United States District Court, M.D. Florida, Orlando Division
HILTON RESORTS CORPORATION, LV TOWER 52, LLC, TUSCANY VILLAGE VACATION SUITE S OWNERS ASSOCIATIONS, INC., ORLANDO VACATIO N SUITES II C O ND O MINIU M AS S O C IATIO N, INC ., LV TOWER 52 CONDOMINIUM ASSOCIATION, INC., LAS VEGAS BOULEVARD VACATION SUITE S OWNERS ASSOCIATION, INC., LAS VEGAS VACATION SUITES OWNERS ASSOCIATION, INC., HTLV OW NERS ASSOCIATION, INC. and KT VACATIO N O W NERS ASSOCIAT IO N, INC., Plaintiffs,
MITCHELL REED SUSSMAN, Defendant.
BYRON UNITED STATES DISTRICT JUDGE.
cause comes before the Court without oral argument upon
Defendant Mitchell Reed Sussman's Motion to Dismiss (Doc.
23 (the “Motion”)) and
Plaintiffs' Response in Opposition (Doc. 24). With
briefing complete, the Motion is ripe. Upon consideration,
the Motion is due to be granted in part and denied in part.
action is one of many recent suits brought against Defendant
Mitchell Reed Sussman by timeshare companies based on alleged
false advertising and deceptive trade practices. Plaintiffs
are affiliated businesses that sell, service, and maintain
ownership stakes in “Hilton Grand Vacations”
branded timeshare properties. (Doc. 1, ¶¶ 1,
36-41). Plaintiffs offer mortgage financing to purchasers of
timeshare interests and initially hold promissory notes
executed in connection with mortgaged timeshare interests.
(Id. ¶¶ 42- 45). Plaintiffs have valid
contracts with their timeshare-owner customers
(“Owners”) requiring Owners pay
mortgages, maintenance fees, and property taxes.
(Id. ¶¶ 36-45). Plaintiffs also enjoy a
right of first refusal to purchase timeshare interests from
Owners that wish to sell, transfer, assign, or hypothecate
their interest. (Id. ¶ 38).
is an attorney who advertises to consumers-including Owners-
“proprietary” services to cancel their ownership
interests and be released from their payment obligations.
(Id. ¶¶ 4, 25-28). Defendant advertises
his services online and is referred clients from
“Timeshare Exit Companies” that (like Defendant)
solicit their timeshare cancellation services to Owners.
(Id. ¶¶ 22-24, 46-47). Defendant
advertises a specialty in “timeshare exit,
cancellation[, ] and relief for embattled timeshare owners no
longer interested in paying the ever escalating fees.”
(Doc. 1-1). He claims to have developed techniques that cause
timeshare companies to absolve timeshare owners of their
liabilities if they give up or transfer their ownership
interest. (Doc. 1, ¶¶ 48-61). Defendant also offers
a “100% MONEY BACK GUARANTEE.” (Doc. 1-1).
techniques for exiting timeshares begin with Owners paying
Defendant and end with a legally and factually ineffective
termination of their payment obligations to Plaintiffs. After
Owners pay Defendant a “substantial up-front fee,
” Defendant instructs them to stop paying Plaintiffs.
(Doc. 1, ¶¶ 62-70). Thereafter, Defendant sends
generic representation letters to Plaintiffs: (i) alleging
misrepresentations and abusive tactics, (ii) stating that
Owners are no longer liable, and (iii) citing
“irrelevant and/or inapplicable” legal bases for
the changed status. (Id. ¶¶ 71, 73). Next,
Defendant executes invalid deeds, on the Owners'
behalves, supposedly conveying their interests either back to
Plaintiffs or to a straw person. (Id. ¶¶
76-92) . These deeds fail to convey any interest, though; the
conveyances to Plaintiffs fraudulently represent that
Plaintiffs willingly accept transfer, and the strawman deeds
violate Plaintiffs' right of first refusal. (Id.
¶¶ 81-82, 88-89). Thus, the Owners are not relieved
of their financial obligations to Plaintiffs by
Defendant's services, and so they next default.
Complaint avers seven Counts arising out of this conduct:
false advertising and unfair competition under the Lanham
Act, 15 U.S.C. § 1125(a) (Count I); declaratory judgment
(Count II); violation of Fla. Stat. § 817.535 (Count
III); violation of Fla. Stat. § 721.17 (Count IV);
tortious interference with existing contracts (Count V);
violation of Florida's Deceptive and Unfair Trade
Practices Act (“FDUTPA”), Fla.
Stat. § 501.201 et seq. (Count VI); violation
of Nevada Deceptive Trade Practices Act (Count VII).
Defendant moves to dismiss. (Doc. 23).
STANDARD OF REVIEW
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) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 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. Legal conclusions and recitation
of a claim's elements are properly disregarded, and
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). 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, 1483 (11th
Cir. 1994) (per curiam). In sum, courts must (1) ignore
conclusory allegations, bald legal assertions, and formulaic
recitations of the elements of a claim; (2) accept well-pled
factual allegations as true; and (3) view well-pled
allegations in the light most favorable to the plaintiff.
Iqbal, 556 U.S. at 67.
Count I: Lanham Act
moves to dismiss Count I for: (i) failure to allege
“false or misleading” statements, and (ii)
failure to allege cognizable injury to Plaintiffs. (Doc. 24,
pp. 4-7). To survive a Rule 12(b)(6) motion, a Lanham Act
claim must plead:
(1) the defendant's statements were false or misleading;
(2) the statements deceived, or had the capacity to deceive,
consumers; (3) the deception had a material effect on the
consumers' purchasing decision; (4) the misrepresented
service affects interstate commerce; and (5) [the plaintiff]
has been, or likely will be, injured as a result of the false
or misleading statement.
Sovereign Military Hospitaller Order of St. John of
Jerusalem of Rhodes & of Malta v. Fla. Priory of Knights
Hospitallers, 702 F.3d 1279, 1294 (11th Cir. 2012).
Accepting the Complaint's allegations as true, Plaintiffs
adequately alleged that Defendant's advertisements were
false or misleading-Defendant promises to absolve Owners of
their financial obligations to Plaintiffs and he knows he
cannot deliver. See Diamond Resorts Int'l v.
Aaronson, No. 6:17-cv-1394-Orl-37DCI, 2018 WL 735627, at
*3 (M.D. Fla. Jan. 26, 2018). Though Defendant quibbles over
whether the “guarantee” is false (since Defendant
offers a money-back, not a success, guarantee) and points to
language from the website stating that success is not