Lingard v. Holiday Inn Club Vacations, Inc.
| Docket Number | 6:23-cv-323-PGB-RMN |
| Decision Date | 20 July 2023 |
| Parties | ANGELIQUE L. LINGARD and SUDARIEN D. SMITH, Plaintiffs, v. HOLIDAY INN CLUB VACATIONS, INC. and WILSON RESORT FINANCE, LLC, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
This cause comes before the Court on Defendants Holiday Inn Club Vacations, Inc. and Wilson Resort Finance, LLC's (the “Defendants”) Motion to Dismiss the Second Amended Class Action Complaint (Doc. 25 (the “Motion”)) and Plaintiffs Angelique L. Lingard and Sudarien D. Smith's (the “Plaintiffs”) response in opposition. (Doc. 28). Upon consideration, the Motion is due to be granted in part and denied in part.
This dispute stems from Plaintiffs' financing of timeshare interests with Defendants. (Doc. 20). Plaintiffs are both active duty United States Air Force servicemembers who were in a relationship and took family vacations together. (Id. ¶¶ 13-14, 24 36). Defendant Holiday Inn Club Vacations, Inc. (“Defendant Holiday Inn”) sells and finances timeshare interests while Defendant Wilson Resort Finance, LLC (“Defendant Wilson Finance”) jointly finances the same. (Id. ¶¶ 15-16). Defendants allegedly act through their agents collectively with a unity of ownership interests. (Id. ¶¶ 17-22).
Plaintiffs allege that Defendant Holiday Inn targets members of the military to sell them timeshare interests because:
1) they are required to pay their financial obligations in a timely manner under the Uniform Code of Military Justice and are subject to punishment, 2) they have a reliable source of income that is subject to garnishment, 3) they are relatively unsophisticated consumers given their average age and educational background, and 4) for those servicemembers who have a security clearance, they risk losing their job entirely.
(Id. ¶¶ 2-4). Although Defendant Holiday Inn allegedly targets military families, it also fails to provide the required disclosures and improperly requires mandatory binding arbitration and waiver of the right to seek class relief in violation of the Military Leave Act, 10 U.S.C. § 987, et seq (“MLA”). (Id. ¶¶ 5-6).
In November 2016, Plaintiffs learned of and attended a “free vacation” in Orlando, Florida that required them to attend a mandatory presentation. (Id. ¶¶ 24-27). The presentation lasted for four hours and offered membership in Defendant Holiday Inn's timeshare vacation points program. (Id. ¶ 28). During the presentation and in one-on-one conversations later, Defendant Holiday Inn's sales agents informed Plaintiffs that they could sell their timeshare interest back to Defendants at any time because they were in the military. (Id.). After the presentation, Plaintiff Sudarien D. Smith entered into a timeshare contract to purchase a “fixed week” timeshare interest from Defendants' agent Orlando Acevedo, Jr., on November 16, 2016 at the Orange Lake Country Club Villas in Kissimmee, Florida. (Id. ¶¶ 29, 32).
While using their timeshare vacation on or about August 22, 2017 in Florida, Defendants presented the possibility of upgrading their timeshare interests, and Defendant Holiday Inn, through Daniel Foreno, again told them that they could sell back their interests at any time because they were in the military. (Id. ¶¶ 3032, 133). As a result, Plaintiff Smith agreed to purchase and finance an upgraded timeshare interest from Defendants. (Id. ¶ 32).
Defendants continued to pitch additional timeshare interest upgrades, and Plaintiffs continued to purchase and finance them: on August 2, 2018, Plaintiffs refinanced their prior purchases and made additional purchases after a Defendant presentation by Daniel Foreno in Orlando, Florida; later in August of 2019, Plaintiffs again made an additional purchase of timeshare points; on September 21, 2020, Plaintiffs again made a further timeshare interest purchase after attending a briefing with Defendants' agent, Taylor Frommelt, in Las Vegas, Nevada; and in April of 2021, Plaintiff Smith made a final timeshare interest purchase in Galveston, Texas after a sales presentation with Defendant's sales representative, Lindsay Gilbertson. (Id. ¶¶ 33-40, 115-22, 132-39). Throughout this process Plaintiffs were reassured they could sell back their timeshare interests due to their military status. (Id. ¶¶ 37, 115-21, 139). In addition to obtaining financing each time, Plaintiffs provided their social security numbers and their military identification cards along with the other required credit information to Defendant Holiday Inn. (Id. ¶ 55).
