Jung, LLC et al v. Sonder USA, Inc.

Filing 27

ORDER AND REASONS: IT IS HEREBY ORDERED that Defendant's 17 Motion to Dismiss Amended Complaint is GRANTED IN PART and DENIED IN PART, as detailed herein. Signed by Chief Judge Nannette Jolivette Brown on December 15, 2023. (mp)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
THE JUNG, LLC, et al.

CIVIL ACTION

VERSUS

CASE NO. 23-692

SONDER USA, INC.

SECTION: “G”(5)
ORDER AND REASONS

Pending before the Court is Defendant Sonder USA, Inc.’s (“Defendant” or “Sonder”)
“Motion to Dismiss Plaintiffs’ Amended Complaint.”1 The Jung, LLC (“Jung”) and The Jung
Master Tenant, LLC (“Master Tenant”) (collectively, “Plaintiffs”) oppose this motion. 2 In the
original petition, Plaintiffs brought claims for alleged breaches of a sublease agreement and
obligations imposed on lessees under Louisiana law.3 Defendant removed the case to this Court.4
Defendant then filed a motion to dismiss.5 This Court granted Plaintiffs leave to amend the
pleadings to cure certain deficiencies.6 Plaintiffs filed an Amended Complaint.7 Defendant then
filed the instant Motion to Dismiss the Amended Complaint.8 The matter came before the Court
for oral argument on August 23, 2023, at 3:00 PM. Considering the motions, the memoranda in
support and in opposition, the record, and the applicable law, the Court grants the motion in part
1

Rec. Doc. 17.

2

Rec. Doc. 20.

3

Rec. Doc. 1-1.

4

Rec. Doc. 1.

5

Rec. Doc. 7.

6

Rec. Doc. 12.

7

Rec. Doc. 16.

8

Rec. Doc. 17.

and denies the motion in part.
I. Background
On January 25, 2023, Plaintiffs filed a Petition for Damages against Defendant in the Civil
District Court for the Parish of Orleans.9 In the Petition, Plaintiffs allege that in 2007, Jung
purchased the Jung Hotel building at 1500 Canal Street in New Orleans (the “Hotel”) and
subsequently spent $155,000,000 for its renovation and restoration.10 On February 24, 2015, Jung
entered a master lease with Master Tenant for the entire Hotel property.11 In 2018, the Hotel
reopened as the Jung Hotel and Residences.12 On August 2, 2018, Master Tenant and Defendant
entered into a Sublease Agreement (“the Sublease”) for a portion of the Hotel consisting of “a total
of (111) residential apartment unit(s) . . . comprising twenty-five (25) two-bedroom and eighty-six
(86) one-bedroom residential apartments” (the “Premises”).13 Generally, the Premises was
comprised of the eighth through the seventeenth floors of the Hotel, “essentially a hotel within a
hotel.”14
Plaintiffs allege that Defendant’s use of the Premises has fallen below the standard
Louisiana law imposes on a prudent administrator.15 For instance, Plaintiffs allege that Defendant
provides its guests with virtually no security, which has resulted in shootings and other violent

9

Rec. Doc. 1-1.

10

Id. at 3–4.

11

Id. at 4.

12

Id.

13

Id.

14

Id.

15

Id. at 6.

crime at the Premises.16 Plaintiffs also allege that Defendant has not maintained the Premises in a
clean and sanitary condition and that Defendant has not otherwise kept the Premises in good order
and repair.17 Plaintiffs bring claims for alleged breach of the sublease and for alleged breach of
Defendant’s obligations under Louisiana law.18
On February 24, 2023, Defendant removed the case to this Court.19 On March 29, 2023,
Defendant filed a motion to dismiss.20 On April 11, 2023, Plaintiffs filed an opposition to the
motion.21 On April 20, 2023, with leave of Court, Defendant filed a reply brief in further support
of the motion.22 On June 20, 2023, this Court denied Defendant’s motion to dismiss, and Plaintiffs
were granted leave of Court to file an amended complaint to cure certain deficiencies identified in
the Order.23 The Court found that Master Tenant had stated a claim against Sonder for alleged
violations of its obligations under Louisiana Civil Code articles 2683(2), 2686, 2688, and 2692.24
However, the Court found that Plaintiffs had not shown that Jung had a claim for breach of these
obligations under Louisiana law.25 The Court also found that Plaintiffs have not stated a claim for
an alleged violation of the contractual provisions of the Sublease.26 Therefore, the Court granted

16

Id. at 7–13.

