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DDK Hotels LLC v. Williams-Sonoma Inc.

Agreements Did Not Bind Williams-Sonoma as a Joint Venturer in Hotel Project With West Elm

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MEMORANDUM AND ORDER Plaintiffs DDK Hotels, LLC (“DDK Hotels”), DDK/WE Hospitality Partners, LLC (“DDK Hospitality”), and DDK/WE Hotels Management, LLC (“DDK Management”) (collectively, “Plaintiffs”) bring this action against defendants Williams-Sonoma, Inc. (“Williams-Sonoma”) and Williams-Sonoma Stores, Inc. (“West Elm”) (collectively, “Defendants”) for breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and unjust enrichment. Defendants move to dismiss the complaint under Rules 12(b)(1), 12(b)(6), and 12(b)(7) of the Federal Rules of Civil Procedure. For the reasons that follow, their motions are GRANTED IN PART and DENIED IN PART. BACKGROUND This case arises from a business venture gone awry. In 2015, West Elm began developing a chain of hotels to complement its retail business in home furnishings. (Am. Compl. 10). As part of that strategy, West Elm’s President, James Brett, sought a joint venture partner with expertise in hotel management. (Id.). West Elm’s parent company and the owner of the West Elm trademark, Williams-Sonoma, assisted in the search. (Id.

6, 9-10). Among the candidates was DDK Hotels, a hospitality company managed by Kimberly Phoebus, David Bowd, and David Wasserman. (Id.

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