GALVESTON — A jury on Friday rendered a verdict in a Hurricane Ike-related lawsuit and awarded Landry’s Restaurants $250,313 plus attorney’s fees after finding the operators of the now-demolished Flagship Hotel breached its lease, court documents state.

Landry’s, however, is to pay a $3 million lease-termination fee to The Flagship Hotel, according to the record of Galveston’s 405th District Court.

When Hurricane Ike made landfall Sept. 13, 2008, it caused widespread flooding and damaged much of the Upper Texas Coast. The storm surge destroyed the hotel’s driveway, which connected the seawall to the 25th Street pier, on which hotel was built.

On Dec. 30, 2008, Landry’s sued the Flagship, which was operated by Daniel Yeh, head of The Flagship Hotel Lt., alleging breach of contract and accusing The Flagship of failing to have enough insurance.

The hotel was insured for $3 million, but Judge Michelle Slaughter found the Flagship breached its lease by not having enough insurance. The jury ruled $4 million would have been reasonably obtainable.

The jury, after deliberating a little more than six on Thursday and Friday, ruled that The Flagship should pay $250,313 to Landry’s as compensation for the hotel’s failure to comply with the lease agreement, court document’s state.

The jury also found that the hotel’s failure to pay rent after the hurricane was excused because the hotel was constructively evicted, the jury verdict states.

The parties are expected to return to court for a hearing on the amount of attorneys’ fees. The court had not set a date for the hearing Friday.

The city of Galveston built the hotel in 1963. It was demolished in 2011 to make way for the Galveston Island Historic Pleasure Pier.

Contact reporter Chris Paschenko at 409-683-5241 or chris.paschenko@galvnews.com.

(1) comment

J. Shaffer

It's funny/sad that we can hold a hotel liable for having only $2 mil in insurance but the fertilizer plant in West had only $1 mil in insurance.

It's shameful that no one in Austin seems to want to hold THAT company responsible.

I have to say, the Pleasure Pier is prettier at night than the hotel ever was, mermaids and all.

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