Time-Share Owners Bash Marriott New-Law 'Ploy' To Toss Suit
By
Time-share purchasers accusing Marriott and a title insurance company of
duping them into invalid real estate deals have rebuffed the hotelier’s
attempt to use a new state-law amendment to toss the suit, telling a Florida
federal court Wednesday the measure was pushed through the legislature
specifically as a defense tactic.
Anthony and Beth Lennen, lead plaintiffs in the proposed class suit against
a number of Marriott companies and
First American Title Insurance Co., alleged that the amendment signed into law by Florida Gov. Rick Scott
on May 23 was a ploy engineered by the defendants, which on June 7 filed
a notice with the court saying the amended Florida Vacation Plan and Timesharing
Act revised the definition of “interestholder” and thus supported
their motions to dismiss the complaint.
“Because defendants could not justify the legality of their conduct
under existing law, they endeavored to change the rules,” the Lennens
said in their opposition to the notice. “The notice is tantamount
to an admission that plaintiffs’ claims are meritorious and that
defendants’ conduct violated the laws that actually were in effect
during the relevant time period.”
The Lennens’ suit,
filed in May 2016, accuses the Marriott companies and First American of carrying out a scheme
that deceived points-based time-share purchasers into invalid and illusory
real estate interests.
Named defendant Marriott Vacation Club Trust Owners Association on June
12 asserted in a joinder to the Marriott and First American notice that
the suit should be dismissed not only because the Lennens failed to state
a claim, but because the amendment resolved the matter at issue.
“The recent clarifications signed into law by Governor Scott with
respect to the Florida Vacation Plan and Timesharing Act that are discussed
in the notice result in the elimination of multiple, if not all, counts
reflected in the complaint,” MVC Trust Owners Association said.
“To the extent any of the counts remain, because the alleged statutory
underpinnings of the plaintiff’s claims are not viable, the complaint
is replete with irrelevant allegations. As a result, determining which
remaining allegations apply to the Trust Owners Association becomes even
more difficult.”
The suit, which also ropes in Orange County, Florida, and its comptroller
as defendants, alleges that Marriott Vacation Club and the co-defendants
violated state racketeering and time-share laws by selling a points-based
time-share product to customers that falsely conveys title to a Florida
time-share estate and a beneficial interest in a Florida land trust.
While these consumers are paying the costs and taking on the burdens associated
with property ownership, like title policy premiums, taxes and maintenance
fees, they are not getting the benefits that come with typical time-share
ownership, according to the suit. What they are really getting is just
a use license for selected corporate-owned time-share estates in various
locations across the country, the suit claims.
On Sept. 15, Marriott
moved to dismiss the putative class action, calling the complaint a “mish-mash”
of unsupported and unlikely claims. The next day, First American Title
also moved to dismiss, calling the complaint a “shotgun pleading.”
Marriott also moved in September for the court to stay the case to allow
the Florida Department of Business and Professional Regulation's Division
of Florida Condominiums, Timeshares and Mobile Homes to issue a declaratory
statement on whether its contracts violate state racketeering and time-share
laws, as the suit alleges.
The Lennens responded
on Oct. 6, urging the Florida federal court to deny Marriott's request to stay,
arguing the agency isn't allowed to do so because state agencies are
prohibited from issuing declaratory statements on pending litigation.
Jeffrey M. Norton, a lawyer representing the Lennens, told Law360 in an
email on Thursday that he believes Marriott and First American have gone
to great lengths “to further the scheme” of their points-based
time-share product sold as a real estate transaction.
“As these latest filings demonstrate, their efforts include leveraging
political clout to change a discrete, two-decade-old provision of the
Florida time-share law — unique to their defense in this action,”
Norton said. “As we argue in our opposition, we believe this is
tantamount to a concession that their conduct was not in compliance with
existing Florida law.”
Counsel for MVC Trust Owners Association declined to comment on Thursday.
Counsel for Marriott and First American did not respond immediately to
requests for comment on Thursday.
The Lennens are represented by Christopher S. Polaszek of The Polaszek
Law Firm PLLC, Jeffrey M. Norton of
Newman Ferrara LLP and Soomi Kim.
MVC Trust Owners Association is represented by Alfred J. Bennington Jr.
and James A. Timko of
Shutts & Bowen LLP.
The Marriott companies are represented by Philip R. Sellinger, Ian S.
Marx and Roger B. Kaplan of
Greenberg Traurig PA.
First American is represented by Douglas B. Brown and W.L. Kirk of
Rumberger Kirk & Caldwell PA and Jeffrey L. Willian, Donna M. Welch and Leslie S. Garthwaite of
Kirkland & Ellis LLP.
The case is Anthony Lennen et al. v. Marriott Ownership Resorts Inc. et
al., case number
6:16-cv-00855, in the U.S. District Court for the Middle District of Florida.
--Additional reporting by Rick Archer, Nathan Hale and Alex Wolf. Editing
by Bruce Goldman.