It is once again the end of another week with AIT and once again we welcome Irene Parker with another piece of US timeshare news, this time from the US Court of Appeals. It is a case which fits in very nicely with our Westgate series, which today this article has replaced part 2 and this will be published next week. We have also received some news from our reader who featured in Wednesday’s article, one case is looking favourable with a couple of issues which need to be clarified on the second case. At least it is an improvement, further details when all is confirmed. Now for Irene’s insight into a case that may be of interest to many owners.
Club Exploria vs Aaronson Law Firm, US Court of Appeals, 11th Circuit
On April 13, 2018, Club Exploria, LLC, Club Exploria Management, and Summer Bay Management, filed a lawsuit in US District Court for the Middle District of Florida, against attorney Austin Aaronson and the Aaronson Law Firm, also located in Florida. This past Tuesday, March 8, I attended oral arguments that took place at the US Court of Appeals, 11th circuit, Jacksonville, Florida.
Exploria stated in their original complaint that one of Aaronson’s clients claimed plaintiffs’ (sales agents) defrauded them by promising them the ability to rent to offset maintenance fees. This was one reason I was interested in attending court proceedings. Twelve families have recently reported that they were told they would be able to offset maintenance fees and loan payments by renting out their timeshare.
Among the six allegations mentioned in the Club Exploria lawsuit, one Exploria owner stated that Exploria: (2) “had a resale and rental program and that the timeshare could easily be rented out to pay its maintenance fees.”
The basis of the lawsuit complaint seemed to center around Aaronson’s website that stated, among other things:
- Timeshare developers are not empathetic.
- Timeshare developers defraud the elderly.
Exploria described such statements as “incendiary.” One Exploria owner, Dorothy, reached out to me a few years ago explaining that Exploria would not take her timeshare back. Dorothy was 90 years young at the time, did not drive, and had fallen and broken her jaw in three places. She said her medical bills were not covered so she could not afford her maintenance fees. When I called Exploria and explained Dorothy’s dire circumstances, I was told the company does not take timeshares back under any circumstances. Another Club Exploria owner provided me with the name of someone who works in Exploria’s title department. She said this person would take Dorothy’s timeshare back. When I called that person, she acted as if she understood. She said she would need to speak with Dorothy directly. I told her I would have Dorothy call.
I called Dorothy a few days later. Dorothy reported that Exploria’s representative said they would not take the timeshare back because she had talked to Irene Parker, this despite Dorothy’s request for release having been rejected several times in the past. Dorothy gave them what for. I called the person in Exploria’s title department angry. The title lady hung up on me. Twenty minutes later Dorothy called me back and said, “Exploria just called. They said they would take it back!” Her relief was immense.
I am a volunteer. I have never been compensated. I had explained to Dorothy that I used to serve on an Ombudsman Board, advocating for patients in nursing homes. Dorothy lives in Independent Living. She said she informed Exploria of this.
I was relieved that the judges this week really seemed to understand the hostage problem timeshare members and owners face when life takes an adverse turn. Exploria’s attorney argued that attorney Austin Aaronson “influenced” Exploria owners to stop making payments, and that was enough to make their case for tortious interference with a legally binding contract.
After the District Court judge dismissed Exploria’s case against Aaronson Law Firm, Exploria filed a motion for a retrial. This too was dismissed. On July 6, 2021, Exploria filed an appeal. Appellants (Exploria) and the Appellees (Aaronson) in the US Court of Appeals, 11th circuit made the following arguments. The arguments from the Appellants were to convince the Appellate Court that the lower Florida District Court was wrong to grant a summary judgment in favor of dismissing the lawsuit against Austin Aaronson and that Exploria should be entitled to a retrial.
One of the three judges hearing appeals was Appellate Court Judge Gerald Bard Tjoflat. I had the privilege of attending a ceremony to honor Judge Tjoflat that took place prior to hearing appeals. The courtroom was being named in his honor. Judge Tjoflat has served in his profession for 51 years beginning October 16, 1970.
Judge Tjoflat talked about the importance of stories told by judges he knew throughout his career. He mentioned the US Circuit Judge of the US Court of Appeal for the Fifth Circuit, Warren Leroy Jones, nominated by President Dwight D Eisenhower on March 4, 1955, reassigned to the Court of Appeals for the Eleventh Circuit on October 1, 1981. Wikipedia Judge Tjoflat said the grandfather of Warren Leroy Jones was one of Abraham Lincoln’s carriage drivers.
