Westgate

Overton v Westgate Resorts

Case Number: E2014-00303-COA-R3-CV

Last Updated: April 16, 2021

Status

Resolved – Trial court order in favor of timeshare owners after a bench trial affirmed on appeal.

Location

Court of Appeals – TN at Knoxville

Presiding Judge

Appellate Judge: THOMAS R. FRIERSON, II

Date Filed

01/30/2015

Highlights

Trial court ruled in favor of timeshare owners on their claim of common law fraud and consumer protection statutes. Appellate court affirmed reasonableness of a punitive damages award (as modified by the statutory cap) in the sum of $500,000 based on Westgate’s “reprehensible” conduct; trial court order correctly refused to enforce Westgate’s forum selection clause.

Case Posture

Claims:

Bench trial resolved in favor of timeshare owners, punitive damages award and affirmed on appeal.

Nathan and Patricia Overton sued Westgate to rescind their timeshare contract and return their payment of $39,280, claiming fraud and violations of the Tennessee Consumer Protection Act and the Tennessee Timeshare Act.

Summary:

The Overtons testified at a bench trial conducted on June 19 and 20, 2013 that — in the course of a nearly eight hour long sales presentation — a Westgate sales manager promised in consideration of a timeshare purchase:

  • The Overtons could book unlimited “Owners’ Nights” at any Westgate resort for $49-$69 a night.
  • The Overtons could book a reservation for the same week in December each year at Westgate’s Gatlinburg resort for an annual trip with their extended family to celebrate Christmas and their wedding anniversary.
  • The sales manager would purchase a Foosball table to be kept at the resort for them, and
  • The sales manager would refund a portion of the commission he received on the sale of the timeshare.

The Overton’s testified that after the sale:

  • The Overtons did not have unlimited “Owners’ Nights” privileges
  • The December reservation was not available.
  • Even after multiple calls to the timeshare developer, and a written request to rescind the contract, Westgate refused to rescind the Overtons’ timeshare contract.

After a hearing, the trial court found that Westgate was guilty of fraud, and that Westgate had trained its salespersons to promise unlimited Owners’ Nights, even knowing that no such program existed in the written documents related to sales of the Westgate timeshares.

The trial court ordered the contract rescinded, and required Westgate to refund the Overtons’ payment of $39,280. The judge additionally ordered Westgate to pay attorney’s fees in the sum of $117,082 and costs in the sum of $19,198, as well as punitive damages in the sum of $600,000 based on Westgate’s financial position and its “reprehensible” conduct.

Westgate argued that the punitive damages award was improper or excessive, and challenged the trial court’s refusal to enforce a forum selection provision requiring any litigation to be filed in Orange County, Florida.

On appeal, the reviewing court affirmed the trial court’s award of punitive damages as reasonable, but reduced the award to $500,000, citing the state’s statutory cap. The court also affirmed the trial court’s refusal to enforce the forum selection clause, reasoning that fraud in the underlying transaction rendered the forum selection clause in the contract unenforceable.

Click on the PDF titles below to view.

Docket link

Operative Complaint

Critical Orders

Critical Briefs

Transcripts

Click on the PDF titles above to view.

Parties

Plaintiffs/Appellees:

Nathan and Patricia Overton

Plaintiffs/Appellees’ counsel:

John O. Belcher and Curtis R. Harrington

Defendant/Appellants’ counsel:

Westgate Resorts, Ltd., L.P.

Defendant’s counsel:

Gregory Logue and Robert L. Vance

copyright © 2020 – 2022 Timeshare Law Library

By using this site and its services you agree to the Terms of Service of this site.

By continuing to use this site you agree to these Terms of Service and acknowledge that you understand that you are agreeing to binding legal terms.