I never got the
public apology,”
countries at the time, that could make the
$50 million seem like pocket change.
“Fifty million dollars,” Siegel says.
“This meant that suddenly there was now
an incentive for hotel owners to sue the
company. Not only could you get out of your
contract, but you could possibly be entitled
to a punitive damage award that was worth
multiple times what the contract value was.
So it was a nervous time for the company
as it looked like these cases were going to
proliferate, not only for us, but throughout
the industry. That’s what I came into.”
Not one to mind a challenge, he
jumped right in and demanded answers
from the senior staff.
“Ken is a terrific strategist who is
challenging to work with in the best sense
of the word,” says Susan Werth, Starwood’s
senior vice president and general counsel
for Global Acquisitions and Development.
“He has excellent judgment and—in one
of the defining qualities of someone in his
role—doesn’t shy away from the tough
calls. He invariably asks the question that
gets to the essence of the issue from a
business, legal and practical perspective.”
But even Siegel’s insistent questioning
couldn’t turn up a good reason as to why
Starwood had lost the Woodley Road case.
So he gathered together his legal team at the
company’s headquarters in White Plains, N. Y.,
to scour the case’s transcripts, examining
every line to figure out why Starwood had
lost the case and determine if anything could
be done to reverse the ruling.
“The law firm that we engaged had
made major mistakes,” Siegel says of what
they found. “This was not simply a matter
of errors in judgment; these were pretty
egregious problems. And I went and met
with them and said, ‘Look, what I want from
you guys is an apology. I want it publicly
because I want to be able to go out and
say that this wasn’t Starwood. This was a
mistake; essentially the vagaries of litigation
resulted in a judgment that, had things
been conducted differently, wouldn’t have
happened.’ They refused and I sued them.”
Burden of proof in a legal malpractice
case can be difficult: Not only does a
plaintiff have to prove that the defendant
attorney failed to exercise a proper degree
of care and skill, but also that the case in
question would have been successful for the
plaintiff had the attorney not failed in those
areas. But Siegel saw another way he could
achieve victory. The Woodley Road case had
been handed off to an inexperienced and
ill-prepared attorney to litigate just a few
weeks before trial, so Siegel claimed breach
of contract—the first time anyone had ever
done so to try to prove legal malpractice.
SIEGEL GREW UP IN THE TINY NEW JERSEY
borough of Morris Plains. His father,
Sheldon, was a junior manager at Warner-Lambert Co., which was later acquired
by Pfizer. After a standard 9-to- 5 day,
Sheldon would head to his second job as a
pharmacist at a local drugstore, where he
worked until midnight. Sometimes after he
closed the store, he would come home and
wake up Ken and his two brothers just so
he could spend time with them.
“It may sound a little clichéd,” Siegel
says, “but the greatest influence on my
life was my dad. [He] worked two jobs and
went to school in order to create a better
life for his family. So literally—other than
late at night when he would come home
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