17

Id. at 19–25.

18

Id.

19

Rec. Doc. 1.

20

Rec. Doc. 7.

21

Rec. Doc. 8.

22

Rec. Doc. 11.

23

Rec. Doc. 12.

24

Id. at 12.

25

Id. at 14.

26

Id.

Plaintiffs leave to amend to clarify these two issues.27
Plaintiffs filed an Amended Complaint on July 5, 2023.28 In the Amended Complaint,
Plaintiffs allege that Defendant caused damage to Master Tenant by: (1) breaching Section 13 of
the Sublease by putting the hotel license for the premises in jeopardy; (2) breaching Section 18 of
the Sublease by failing to maintain the hotel industry AAA Four-Diamond Standard; and (3)
breaching Section 18 of the Sublease by failing to comply with its maintenance obligations. 29 As
to the claims of Jung, the Amended Complaint alleges “diminution in the value of the Hotel from
a development cost of $155,000,000.00 to its current appraised value of $40,000,000.00 and
physical damages and deterioration to the Premises caused by Sonder and its guests.”30
On July 19, 2023, Defendant then filed the instant Motion to Dismiss Plaintiffs’ Amended
Complaint.31 On July 24, 2023, this Court ordered that oral arguments in this matter be set for
August 23, 2023, at 3:00 P.M.32 On August 1, 2023, Plaintiffs filed an opposition to the motion.33
On August 9, 2023, with leave of Court, Defendant filed a reply brief in further support of the
motion.34

27

Id. at 15.

28

Rec. Doc. 16.

29

Id. at 22–30.

30

Id. at 31.

31

Rec. Doc. 17.

32

Rec. Doc. 19.

33

Rec. Doc. 20.

34

Rec. Doc. 23

II. Parties’ Arguments
A.

Defendant’s Arguments in Support of the Motion to Dismiss
Defendant asserts that Plaintiffs’ Amended Complaint should be dismissed since it is

“nearly identical” to the original compliant and Plaintiffs have not cured the deficiencies noted in
the Court’s ruling.35 Defendant then re-urges its arguments from their original motion to dismiss
as follows.
First, Defendant contends that the Amended Complaint is barred by the Sublease’s
limitation of remedies provision.36 It is Defendant’s position that the only available remedies are
termination of the Sublease or payment of past due rent.37 Thus, Defendant asserts that Plaintiffs’
requests for “damages and specific performance” are barred by the language of the Sublease.38
Second, Defendant contends that the Amended Complaint fails to plead a plausible claim
for breach of contract.39 Defendant states that this Court held that neither Jung nor Master Tenant
had pleaded viable claims for breach of any provision of the Sublease.40 Defendant avers that the
Amended Complaint is nothing more than a regurgitation of the same allegations set forth in the
original complaint and the deficiencies have not been cured.41 Thus, Defendant contends that all
claims for breach of sublease by both Jung and Master Tenant should be dismissed.42

35

Rec. Doc. 17 at 1.

36

Rec. Doc. 17-1 at 6.

37

Id. at 7.

38

Id.

39

Id. at 9.

40

Id. at 10.

41

Id.

42

Id.

Third, Defendant states that the Amended Complaint “does not plausibly plead that Sonder
undertook any obligation that was breached regarding hotel licensure.”43 Defendant contends that
the Amended Complaint does not give any reason to believe its hotel license is in jeopardy or any
action that has been taken against the hotel license.44 Further, Defendant argues that the licensure
of businesses in the City of New Orleans is governed by the Code of Ordinances for the City of
New Orleans and not the Louisiana Revised Statutes as cited by Plaintiffs.45 Defendant also points
out that The Jung Hotel’s license has been renewed multiple times since the incidents described in
the Amended Complaint.46 As such, the Defendant asserts that Plaintiffs have failed to plausibly
plead that Defendant breached any obligations regarding hotel licensure.
Fourth, Defendant asserts that the Amended Complaint “does not plausibly plead that
Sonder undertook any obligation that was breached regarded security.”47 Defendant contends that
there is nothing in the Sublease that imposes obligations as it relates to security.48 Additionally,
Defendant avers that the common areas, including hallways and elevators, are solely the
responsibility of Master Tenant.49 As such, Defendant contends that the Amended Complaint fails
to plead a viable claim under the Sublease with respect to security issues.50
Fifth, Defendant asserts that the Amended Complaint “does not plausibly plead that Sonder

43

Id.

