Time-Share Owners Say Fla. County Can't Escape Marriott Suit
By
Law360, New York (January 5, 2018, 4:56 PM EST) -- Time-share purchasers
alleging Marriott Ownership Resorts Inc. and its insurer duped them into
invalid real estate deals urged a Florida federal judge on Thursday not
to dismiss Orange County, Florida, from their suit, arguing it breached
its official duties by improperly recording trust instruments and collecting taxes.
Lead plaintiffs Anthony and Beth Lennen said Orange County negligently
interprets Florida statute by accepting any documents that come its way.
This practice, the Lennens allege, has led the county to wrongly record
thousands of facially invalid consumer deeds and other unauthorized instruments
in the proposed class suit accusing a number of Marriott companies, including
Marriott Vacation Club Trust Owners Association, as well as
First American Title Insurance Co. of carrying out a scheme that deceived time-share purchasers into invalid
and illusory real estate interests.
“The county interprets Fla. Stat. § 28.222 erroneously to mean
that it is required to robotically and indiscriminately record any document
that appears to connect to real or personal property without regard to
the form or content of the document or the location of property,”
the Lennens said in opposing Orange County’s Dec. 21 bid to dismiss
a count in the suit’s amended complaint that names the county.
The fourth count of the amended complaint accuses Orange County of negligence
by breaching its official duties when improperly recording and indexing
MVC trust instruments and collecting transfer tax.
Orange County on Dec. 21 said that while the crux of the Lennens’
complaint against the county claims it improperly recorded various legal
instruments, the conduct complained of is not performed by Orange County
itself, but by the Orange County Comptroller, which is a separate legal entity.
“Plaintiffs have acknowledged that ... the statutory duty to record
legal instruments of the type at issue in this litigation is performed
by the Orange County Comptroller,” the county said. “Accordingly,
Orange County is an improper party defendant in this litigation, and the
amended complaint should be dismissed as to the county.”
The Lennens’ suit,
filed in May 2016, 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, such as 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. 27, Marriott
lost its bid to win a stay in the litigation when U.S. District Judge Carlos E. Mendoza
ruled that he wouldn’t stop proceedings so a state agency could
review the case.
Judge Mendoza said he would not refrain from exercising the court’s
jurisdiction over the case pending a declaratory statement by the Florida
Department of Business and Professional Regulation’s Division of
Florida Condominiums, Timeshares, and Mobile Homes regarding Marriott’s
compliance with the Florida Vacation Plan and Timesharing Act.
“Defendants ... fail to address whether the application of the Timeshare
Act is beyond the ordinary experience of judges and juries. To the contrary,
the interpretation and application of statutes and regulations is precisely
within the expertise of the court,” Judge Mendoza said.
Counsel for the Lennens and Marriott declined to comment on Friday.
Counsel for Orange County, MVC Trust Owners and First American did not
respond immediately to a request for comment.
The Lennens are represented by Christopher S. Polaszek of The Polaszek
Law Firm PLLC, Jeffrey M. Norton of
Newman Ferrara LLP and Soomi Kim.
Orange County is represented by John T. Conner and William E. Lawton of
Dean Ringers Morgan & Lawton PA.
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 Dawn I. Giebler-Millner, Philip
R. Sellinger, Ian S. Marx and Elliot H. Scherker of
Greenberg Traurig LLP.
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 Alex Wolf. Editing by Jack Karp.