During an August 2021 trip to Galveston, Texas, Plaintiffs explained they could no longer afford their existing timeshare contracts and requested that Defendant Holiday Inn buy back the interests sold to them previously pursuant to their military status. (Id. ¶¶ 41-42). Defendants refused. (Id. ¶¶ 42-44). Instead, Defendant Holiday Inn's sales representative, Kim McCurry, again convinced Plaintiffs to consolidate and refinance their prior points in a way that “would reduce the overall maintenance costs.” (Id. ¶¶ 43-44). At the time of the filing of this suit, Plaintiffs have two timeshare financing contracts with Defendants that collectively require them to pay 29% of their combined income on timeshare related costs. (Id. ¶ 46). These two contracts require mandatory arbitration, foreclose seeking relief on behalf of a class, and do not mention the Military Annual Percentage Rate (“MAPR”) as defined by the MLA and its implementing regulations. (Id. ¶¶ 57-75).
The maintenance costs on Plaintiffs' timeshare interests did not decrease, so Plaintiffs ceased to make payments on the two outstanding timeshare contracts. (Id. ¶¶ 47-48). Defendant Holiday Inn reported Plaintiffs' failure to pay to the credit reporting agencies, and these loans are now listed as delinquent. (Id. ¶ 49). Because of this outstanding debt and a corresponding detrimental credit reporting, Plaintiffs were prevented from purchasing a home, are in jeopardy of losing their security clearances, and are subject to involuntary termination from the Air Force. (Id. ¶ 50).
After an original and first amended complaint, Plaintiffs seek recompense on behalf of themselves and all others similarly situated in Count I of the Second Amended Complaint for three alleged violations of the MLA. (Id. ¶¶ 86-106). Specifically, Plaintiffs allege that the standard timeshare contracts failed to include a statement of the MAPR while also containing impermissible binding arbitration and class action waiver provisions. (Id.). In addition, in Count II Plaintiffs bring individual claims under Florida's Deceptive and Unfair Trade Practices Act, FLA. STAT. § 501.201, et seq (“FDUTPA”). (Id. ¶¶ 106-26). Finally, in Count III Plaintiffs raise individual common law fraud claims. (Id. ¶¶ 127-39). Defendants now move to dismiss all three counts for either lack of standing or for failure to state a claim pursuant to Rules 12(b)(1) and 12(b)(6). (Doc. 25). With Plaintiffs' response in opposition (Doc. 28), this matter is ripe for review.
Article III, Section 2 of the United States Constitution limits federal courts' jurisdiction to actual cases and controversies. Standing is part of this limitation, as a “threshold jurisdictional question” that must be resolved before a court can turn to a claim's merits. Bochese v. Town of Ponce Inlet, 405 F.3d 964, 974 (11th Cir. 2005). Courts determine standing at the time of filing. Id. at 976.
Rule 12(b)(1) attacks on subject matter jurisdiction may be facial or factual. Carmichael v. Kellogg, Brown & Root Servs., Inc., 572 F.3d 1271, 1279 (11th Cir. 2009). For facial attacks as here, the court looks to the face of the complaint and determines whether the plaintiff sufficiently alleges standing. Stalley ex rel. U.S. v. Orlando Reg'lHealthcare Sys. Inc., 524 F.3d 1229, 1232-33 (11th Cir. 2008). In doing so, the court is limited to the complaint's allegations and exhibits, which the court must accept as true. Id. at 1232. Factual attacks, in contrast, allow a court “to consider extrinsic evidence such as deposition testimony and affidavits.” Carmichael, 572 F.3d at 1279.
A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” FED. R. CIV. P. 8(a)(1). In order to survive a motion to dismiss made pursuant to Rule 12(b)(6), the complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) ). A claim is plausible on its face when the plaintiff “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. In addition, “the district court may consider an extrinsic document if it is (1) central to plaintiff's claim; and (2) its authenticity is not challenged.” SFM Holdings v. Banc of America Sec., 600 F.3d 1334, 1337 (11th Cir. 2010).
Though a complaint need not contain detailed factual allegations mere legal conclusions or recitation of the elements of a claim are not enough. Twombly, 550 U.S. at 555. Moreover, courts are “not bound to accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986). “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Iqbal, 556 U.S. at 679. Courts must also view the complaint in the light most favorable to the plaintiff and must resolve any doubts as to the sufficiency of the complaint in the plaintiff's favor. Hunnings v. Texaco, Inc., 29 F.3d 1480,...
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