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Wyndham Vacation Ownership v. Reed Hein & Associates, LLC

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

August 20, 2019

WYNDHAM VACATION OWNERSHIP, et al., Plaintiffs,
v.
REED HEIN & ASSOCIATES, LLC, SCHROETER GOLDMARK & BENDER, P.S., HAPPY HOUR MEDIA GROUP, LLC, MITCHELL R. SUSSMAN, KEN B. PRIVETT, BRANDON REED, TREVOR HEIN and THOMAS PARENTEAU, Defendants.

          ORDER

          GREGORY A. PRESNELL, UNITED STATES DISTRICT JUDGE

         Plaintiffs Wyndham Vacation Ownership, Inc.; Wyndham Vacation Resorts, Inc.; Wyndham Resort Development Corporation; Shell Vacations, LLC; SVC-West, LLC; SVC-Americana, LLC; and SVC-Hawaii, LLC (collectively, “Wyndham”) sue Defendants Reed Hein & Associates, LLC d/b/a Timeshare Exit Team (“RHA”); Thomas Parenteau (“Parenteau”); Brandon Reed (“Reed”); and Trevor Hein (“Hein”) (collectively, “TET”);as well as Happy Hour Media Group, LLC (“Happy Hour”); Mitchell R. Sussman (“Sussman”); Ken B. Privett (“Privett”); and Schroeter Goldmark & Bender, LLC (“SGB”).

         In separate motions, TET, Happy Hour, SGB, and Privett (“Movants”)[1] seek to dismiss certain of Wyndham's claims. (See Docs. 72, 73, 75). Wyndham has responded. (Doc. 83). Upon consideration, the Court finds that the motions are due to be denied.

         I. Background[2]

         A. Parties

         Wyndham develops and sells timeshares throughout the United States. (Doc. 63, ¶¶ 2-4, 59-61). Defendant TET is a timeshare exit company directed and controlled by non-lawyers Reed, Hein, and Parenteau. (Id. ¶¶ 38-43). Defendant Happy Hour is a limited liability company formed by Reed and Hein to act as the in-house marketing agency for TET. (Id. ¶ 44). Defendants Sussman SGB, and Privett are licensed attorneys that have “bulk retainer agreements” with TET. (Id. ¶¶ 45- 47, 113).

         B. Defendants' Scheme

         Wyndham alleges that Defendants profit from deceiving timeshare owners, including owners of Wyndham timeshare properties (“Wyndham Owners”), into paying thousands of dollars with the expectation that Defendants will make it possible for them to get out of their timeshare contracts. (Id. ¶¶ 4, 5, 10). To do this, TET publishes false and misleading advertisements to convince Wyndham Owners that it has a “safe, ” “legitimate, ” or “guaranteed” means of “exit[ing]” them from their timeshare contracts. (Id. ¶¶ 5-6, 10-12, 95-108, 139). Those advertisements [published] by TET are made and created, at least in part, by Happy Hour. (Id. ¶¶ 108).

         After successfully soliciting Wyndham Owners, TET instructs them to stop making payments on their timeshare contracts, telling them that so doing will facilitate the “exit.” (Id. ¶¶ 13, 67, 110-111, 132). But TET does not disclose to Wyndham Owners that non-payment will result in a breach of their contracts, foreclosure of their timeshare interests, and other adverse consequences. (Id. ¶ 14).

         TET then hires lawyer Defendants Sussman, SGB, and Privett (collectively, the “Lawyer Defendants”) for a fixed fee to engage in fruitless negotiations with Wyndham. (Id. ¶¶ 7-9, 112- 114). Without speaking to any Wyndham Owner, the Lawyer Defendants then send boilerplate demand letters (“Demand Letters”) to Wyndham, demanding that it stop communicating with their client. (Id. ¶¶ 19, 69, 115-128). The Lawyer Defendants never work with Wyndham to legitimately terminate a timeshare contract. (Id. ¶¶ 115). Instead, they engage in three deceptive and unlawful “Strategies”:

i. The “Resignation”: the Lawyer Defendants send a letter simply “notifying” the relevant Wyndham entity that the Wyndham Owner has “resigned” from the Timeshare Contract;
ii. The “Deed Back”: the Lawyer Defendants have the Wyndham Owner execute a quitclaim deed purporting to quitclaim the timeshare interest back to the relevant Wyndham entity; and
iii. The “Strawman”: the Wyndham Owner's timeshare interest is transferred to a strawman buyer - who lacks any intent or ability to pay - without the knowledge or consent of the relevant Wyndham entity.

