Westgate

Westgate Resorts v Reed Hein & Assoc., SGB Law and Ken Privett Esq.

Case Number: 6:18-cv-01088

Last Updated: June 5, 2021

Status

Pending jury trial

Location

USDC, Middle District of Florida (Orlando)

Presiding Judge

Judge Gregory A. Presnell

Date Filed

07/09/2018

Highlights

Court order dismissing Lanham Act claim; Rulings on Daubert Motions

Case Posture

Claims:

Westgate asserted causes of action against TET for tortious interference with existing contracts, violation of Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”), and false advertising under the Lanham Act.

Westgate asserted two claims of civil conspiracy against TET and the attorneys.

Posture:

Stipulations were entered dismissing all claims against Privett and SGB, Hailey and Breen with all parties bearing their own attorney’s fees and costs.  Case is at issue as to TET with trial pending.

Summary:

Westgate claimed TET’s business plan is to break the contracts between Westgate and the timeshare owners by redirecting the money that timeshare owners would normally pay to Westgate in annual maintenance, mortgage payments and taxes to TET.  Westgate alleged TET instructs timeshare owners to stop making their required payments to Westgate.  TET retains the attorneys to assist in its’ “exit” scheme.  The attorneys send boilerplate demand letters to Westgate instructing Westgate not to speak with the timeshare owners and demanding that Westgate terminate the timeshare agreements with the timeshare owners.  

Allegedly, the attorneys retained by TET never meet with the timeshare owners.  TET deliberately conceals the identity of the attorneys from the timeshare owners by insisting that updates on the status of the exit from the timeshare can only be obtained through TET.  TET charges the timeshare owners a substantial fee, which differs between each timeshare owner to assist timeshare owners in exiting their timeshare agreement with Westgate.    TET does not do any of the work to accomplish the “exit” from the timeshare agreement.  TET allegedly paid the attorneys a minimum of $1,200 per file, with a minimum of 800 files per month to send a generic boilerplate letter to Westgate.   After a year or more of nothing being done to assist timeshare owners with the “exit”, TET informs the timeshare owner that the attorneys could not help the timeshare owners anymore.  Since the demand letters forbid Westgate from speaking with the timeshare owner, most owners are not informed that nothing was accomplished until they are served with Westgate’s collection and/or foreclosure lawsuits.

Westgate requested an injunction and restraining order against TET to cease and desist falsely advertising and soliciting Westgate timeshare owners.  Westgate also requested the Court award it  special damages, lost profits, punitive damages and its attorneys’ fees and costs in bringing this action as against TET and the attorneys.

Selected Events:

7/14/2020- Order on Westgate’s Motion to Exclude Expert Witness Testimony and Report of Steven Marshall- The Court granted Westgate’s motion to exclude TET’s expert witness Steven Marshall’s testimony and report from trial on the basis that although Marshall is a qualified appraiser and his observations about the timeshare industry appear to be based on reliable data, his opinion about the economic difficulties timeshare owners suffer at the hands of the timeshare industry does not require expert testimony.  This information can be relayed to the jury through lay person testimony during the trial.

4/27/2020 – Order on WG’s Motion to reconsider grant of summary judgment on Lanham Act claim [156]

2/11/2020 – Order granting TET’s Motion for Summary Judgment on Lanham Act

2/11/2019- Order on Westgate’s Motions to Dismiss TET, Privett and SGB’s Affirmative Defenses [87]:  

The court found that the defenses at issue, whether they should be considered affirmative defenses or denials were adequate to provide Westgate with adequate notice of the factual and legal defenses TET and the attorneys planned to raise at trial.   However, SGB’s ninth affirmative defense based on intra-corporate conspiracy doctrine appears to assert an affirmative defense however, it is not an affirmative defense to the tort of conspiracy.  The Court struck SGB’s ninth affirmative defense with leave to amend.  The Court deemed SGB’s second and eight defenses to be denials and declined to strike those defenses.

10/24/2018- Order on TET, Privett and SGB’s Motions to Dismiss [56]:  

TET’s Motion to Dismiss:

The court denied TET’s motion to dismiss Westgate’s tortious interference with existing timeshare contracts claim because the allegations pled in the Complaint were sufficient to put TET on notice and the fraud was plead with specificity.    Westgate pled it had valid and enforceable timeshare agreements with the timeshare owners, that  TET knew of Westgate’s existing agreements with the timeshare owners and urged Westgate timeshare owners to stop making payments to Westgate.  As a result, Westgate suffered damages.

TET’s motion to dismiss Wesgate’s claim that TET violated Florida’s Deceptive and Unfair Trade Practices Act was also denied.  TET argued Westgate’s FDUTPA claim should fail as Westgate is not a consumer.  The court denied TET’s motion as FDUTPA claims are not limited to consumers but to all entities that can prove the elements of a FDUTPA claim.  Additionally, Westgate’s claims of fraud were not based on mere words of puffery but by alleged false and misleading advertising statements.

The court also denied TET’s motion to dismiss Westgate’s  false advertising under the Lanham Act as TET’s advertising, as pled by Westgate was not mere puffery or non-actionable opinions.  Additionally, Westgate was not required to plead it was in commercial competition with TET as it pled it suffered from reputational injury.  Finally, Westgate also sufficiently alleged it was injured and those injuries were proximately caused by TET.

Civil Conspiracy Claims:  

Westgate asserted two civil conspiracy claims, one against TET and SGB and another against TET and Privett.  The court denied the motions to dismiss as to TET, SGB and Privett.  The argument that the demand letters sent by the attorneys on behalf of Westgate timeshare owners were governed by the  litigation privilege thereby barring Westgate’s claims.  The court was unable to reasonably conclude that Westgate’s claims were covered by the litigation privilege, which is an affirmative defense.  As such, the court denied the motions as to this claim.

Parties

Plaintiffs: Westgate GV at the Woods, LLC, Westgate River Ranch Owners Association, Inc., Westgate GV at Painted Mountain, LLC, Westgate Towers, LLC, Westgate Resort, Ltd., Westgate Myrtle Beach Ocean Front Owners Association, Inc., Westgate Lakes, LLC, Westgate Town Center Owners Association, Inc., Painted Mountain Golf Villas Condominium Association, Inc., Grand Vista at Emerald Point Condominium Owner’s Association, Inc., Westgate Flamingo Bay, L.L.C., Westgate GV at Emerald Pointe, LLC, Westgate Vacation Villas, LLC, Westgate Park City Resort & Spa, Owners Association, Inc., Cedar Ridge at the Woods Condominium Owners Association, Inc., Westgate Vacation Villas Owners Association, Inc., Westgate Las Vegas Resort, LLC, Westgate Resorts, Inc., Westgate Myrtle Beach, LLC, Westgate Lakes Owners Association, Inc., Westgate Palace, LLC, Westgate Flamingo Bay, Las Vegas Owners Association, Inc., Westgate Branson Woods Owners Association, Inc., Westgate Towers Owners Association, Inc., Westgate Towers North Owners Association, Inc., Westgate Palace Owners Association, Inc., Westgate Historic Williamsburg, Owners Association, Inc.

Plaintiffs’ counsel:  Brian R. Cummings, Jeffrey Aaron Backman, and Richard W. Epstein

Defendant:  Thomas James Breen, James D. Hailey, Trevor Hein, Ken B. Privett PLC, Thomas Parenteau, Ken B. Privett, Brandon Reed, Reed Hein & Associates, LLC, Schroeter Goldmark & Bender, P.S.

Defendant’s counsel: 

Amy Leigh Baker and John Y. Benford.

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