Palmer v Flagship Resort Development dba FantaSea

Summary:

Andrew Milz, of Flitter Milz, PC writes: “[A]fter a three-week jury trial in Atlantic City, Joe Solseng and I obtained a verdict of $1.07M for our wonderful clients – 11 couples and individuals told a litany of lies during timeshare sales by Fantasea Resorts. The jury also found the resort’s exculpatory clauses in its contracts to be illegal waivers in violation of New Jersey’s Real Estate Timeshare Act. These clauses – such as ‘No representations of Seller or Seller’s agents or representatives, shall in any way be binding upon the seller’ and ‘Purchaser acknowledge[s] that they have entered into this [agreement] without coercion or undue pressure…’ were found to be void and unenforceable, meaning resorts cannot lie with impunity and then hide behind such contract clauses. This case, and the jury’s verdict, appear to be the first of its kind. Our team also included David Ricci, Esq., Thomas Breen and Kara Donahue from Schroeter Goldmark & Bender, and Jody Thomas Lopez-Jacobs and Cary Flitter from Flitter Milz, P.C., who lent significant support over the past four years and throughout the trial.”

Regarding the damage award:

The jury awarded compensatory damages for each plaintiff as follows:

The Court then trebled these under the CFA and doubled under the RETA, amounting to $1,069,285.00, then “molded to reduce by the double damages provision of the RETA” to avoid a double recovery on both statements, resulting in a final damages award of $641,571.06.

As for the fee award:

The court awarded fixed attorney’s fees in the sum of $996,013.

In its April 17, 2023 Order regarding the amount of attorney fees pursuant to a provision awarding discretionary reasonable fees to a prevailing plaintiff* the court granted the owners’ motion to reconsider the proper fee enhancement, increasing the multiplier from 10% to 25%.

“The court finds the risk involved in taking matters of this nature require a greater enhancement than 10%. In addition, the court finds the typical fees in consumer protection matters generally and in this matter are based primarily on the fee shift provisions set forth in the pertinent statutes which, in this matter, are the CFA and RETA. The court is persuaded by plaintiffs’ position in its initial submission and bolstered by their present submission that matters such as this are extremely risky matters for a plaintiff’s attorney to take without the enhancement of fee award right permitted in certain fee shifting matters. Taking the above into account, the court awards a 25% enhancement to plaintiff.

The base amount of attorney’s fees awarded to plaintiffs’ counsel shall be $788,415. Based on the courts findings herein, costs of $10,494 shall be awarded. The 25% fee enhancement awarded results in an additional $197,104. The total judgment [on fees and costs] before interest is entered in the amount of $996,013.”

As proof of risk, the same court (different judge) granted the same developer $88,550 when owners brought a lawsuit alleging developer fraud.

* Real Estate Timeshare Act at N.J.S.A. 45:15-16.80(a). Any person who suffers any ascertainable loss of moneys as a result of the failure of another to comply fully with the provisions of this act may bring an action or assert a counterclaim in any court of competent jurisdiction. In any action filed under this section in which a defendant is found to have knowingly engaged in any false, deceptive, misleading promotional or sales methods or discriminatory advertising on the basis of race, sex, creed, color, marital status, national origin or religion, concealed or fraudulently diverted any funds or assets so as to defeat the rights of timeshare plan purchasers, made an intentional misrepresentation or concealed a material fact in an application for registration, or disposed of any timeshare plan required to be registered under this act, which are not so registered, the court shall, in addition to any other appropriate legal or equitable remedy, award double the damages suffered, and court costs, including reasonable attorney’s fees. In the case of an untruth, omission, or misleading statement the developer sustains the burden of proving that the purchaser knew of the untruth, omission or misleading statement, or that he did not rely on such information, or that the developer did not know, and in the exercise of reasonable care could not have known of the untruth, omission, or misleading statement.