govinfo:USCOURTS-njd-2_23-cv-03169-3

UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY 
DAYS INNS WORLDWIDE, INC. and 
WYNDHAM HOTELS & RESORTS, INC., 
Plaintiffs, 
V. 
ASH MANAGEMENT CORPORATION and 
MOHAMMAD ASHRAF, 
Defendants. 
* 
No. 23-cv-3169 (MEF) (JRA) 
OPINION and ORDER 
* * 
For the purposes of this brief Opinion and Order, the Court 
largely assumes familiarity with the facts and procedural 
history of this case. 
* * * 
In 2003, one entity 1 and another entity 2 signed an agreement. 
See Statement of Undisputed Material Facts ("Defendants' SOMF") 
(ECF 72-1) 1 4; Wyndham Plaintiffs' Response to the Ash 
Defendants' Statement of Undisputed Material Facts in Support of 
Summary Judgment ("Plaintiffs' SOMF") (ECF 82-3) 1 4; see also 
Motion for Summary Judgment, Exhibit G ("License Agreement") 
(ECF 72-4) . 
It was labeled a License Agreement. See License Agreement at 1. 
One of the parties to the License Agreement (Days Inns 
Worldwide, Inc.) was apparently the licensor, see id. at 1, 20, 
so it is referred to from here as "the Licensor." The other 
party (Ash Management Corporation) was apparently the licensee, 
1 
2 
Days Inns Worldwide, Inc. 
Ash Management Corporation. PageID:
<pageID>
see id. at 1, 3, 5, 7, 9, 20, 23, so it is called "the 
Licensee." 
Under the License Agreement, the Licensee was to run a hotel. 
See Complaint 1 9, Days Inns Worldwide, Inc. v. Ash Mgmt. Corp. 
(D.N.J. June 27, 2023) (No. 23-3472) (ECF 1); Defendants' Answer 
and Affirmative Defenses to Plaintiffs' Complaint 1 9, Days Inns 
Worldwide, Inc. v. Ash Mgmt. Corp. (D.N.J. Nov. 13, 2023) (No. 
23-3472) (ECF 11). 
Around 20 years after the License Agreement was inked, the 
apparent parent company 3 of the Licensor was sued 
time as to alleged sex-trafficking at the hotel. 
Defendants' SOMF 11 1-3; Plaintiffs' SOMF 11 1-3. 
* * * 
--- twice, 
See 
each 
In light of the above, this lawsuit was filed by (i) the 
apparent parent company ("the Licensor's Parent Company") and 
(ii) the Licensor. They are together called "the Plaintiffs." 
The Plaintiffs sued (i) the Licensee-hotel operator, 4 plus (ii) 
an individual. 5 They are together called "the Defendants." 
The gist of the Plaintiffs' claim: under the License Agreement, 
the Defendants are required to make indemnification payments for 
attorneys' fees and costs associated with the sex-trafficking 
lawsuits. See Complaint 11 9-23. 
The Defendants have now moved for summary judgment, contending 
that they do not have to cover the fees and costs. See 
Defendants Ash Management Corporation and Mohammad Ashraf's 
Memorandum of Law in Support of their Motion for Summary 
Judgment ("Defendants' Brief") (ECF 7 2) at 1. 
The motion is denied. 
* * 
3 Wyndham Hotels & Resorts, Inc. 
Worldwide, Inc. v. Ash Mgmt. Corp. 
23-3472) (ECF 1). 
4 
5 
Ash Management Corporation. 
Mohammad Ashraf. 
2 
* 
See Complaint 1 2, Days Inns 
(D.N.J. June 27, 2023) (No. PageID:
<pageID>
Work through each of the Defendants' five arguments for summary 
judgment. As set out below, none is persuasive. 
* * * 
First, the Defendants assert that they have no obligation to 
indemnify because the "motive" of the people who sued in the two 
underlying sex-trafficking lawsuits was to hold the Licensor 
responsible. See Defendants' Brief at 6-10. 
The plaintiffs in the sex-trafficking lawsuits, the argument 
seems to go, wanted to reach the Licensor's Parent Company (one 
of the Plaintiffs here) not the Licensee (one of the Defendants 
here). And that, it is suggested, would be undone if the 
Defendants were required to indemnify the Plaintiffs for lawyer 
fees and costs. 
