The court called “chutzpah” on Wyndham and denied Wyndham’s motion to compel arbitration, because Wyn ”failed to comply with the AAA’s policies.”
Timeshare owners allege causes of action against Wyndham for breach of contract; breach of implied covenant of good faith and fair dealing; declaratory relief; violation of Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”); and fraud in the inducement. [1-1]
The Court denied Wyndham’s Motion to Compel Arbitration because Wyndham failed to comply with AAA’s arbitration policies.
In their Complaint, the timeshare owners alleged that in May 2019, they were on vacation at a Wyndham resort in West Palm Beach, Florida when Wyndham’s sales staff “befriended” the 61 and 78 year old couple and offered them incentives to attend a timeshare presentation.
“The salesperson that was assigned to Plaintiffs was so nice and friendly and said she would help whenever assistance was needed, however despite repeated calls, she never responded. Finally in response to a text message explaining the buyers’ frustration and issues, she did nothing but respond with a frowning emoji”.
As to the breach of contract claim, the timeshare owners claim Wyndham:
In support of the breach of the implied covenant of good faith and fair dealing claim, the timeshare owners allege Wyndham:
In the declaratory relief cause of action, the timeshare owners allege and seek the following declaratory relief from the Court:
In the Complaint, the timeshare owners claim Wydham violated the FDUTFA by unfair methods of competition, unconscionable acts or practices and unfair or deceptive acts or practices such as:
In the sixth cause of action against Wyndham, the timeshare owners allege Wyndham fraudulently induced them to enter into timeshare contract in the following manner:
The timeshare owners prayed for the Court to declare the Security Agreement void ab initio; to rescind the Security Agreement; for restitution of all monies the timeshare owners paid to Wyndham; for compensatory and punitive damages; and for compensation for their attorneys’ fees.
3/22/2021- ORDER DENYING WYDHAM’S MOTION TO COMPEL ARBITRATION :
The timeshare owners initially brought a claim in arbitration against Wyndham before the American Arbitration Association (“AAA”) as required by the timeshare agreement with Wyndham. AAA denied to hear the claim because Wyndham did not cooperate with their procedures. AAA advised the timeshare owners that they could sue in state court. When the timeshare owners filed this claim, Wyndham removed the action to the United States District Court for the District of New Jersey and now requests the USDC compel the timeshare owners to participate in arbitration. As artfully stated by the Court:
“[C]hutzpah alert- now [Wyndham] moves to compel arbitration.”
“Wyndham is not the first defendant to bobble an arbitral forum, only to later seek to compel arbitration when the other party sued.” Courts review this issue of compelling the timeshare owners to participate in arbitration based on the text of the Federal Arbitration Act (“FAA”),and waiver and material breach by the compelling party. The Court analyzed the issue using all three doctrinal lenses but came to the same conclusion under each: Wyndham cannot compel the timeshare owners to arbitrate.
The FAA provides two ways to enforce arbitration agreements: the Court should stay an arbitrable case “until such arbitration has been had in accordance with the terms of the agreement. . . “ pursuant to Section 3 or [a] party aggrieved by the alleged failure, neglect, or rusual of another to arbitrate…may petition any United States district court. .. for an order directing that such arbitration proceed in the manner provided for in such agreement.” (Section 4).
The Court denied Wyndham’s motion pursuant to Sections 3 and 4 because:
Wyndham failed to follow the arbitration rules which amounted to a waiver of the right to compel arbitration by acting inconsistently with the right to arbitrate.
It is not equitable to allow Wyndham to give the timeshare owners “the runaround, then reinvoke the arbitral forum Plaintiffs were seeking in the first place.” In addition, Wyndham failed to:
The timeshare owners have shown prejudice by:
Wyndham additionally requested the court appoint an arbitrator under section 5 of the FAA. However, the Court declined to do so because:
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Plaintiffs: BRADLEY B. HEISMAN, JULIA MATONTI
Plaintiffs’ counsel: WOLFGANG HEIMERL, HEIMERL LAW FIRM
Defendants: WYNDHAM VACATION RESORTS, INC.
Defendants’ counsel: CAITLIN CAMERON CONKLIN, DANIEL M. ELIADES of K&L Gates LLP