Lawsuit filed in hotel dispute

Plans to accelerate the name change of a Newport Beach hotel will not

stop a lawsuit filed against the hotel’s owners and management

company, a plaintiff’s attorney said Monday.

Canal Street Grande Inc., based in Irvine, filed a lawsuit

Thursday alleging that the new owners and managers of the Sutton

Place Hotel violated federal and California trademark law and engaged

in unfair competition practices by continuing to use the Sutton Place

name after closing a deal to buy the hotel July 11.

The lawsuit named hotel owners at San Clemente-based Sunstone

Hotel Investors Inc. and the hotel’s management company,

Toronto-based Fairmont Hotels & Resorts, as defendants. Also named

were two entities called Sunstone Hotel Investors and Sunstone

MacArthur.

On Friday, the hotel’s new general manager, Randy Zupanski, said

the hotel would be renamed the Fairmont Newport Beach this Wednesday.

The name change was initially planned to become official next year

after the completion of a multimillion-dollar renovation effort.

“We’re obviously anxious to see that done,” said Steven Davis, a

Los Angeles-based attorney representing Canal Street Grande.

Even if the name change occurs as scheduled, Canal Street Grande

will continue to press its case against Sunstone and Fairmont.

“There’s clearly going to be the question of damages from using

the name and probably confusing the public,” Davis said.

The lawsuit estimates Canal Street Grande has suffered more than

$1 million worth of damage from alleged violations.

The lawsuit was filed in U.S. district court in Los Angeles and

states Canal Street Grande has owned the Sutton Place trademark since

1995, and the right to use the name was not transferred to Sunstone

after the San Clemente firm assumed ownership of the hotel in July.

“This is obviously an illegal-use-of-name situation,” Charles Woo,

Canal Street Grande executive vice president, said Monday.

The filing states a Sunstone representative contacted Woo the day

the hotel purchase closed to seek an agreement to use the Sutton

Place name. Woo declined the offer July 12, according to the lawsuit.

Representatives from Fairmont could not be reached for comment

Monday. A woman at Sunstone’s offices said Sunstone representatives

were not available for comment Monday.

* ANDREW EDWARDS covers business and the environment. He can be

reached at (714) 966-4624 or by e-mail at andrew.edwards@

latimes.com.