The necessary premise of this argument is that the "motive" of 
the plaintiffs in the sex-trafficking lawsuits matters here, 
that it can move the needle on the indemnification question now 
before the Court. 
But whether the Defendants must indemnify the Plaintiffs turns 
on the License Agreement. See Days Inns Worldwide, Inc. v. MGH 
Hosp. Ltd., 2026 WL 1329449, at *1-2 (D.N.J. May 13, 2026). And 
it says nothing about motives. 
[The Licensee-Defendant] will indemnify. . the 
Indemnitees from and against all Losses and Expenses, 
incurred by Indemnitees for any. . suit . . relating 
to or arising out of any transaction, occurrence, or 
service at, or involving the operation of, the [hotel]. 
License Agreement§ 8.1, at 10 (emphasis added) . 6 
"[A]ny. . suit." Not just the subset of suits that are 
animated by certain motives. 
* * * 
Second, the Defendants argue that they do not have to satisfy 
any indemnification obligations because it was the Licensor's 
Parent Company who "committed the first material breach of the 
[License] Agreement." See Defendants' Brief at 10-12. 
6 The agreement defines "Indemnitees" to include, as relevant 
here, the Plaintiffs. See License Agreement at 26. 
3 PageID:
<pageID>
What breach? The Defendants' argument is apparently that, under 
the License Agreement, the Licensor was required to "mandate" 
that the Licensee take certain training --- but the Licensor did 
not impose that mandate and make it stick. See id. 
But the Defendants have not shown that the License Agreement 
says anything about a mandate. Under the License Agreement 
passages that have been brought to the Court's attention, the 
Licensor did not have to require ("mandate") that the Licensee 
undergo certain training. Rather, the Licensor just had to 
offer certain training to the Licensee. Per the Agreement: 
We will offer (directly or indirectly by subcontracting 
with an affiliate or a third party) general manager and 
owner orientation training, on-site opening training, 
remedial training and supplemental training. 
License Agreement§ 4.1, at 6. 7 
Offering training and mandating it --- these are not the same 
thing. Under state law, for example, a local high school might 
have to offer a chemistry class. But that does not mean that 
the high school needs to make each student take it. 
In short: the Licensor's "first breach" of the obligation to 
mandate training is said to relieve the Defendants of any 
indemnification obligation they might otherwise have had. See 
Defendants' Brief at 12. But that argument cannot get off the 
ground because the Defendants 8 have not shown that a training 
mandate is a part of the License Agreement in the first place. 9 
7 It appears that training was offered. See Motion for Summary 
Judgment, Exhibit A (ECF 71-3) at 3-4 (indicating that the 
Plaintiffs made "training regarding human trafficking prevention 
and awareness . . available to franchisees as early as 2012"). 
In their legal brief, the Defendants seem to suggest that the 
training may not have been sufficient. See Defendants' Brief at 
11-12. But they do not meaningfully explain what made it 
insufficient. Or what part of the License Agreement required 
that better or different training be provided, let alone that 
anyone be mandated to take it. 
8 Who have the burden. See Shields, 254 F.3d at 481. 
9 There may also be a more basic set of difficulties with the 
Defendants' "first breach" argument. Even if there had been a 
4 PageID:
<pageID>
* * * 
Third, the Defendants argue that the Licensor's Parent Company 
violated the implied covenant of good faith and fair dealing 
built into the License Agreement by picking a law firm that was 
especially pricey --- and now seeking indemnification for the 
"unreasonable" fees and costs the law firm charged. See 
Defendants' Brief at 12-13. 
To make out an implied covenant claim, the law of some states 
requires "an allegation of[] bad faith on the part of the 
defendant." See 23 Williston on Contracts§ 63:22 (4th ed. 
2026). In other states, "inequitable conduct in the performance 
of . . contractual obligations" is enough, even standing 
alone. Id. 
failure by the Licensor to comply with a clause in the License 
Agreement (as contended here, a mandatory-training clause) --­
that would likely have relieved the Licensee of its License 
Agreement indemnification obligation only in certain limited 
circumstances. What sorts of circumstances? Maybe if the 
hypothesized mandatory-training requirement was a condition 
precedent to the indemnification requirement. See Duff v. 
