage Foreclosure
Condominium
Eminent Domain
Professional Malpractice
Antitrust / Trade Regulation
Business Governance
Environmental / Toxic Tort
Construction Defect
Mass Tort
Insurance Claims
Other: _____
Causes of Action Alleged (Ten Counts Total):
The Complaint filed contemporaneously herewith sets forth the following ten (10) counts, each arising from and relating to the parties' commercial franchise relationship governed by twenty-two (22) individual Franchise License Agreements (collectively, the "FLA" or "Franchise License Agreements"):
Count I: Breach of Contract — Royalties (FLA § 4.1)
Plaintiff alleges that Defendants Coastal Palms Franchise Holdings LLC failed and refused to pay continuing royalty fees due and owing under Section 4.1 of each of the twenty-two Franchise License Agreements. Section 4.1 requires the franchisee to pay a continuing royalty equal to five percent (5%) of Gross Room Revenue (as defined in FLA § 1.12) on a monthly basis. Plaintiff alleges systematic underpayment through under-reporting of Gross Room Revenue beginning in or about January 2019 and continuing through the date of filing.
Count II: Breach of Contract — Marketing Fund Contributions (FLA § 4.2)
Plaintiff alleges that Defendants Coastal Palms Franchise Holdings LLC failed to remit the required marketing fund contributions as mandated under Section 4.2 of each FLA. Section 4.2 requires monthly contributions equal to two and one-half percent (2.5%) of Gross Room Revenue to the Verimark National Marketing Fund. Plaintiff alleges that Defendant's understatement of Gross Room Revenue resulted in corresponding underpayments to the Marketing Fund.
Count III: Breach of Contract — Technology Fees (FLA § 4.3)
Plaintiff alleges that Defendants Coastal Palms Franchise Holdings LLC failed to pay technology access and integration fees as required under Section 4.3 of each FLA. Section 4.3 mandates payment of a fixed monthly technology fee per guest room, plus variable fees based on reservation system transactions. Plaintiff alleges non-payment and underpayment of such fees across multiple billing periods.
Count IV: Breach of Implied Covenant of Good Faith and Fair Dealing
Plaintiff alleges that Defendants' deliberate scheme to understate Gross Room Revenue and divert operating income through affiliated entities constitutes a breach of the implied covenant of good faith and fair dealing inherent in each FLA. Plaintiff alleges that Defendants' conduct was designed to deprive Plaintiff of the benefits it reasonably expected to receive under the Franchise License Agreements, including the full and accurate payment of all fees, royalties, and contributions.
Count V: Fraudulent Concealment
Plaintiff alleges that Defendants knowingly and intentionally concealed material facts regarding the actual Gross Room Revenue generated at the twenty-two franchised properties, including by maintaining dual sets of accounting records, misclassifying room revenue as non-reportable ancillary income, and channeling room receipts through Defendant Suncoast Room Management Inc. to evade fee calculations. Plaintiff alleges that such concealment was undertaken with the intent to deceive Plaintiff and to induce Plaintiff to accept understated financial reports as accurate.
Count VI: Negligent Misrepresentation
In the alternative to Count V, Plaintiff alleges that Defendants negligently supplied false information to Plaintiff in the form of monthly revenue reports, annual financial statements, and audit responses that materially understated the Gross Room Revenue at the franchised properties. Plaintiff alleges that it justifiably relied on such representations in calculating fees, assessing brand performance, and making business decisions regarding the franchise relationship.
Count VII: Unjust Enrichment (Alternative)
As an alternative theory of recovery, Plaintiff alleges that Defendants Coastal Palms Franchise Holdings LLC and Suncoast Room Management Inc. were unjustly enriched by retaining revenues, fees, and profits properly attributable to Plaintiff under the terms of the franchise relationship. Plaintiff alleges that it would be inequitable and unconscionable for Defendants to retain the benefits conferred upon them by Plaintiff's brand, reservation systems, loyalty programs, marketing efforts, and operational support without making full and accurate payment therefor.
