Four Seasons wins hotel dispute

The Miami Herald Posted on Wed, May. 21, 2003 BY CARA BUCKLEY cbuckley@herald.com

Developers of the Four Seasons in Caracas must pay $4.87 million in damages for hacking their way into Four Seasons' computer system, accessing proprietary information and using the hotel company's logo without permission, a U.S. District Court in Miami has ruled.

Judge K. Michael Moore's decision, made last week, ended a tense months-long court battle between the Toronto-based Four Seasons and Consorcio Barr, a company headed by two Venezuelan brothers, Carlos and Lautaro Barrera.

At the heart of the dispute is control of the lush 21-story Four Seasons Caracas, built in the tony Altamira section of Venezuela's capital. Designed by Arquitectonica, and costing the Barreras $120 million, the hotel opened in January 2001 to accolades from the travel press, its status bolstered by being Four Seasons' first hotel in South America.

Almost immediately, though, the developers and Four Seasons began to spar.

The Barreras charged Four Seasons with overspending and mismanagement. Four Seasons countered that the Barreras were not paying their suppliers and, worse, were snooping through their computer files.

The Four Seasons in Caracas is the Barreras' first hotel. They are not connected with the Four Seasons condo/hotel in Miami, which is scheduled to open by the end of this year.

Four Seasons filed suit against Consorcio Barr in Miami in November 2001 and obtained an injunction one month later barring Consorcio Barr from accessing their computers. In December 2001, Four Seasons seized control of the financial management of the hotel. A Venezuela court ruled that financial control be restored to Consorcio Barr. The Four Seasons appealed, and last June stopped taking reservations at the hotel. Some 300 employees walked out in fury, demanding pay and attracting the Venezuelan media. By July, the hotel was empty, and has remained so ever since.

The trial in Miami, which ran from Dec. 16 to Jan. 30, was pitted with tension.

''Everything was contested,'' said Albert Xiques, who represented Four Seasons in the trial along with lawyers Juan Rodriguez and John Carey. ``The parties couldn't agree on the color of the sky.''

The Barreras' Miami lawyer, Eddie Palmer, presented evidence that the Four Season's supposed computer expert witness had fabricated his credentials. Consorcio Barr also accused the hotel management giant with attempting to strong-arm it into acquiescence.

But in his ruling, first reported in the Daily Business Review, Judge Moore said Consorcio Barr had stolen Four Seasons' trade secrets, violated the Computer Fraud and Abuse Act and the Electronic Communications Act, thus obtaining proprietary information, and unlawfully used Four Seasons' logo to rent hotel rooms and sell condo units, which are part of the hotel.

Along with the $4.87 million awarded in damages, Moore ruled that a magistrate judge review the accounting of Consorcio Barr's sales of condo units under Four Seasons' name. Moore also ordered Consorcio Barr to hand over all desktop and laptop computers, compact, floppy and zip disks.

The decision was devastating to the Barreras, who had hoped to line up new management for the hotel. Palmer said his clients would appeal. A spokeswoman for Four Seasons says the hotel company remains committed to managing the luxury resort.

''Our goal,'' Elizabeth Pizzinato, a spokeswoman for Four Seasons, wrote in an e-mail, ``is still that the hotel will be able to resume operation under Four Seasons management on a sound financial basis.''