The court refused to enforce a timeshare contract’s forum selection provision that would otherwise require timeshare owners to litigate in Mexico; Diamond seeks to overturn the ruling.
In her lawsuit, timeshare owner Sandra Cooksey, represented by attorney Leonard DuBoff of the DuBoff Law Group, LLC, in Portland Oregon, claims fraud, misrepresentation, abuse in violation of Oregon’s statute protecting elders, and violation of Oregon’s Unlawful Trade Practices Act.
Ms. Cooksey asks the Court to order Diamond to rescind her timeshare contract, and to pay treble damages and attorney’s fees as provided by Oregon’s elder abuse statute.
Timeshare owner Sandra Cooksey alleges that Diamond made material and fraudulent misrepresentations that her purchase of additional timeshare points would be akin to having deeded ownership in a mortgaged property. She additionally alleges that Diamond misrepresented the true amount of her monthly maintenance fee obligation and attempted to open a new credit card in her name in order to pay for her down payment.
According to the complaint, Ms. Cooksey, a retired 66-year-old, purchased a timeshare from Diamond Resorts in January of 2018. On March 4, 2109, Ms. Cooksey, traveling alone, used her timeshare membership to check into a Diamond Resorts property in San Jose del Cabo, Mexico. Upon check-in, the concierge told Cooksey that she would be eligible for a $100 certificate if she attended a VIP lunch. Ms. Cooksey alleges that at the lunch, a Diamond employee began reviewing her 2018 sale documents and told her she was eligible for a gift left for her by her previous salesman. She alleges that the representative advised her that this “gift” allowed her to purchase more points at a reduced rate, and told her the additional points were like having a deeded ownership interest in a property with a mortgage. She alleges that the sales representative also engaged in conversations that made her feel that they were becoming “special, close friends,” and told her that they had a “spiritual connection.”
Cooksey alleges she explained to the Diamond representative that she did not have the down payment of $10,600, but the representative attempted to open a new American Express card in her name. When the employee could not complete the transaction, the timeshare owner provided two other credit cards for the down payment. The timeshare owner alleges she was given insufficient time to read documents that were put in front of her and expressed to the sales representative that she feared it would require her to sell her residence.
Ms. Cooksey alleges that she returned to Oregon under the impression she only needed to pay a monthly maintenance fee of $119; however, she subsequently received notice from Diamond that $1,428.47 would be deducted from her bank account monthly.
In its answer, Diamond denies liability, and alleges, inter alia, that it is not a party to the timeshare contract; alleging that the contract instead was made with DPM Acquisition Mexico, S. De. R.L. De. C.V. (“DPM:). Further, Diamond asserts that even if it were a party to the contract, the contract states it must be litigated in Mexico, and that the law of Mexico, not Oregon, applies.
9/4/20 – FINDINGS & RECOMMENDATIONS DENYING DIAMOND’S INTERLOCUTORY APPEAL 
2/20/20 – FINDINGS & RECOMMENDATIONS DENYING DIAMOND’S MOTION TO DISMISS 
Diamond moved unsuccessfully to dismiss the timeshare owner’s case at the pleading stage, arguing that Diamond was not a proper party because Cooksey’s timeshare contract was with a Mexican company, DPMAM, a wholly owned affiliate of Diamond, and because the contract purportedly required any dispute to be litigated in Baja California Sur, Mexico. Diamond argued it was not a “named party” to the timeshare contract, although Diamond conceded it is “the upstream corporate owner” of the resort.
The Magistrate Judge disagreed, ruling that Diamond could be liable for its affiliate’s wrongful acts based on the allegations that Diamond had a close relationship with DPM and could be found to be its alter ego. As for the forum selection clause, based on its examination of extrinsic evidence, the court ruled that term was unenforceable. The judge explained that an “adhesion contract” is “a standard-form contract prepared by one party, to be signed by another party in a weaker position, usu[ally] a consumer, who adheres to the contract with little choice about the terms.” The forum selection clause was against Oregon’s public policy disapproving forum selection clauses in such adhesion contracts.
Over Diamond’s objections, the magistrate judge in Oregon recommended in his findings and recommendations (“F&R”) that the presiding judge deny Diamond’s motion that the court certify its order denying the motion to dismiss the complaint for an interlocutory appeal.
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Plaintiff: SANDRA J. COOKSEY
Plaintiffs’ counsel: DuBoff Law Group, PC
Defendants: DIAMOND RESORTS INTERNATIONAL CLUB, INC.
Defendants’ counsel: Ballard Spahr LLP (Local Counsel Betts, Patterson & Mines, P.S.