Count VIII: Declaratory Judgment — FLA Termination
Plaintiff seeks a declaratory judgment pursuant to Chapter 86, Florida Statutes, declaring that (a) Defendants' breaches of the Franchise License Agreements constitute material defaults entitling Plaintiff to terminate each of the twenty-two FLAs; (b) Plaintiff is entitled to exercise its termination rights under FLA § 15.1 upon the provision of written notice; and (c) the liquidated damages provisions of FLA § 15.3 are enforceable and applicable upon such termination. This claim presents a bona fide, actual, and present controversy regarding the parties' respective rights and obligations under the FLAs.
Count IX: Accounting
Plaintiff seeks an equitable accounting of all revenues, income, receipts, and financial transactions associated with the operation of the twenty-two franchised properties for the period from January 1, 2019 through the present. Plaintiff alleges that Defendants' books and records are within Defendants' exclusive custody and control, and that Plaintiff is unable to determine the full extent of its damages without a complete and transparent accounting of all financial activity at the properties.
Count X: Civil Conspiracy (Against Randall Brecker and Suncoast Room Management Inc.)
Plaintiff alleges that Defendants Randall Brecker and Suncoast Room Management Inc., acting in concert with Defendant Coastal Palms Franchise Holdings LLC, entered into an agreement and combination to defraud Plaintiff by systematically diverting revenue from the franchised properties through Suncoast Room Management Inc. in order to reduce the Gross Room Revenue reported to Plaintiff, thereby reducing fee obligations owed under the FLAs. Plaintiff alleges that overt acts were committed in furtherance of the conspiracy, resulting in damages to Plaintiff.
SECTION IV — RELATED CASES
Are there any related cases pending in this Court or any other court?
Yes
No
If yes, provide case number(s) and court(s): N/A
Prior or Pending Cases Involving the Same Parties or Same Subject Matter:
At the time of filing, Plaintiff's counsel has conducted a reasonable inquiry and is not aware of any prior or pending cases in the Circuit Court of the Seventeenth Judicial Circuit, or in any other Florida state or federal court, involving the same parties or the same subject matter as the instant action. Counsel certifies that no duplicative filings have been made.
Related Proceedings:
There are no pending arbitration proceedings, administrative actions, or regulatory proceedings known to Plaintiff's counsel that involve the parties or subject matter of this case as of the date of filing.
SECTION V — AMOUNT IN CONTROVERSY / DAMAGES CLAIMED
Amount in Controversy: $150,000,000.00 (One Hundred Fifty Million Dollars and No Cents)
Basis for Amount in Controversy:
The total amount in controversy is computed as the aggregate of the following categories of damages, each of which is supported by detailed allegations in the Complaint:
1.  Underpaid Royalties, Marketing Fund Contributions, and Technology Fees:
The Complaint alleges that, across twenty-two (22) franchised hotel properties and over a period of approximately thirty-eight (38) months (from January 2019 through February 2022), Defendants systematically understated Gross Room Revenue and failed to remit the full amount of royalties under FLA § 4.1, marketing fund contributions under FLA § 4.2, and technology fees under FLA § 4.3. Based upon Plaintiff's analysis of available financial data, industry benchmarking, and preliminary forensic review of property-level revenue records obtained through Plaintiff's limited audit rights under FLA § 6.2, the estimated aggregate shortfall in fee payments across all twenty-two properties is:
$16,095,000.00
2.  Contractual Late-Payment Interest:
Pursuant to FLA § 4.7, any amounts not paid when due shall bear interest at the rate of one and one-half percent (1.5%) per month, compounded monthly, from the date such payment was due until the date of actual payment. Applying this contractual interest rate to the estimated underpayments over the relevant time periods for each of the twenty-two properties, the accrued contractual late-payment interest through the date of filing is estimated at:
$28,400,000.00
3.  Liquidated Damages Upon Termination (FLA § 15.3):
Pursuant to FLA § 15.3, in the event of termination of a Franchise License Agreement due to franchisee default, the franchisee shall pay to the franchisor, as liquidated damages and not as a penalty, an amount equal to three times (3×) the trailing-twelve-month royalties attributable to the terminated property. This provision applies to each of the twenty-two properties independently. Based upon Plaintiff's calculation of actual (corrected) Gross Room Revenue for the twelve-month period preceding the anticipated termination date, the aggregate liquidated damages across all twenty-two properties is estimated at:
$105,500,000.00
4.  Summary of Damages:
The total amount in controversy is stated as approximately $150,000,000.00 for purposes of this Civil Cover Sheet. The actual damages sought may increase or decrease based upon the results of discovery, including the accounting sought in Count IX, and the forensic examination of Defendants' books and records.
