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Orange Lake Country Club, Inc. v. Castle Law Group, P.C.

United States District Court, M.D. Florida, Orlando Division

March 29, 2018




         This matter comes before the Court without a hearing on the motions to dismiss filed by the following Defendants: Sean Austin (Doc. 99); Castle Law Group, P.C. (“Castle Law”) and Judson Phillips (“Phillips”) (Doc. 103); and Resort Relief, LLC (“Resort Relief”) and Kevin Hanson (“Hanson”) (Doc. 106). In resolving the motions, the Court has considered the omnibus response in opposition (Doc. 112) filed by the Plaintiffs, Orange Lake Country Club, Inc. (“Orange Lake”) and Wilson Resort Finance, LLC (“Wilson Finance”).

         I. Background

         The instant case involves a dispute between entities involved in selling timeshares and a group that promises to help timeshare owners get out of their contracts. According to the allegations of the Third Amended Complaint (Doc. 91) (henceforth, “TAC”), which are accepted in pertinent part as true for the purpose of resolving the instant motions, Orange Lake develops and sells timeshare properties throughout the United States, including Florida. (TAC at 5). Individuals who buy timeshares from Orange Lake (henceforth, “Orange Lake Owners”) sometimes obtain financing through Wilson Finance. (TAC at 6). The Plaintiffs allege that Defendant Castle Venture Group, LLC (“Castle Venture”) funds Defendant Castle Marketing Group, LLC (“Castle Marketing”), which (along with Resort Relief) solicits timeshare owners, directing them to retain Castle Law. (TAC at 4). According to the records of these various entities, Austin is the sole member of Castle Marketing (TAC at 6-7); Defendant William Keever (“Keever”) and Austin are the members of Castle Venture (TAC at 7); Hanson is the sole member of Resort Relief (TAC at 8); and Phillips, a lawyer, is associated with Castle Law (TAC at 7).

         When they buy their timeshares, Orange Lake Owners enter into contacts in which they agree to certain ongoing obligations. Among other things, they agree to pay assessments, maintenance fees, and a portion of the common expenses for the entire development. (TAC at 5-6). According to the Plaintiffs, the Defendants are engaged in a scheme to swindle Orange Lake Owners by falsely promising to get them out of these contracts. (TAC at 17). The Plaintiffs contend that the Defendants use misleading advertising to solicit Orange Lake Owners, claiming a high likelihood of success, when in reality they are rarely successful. (TAC at 18). Further, the Plaintiffs contend, after Orange Lake Owners retain Castle Law, Castle Law advises them to breach their contracts with Orange Lake as a way of increasing the chance that Orange Lake will agree to let them out of their contracts. (TAC at 23-24).

         The Plaintiffs filed the instant suit on June 8, 2017. (Doc. 1). In response to a motion to dismiss for lack of jurisdiction (Doc. 24), the Plaintiffs filed an amended complaint (Doc. 29) on August 7, 2017. After a second motion to dismiss on jurisdictional grounds[1] (Doc. 35), the Plaintiffs filed a second amended complaint (Doc. 60) on September 21, 2017. On December 15, 2017, the Court granted in part motions to dismiss filed by Castle Law and Phillips (Doc. 61) and by Austin (Doc. 62). The Court denied the motions insofar as they sought dismissal of the Plaintiffs' tortious interference with contract and civil conspiracy claims, but granted the motions as to claims for tortious interference with advantageous business relationships, violations of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §§ 501.201-501.23 (“FDUTPA”), violations of Florida's Vacation Plan and Timesharing Act, Fla. Stat. §§ 721.02-721.98 (“FVPTA”), and a standalone claim for injunctive relief. (Doc. 84 at 4-7).

         On December 27, 2017, the Plaintiffs filed their Third Amended Complaint (Doc. 91). In addition to the claims for tortious interference with contract (Count I) and civil conspiracy (Count II), which survived from the previous pleading, the Plaintiffs again assert claims for violations of the FVPTA (Count III) and FDUTPA (Count IV). In addition, they assert claims under the Lanham Act, 15 U.S.C. 1125(a) (Counts V-VI) and for misleading advertising in violation of Fla. Stat. § 817.41 (Counts VII-VIII).

         II. Legal Standard

         Federal Rule of Civil Procedure 8(a)(2) requires “a short and plain statement of the claim showing that the pleader is entitled to relief” so as to give the defendant fair notice of what the claim is and the grounds upon which it rests, Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957), overruled on other grounds, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A Rule 12(b)(6) motion to dismiss for failure to state a claim merely tests the sufficiency of the complaint; it does not decide the merits of the case. Milburn v. United States, 734 F.2d 762, 765 (11th Cir.1984). In ruling on a motion to dismiss, the Court must accept the factual allegations as true and construe the complaint in the light most favorable to the plaintiff. SEC v. ESM Group, Inc., 835 F.2d 270, 272 (11th Cir.1988). The Court must also limit its consideration to the pleadings and any exhibits attached thereto. Fed.R.Civ.P. 10(c); see also GSW, Inc. v. Long County, Ga., 999 F.2d 1508, 1510 (11th Cir. 1993).

