Host Marriott, contractors settle suit for $70 million 1984 lawsuit prompted by construction delays

Hospitality

October 11, 1997|By Sean Somerville | Sean Somerville,SUN STAFF

Host Marriott Corp. of Bethesda said yesterday that it had reached a $70 million settlement in a 13-year-old lawsuit against contractors who built the Marriott Marquis Hotel in New York City.

The hotel's general contractor, Morse-Diesel Inc., filed suit against Trinity Industries Inc., of Dallas, and other subcontractors in 1984. The general contractor complained about delays in construction of the hotel's steel structure. The hotel was completed in 1985.

To settle the suit, the defendants paid $70 million, most of which will go to Times Square Marquis Hotel LP, an affiliate of Host Marriott.

"We are extremely pleased to have this lawsuit settled on terms so favorable," said Christopher G. Townsend, senior vice president and general counsel of Host Marriott.

The complicated litigation took a decade to come to trial in federal court in New York. In 1995, Morse-Diesel won a jury verdict, which later was overturned on appeal. The company won a second verdict in 1996. That verdict was under appeal when the two sides settled.

"After 13 years of litigation and two verdicts in the plaintiffs' favor, the settlement justifies the many years and effort which went into the lawsuit," Townsend said.

In a separate announcement, Host Marriott also said it has added 419 units to the senior-living communities it obtained with the acquisition of the Forum Group Inc. last summer.

The company now expects to exceed its goal of completing 500 expansion units by the end of the year.

Pub Date: 10/11/97

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