Bluegreen Vacations Unlimited, Inc. v. Timeshare Lawyers, P.A
| Docket Number | Civil Action 20-24681-Civ-Scola |
| Decision Date | 27 October 2023 |
| Parties | Bluegreen Vacations Unlimited, Inc. and Bluegreen Vacations Corporation, Plaintiffs, v. Timeshare Lawyers P.A., and others, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
VERDICT AND ORDER FOLLOWING NON-JURY TRIAL
In this trial, the Court has learned that tens of thousands of timeshare owners have been victimized twice: first by the timeshare industry, which used false and misleading tactics to induce the owners to purchase their timeshares -often financed with high-interest mortgages; and second by the timeshare exit industry, which charged the owners thousands of dollars and used false and misleading tactics to tortiously induce them to breach their contracts with the timeshare companies, thus exposing them to damaged credit.
Bluegreen Vacations Unlimited and Bluegreen Vacations Corporation (collectively “Bluegreen”) filed this action seeking relief from a multi-party scheme to induce Bluegreen timeshare owners to breach their timeshare contracts.
While Bluegreen initially instituted the action against all those purportedly involved in the scheme, as a result of various settlement agreements and the Court's decisions on dispositive motions, only the Defendants Pandora Marketing LLC, and its owners, Rich Folk, and William Wilson (collectively, the “Marketing Defendants”) remain. As suggested by their name, the Marketing Defendants' role in the scheme is to advertise timeshare exit services by promoting a legitimate process to exit timeshare contracts while protecting the customers' credit. In reality, theirs was not a legitimate process and instead merely induced Bluegreen owners to breach their timeshare contracts through nonpayment, thus injuring many of their credits.
Bluegreen brought claims against the Marketing Defendants for false advertising in violation of the Lanham Act (Count One) tortious interference with contractual relations (Count Five), civil conspiracy to commit tortious interference (Count Seven), and violation of Florida's Deceptive and Unfair Trade Practices Act (“FDUTPA”) (Count Six).
Previously, the parties filed cross-motions for summary judgment, and on May 2, 2023, the Court issued an omnibus order addressing the motions.
(Summ. J. Order, ECF No. 437.) The Court denied the Marketing Defendants' motion for summary judgment in its entirety and granted in part and denied in part Bluegreen's motion for partial summary judgment. Specifically, the Court granted summary judgment in Bluegreen's favor only with respect to its claim for tortious interference as to fifteen timeshare owners (except as to the issue of damages); its claim for injunctive relief pursuant to FDUTPA; and on the Marketing Defendants' affirmative defenses.
On May 5, 2023, shortly after this Court entered its omnibus order on the parties' cross-motions for summary judgment, Bluegreen filed a notice indicating its withdrawal of all requests for legal relief, and specifically monetary damages. (ECF No. 438.) In the notice, Bluegreen stated that it had chosen to proceed only with its requests for equitable relief, namely a permanent injunction and disgorgement of the Defendants' profits, as well as an award of attorney's fees and costs. Together with the notice, Bluegreen filed a motion to proceed exclusively via bench trial, which the Court granted. (ECF Nos. 439, 458.)
As a result of the Court's order on summary judgment and Bluegreen's decision to forego all forms of legal relief, the only issues pending before the Court are whether Bluegreen is also entitled to injunctive relief pursuant to its claims for false advertising (Count One), tortious interference (Count Five), and civil conspiracy (Count Seven), and whether it is entitled to disgorgement damages pursuant to its claim for false advertising (Count One).
The Court held a four-day, non-jury trial, beginning on August 21, 2023. Prior to the trial, the parties submitted a joint pretrial stipulation (ECF No. 515), as well as their proposed findings of fact and conclusions of law (ECF Nos. 501, 509). Following the trial, the parties also submitted post-trial proposed findings of fact and conclusions of law. (ECF Nos. 551, 552.)
