Diamond Resorts v Neally Law

Summary:

Diamond alleges that defendants falsely guarantee the ability to cancel timeshare contracts and scare customers into believing their heirs will inherit their timeshare obligations, and interfere with Diamond contracts with Diamondowners by instructing Diamond owners to stop paying their mortgage; Defendant attorneys are co-conspirators because they send Letters of Representation to Diamond that are ineffective and intended to deceive Diamond owners into believing that any legal cancellation of their ownership is possible. Diamond alleges that the use of attorneys and law firms can “easily be abused. For example, Neally and Neally Law typically send a letter of representation to developers like [Diamond] to prevent Plaintiff from communicating directly with its customers and to cause debt collection efforts to be directed to Neally and Neally Law, as the customer’s representative, so the customers are not aware of the consequences of what is occurring.”

Diamond concedes that “[w]hile it is true that non-payment may result in contract cancellation, [the] same can be accomplished without hiring Defendants or paying exorbitant fees, and same will result in negative credit consequences, if not also adverse tax consequences, foreclosure, or potentially being sued.”