         The plaintiff must provide enough factual allegations to raise a right to relief above the speculative level, Twombly, 550 U.S. at 555, 127 S.Ct. at 1966, and to indicate the presence of the required elements, Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1302 (11th Cir. 2007). Conclusory allegations, unwarranted factual deductions or legal conclusions masquerading as facts will not prevent dismissal. Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1185 (11th Cir. 2003).

         In Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), the Supreme Court explained that a complaint need not contain detailed factual allegations, “but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement.” Id. at 1949 (internal citations and quotations omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not ‘show[n]' - ‘that the plaintiff is entitled to relief.'” Id. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)).

         III. Analysis

         Before addressing the merits of the claims asserted against them, Castle Law and Phillips argue that the Third Amended Complaint falls short of the requirements of Fed.R.Civ.P. 8(a), which requires that such a pleading provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” They point out that the Third Amended Complaint is 68 pages long - twice as long as the Second Amended Complaint - with 238 numbered paragraphs. The first 100 paragraphs are incorporated into each of the document's eight counts, despite the fact that many of them appear to have no relevance to at least some (if not all) of the claims asserted. For example, roughly four pages are devoted to the formation of Castle Law Group by Keever, Austin, and Philips, even though that information appears to have no relevance to the question of whether any of the Defendants tortiously interfered with the Plaintiffs' contracts or violated the FVPTA. But while the latest pleading is unnecessarily lengthy and filled with redundancies, the Court finds it does not quite warrant dismissal as a shotgun pleading or for violation of Rule 8(a).

         Castle Law and Phillips also argue that dismissal is required because some of the Plaintiffs' allegations in regard to allegedly false advertising are contradicted by some of the exhibits attached to the Third Amended Complaint. (Doc. 103 at 5-7). Without going through all of the examples, the Court notes that among other things the Plaintiffs allege, as false or misleading, communications from Castle Law in which it “guaranteed timeshare owners it would relieve them of their timeshare obligations within one year to eighteen months”. (Doc. 103 at 6). In its motion, Castle Law does not dispute having made this statement or the other examples attributed to it. Instead, it cites to the standard engagement contract between itself and its clients - attached to the Third Amended Complaint as Exhibit S - which states that

Client understands and agrees that there is no guaranteed result of the Firm's services or that Client will recover money or other property as a result of the Firm's engagement. Client understands and agrees that there is no way to determine the time frame in which the Client's case will be resolved and that there is no guarantee regarding the time required to resolve your Claims.

(Doc. 91-19 at 3). However, a truthful disclosure is not necessarily sufficient to overcome the net impression caused by a misleading communication. See, e.g., FTC v. World Patent Marketing, 2017 WL 3508639, * 13 (S.D.Fla. Aug. 16, 2017). Even if every Castle Law customer signed an engagement letter with the quoted language - something that cannot be determined at this stage of the proceedings - it would not necessarily require dismissal.

         A. Count I - Tortious Interference and Count II - Civil Conspiracy

         Austin contends that the surviving tortious interference claim should be dismissed because the Plaintiffs fail to identify any specific contracts with which the Defendants have allegedly interfered and fail to allege facts supporting the allegation that he, personally committed such interference. (Doc. 99 at 2-6). However, this claim survived the previous round of motions to dismiss, including one filed by Austin himself. No. party has pointed to any material change in the allegations of Count I or the law of tortious interference that would warrant reexamination of this claim. The same holds true for the civil conspiracy claim asserted in Count II, which also survived the previous round of motions to dismiss. The current motions will therefore be denied as to these two counts.

         B. Count III - Violation of Fla. Stat. § 721.121

         The Plaintiffs allege that Defendants Resort Relief, Hanson, Castle Marketing and Austin violated a recordkeeping obligation under Florida's Vacation Plan and Timesharing Act (“FVPTA”), Fla. Stat. §§ 721.02-721.98. The Plaintiffs allege that these four Defendants were “lead dealers, ” which is defined by the FVPTA in pertinent part as

any person who sells or otherwise provides a resale service provider or any other person with personal contact information for five or more owners of timeshare interests. In the event a lead dealer is not a natural person, the term shall also include the natural person providing personal contact information to a resale service provider or other person on behalf of the lead dealer entity.

Fla. Stat. § 721.05(42). The Act defines “personal contact information” as

any information that can be used to contact the owner of a specific timeshare interest, including, but not limited to, the owner's name, address, telephone number, and e-mail address.

Fla. Stat. § 721.05(43). The Act requires that lead dealers maintain certain records for five years after obtaining personal contact information.[2] Fla. Stat. § 721.121(1).

         The FVPTA also provides that any party who establishes that a lead dealer wrongfully obtained or used personal contact information is entitled to recover from the lead dealer “an amount equal to $1, 000 for each owner about whom such personal contact information was wrongfully obtained or used, ” plus attorney's fees and costs. Fla. Stat. § 721.121(3). In this case, the Plaintiffs contend that Resort Relief and Hanson provided personal contact information of Orange Lake Owners to Castle Marketing and Austin, who then provided this personal contact information to Castle Law. (TAC at 35). ...

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