Berkley-Vacation-Resorts

Berkley v Mitchell Sussman, Esq.

Case Number: 0-18-cv-62372

Last Updated: June 4, 2021

Status

Resolved by stipulated directed entry of agreed judgment on 5/15/20.

Location

US District Court Southern District of FL (Ft. Lauderdale)

Presiding Judge

Judge Rodolfo A. Ruiz, II

Date Filed

10/04/2018

Highlights

Timeshare exit attorney stipulated to a judgment that can’t be enforced or executed unless and until a court determines breach of the parties’ confidential settlement. See orders on the challenges to the parties’ respective pleadings and affirmative defenses.

RELATED:
On 8/16/19, in a related action, now resolved by settlement, Hilton Resorts Corporation v Mitchell Reed Sussman, US District Court, Middle District of Florida, Case No. 6:19-cv-305, Sussman filed a Notice of Constitutional Challenge to section 721.17(3)(e), Fla. Stat. [Doc 50]. That case was resolved by confidential settlement.

Case Posture

Claims:

In their complaint against Attorney Mitchell Sussman, timeshare developers Berkley Vacation Resorts, Vacation Village, Lando Resorts Corporation and affiliated entities (collectively, Berkley) alleged tortious interference with contracts and business relationships, and violations of the federal Lanham Act, the Florida and Nevada deceptive trade practices acts. The Florida plaintiffs alleged violations of Florida Statute 721.17 (“Timeshare Reseller Law”) and the Nevada Revised Statute 119A.117A et seq. (“the Timeshare Reseller Act”)

Regarding Sussman’s alleged deed practices, the Florida plaintiffs additionally alleged violations of Florida Statute 817.535, which makes it illegal for any “person who files or directs a filer to file, with the intent to defraud or harass another, any instrument containing a materially false, fictitious, or fraudulent statement or representation that purports to affect an owner’s interest in the property described in the instrument,” while the Nevada plaintiffs alleged a violation of Nevada Statute 225.084, which provides, “[a] person shall not willfully file, promote the filing of, or cause to be filed, or attempt or conspire to file, promote the filing of, or cause to be filed, any record in the Office of the Secretary of State if the person has actual knowledge that (b) the record contains a false statement of material fact; or (c) is being filed in bad faith or for the purpose of harassing or defrauding any person.” This last Nevada count was voluntarily dismissed by Berkley, which conceded the filings at issue were deeds filed with county recorders and not with the Nevada Secretary of State.

Posture:

Resolved by stipulated order entering judgment against Attorney Sussman in the amount of $175,000, not to be enforced or executed unless and until a court determines that Sussman has violated the parties’ May 12, 2020 confidential settlement agreement.

Summary:

Berkley alleged that Attorney Sussman published false advertisements inducing plaintiffs’ timeshare owners to retain his services to cancel their timeshare contracts, and to cease making payments to plaintiffs. The developers alleged that Sussman mailed form letters to plaintiffs to negotiate a release from such timeshare contracts, without citing any investigation justifying rescission. Berkley alleged that if the negotiation failed, Sussman would cause Florida attorneys to prepare and record fraudulent deeds purporting to convey the timeshare interest back to the developers or “to an individual serving as a strawman.” Finally, Berkley alleged that Sussman would send his customer a letter and the deed congratulating the plaintiffs’ owners for their release from their timeshare contract, when in reality, the deeds failed to convey the interest, because Berkley “never requested or approved the transfers of ownership, leaving the timeshare owners responsible for their obligations” to Berkley.

For his part, in his answer, Sussman denied liability and asserted that prior to Plaintiffs filing their lawsuit, he has been assisting timeshare owners for 20 years in the same manner without complaint from the timeshare developers. Sussman cited correspondence from the plaintiffs in which they responded to his negotiating efforts by “amicably releasing” Attorney Sussman’s clients from their timeshare contracts. Furthermore, Sussman alleged that transferring timeshare interests back to plaintiffs gives a “substantial benefit” to plaintiffs, because the property goes back in their inventory to resell.