Plaintiff further reserves the right to seek prejudgment interest on all amounts awarded, attorneys' fees and costs as provided under FLA § 17.4 (prevailing party fee-shifting provision), and such other and further relief as the Court deems just and equitable.
Jury Trial Demanded:
Yes — Plaintiff demands trial by jury on all issues so triable, as stated in the Complaint.
No
Injunctive or Declaratory Relief Sought:
Yes — Plaintiff seeks declaratory relief in Count VIII of the Complaint, requesting that the Court enter a declaratory judgment pursuant to Chapter 86, Florida Statutes, determining Plaintiff's right to terminate the twenty-two Franchise License Agreements for material default and confirming the enforceability of the liquidated damages provisions of FLA § 15.3. Plaintiff also seeks an equitable accounting in Count IX.
No
SECTION VI — VENUE AND JURISDICTION
Basis for Venue in Broward County, Florida:
Venue in Broward County is proper and mandatory pursuant to the exclusive forum selection clause contained in Section 18.1 of each of the twenty-two Franchise License Agreements. Section 18.1 provides, in relevant part:
"Any action or proceeding arising out of or relating to this Agreement, or the breach, termination, or validity thereof, shall be brought exclusively in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida, or the United States District Court for the Southern District of Florida, Fort Lauderdale Division. The parties hereby irrevocably consent to the jurisdiction and venue of such courts and waive any objection based on forum non conveniens or any other basis."
Each of the twenty-two FLAs contains this identical forum selection provision, which was freely negotiated and agreed to by both parties as a material term of the franchise relationship. Accordingly, venue in Broward County is both proper and contractually mandated.
Governing Law:
Section 18.2 of each FLA provides that the Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard to conflicts of law principles. All claims asserted in the Complaint arise under Florida common law and Florida statutory law.
Subject Matter Jurisdiction:
The Circuit Court of the Seventeenth Judicial Circuit has subject matter jurisdiction over this action pursuant to Article V, Section 5(b) of the Florida Constitution and Section 26.012, Florida Statutes, as the amount in controversy exceeds $30,000.00, exclusive of interest, costs, and attorneys' fees.
SECTION VII — CERTIFICATION AND ATTORNEY SIGNATURE
I, the undersigned attorney of record, hereby certify that the information provided on this Civil Cover Sheet is accurate and complete to the best of my knowledge, information, and belief, formed after a reasonable inquiry. I further certify that this Civil Cover Sheet is being filed contemporaneously with the Complaint and Summons in the above-captioned matter.
I understand that the filing of this Civil Cover Sheet does not constitute a waiver of any rights, claims, or defenses, and that the information contained herein is provided for administrative and case management purposes only.
CALDERWOOD & HARKNESS LLP
By: ________
Priya Anand, Esq. Florida Bar No. 0087451 110 SE 6th Street, Suite 2800 Fort Lauderdale, FL 33301 Telephone: (954) 761-3200 Facsimile: (954) 761-3201
Email: panand@calderwoodharkness.com
Secondary Email: litigation-service@calderwoodharkness.com
Counsel for Plaintiff, Verimark Hospitality Group Inc.
Date: March 7, 2022
SECTION VIII — FOR CLERK'S USE ONLY
The section below is reserved for use by the Clerk of the Circuit Court of the Seventeenth Judicial Circuit, Broward County, Florida. This section shall not be completed by the filing party or counsel.
