Bluegreen

Bluegreen v Montgomery Law Firm, Square One

Case Number: 1-19-cv-24704

Last Updated: June 4, 2021

Status

Pending

Location

USDC, Southern District of FL (Miami)

Presiding Judge

Judge Jose E. Martinez

Date Filed

11/13/2019

Highlights

Case Posture

Claims:

Claims

Bluegreen brought one cause of action against Hemingway, PTG and CLS and Square One for violation of the Lanham Act and one cause of action against Montgomery Law for contributory false advertising in violation of the Lanham Act, 

Bluegreen alleged three causes of action against Hemingway, PTG, CLS, Square One and Montgomery Law for tortious interference with contractual relations, civil conspiracy to commit tortious interference with contractual relations, and violation of Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”).

Counter claims:

Montgomery Law brought four declaratory judgment claims against Bluegreen for litigation privilege, fraudulent or deceptive practices, violation of the Clayton Act and  Anti-Competitive Litigation.

Posture:

Montgomery Law’s Motion to Dismiss Bluegreen’s Complaint for lack of jurisdiction as well as for failure to state claims for contributory false advertising under the Lanham Act; tortious interference with contractual relations; civil conspiracy; and violations of FDUTPA was denied.  Montgomery Law filed an answer asserting affirmative defenses and an amended Counterclaim against Bluegreen. 

Square One’s Motion to Dismiss was also denied.  The case is at issue with regards to Square One.  Bluegreen filed a Motion to Dismiss Montgomery Law’s Counter-Claim.  The matter is not at issue as to Montgomery Law subject to the Court’s ruling on the Motion to Dismiss.

Summary:

Bluegreen claimed  Hemingway, PTG, CLS, Square One (“TPE”) and Montgomery Law falsely advertised that it could release Bluegreen timeshare owners from their timeshare contracts with Bluegreen by cancelling and/or “exiting” the timeshare owners from their timeshare contracts.   In order to further the exit scheme, timeshare owners are instructed to cease making payments to Bluegreen in order to facilitate the “exit” or “cancellation” strategy.  The timeshare owners pay thousands of dollars for assistance in exiting their timeshares in this manner which timeshare owners could have done for free.  Bluegreen further alleges that the timeshare owners were not informed that defaulting on their timeshare payments would result in damage to their credit ratings. 

Bluegreen claimed that TPE and Montgomery Law facilitated this scheme by TPE soliciting Bluegreen timeshare owners by claiming to provide them with a legal exit from their timeshare contracts.  TPE then referred the timeshare owners to Montgomery Law.  TPE and Montgomery Law allegedly split the fees charged to the timeshare owner prior to any legal services being provided.  Bluegreen further alleged that the timeshare owners never meet with Montgomery Law which is providing the legal services.  

As part of the alleged scheme, Montgomery Law sent demand letters on behalf of timeshare owners claiming misrepresentations by Bluegreen representatives during the formation of the contract.  After the demand letters are sent, TPE does nothing more than facilitate information between the timeshare owners and Montgomery Law.  The exit services provided by TPE are nothing more than waiting for the Bluegreen timeshare owner to go into default for not paying as agreed pursuant to the timeshare contract.   Bluegreen further alleged that TPE inflate the costs of the services and usually offer timeshare owners the option of paying with an instantly-approved credit card account.  The transactions on these types of accounts are often difficult to challenge when the timeshare owners discover the fraudulent outcome of the exit scheme.

Bluegreen requested the Court issue an injunction to stop TPE and Montgomery Law from falsely advertising a guaranteed exit strategy from timeshare contracts, actual damages based on the thousands of timeshare owners defaulting on the contracts,  and its attorneys’ fees and costs in bringing this action.

Counterclaim:

In its Counterclaim, Montgomery Law requested the Court make declaratory judgments against Bluegreen that Montgomery Law may assert the affirmative defenses of prior breach and fraudulent inducement  on behalf of its timeshare owner clients in lawsuits brought by Bluegreen against Montgomery Law.  Additionally, Bluegreen cannot prevail in any lawsuits against Montgomery for tortious interference with timeshare contracts when the clients believe they were fraudulently induced into timeshare contracts with Bluegreen or that Montgomery Law.

In the second count, Montgomery Law requested the Court make a declaratory judgment against Bluegreen that Bluegreen’s sales of timeshare interests without properly disclosing to timeshare owners regarding the diminution in value of the timeshare interest is a per se violation of FDUTPA, that any Bluegreen timeshare owner who is a client of Montgomery Law has a right to breach their timeshare contract based on the per se violation of FDUTPA, Montgomery Law has a honest, good faith basis to counsel its’ clients who did not receive proper disclosures from Bluegreen that they may breach their timeshare contract, and for Bluegreen to develop and issue a remedial disclosure to all Bluegreen timeshare owners and prospective owners.

In the third count, Montgomery Law sought a declaratory relief judgment against Bluegreen and Wyndham. Wyndham similarly sued Montgomery Law in the Middle District.  In both cases, Wyndham and Bluegreen alleged that Montgomery Law instructs or persuades timeshare owners to stop fulfilling their contractual obligations as a means to facilitate the exit or transfer from the timeshare.  The purpose of this is to help Montgomery Law in justifying their fees to effectuate the transfer of the timeshare, to divert funds from Wyndham or Bluegreen and to ensure that the timeshare owner will go into default and foreclosure.  Montgomery Law pointed out to the Court that Wyndham and Bluegreen are competitors in the timeshare marketplace but also share the same counsel in the lawsuits against Montgomery Law.  Montgomery Law requested the Court make a declaratory relief judgment against Bluegreen that Montgomery Law has been damaged by Bluegreen’s violations of the anti-trust laws and for a nationwide temporary restraining order against all timeshare companies from pursuing similar litigation against Montgomery Law until this count can be resolved.

Finally, Montgomery Law requested a declaratory relief judgment against Bluegreen regarding Anticompetitive Securitization it creates to investors  due to the harm it creates to investors in its timeshare financing-backed securities, that Bluegreen’s lawsuit should be enjoined or dismissed due to its anticompetitive nature and that any other anti competitive lawsuits against Montgomery Law should be dismissed or enjoined due to the anti-competitive nature of the lawsuits.

Parties

Plaintiffs: 

BLUEGREEN VACATIONS UNLIMITED, INC., BLUEGREEN VACATIONS CORPORATION

Counsel: Shutts & Bowen LLP

Defendants: 

THE MONTGOMERY LAW FIRM, LLC, MONTGOMERY & NEWCOMB, LLC, M. SCOTT MONTGOMERY, W. TODD NEWCOMB

Counsel: Waugh Law, PA, Watson LLP

SQUARE ONE DEVELOPMENT GROUP, INC.

Counsel: Dubbin & Kravetz LLP, Michael Sokolik, Esq., local counsel 

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