Sussman additionally asserted that “Plaintiffs’ failed to mitigate their damages where a disproportionate percentage of Plaintiffs’ customers are destined to default upon their contractual obligations.” Sussman argued that Florida Statute 721.80, the Timeshare Lien Foreclosure Act, was enacted “specifically to deal with the large number of foreclosures in the timeshare industry and to streamline timeshare lienholder’s ability to foreclose and recover distressed and defaulted interests.” He went on to argue that “[t]o the extent Plaintiffs’ failed to utilize the remedy provided by the Timeshare Lien Foreclosure Act, and suffered increased costs and expense in foreclosing, Plaintiffs failed to mitigate their damages.” Sussman argued that “this Act provides a way to foreclose without harming defaulted timeshare owners and Plaintiffs’ negligent failure to utilize this remedy is harm both to Plaintiffs and timeshare owners in default which could have been easily avoided without additional cost to Plaintiffs.”

Selected Events:

On 5/15/20, the case was resolved by stipulated order entering judgment against Attorney Sussman in the amount of $175,000, not to be enforced or executed unless and until a court determines that Sussman has violated the parties’ May 12, 2020 confidential settlement agreement. [Doc 125]

On 4/17/20, the Court struck a number of Sussman’s affirmative defenses. These included Sussman’s assertion of the Noerr-Pennington doctrine and litigation privilege, citing its prior order denying such defenses in Sussman’s Motion to Dismiss. [Doc 89]. The Court rejected Sussman’s constitutional challenge to the Florida Timeshare Act, section 721.17(3)(e), Fla. Stat., which provides, “No person shall participate, for consideration or with the expectation of consideration, in a plan or scheme, a purpose of which is to transfer a consumer resale timeshare interest to a transferee that the person knows does not have the ability, means, or intent to pay all assessments and taxes associated with the consumer resale timeshare interest.” The Court similarly rejected affirmative defenses based on the First and Fifth Amendments. [Doc 110]

On 11/22/19, a court-ordered mediation conducted by Jeffrey Streitfeld, Esq., adjourned without a resolution. [Doc 100]

On 10/17/19, a hearing was held on Sussman’s motion to dismiss the complaint. Prior to the hearing, Berkeley voluntarily dismissed Count, VII, which precludes false filings with the Nevada Secretary of State.

On 10/20/19, after a hearing, the court entered an order denying Sussman’s Motion to Dismiss the developers’ complaint. [Doc 89; Transcript – Doc 93]


TRANSCRIPTS
[93] Transcript of October 17, 2019 hearing on Sussman’s Motion to Dismiss Berkley’s complaint.

Parties

Plaintiffs:

BERKLEY VACATION RESORTS, INC., ELDORADO RESORTS CORP., LANDO RESORTS CORPORATION, WILLIAMSBURG PLANTATION, INC., PALM BEACH RESORT DEVELOPMENT GROUP, LLC, PATRIOT SUITES, INC., VACATION VILLAGE AT PARKWAY OWNERS ASSOCIATION, INC., GRANDVIEW AT LAS VEGAS OWNERS’ ASSOCIATION, INC., WILLIAMSBURG PLANTATION OWNERS ASSOCIATION, MIZNER PLACE AT WESTON TOWN CENTER OWNERS ASSOCIATION, INC., PALM BEACH SHORES RESORT AND VACATION VILLAS ASSOCIATION, INC., BERKSHIRE MOUNTAIN LODGE OWNERS ASSOCIATION, INC., THE COLONIES OWNERS ASSOCIATION, VACATION VILLAGE AT BONAVENTURE OWNERS ASSOCIATION, INC., and VACATION VILLAGE AT WESTON OWNERS ASSOCIATION, INC.,

Plaintiffs’ counsel:

Greenspoon Marder LLP

Defendant:

MITCHELL REED SUSSMAN, ESQ.

Defendant’s counsel:

Wicker Smith O’Hara McCoy & Ford PA (Clay Coward), Nardella & Nardella PLLC (John Bennett),

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