The highest paid executive in cruise industry history has been denied additional compensation by the 11th Judicial Circuit Court in Miami.
Frank Del Rio filed a lawsuit against his former employer Norwegian Cruise Line Holdings (NCLH), arguing he was owed additional compensation as part of an under the table agreement he made with four board directors. The lawsuit argues Del Rio signed a 2.5 year, $10 million consulting agreement but verbally agreed to a 4.5 year, $18 million deal.
Judge Mavel Ruiz of the 11th Judicial Circuit Court dismissed the case with prejudice, stating Del Rio cannot benefit from a concealed compensation scheme he was a knowing participant in, according to Seatrade Cruise News.
We wrote about the lawsuit early in June and the several reasons it would be dismissed. Florida courts have repeatedly held that a party cannot reasonably rely on a prior oral agreement that is clearly contradicted by a written contract the party later signs. The contract between Del Rio and NCLH clearly states the compensation Del Rio was entitled to as well as the terms for extending the contract. A sophisticated executive like Del Rio will have a difficult time convincing a court he was deceived by signing a written contract with such clear terms.
Furthermore, Del Rio, who was CEO and president of NCLH at the time, did not exercise his legal fiduciary duty to act in the best interest of the company by agreeing to a secret deal he knew would be rejected by shareholders.
According to Seatrade Cruise News, Del Rio voluntarily abandoned his claim for promissory estoppel, conceding that the alleged oral agreement was unenforceable under Florida’s statute of frauds. Instead, he argued his damages were for compensation he lost as a result of agreeing to the deal and retiring in 2023. Judge Ruiz rejected this claim, stating “a party cannot avoid the writing requirement of the statute of frauds by reformulating what amounts to a breach of an oral contract into a fraud claim.”
Del Rio, who has career earnings of over $175,000,000, plans to appeal Judge Ruiz’s decision.
An NCLH spokesperson said the company had no comment on the lawsuit.
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