Overton v Westgate Resorts

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The trial court ordered the contract rescinded, and required Westgate to refund the Overtons’ payment of $39,280.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.