(Id. ¶ 17, 20). After using these Strategies, or after the timeshare contracts are foreclosed on, TET and the Lawyer Defendants falsely represent to their clients that they successfully cancelled or transferred their timeshare contracts. (Id. ¶ 18). These practices allegedly cause significant harm to Wyndham and to Wyndham Owners. (Id. ¶¶ 139-147).

         On December 19, 2018, Wyndham filed the instant suit, seeking injunctive and monetary relief. Following the Court's partial dismissal of Wyndham's initial complaint (see Doc. 60), Wyndham filed an Amended Complaint asserting claims for false advertising (Count I) and contributory false advertising (Counts II and III) in violation of the Lanham Act, 15 U.S.C. § 1125(a); tortious interference with contractual relations (Count IV); violation of Florida's Deceptive and Unfair Trade Practices Act (“FDUTPA”) (Count V); and civil conspiracy to commit tortious interference (Count VI). (Id. ¶¶ 144-230). By way of the instant motions, the Movants seek dismissal of Counts I, II, III, V and VI. (see Docs. 72, 73, & 75).

         II. Legal Standards

         The Federal Rules of Civil Procedure require pleaders to provide short and plain statements of their claims with simple and direct allegations set out in numbered paragraphs and distinct counts. See Fed.R.Civ.P. 8(a), 8(d), & 10(b). Where a complaint contains claims of fraud or mistake, however, Rule 9(b) imposes a heightened pleading standard, requiring that the circumstances constituting fraud be stated with particularity. See Brooks v. Blue Cross & Blue Shield of Fla., 116 F.3d 1364, 1381 (11th Cir. 1997). This particularity requirement is satisfied if the complaint alleges “facts as to time, place, and substance of the defendant's alleged fraud, specifically the details of the defendant's allegedly fraudulent acts, when they occurred, and who engaged in them.” U.S. ex rel. Matheny v. Medco Health Sols., Inc., 671 F.3d 1217, 1223 (11th Cir. 2012) (quoting Hopper v. Solvay Pharm., Inc., 588 F.3d 1318, 1324 (11th Cir. 2009)).

         If a complaint does not comport with the pleading requirements or fails to set forth a plausible claim, it may be dismissed under Rule 12(b)(6). See Ashcroft v. Iqbal, 556 U.S. 662, 672, 678-79 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). Plausible claims must be founded on sufficient “factual content” to allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. See Iqbal, 556 U.S. at 678; see also Miljkovic v. Shafritz & Dinkin, P.A., 791 F.3d 1291, 1297 (11th Cir. 2015). To assess the sufficiency of the factual content and the plausibility of a claim, courts draw on their “judicial experience and common sense” in considering: (1) the exhibits attached to the complaint; (2) matters that are subject to judicial notice; and (3) documents that are undisputed and central to a plaintiff's claim. See Iqbal, 556 U.S. at 679; Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1215-16 (11th Cir. 2012).

         Courts do not consider other matters outside the four corners of the complaint, and they must: (1) disregard conclusory allegations, bald legal assertions, and formulaic recitation of the elements of a claim; (2) accept the truth of well-pled factual allegations; and (3) view well-pled facts in the light most favorable to the plaintiff. See Hayes v. U.S. Bank Nat'l Ass'n, 648 Fed. App'x. 883, 887 (11th Cir. 2016);[3] Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002).

         III. Analysis

         A. False Advertising in Violation of the Lanham Act

         In Count I, Wyndham asserts a claim against TET for false advertising under Lanham Act, which provides in pertinent part that:

(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which--. . .
(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who ...

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