Welcome

Winston & Strawn Sees Suit Against Sports Arena Developer Tossed

July 20, 2021, 1:23 AM

Winston & Strawn LLP lost its bid to force developer Mid-Atlantic Arena LLC to cover the cost of legal fees for a failed sports arena project Monday when a federal court in New York dismissed breach of contract and unjust enrichment claims.

The law firm represented JPMorgan Chase in loan arrangements for the construction of an 18,000 seat sports arena in Virginia Beach, Va. The bank loaned $150 million for the project, and as part of the credit agreement, Mid-Atlantic agreed to pay the attorneys fees accrued by JPMorgan during the transaction.

Virginia Beach ultimately didn’t approve the loan documents, and the development project fell through. The Virginia Supreme Court tossed a breach of contract suit filed against the city by Mid-Atlantic.

Winston & Strawn sued Mid-Atlantic in the U.S. District Court for the Southern District of New York, seeking $833,790 for nearly one-thousand hours of legal services.

The firm wasn’t a party to the credit agreement, and wasn’t an intended beneficiary, Judge Colleen McMahon wrote for the court. And there’s no indication in the agreement that Winston could receive payment directly from Mid-Atlantic, or that it had any right to sue Mid-Atlantic for payment.

An unjust enrichment claim must also be dismissed, McMahon said, because Winston & Strawn failed to allege the firm conferred any benefit on Mid-Atlantic. It wasn’t counsel to them, and didn’t provide any legal services except those that benefited JPMorgan, McMahon said.

McMahon also dismissed a claim for tortious interference with contract against ESG Enterprises, Inc. Mid-Atlantic’s parent company. There was nothing between Winston & Strawn and Mid Atlantic in which ESG could interfere, McMahon wrote.

Pierce McCoy PLLC and Wolcott Rivers Gates represent Mid Atlantic and ESG.

The case is Winston Strawn LLP v. Mid-Atlantic Arena LLC, 2021 BL 270114, S.D.N.Y., No. 18-CV-11430, 7/19/21.

To contact the reporter on this story: Maeve Allsup in San Francisco at mallsup@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com

To read more articles log in.

Learn more about a Bloomberg Law subscription.