44

Id.

45

Id. at 11.

46

Id.

47

Id. at 12.

48

Id. at 13.

49

Id.

50

Id. at 15.

undertook any obligation that was breached regarding ‘dirty rooms.’”51 Defendant restates that
there hasn’t been proof of any action taken against Jung’s hotel licensure, and that Plaintiffs
incorrectly rely on the Louisiana Revised Statutes.52
Sixth, Defendant contends that the Amended Complaint “does not plausibly plead that
Sonder undertook and breached any Sublease obligations regarding ‘AAA Four-Diamond
Standards.’”53 Defendant alleges that the AAA Four-Diamond Standard was contemplated to only
apply to repair and maintenance obligations.54 Defendant contends that the Sublease did not
require that it comply with all aspects of the AAA Four-Diamond Standard.55 As such, Defendant
avers that the Plaintiff’s allegations regarding the AAA Four-Diamond Standard are not plausible
claims.56
Seventh, Defendant contends that the Amended Complaint “does not plausibly plead that
Sonder undertook any maintenance obligations that were breached.”57 Defendant asserts that the
Amended Complaint never alleges when the complaints regarding damages were made, who made
them, whether they were addressed, or whether there are currently unrepaired damages to the
Premises.58 As such, Defendant contends that the pleading deficiencies remain fatal to this claim.59
Eighth, Defendant argues that the Sublease controls the relationship between Sonder and
51

Id.

52

Id.

53

Id. at 16.

54

Id.

55

Id.

56

Id.

57

Id. at 17.

58

Id.

59

Id.

Master Tenant and there were no gaps in it.60 Defendant alleges that Plaintiffs are attempting to
rewrite the sublease using codal articles.61 Defendant contends that the Sublease addresses the
rights and obligations of the parties, and the “prudent administrator” provisions of the Louisiana
Civil Code cannot be a basis to impose additional obligations.62
Lastly, Defendant contends that all claims by Jung must be dismissed for lack of
contractual privity.63 Defendant states that Jung was not a party to the Sublease and does not have
any rights under the Sublease.64 As such, all of Jung’s claims for damages, including its claim tied
to the alleged decrease in value to the property, should be dismissed.65
B.

Plaintiffs’ Arguments in Opposition to the Motion to Dismiss
In opposition, Plaintiffs asserts that this Court has already found that they stated a cause of

action in their original pleadings.66 Plaintiffs maintain that they have cured all issues noted in the
Court’s Order and Reasons.67 Plaintiffs contend that Defendant continues to make the same
arguments, and that the motion to dismiss is in effect a motion to reconsider.68 Plaintiffs also state
that Jung’s claims against Defendant are delictual in nature.69 Thus, Plaintiffs assert that they have
adequately alleged the elements of claims for Defendant’s breach of its obligations under

60

Id. at 20.

61

Id.

62

Id.

63

Id. at 23.

64

Id.

65

Id.

66

Rec. Doc. 20 at 1.

67

Id. at 2.

68

Id. at 6.

69

Id. at 8.

Louisiana law and the Sublease at issue, and the motion to dismiss should be denied.70
C.

Defendant’s Arguments in Further Support of the Motion to Dismiss
In further support of the Motion to Dismiss, Defendant asserts that the Amended Complaint

fails to state a cause of action for breach of the Sublease or under the Louisiana Civil Code in favor
of Jung.71 Sonder asserts that any tort claim must be dismissed because it is not alleged in the
Amended Complaint and because Jung has not plead any specific facts showing that it has a
plausible claim for tort-based relief.72 As such, Defendant contends that all claims by Jung should
be dismissed.73
Defendant re-urges that Master Tenant has failed to plead a plausible claim for breach of
the written Sublease, has not adequately pleaded jeopardy of hotel licensure, and that Plaintiffs
cannot use the Civil Code to rewrite the Sublease.74 Defendant also asserts that Plaintiffs’ remedies
are limited to those set out in the Sublease, namely termination of the Sublease or past due rent.75
III. Legal Standard
Federal Rule of Civil Procedure 12(b)(6) provides that an action may be dismissed for
“failure to state a claim upon which relief can be granted.”76 A motion to dismiss for failure to
state a claim is “viewed with disfavor and is rarely granted.”77 “To survive a motion to dismiss, a

70

Id. at 9.