I was able to tell one of the presiding judges my favourite Abe Lincoln story: Abe was travelling in his carriage when he saw a pig stuck in the mud. He asked his driver to stop. He got out and pulled the pig out of the mud. His driver commented that Abe was a nice person to help the pig stuck in the mud. Abe responded that he was a selfish person because it made him feel uncomfortable seeing the pig stuck in the mud. It made him feel better when the pig was no longer suffering. I have often thought of this parable having listened to over 2,000 families angry and desperate, reporting unfair and deceptive timeshare sales practices. The judge promised to tell Judge Tjoflat the story about Abe.
I did not get the name of the lady judge who appeared by Zoom. She began by saying there was no evidence that Austin Aaronson told Club Exploria owners to stop paying. She later mentioned the name of Owner #3, Cynthia S, bringing up why Cynthia stopped paying. According to a deposition, it was reported that it was because her Club Exploria ownership was a “waste of money” and that her husband had seven herniated discs.
Judge Trofalt referenced traditional mortgages and other kinds of predatory lending. He mentioned that many people contacted an attorney during the economic downturn because they wanted to get out of their contracts and that the courts were flooded with these cases. He advised Exploria’s attorney to, “PIN IT DOWN” meaning to separate this timeshare matter from those defaulting on other mortgages. He further asked Exploria’s attorney to “narrow the scope.”
That was when Exploria’s attorney responded that attorney Aaronson “influenced” owners to stop paying and said that attorneys were not allowed to appeal to the emotions of a potential client. (This restriction does not apply to timeshare sales agents.)
Next, the attorney for Austin Aaronson, Charles Meltz, responded that there was never any evidence that Mr Aaronson advised clients to stop paying. He mentioned that only two of the six Club Exploria owners were deposed. Requests for an expanded appeal beyond six Club Exploria’s owners did not happen. There was never any direct testimony that Mr Aaronson advised Club Exploria owners to stop paying.
Mr Meltz brought up that the only “evidence” presented during the trial was a dentist by the name of Dr Feldman, not related to this lawsuit. Dr Feldman was a witness in a lawsuit Diamond Resorts had filed against Mr Aaronson concerning the same allegations. I attended that trial. I remember Dr Feldman. The cost for 26,500 Diamond points is about $95,000.
Witness 1 testified that buying additional points did not improve availability. He had purchased a total of 26,500 points. 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.
Mr Meltz recalled the conversation between Dr Feldman and Austin Aaronson:
Dr Feldman: I’m not using it. I want to stop paying. I really want to do so.
Mr Aaronson: Fine with me.
Mr Meltz stated that providing Dr Feldman as evidence was a stretch and that there never was a pattern or practice of advising clients to stop paying.
Judge Troflat asked Mr Aaronson if he recalled a Common Law that states, a “Contract party has a right to breach a contract.” The fact that the owner is dissatisfied is not tortious interference if the owner understands the consequences of breaching their contract.
Mr Meltz said the records showed Club Exploria owners #1 – 6 did not want their timeshare, and that Mr Aaronson had explained the risks and benefits of default.
Mr Meltz explained that Exploria offers no buy-back program and that owners had attempted to exit through other means. He brought up that contracts were perpetual. The vast majority of timeshare members and owners that contact me have financial and/or medical hardships. When the resort offers no responsible exit, members may have no choice but to default.
The lady judge brought up that one owner had upgraded and merely wanted to go back to what they had before. That request was denied.
Judge Troflat brought up that there was never any doubt that the six Club Exploria owners wanted to breach their contracts. I thought this, based on the Common Law that everyone has a right to breach a contract if understanding the risks was a pretty good argument.
When you win a lawsuit, you may or may not be awarded attorneys’ fees. According to Aaronson’s motion for fees, he spent $278,060 on attorneys’ fees, up to the summary judgment.
I learned that an Appellate hearing is not like a jury trial. It will likely take a few months to determine the ruling of this court.
All I know is that after I started writing about timeshares in 2016, callers increased from a trickle to a flood. Those who report deceptive sales and marketing practices are angry, frustrated and scared. Timeshare buyers learn the hard way that a timeshare purchased to reduce stress can easily turn into a financial disaster when not sold honestly. Seniors, who maintained a lifelong high credit score, find themselves faced with no choice but to default, and far too many of our veterans have been harmed. The most disturbing is active duty service members who find their security clearances and military careers in jeopardy because of a timeshare default. This poses a risk to our national security, very much in the news today.
The article that was scheduled for today, submitted by Sheri in Minnesota and Debbie in North Carolina, will be published next week. They are families eleven and twelve to share how they purchased promised they could rent or sell their timeshare to offset loan payments and maintenance fees. It’s often not until life takes a turn in the wrong direction that the purchaser learns this is not viable. Two experts in the industry offered their opinion on the futility of buying a timeshare as a rental opportunity.
Related articles: Ten Westgate families share their experience
That is all for this week, if you have any comments or require any information please use the comments section or the contact page. Have a great weekend, Baby Dog is getting ready for his!