Trenton Beverage Co., 4 N.J. 595, 604 (1950) ("Generally, no 
liability can arise on a promise subject to a condition 
precedent until the condition is met.") But the Defendants 
develop no condition precedent argument. Or maybe if, in the 
face of a breach of a hypothesized mandatory-training 
requirement, the Licensee had walked away from the License 
Agreement and terminated it. See generally Frank Stamato & Co. 
v. Borough of Lodi, 4 N.J. 14, 21 (1950) ("In a case of a 
material breach of contract which does not . indicate any 
intention to renounce or repudiate the remainder of the contract 
the injured party has a genuine election offered him of 
continuing performance or of ceasing to perform, and any action 
indicating an intention to perform will operate as a conclusive 
choice, not indeed depriving him of a right of action for the 
breach which has already taken place, but depriving him of any 
excuse for ceasing performance on his own part.") (cleaned up) 
But no evidence of termination has been put before the Court. 
5 PageID:
<pageID>
Under New Jersey law, 10 a showing of bad faith is needed. The 
New Jersey Supreme Court has made that clear. 11 And the Third 
Circuit understands New Jersey law that way, too. 12 
10 Which controls here. See License Agreement§ 17.6.1, at 20. 
11 See Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping 
Ctr. Assocs., 182 N.J. 210, 225 (2005) ("[p]roof of bad motive 
or intention is vital to an action for breach of the covenant" 
of good faith and fair dealing) (cleaned up); Comprehensive 
Neurosurgical, P.C. v. Valley Hosp., 257 N.J. 33, 63 (2024) 
(similar); Wilson v. Amerada Hess Corp., 168 N.J. 236, 251 
(2001) ("Without bad motive or intention, discretionary 
decisions that happen to result in economic disadvantage to the 
other party are of no legal significance."); Iliadis v. Wal-Mart 
Stores, Inc., 191 N.J. 88, 110 (2007) (listing proof of "bad 
motive or intention" as one of the elements of a breach of the 
covenant of good faith and fair dealing claim) (cleaned up); see 
also 49 New Jersey Practice, Business Law Deskbook § 7:26 (2025~ 
2026 ed.) (noting that a plaintiff "must prove" the defendant's 
"bad motive or intention" to prevail on a claim for the breach 
of the implied covenant of good faith and fair dealing); 30A New 
Jersey Practice, Law of Mortgages§ 32A.10 (2d ed. 2025) 
(describing a New Jersey law claim for the breach of the 
covenant of good faith and fair dealing as having a "'state of 
mind or malice-like' element"). 
12 See, e.g., Elliott & Frantz, Inc. v. Ingersoll-Rand Co., 457 
F.3d 312, 329 (3d Cir. 2006); Coba v. Ford Motor Co., 932 F.3d 
114, 124 (3d Cir. 2019); Sat Agiyar, LLC 7 Eleven, Inc. v. 
Patel, 2026 WL 608752, at *4 (3d Cir. Mar. 4, 2026). 
6 PageID:
<pageID>
But here, the Defendants do not come forward with any meaningful 
"bad motive" evidence. 13 So their implied covenant claim cannot 
work. 14 
* * * 
13 And note that the evidence put before the Court seems to 
affirmatively suggest everyday motives, not "bad" ones. This 
Opinion and Order concerns the Defendants' motion for summary 
judgment. But the Plaintiffs have also cross-moved for summary 
judgment. See Notice of Motion for Partial Summary Judgment 
("Plaintiffs' Motion for Summary Judgment") (ECF 77). The 
Plaintiffs' summary judgment motion attaches a letter. See 
Plaintiffs' Motion for Summary Judgment, Exhibit 37 at 1 (ECF 
77-8). And the Court can consider the letter here, in deciding 
the Defendants' summary judgment motion. See, e.g., Torry v. 