71

Rec. Doc. 23 at 1–5.

72

Id. at 3–4.

73

Id.

74

Id. at 5.

75

Id. at 10.

76

Fed. R. Civ. P. 12(b)(6).

77

Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982).

complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’”78 “Factual allegations must be enough to raise a right to relief above the
speculative level.”79 A claim is facially plausible when the plaintiff has pleaded facts that allow
the court to “draw the reasonable inference that the defendant is liable for the misconduct
alleged.”80
On a motion to dismiss, asserted claims are liberally construed in favor of the claimant,
and all facts pleaded are taken as true.81 However, although required to accept all “well-pleaded
facts” as true, a court is not required to accept legal conclusions as true.82 “While legal conclusions
can provide the framework of a complaint, they must be supported by factual allegations.”83
Similarly, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements” will not suffice.84 The complaint need not contain detailed factual allegations, but it
must offer more than mere labels, legal conclusions, or formulaic recitations of the elements of a
cause of action.85 That is, the complaint must offer more than an “unadorned, the-defendantunlawfully-harmed-me accusation.”86 From the face of the complaint, there must be enough factual
matter to raise a reasonable expectation that discovery will reveal evidence as to each element of

78

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

79

Twombly, 550 U.S. at 555.

80

Iqbal, 556 U.S. at 663 (citing Twombly, 550 U.S. at 556).

(2007)).

81

Leatherman v. Tarrant Cnty. Narcotics Intel. & Coordination Unit, 507 U.S. 163, 164 (1993); see also
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322–23 (2007).
82

Iqbal, 556 U.S. at 678–79.

83

Id. at 679.

84

Id. at 678.

85

Id.

86

Id.

the asserted claims.87 If factual allegations are insufficient to raise a right to relief above the
speculative level, or if it is apparent from the face of the complaint that there is an “insuperable”
bar to relief, the claim must be dismissed.88
IV. Analysis
A.

Whether Jung Has Stated a Claim Upon Which Relief Can Be Granted
In analyzing the original petition and the first motion to dismiss, this Court found that Jung

had “not stated a claim against Sonder under Louisiana Civil Code articles 2638(2), 2686, 2688,
and 2692,”89 since Jung was not a sublessor under the instant Sublease. As it was unclear to the
Court what claims Jung was attempting to bring, Plaintiffs were granted leave to file an Amended
Complaint to clarify this issue.90 In the Amended Complaint, Plaintiffs allege that Sonder’s lack
of control or oversight over the Premises caused Plaintiffs to lose out on a lucrative business
opportunity which in turn would have increased Master Tenant’s profits and increased the value
of the Jung Hotel.91 Plaintiffs further contend that Jung’s damages include, but are not limited to,
diminution in the value of the Hotel from a development cost of $155,000,000.00 to its current
appraised value of $40,000,000.00, and physical damages and deterioration to the Premises caused
by Sonder and its guests.92
In opposition to the instant motion, Jung clarifies that its claims against Sonder are delictual

87

Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 257 (5th Cir. 2009).

88

Carbe v. Lappin, 492 F.3d 325, 328 n.9 (5th Cir. 2007); Moore v. Metro. Hum. Serv. Dist., No. 09-6470,
2010 WL 1462224, at * 2 (E.D. La. Apr. 8, 2010) (Vance, J.) (citing Jones v. Bock, 549 U.S. 199, 215 (2007)).
89

Rec. Doc. 12 at 14.

90

Id.

91

Rec. Doc. 16 at 19.