Coastal Palms Franchise Holdings LLC — c/o Garrison Registered Agents LLC, 100 S. Ashley Drive, Suite 600, Tampa, FL 33602
Randall Brecker (individually) — Naples, FL (personal address per service records)
Suncoast Room Management Inc. — Naples, FL (corporate address per Florida Division of Corporations records)
NOTICE: This Civil Cover Sheet and the information contained herein do not replace or supplement the filing and service of pleadings or other papers as required by the Florida Rules of Civil Procedure. The Clerk of Court shall not refuse to accept for filing any pleading or paper solely because of the absence of a civil cover sheet; however, the filing party may be directed to file a cover sheet before the case is processed for assignment.
Administrative Order No. 2019-37-Civ, Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida.
Field | Entry
Case Number: | 1021-00006
Judge Assigned: | To be assigned at filing
Date Filed: | March 7, 2022
Division: | Circuit Civil
Field | Entry
Full Legal Name: | Verimark Hospitality Group Inc.
Address: | 2400 East Las Olas Boulevard, Suite 3100, Fort Lauderdale, FL 33301
Entity Type: | Corporation
State of Incorporation: | Delaware
Principal Place of Business: | Fort Lauderdale, Florida
Federal Employer ID No.: | On file with counsel
Field | Entry
Law Firm: | Calderwood & Harkness LLP
Attorney of Record: | Priya Anand, Esq.
Florida Bar No.: | 0087451
Address: | 110 SE 6th Street, Suite 2800, Fort Lauderdale, FL 33301
Telephone: | (954) 761-3200
Facsimile: | (954) 761-3201
Email: | panand@calderwoodharkness.com
Secondary Email: | litigation-service@calderwoodharkness.com
Field | Entry
Full Legal Name: | Coastal Palms Franchise Holdings LLC
Address: | 9500 Gulf Shore Drive, Suite 450, Naples, FL 34108
Entity Type: | Limited Liability Company
State of Formation: | Florida
Registered Agent: | Garrison Registered Agents LLC
Registered Agent Address: | 100 S. Ashley Drive, Suite 600, Tampa, FL 33602
Capacity: | Primary defendant in all counts (Counts I through X)
Field | Entry
Full Legal Name: | Randall Brecker (individually)
Address: | Naples, FL (personal residential address per service records on file with the Clerk)
Entity Type: | Individual
Capacity: | Individual defendant named in Count X (Civil Conspiracy). Mr. Brecker is alleged to be the managing member and principal of Coastal Palms Franchise Holdings LLC, who personally directed and participated in the tortious conduct giving rise to the civil conspiracy claim.
Field | Entry
Full Legal Name: | Suncoast Room Management Inc.
Address: | Naples, FL (corporate address per Florida Division of Corporations records)
Entity Type: | Corporation
State of Incorporation: | Florida
Capacity: | Defendant in Count VII (Unjust Enrichment — alternative) and Count X (Civil Conspiracy). Suncoast Room Management Inc. is alleged to have been utilized by Defendant Brecker to siphon revenues, management fees, and operational income from properties subject to the Franchise License Agreements in order to circumvent royalty and fee payment obligations owed to Plaintiff.
Category | Estimated Amount
Underpaid Royalties, Marketing Fund Contributions, and Technology Fees | $16,095,000.00
Contractual Late-Payment Interest (FLA § 4.7, 1.5%/month compounded) | $28,400,000.00
Liquidated Damages Upon Termination (FLA § 15.3, 3× trailing royalties, 22 properties) | $105,500,000.00
Total Estimated Amount in Controversy | $149,995,000.00
Clerk's Notation | Entry
Filing Fee Paid: | Yes  No
Filing Fee Amount: | $ ____
Method of Payment: | Check  Credit Card  Cash  E-Filing Portal
Receipt No.: | ____
Case Assignment / Division: | ____
Assigned Judge: | Hon. Richard M. Calloway, Circuit Judge
Complex Business Litigation Division Assignment: | Assigned  Not Assigned
Summons Issued To:
Clerk's Notation | Entry
Summons Issuance Confirmed: | Yes  No
Date Summons Issued: | ____
Process Server Designated: | ____
Deputy Clerk Initials: | ____
Date Processed: | ____

CIVIL COVER SHEET

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CALDERWOOD & HARKNESS LLP

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