Wyndham Resorts v US Consumer Attys, Newton Group

Summary:

In its proposed Second Amended Complaint, Wyndham alleges that defendants falsely advertise the ability to cancel timeshare contracts between Wyndham and owners of Wyndham timeshares, and after taking fees, instructs the owners to default their timeshare obligations.  Wyndham alleges that the owners could have breached their contracts with Wyndham at no charge without Defendants’ assistance and that Defendants services are “illusory” and “a scam,” because Wyndham argues that the advertised “cancellation” of a timeshare contract is different than the actual breach and termination of the owners’ timeshare contracts. Wyndham concedes that Defendants at times negotiate a deed-in-lieu on behalf of the Wyndham owners, however, Wyndham alleges that Defendants fail to inform the Wyndham owners that the consequence of doing so has “substantial negative impacts” on the owners’ credit. Moreover, Wyndham alleges that a Wyndham timeshare owner can “terminate his or her contract for free, or at a much lower cost, by appealing directly to Wyndham or the Ovation® program,” Wyndham’s putative voluntary surrender program. Finally, Wyndham alleges that the attorney defendants “undermine” the “so-called lawyer privilege to recommend to its clients that the Timeshare Contract may be breached, by rarely filing lawsuits on behalf of those Wyndham Owners for the equitable rescission of those Timeshare Contracts. [The attorney defendants’] across-the-board strategy to induce its clients to breach their Timeshare Contracts is not sound, individualized legal advice done in the course of representation of any clients, but rather an overall business decision of the law firm itself that is not privileged.”

In its proposed Second Amended Complaint, Wyndham alleges that the USCA defendants have shifted their business to new entities, Timeshare Attorneys of America and Attorney Advocates of America. 

Wyndham seeks actual and punitive damages, disgorgement, attorney fees, and injunctive relief. 

In its answer, The Newton Group denies Wyndham’s allegations and responds that Wyndham fails to state its claims. The Newton Group alleges in its affirmative defenses that Wyndham has “for years been fully aware of services provided by Newton Defendants and [Wyndham has] voluntarily and willingly worked with Newton Defendants on consumer timeshare exits or transfers.” The Newton Group additionally argues that Wyndham alleges “a program that allows consumers to exit their timeshares for zero or little cost and lawfully terminate their timeshare contracts, yet Plaintiffs nonetheless allegedly have chosen to foreclose on consumer timeshare interests or have sued consumers for damages instead of allowing them to take advantage of that very program; if Plaintiffs have been damaged in some way, it is their own fault, for they could have prevented such damage by allowing use of the very consumer program they tout.” Moreover, according to the Newton Group, it is Plaintiffs who have engaged in oppressive, unconscionable, fraudulent, unfair, unlawful, anti-consumer sales and business practices and tactics, taking advantage of vulnerable consumers. Plaintiffs’ purpose in pursuing claims against Newton Defendants is not pro-consumer but is anti-consumer, the aim being to make it more difficult for consumers who do not want and/or cannot afford their timeshare interests to exit or otherwise secure relief therefrom. Plaintiffs seek to prevent such consumers from seeking assistance or representation and from securing information about and enforcing their rights, legal or otherwise, and to force consumers to deal only with Plaintiffs when they desire relief from timeshare obligations, so that Plaintiffs may seek to pressure or deceive consumers into retaining such obligations or even agreeing to further such obligations.”

Similarly in its answer, USCA and Porter deny Wyndham’s allegations and respond that Wyndham fails to state its claims.   USCA and Porter allege in their affirmative defenses that “[t]o the extent that Plaintiffs have suffered any injury to their reputation or goodwill, that injury was caused by Plaintiffs themselves and Plaintiffs’ own conduct,” and that Wyndham is barred by the doctrine of unclean hands, including Wyndham’s “unethical and high-pressure timeshare sales, advertising and marketing practices through which [Wyndham representatives] coerce and induce unwitting consumers to enter into purchase and sale contracts that bind consumers and their heirs to timeshare units that they are unable to freely alienate and to exorbitant maintenance fees that [Wyndham representatives] fail to fully disclose and intentionally withhold from customers.”

Related: On 3/9/18, Diamond, represented by the same counsel, brought a similar complaint against USCA, captioned DIAMOND RESORTS INTERNATIONAL, INC. et al v. US CONSUMER ATTORNEYS, P.A., Case No. 9:18-cv-80311. In amended complaints, Diamond subsequently named all of the same defendants as in the Wyndham v USCA lawsuit. Both cases were assigned to Magistrate Judge Bruce E. Reinhart in US District Court, Southern District of Florida. In that case, a stipulated permanent injunction was entered against USCA, resolving the case as to that defendant.