City of Chicago, 932 F.3d 579, 584 (7th Cir. 2019); Las Vegas 
Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir. 2011). The 
letter --- which the Defendants do not contest or seek to 
undermine --- suggests that the Plaintiffs picked the law firm 
they did because the firm was already working on similar, 
pending lawsuits. See Plaintiffs' Motion for Summary Judgment, 
Exhibit 37 at 1 ("As you may be aware, [the Plaintiffs] ha[ve] 
retained [the law firm] . as national coordinating counsel 
for the more than 30 sex trafficking actions pending against 
[the Plaintiffs.]"). And because the firm had relevant 
experience. See id. (" [The law firm] has vast experience 
defending suits like the [two underlying sex-trafficking 
lawsuits] and in coordinating numerous actions on behalf of a 
single client"). These are bread-and-butter motives, not "bad" 
ones of the sort required to establish an implied covenant claim 
under New Jersey law. 
14 If, later, there is a motion for attorneys' fees and costs in 
a specific amount, the Defendants will then be permitted to 
argue that the proffered amount is not "reasonable," as required 
by the License Agreement. Cf. Days Inns Worldwide, Inc. v. 4200 
Rose Hosp., 2025 WL 2450755, at *9 (D.N.J. Aug. 25, 2025). But 
the argument made here is different. It is not that, say, $300 
an hour is not reasonable but that $200 an hour can be paid. 
Rather, the argument is that there is no indemnification 
obligation here at all --- because the Licensor picked a too­
expensive law firm I the first place. 
7 PageID:
<pageID>
Fourth, the Defendants argue that the Licensor waived its right 
to seek indemnification. See Defendants' Brief at 13. 
The burden is the Defendants' to shoulder, see Shields, 254 F.3d 
at 481, and they have not done so. 
Their waiver argument is sparse, a paragraph long. And it is 
not backed up by citations to any substantial legal authority. 
Moreover, the bar is set high. Under New Jersey law, "[a] party 
waives its right to enforce a contract provision if it 
consistently acts in such a way as to indicate that it does not 
intend to hold the other contracting party to that provision." 
Bilal v. Han, 2019 WL 3521522, at *3 (N.J. Super Ct. App. Div. 
Aug. 2, 2019) (citing Schlegel v. Bott, 93 N.J. Eq. 607, 610 
(N.J. 1922)); see also Lane v. Blackwood Ests., 104 N.J.L. 152, 
155 (1927) (similar). 
But the evidence before the Court, 15 does not suggest anything 
like that. 
A February 2021 letter from the parent of the Licensor reads in 
relevant part: 
[The Licensor's Parent Company] reiterates its request that 
[the Licensee] take immediate steps to honor its 
obligations under the [License] Agreement. These include 
confirming its obligation to indemnify [the Licensor's 
Parent] 
Motion for Summary Judgment, Exhibit B (ECF 72-2) at 2-3. 
And a July 2022 letter from the parent of the Licensor to the 
Licensee: 
This letter is to advise you that under the terms of 
[the License A]greement . . you are obligated to 
indemnify [the Licensor and its parent company] 
against any liability arising from your operation of the 
[hotel] and to further indemnify [the Licensor] for all 
costs, fees, and expenses they incur in their defense of 
these matters. 
Id. at 4. 
15 Which is cited by the Defendants. See Defendants' Brief at 
13. 
8 PageID:
<pageID>
This is not "consistent[] act[ion]" 16 to shrug off one's 
contractual indemnification rights and to abandon them. If 
anything, the opposite. 
* * * 
Fifth and finally, the Defendants argue that there can be no 
indemnification requirement here because the Licensor "failed to 
mitigate its alleged damages." See Defendants' Brief at 14-16. 
Failure to mitigate can reduce the bottom-line damages that are 
ultimately owed. But the Defendants have not meaningfully tried 
to show that an asserted failure to mitigate damages might count 
as a full defense as to the liability question that is on the 
table for now --- the question of whether the Defendants have to 
make any indemnification payment in the first place. Cf. 
footnote 14. 
* * * 
The motion for summary judgment at ECF 71 is denied. 
It is on this 1st day of June, 2026 SO O~D. 
16 Hilal, 2019 WL 3521522, at *3. 
9 
¥ / 
Michael E. Farbiarz, U.S.D.J. PageID:
<pageID>

Passage view · GavelSight