It’s no April fool’s joke that the United States Court of Appeals for the Eleventh Circuit, on Friday, March 25th, issued their opinion by ruling indirectly in favor of the consumer. No. 21-11556
Three Court of Appeals judges in a five-page opinion denied Club Exploria’s request for a retrial, affirming the summary judgment issued by the Middle District of Florida Court, stating that there was insufficient evidence to show that attorney Austin Aaronson intentionally influenced Exploria’s owners to cease meeting their timeshare debt and maintenance fee obligations. Club Exploria had alleged tortious interference in a contractual relationship. No. 6:18-cv-00576-JA-DCA
Mr Aaronson has a prevailing party motion asking for $278,060 in attorney fees, likely to be augmented for appeal-related fees and costs. The Appellant’s Brief was 63 pages and the Appellees’ Brief was 65 pages. That had to be expensive.
Six of Aaronson’s clients were named in the lawsuit. Two of the clients deposed testified at deposition that Aaronson never told them to stop making payments, but that they stopped making payments for unrelated reasons. Several had stopped payments before retaining Aaronson.
Exploria argued on appeal that they did introduce sufficient evidence. Of the four citations of evidence produced by Club Exploria, numbers 3 and 4 are of note:
(3) the lawyer took the position in communications with Exploria that his clients could rescind the contract.
During the oral arguments that took place in Jacksonville, Florida, on March 8, Judge Tjoflat brought up a Common Law stating that any party has a right to breach a contract if they understand the risks and benefits of doing so.
(4) the lawyer approved (the stopping of payments) when a client in an unrelated case asked whether he could stop paying another timeshare company.
That particular client of Aaronson is a dentist and a witness in a trial I attended in 2019 in which Diamond Resorts filed a similar lawsuit against the Aaronson Law Firm that was resolved by settlement.
Witness 1 testified that buying additional points did not improve availability. He had purchased a total of 26,500 points (estimated cost approximately $95,000). Diamond had sued witness 1 for $170,000, which included arbitration fees. The judgment against witness 1 was wiped clean in exchange for his testimony. Witness 1 confirmed that he was aware of Mr Aaronson’s website that stated the firm had leverage over Diamond resorts due to misappropriated maintenance fees and a breach of fiduciary duty.
As stated in the judges’ ruling against Exploria:
Assuming without deciding that Florida law authorizes a tortious interference claim against a lawyer based on his advice to a client, the mere fact a person hires a lawyer to assist him (or her) with a disputed contractual obligation and then breaches that disputed contractual obligation is insufficient to establish that the lawyer intentionally procured the breach. This is especially true when, as in this case, the client testifies without contradiction that he or she breached the contract for reasons unrelated to the lawyer’s advice or representations.
Why do I feel the ruling was indirectly a win for the consumer? The courts ruled in favor of Aaronson, not his clients. However, the consumer benefits because this ruling hints that to protect their lawyer, the consumer should actually stop making payments before talking to the lawyer. You can always bring your payments current if you change your mind, after speaking with a lawyer. This ruling is a very big win for lawyers, in my opinion.
I asked several attorneys what they think. According to Florida attorney Michael Finn,
“I think we attorneys have a duty to our clients that supersedes any other consideration. When we know the client has been taken advantage of and they’re continuing to pay for something that is essentially worthless, then we should advise the client to stop paying if we feel that there is any legal basis whatsoever for giving that advice. That being said, as there may be consequences to the client taking that position, the lawyer also must further advise of those consequences, including the strong possibility that their nonpayment will be reported to a credit reporting agency, and a more remote possibility that the resort might take legal action against the contracting parties. It’s a delicate balance, and all factors must be weighed.”
Having followed lawsuit after lawsuit over the last several years, I’m not out of line in saying that the dollar amount of legal fees generated on both sides of a timeshare dispute would in all likelihood exceed the GNP of Brazil. In the long run, it is the consumer who usually absorbs the cost, one way or another. My goal and the goal of our volunteers is to improve communications between developers and members to save members from the agony of endless filings and counter-motions.
Next week we expand upon the dentist’s extreme adverse ruling, mentioned above, to report on the outcome of three others who also experienced extreme adverse arbitration judgments. The most disturbing concerns an active duty member in the Navy who lost in arbitration disputing a $10,000 loan. The judgment against him is $66,000. The difference is mostly the developer’s attorneys’ fees. It is un-American to see any member of our military be separated from service because they sought legal advice after buying a minimum number of timeshare points.
Club Exploria LLC v Aaronson Law Firm, March 11, 2022
A lawsuit alleging Bluegreen violated the MLA
Bluegreen PDF Link
A lawsuit alleging Westgate violated the Military Lending Act (MLA)
Westgate PDF Link
Thank you, Irene, for your insight, in a way, this is a victory for the consumer and the legal profession, there is no other industry that holds its clients to ransom and at the same time makes it impossible for them to seek legal advice because they have silenced the lawyers. If the industry wins in these types of cases what lawyers will even think about taking on a case, driving the consumer into the ever-open arms of the scammers. We saw this in Europe when the first law firms began their cases through the courts, where the industry used their greatest tool, misinformation, in an attempt to destroy their reputations and deter other lawyers from pursuing claims. In the end, this failed miserably and the industry is paying for it, but they have still yet to learn its lesson.
Next week, we continue the series on the RDO, the “mouthpiece” for the timeshare industry in Europe, as the title banner for the series states it’s all smoke and mirrors. There will also be an update on our continuing story regarding the FCA & the FOS, the latest would be laughable if it were not so serious. There is also some news from the UK courts on a scam which when we checked our records, began around 2011 and was associated with some of the biggest operations in Spain at the time. So join us again next week and if you have any comments please place them on the appropriate article, if you would like any further information or details on your own circumstances, please use our contact page.
That is it for this week and for this month, we hope you all have a great weekend, Baby Dog will be going to visit his best friend so will definitely have some fun.