The Court has carefully reviewed these submissions as well as the transcript of the trial proceedings. After considering the credible testimony and evidence, and the applicable law, the Court finds that Bluegreen has prevailed on its claims for false advertising (Count One), tortious interference (Count Five), and civil conspiracy (Count Seven), and is entitled to injunctive relief. The Court further finds that Bluegreen is entitled to $100,000 in disgorgement damages pursuant to its claim for false advertising (Count One).
Bluegreen is a timeshare developer based in Boca Raton, Florida. Bluegreen maintains a portfolio of approximately seventy vacation resorts, each of which are comprised of various units within. Tr. of Bench Trial Proceedings, Vol. I (“Trial Tr. Vol. I”), 28:11-12, 45:16-18. Bluegreen sells portions of such units to consumers. Id. at 28:12-13. Through purchase of the Bluegreen vacation interests, also known as timeshares, owners are allotted an associated number of “points.” Id. at 108:9-10.
The points that a Bluegreen timeshare owner acquires give the owner access to Bluegreen's entire portfolio of resorts, which permits owners to book vacations at multiple resorts. Id. at 28:13-16, 46:13-15. When booking a stay at a Bluegreen resort, owners are able to book stays that match the number of points they hold. Id. at 45:4-7.
Consumers may choose to finance their purchase of Bluegreen timeshare interests, which Bluegreen will provide itself. Id. at 29:15-22. Thereafter, Bluegreen will collect payments on the debt and may act as the servicer of the loan. Id. at 29:22-23, 93:2-4.
Bluegreen maintains adequate inventory to make additional sales at all times. Id. at 61:3-5. There is no need for Bluegreen to recover inventory for it to continue its sales operations. Id. at 6-11.
Many of the timeshare owners testified that Bluegreen lied to them, made misrepresentations to them during the sales process, pressured them into purchasing and/or upgrading, and otherwise defrauded them. See Trial Tr.
Vol. IV, 9:16-21. These lies, misrepresentations, and high-pressure sales tactics include the following:
Bluegreen asked the Court to accept as credible the testimony of the timeshare owners relating to misrepresentations made to them by Pandora, but to reject the same owners' testimony concerning misrepresentations made to them by Bluegreen. This is simply not plausible. See Tr. of Bench Trial Proceedings, Vol. IV (“Trial Tr. Vol. IV”), 13:11-23. As the Court put it during the trial, it cannot be true that “these tens of thousands or hundreds of thousands of people that are going to these timeshare exit companies”-people who are “so dissatisfied with [their timeshares] that they're willing to pay thousands of dollars to get out”-are “just all wrong.” Id. at 13:24-14:7.
Pandora is a timeshare exit company based in California. See P-1001 through 1191 (Pandora customer services agreements referencing California office). Pandora is owned and operated by Folk and Wilson. Deposition of Rich Folk, Aug. 28, 2020 (“Folk Dep.”), 30:12-13, 17-18, 31:19-21. Folk and Wilson are Pandora's managing partners and the final decision-makers for Pandora's business decisions. Folk Dep. at 30:12-13, 17-18, 31:1-7, 15-18.
As a timeshare exit company, Pandora advertises to timeshare owners the ability to terminate the owner's obligations under his or her timeshare contract. P-1390,[1] RFA No. 70 (admitting that Pandora advertises the ability to terminate a timeshare owner's obligations under a timeshare contract). Pandora advertises that its process is “legal,” even though Pandora is not itself a law firm or registered with the California Bar as a lawyer referral service. See P-1390 at RFA Nos. 84 (admitting that Pandora is not a law firm), 163 (admitting that Pandora claims its exit “process is legal”), 168 (admitting that Pandora makes the claim that it can “legally and permanently exit your timeshare”); Trial Tr. Vol. I, 249:17-22; Tr. of Bench Trial Proceedings, Vol. III (“Trial Tr. Vol. III”), 102:15-17.
Pandora takes the position that it only accepts as...
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