Court finds against Molinaro Koger v. Host Hotels

The Washington Post reported on Wednesday that former hotel real estate brokerage Molinaro Koger has been ordered by a Montgomery County Court to pay Host Hotels & Resorts a US$22.7 million judgment after the Bethesda, Maryland-based hotel REIT accused the brokerage of fraud.

The decision, issued three days before the case was set to go to trial, stems from a civil lawsuit in which Host accused the brokerage and its president, Robert Koger, of conspiring with the buyers of three Host properties to secretly flip the properties for a US$15 million profit, instead of obtaining the highest sales price for Host.

Koger declined to discuss the case with the Washington Post, but his representative said he plans to appeal the decision.

Host’s general counsel stated, “The decision validates our claims that Molinaro Koger and Robert Koger completely abandoned their fiduciary duty as Host’s broker and engaged in fraudulent schemes against us.”

According to transcripts, the court sided with Host because Koger failed to submit depositions or documents during the discovery phase of the proceedings. Attorneys for Koger argued that delays were caused by the defendant’s decision to change lawyers.

Molinaro Koger brokered 11 deals for Host since 2004, receiving about US$4.4 million in commissions. Three of those deals are at the center of the lawsuit.