92

Id. at 31.

in nature, rather than contractual.93 In reply, Sonder asserts that any such claim must be dismissed
because it is not alleged in the Amended Complaint and because Jung has not plead any specific
facts showing that it has a plausible claim for tort-based relief.94
The Federal Rules of Civil Procedure impose a requirement of “notice pleading,” meaning
that a defendant must be given notice of the specific claims against it.95 Although this notice does
not require pleading specific facts, the complaint must “give the defendant fair notice of what the
. . . claim is and the grounds upon which it rests.”96 “Where the complaint is devoid of facts that
would put the defendant on notice as to what conduct supports the claims, the complaint fails to
satisfy the requirement of notice pleading.”97
Jung’s claims against Sonder meet these requirements. Jung alleges that Sonder’s lack of
control and/or oversight over the Premises caused Plaintiffs to lose out on a lucrative business
opportunity which in turn would have increased the value of the Jung Hotel.98 Plaintiffs further
contend that Jung’s damages include, but are not limited to, diminution in the value of the Hotel
from a development cost of $155,000,000.00 to its current appraised value of $40,000,000.00, and
physical damages and deterioration to the Premises caused by Sonder and its guests.99
Sonder also argues that Plaintiffs have failed to identify “a specific legal duty or standard

93

Rec. Doc, 20 at 8.

94

Rec. Doc, 24 at 3–4.

See Fed. R. Civ. P. 8(a)(2) (“A pleading that states a claim for relief must contain a short and plain statement
of the claim showing that the pleader is entitled to relief”).
95

96

Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

97

Anderson v. U.S. Dep’t of Hous. & Urb. Dev., 554 F.3d 525, 528 (5th Cir. 2008) (citing Beanal v. Freeport–
McMoran, Inc., 197 F.3d 161, 165–66 (5th Cir. 1999)).
98

Rec. Doc. 16 at 19.

99

Id. at 31.

of care breached by Sonder.”100 “While Louisiana law does impose a ‘universal duty’ on
defendants in a negligence action to use ‘reasonable care,’ plaintiffs are still required to assert a
‘specific standard’ of care.”101 “The inquiry is whether the plaintiff has any law (statutory,
jurisprudential, or arising from general principles of fault) to support the claim that the defendant
owed him a duty.”102 Jung cites Louisiana Civil Code article 2317.1, which imposes a duty on a
custodian of a building to keep it free from vices or defects. To establish negligence under Article
2317.1, the plaintiff must prove the following: “(1) that the defendant knew or should have known
of the vice or defect; (2) that the damage could have been prevented by the exercise of reasonable
care; and (3) that the defendant failed to exercise reasonable care.”103 Jung alleges that Sonder had
a lack of control or oversight over the Premises, which allegedly caused damage to Jung. 104 Jung
alleges that it informed Sonder of these alleged defects, but that Sonder failed to take any steps to
prevent these issues.105
In a motion to dismiss, the sole question is whether the complaint states a claim on which
relief can be granted.106 Jung has clearly provided “grounds” for its “entitlement to relief.”107 As
such, Jung has stated a claim upon which relief can be granted.

100

Rec. Doc. 23 at 5.

101

Butler v. Denka Performance Elastomer, L.L.C., 16 F.4th 427, 445 (5th Cir. 2021) (quoting Lemann v.
Essen Lane Daiquiris, Inc., 2005-1095 (La. 3/10/06), 923 So. 2d 627, 633).
102

Lemann, 923 So. 2d at 633.

103

Johnson v. Mike Anderson’s Seafood, Inc., 2013-0379 (La. App. 4 Cir. 6/11/14), 144 So. 3d 125, 134,
writ denied, 2014-1459 (La. 10/10/14), 151 So. 3d 586
104

Rec. Doc. 16 at 5, 19.

105

Id. at 19–20.

106

Columbia Broadcasting System v. U.S., 316 U.S. 407 (1942).

107

Twombly, 550 U.S. at 545.

B.

Whether Master Tenant Has Stated a Claim Upon Which Relief Can Be Granted
1. Claims Asserted Pursuant to Obligations Under Louisiana Civil Code
In analyzing the original petition and the first motion to dismiss, this Court found that

“Master Tenant has stated a claim against Sonder for alleged violation of its obligations under
Louisiana Civil Code articles 2683(2), 2686, 2688, and 2692.”108 The Amended Complaint reurges the same claims under the aforementioned Civil Code articles. As such, Master Tenant has
stated a claim against Defendant for alleged violation of its obligations under Louisiana Civil Code
articles 2683(2), 2686, and 2692 in the Amended Complaint.
Defendant re-urges its argument that the Civil Code articles do not apply in this case since
the Sublease controls the relationship between Sonder and Master Tenant and there were no gaps
in it.109 However, the Court already addressed this issue in its prior order. “If the parties do not
specify in the lease to the contrary, the general law of lease in the Civil Code will supply that
implied right or obligation.”110 The Court further held that basic obligations of a lessee are not
overridden by the provisions of the Sublease.111 Nothing in the Sublease suggests that these
obligations were waived. Indeed, the Sublease recognizes that Louisiana law governs “matters for
which this lease does not provide.”112
In oral argument, Defendant also re-urged its argument that the only available remedies are
termination of the Sublease or payment of past due rent. Defendant cites Rhodes v. Congregation

108

Rec. Doc. 12 at 12.

109

Id. at 20.

110

2 La. Prac. Real Est. § 18:19, Implied rights and obligations (2d ed. 2022).

111

Rec. Doc. 12 at 11.

112

Rec. Doc. 16-1 at 8.

of St. Francis113 to support this position. There, the Louisiana First Circuit Court of Appeal stated
that “[a] party may, under some circumstances, legally contract against liability for his own
negligence or for a limitation on recoverable damages, but such an agreement must clearly indicate
the intention of the parties.”114
Section 29 of the Sublease is titled “Default by Lessee.” That section provides that Sonder
will be in default under the Sublease if it: (1) fails to pay rent; (2) fails to comply with any other
provision of the Sublease and the failure continues more than 30 days after receipt of written notice
of such failure; or (3) becomes insolvent or files for bankruptcy.115 “If Sublessee is in default under
this Section 29, Sublessor may, as its sole and exclusive remedy, cancel and terminate the Lease
upon written notice to Sublessee and proceed for all past due Rent owed by Sublessee as of the
date of such termination.”116 The claims brought against Defendant include alleged violations of
Louisiana law. The language is clear that the exclusive remedy only applies to defaults under the
Sublease. As such, Defendant’s argument is unavailing as the Sublease does not clearly indicate
an intention of the parties to waive a claim for damages for alleged violations of obligations
imposed on lessees under Louisiana law.

113

Rhodes v. Congregation of St. Francis De Sales Roman Cath. Church, 476 So. 2d 461 (La. App. 1 Cir.

1985).
114

Id. (citing La. Civ. Code art. 11; Elephant, Inc. v. Hartford Accident & Indemnity Co., 239 So.2d 692
(La.App. 1st Cir.1970).
115

Rec. Doc. 16-1 at 9.

116

Id.

2. Claims Asserted Pursuant to Breach of Sublease
Defendant also argues that Plaintiffs have not alleged a breach of the Sublease. Plaintiffs
assert that Defendant has breached Section 13 of the Sublease.117 Section 13 provides that the
“Sublessee agrees that it will not commit any act or omission which would jeopardize or result in
the suspension, expiration, or termination of the Hotel License.”118 Plaintiffs contend that dirty
linens and unkempt hotel rooms and bathrooms violate Louisiana Revised Statute § 21:1(A)119 and
§ 21:3(A),120 and thus put Plaintiffs at jeopardy of losing the hotel license.121 Defendant argues
that the Louisiana Revised Statutes are irrelevant to the revocation of the hotel license and that the
hotel license has been renewed multiple times.122 In any event, only the sufficiency of the pleading
is at issue.123 Furthermore, Section 13 does not require that the hotel license actually be revoked,
only that it be put in jeopardy. The Amended Complaint clearly states “well-pleaded facts”124
which shows a “legally cognizable claim”125 for an alleged breach of Section 13. Plaintiffs allege
specific facts such as “toenails in the bed sheets,” “bloody linen,” “splattered bathroom walls,”
“sticky stains,” and “dirt, hair, and other filth,” which they assert could jeopardize their hotel

117

Rec. Doc. 16 at 22.

118

Rec. Doc. 16-1 at 3.

119
“Every hotel…shall furnish clean and fresh bed linens, unused by any other person since the last
laundering thereof, on all beds assigned to the use of any guest or patron…”

“Every keeper, manager, or person in charge of the conduct of any hotel…shall keep the closets,
bathrooms, and toilet facilities provided for the use of its guests and patrons cleaned and maintained in sanitary
condition.”
120

121

Rec. Doc. 16 at 22.

122

Rec. Doc. 17-1 at 11.

123

Twombly, 550 U.S. at 544 (emphasis added).

124

Id.

125

Id.

license.126 On a motion to dismiss, these facts must be accepted as true.127 As such, Master Tenant
has stated a claim on which relief can be granted for alleged breach of Section 13 of the Sublease.
Next, Plaintiffs assert that Defendant has breached Section 18 of the Sublease.128 Section 18
provides that, “In all respects regarding repairs and maintenance of the Property and Premises, the
parties mutually commit themselves to maintain the hotel industry AAA Four-Diamond
Standard.”129 Section 18 also provides that:
Sublessee, at Sublessee’s expense, shall maintain and keep in good condition the
nonstructural interior cosmetic components, appliances, and consumables
including but not limited to filters and light bulbs in the Premises that do not
constitute Sublessor’s Repairs and immediately repair all damage to the Premises
caused by the fault or negligence of Sublessee of the Sublessee Parties of damage
that, due to the anticipated short-term rentals, exceeds the wear and tear attributable
to normal single-tenant residential apartment use.130
Plaintiffs claim that Defendant has breached its maintenance and repair obligations under
the Sublease.131 Plaintiffs then refer to a guest complaint which states that the rooms are “in
disrepair” and that there are “holes punched in the walls.”132 Defendant states that it is unclear
when or where these complaints were made, or whether they have since been repaired by
Defendant.133 However, a motion made under Rule 12(b)(6) challenges the legal theory of the
complaint, not the sufficiency of any evidence.134 All in all, Master Tenant has alleged sufficient

126

Rec. Doc. 16 at 22–24.

127

Iqbal, 556 U.S. at 662.

128

Rec. Doc. 16 at 25.

129

Rec. Doc. 16-1 at 7.

130

Id. at 6.

131

Rec. Doc. 16 at 29.

132

Id.

133

Rec. Doc. 17-1 at 17.

134

Advanced Cardiovascular Systems, Inc. v. Scimed Life Systems, Inc., 988 F.2d 1157, 1160, 26

facts under a breach of Section 18 of the Sublease.
For these reasons, the Court concludes that Master Tenant has stated a claim for alleged
breaches of Sections 13 and 18 of the Sublease. However, the Sublease contains a limitation of
remedies provision for alleged violations of provisions of the Sublease. Section 29 provides that
Sonder will be in default under the Sublease if it: (1) fails to pay rent; (2) fails to comply with any
other provision of the Sublease and the failure continues more than 30 days after receipt of written
notice of such failure; or (3) becomes insolvent or files for bankruptcy.135 “If Sublessee is in default
under this Section 29, Sublessor may, as its sole and exclusive remedy, cancel and terminate the
Lease upon written notice to Sublessee and proceed for all past due Rent owed by Sublessee as of
the date of such termination.”136 This section clearly indicates the parties intent to limit damages
for alleged violations of any “provision of the Sublease.”137 Therefore, Master Tenant’s request
for damages for alleged violations of Sections 13 and 18 of the Sublease is barred by the limitation
of remedies provision.

U.S.P.Q.2d 1038 (Fed. Cir. 1993).
135

Rec. Doc. 16-1 at 9.

136

Id.

137

Id.

V. Conclusion
For the reasons discussed above, the Court finds that Plaintiffs’ Amended Complaint has
stated a claim upon which relief can be granted. Accordingly,
IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss Amended Complaint138
is GRANTED IN PART and DENIED IN PART. The motion is GRANTED to the extent that
any request for damages for alleged violations of Sections 13 and 18 of the Sublease is barred by
the limitation of remedies provision. The motion is DENIED in all other respects.
NEW ORLEANS, LOUISIANA, this _____
15th day of November, 2023.

_________________________________
NANNETTE JOLIVETTE BROWN
CHIEF JUDGE
UNITED STATES DISTRICT COURT

138

Rec. Doc. 17.