Five lawsuits in which the court denied Wyndham’s motions to dismiss Claims of Fraud and Breach of Contract
Timeshare members often suggest filing a class action lawsuit. Last week we reported on a victory for FantaSea Resorts owners who were awarded more than $1.6 million. Today we revisit Kirchner vs Wyndham Vacation Resorts, a class action lawsuit that we previously reported on after a Delaware judge dismissed allegations of fraud in Nevada on March 27, 2023, deciding that the Nevada Deceptive Trade Practices Act does not apply to timeshare because timeshares are not considered “goods or services.” Claims of fraud were allowed to proceed in Tennessee.
There is probably no such thing as a simple timeshare lawsuit, but how the Kirchners vs Wyndham Vacation Resorts lawsuit evolved provides a good example of just how complex class actions can be and why they can drag on for years. Accumulated documents can take up an entire courtroom pew.
The Kirchner lawsuit was preceded by Deneen et al. vs Wyndham Vacation Resorts, a class action filed in Illinois in August of 2019. That case was dismissed in 2020 based on jurisdiction. In March 2020, it was refiled in Delaware, the corporate home of Wyndham, as Kirchners vs Wyndham Vacation Resorts. Plaintiff NAZRET Z. GEBREMESKEL was a plaintiff in both lawsuits.
The bulk of timeshare complaints are about misrepresentations made by sales agents. Disputes are routinely dismissed because the buyer unwittingly acknowledged in their signed contract that they did not rely on claims made by their sales agents. Our plea to lawmakers is that notification that you cannot rely on anything a sales agent says should be disclosed PRIOR to a sales presentation, not buried in electronic fine print after the fact.
As stated in Deneen vs Wyndham:
Wyndham’s business model is premised on the false assumption that you can lie to consumers to get them to sign confusing, vague and ambiguous boilerplate contracts and that because then there is a purported written agreement, you have no liability for the lies. This is not the law.
Yahoo Finance reporter Abigail Fisher even wrote an article explaining that’s why hedge funds like timeshare stocks!
We find evil companies to be a very rewarding hunting ground to uncover long-term stock winners…. companies that use high-pressure sales tactics to trick consumers into signing complex long-term contracts that they don’t understand: timeshare marketing companies. Check out this Reddit post where the user is asking several questions about Wyndham timeshare cancellation. This person was able to cancel and receive a full refund, but many consumers don’t cancel within the 7-day or 10-day window specified in their contracts.
As stated in FantaSea’s First Amended Complaint:
To compound the deception, Defendant after its sales pitch to each of the Plaintiffs would have the consumer purchaser sign a “Purchaser’s Acknowledgment Annual Use Form” which deceptively required the consumer to acknowledge the opposite of what he or she had just heard from Defendant’s sales agent in Defendant’s sales pitch, including the paradoxical statement that the purchaser understands he/she: “should not, under any circumstances, allow himself/herself to become confused or misled by any representations or interpretations to the contrary.”
Wyndham Lawsuit #1 of 5: Deneen et. al. v Wyndham Vacation Resorts, No. 19 C 5499, filed on August 14, 2019 in Northern Illinois
ANNAMARIE DENEEN, MICHAEL J. DENEEN, ERIN MUNOZ, PAUL MUNOZ, and NAZRET Z. GEBREMESKEL plaintiffs
AnnaMarie and Michael Deneen (Deneens) are a married couple living in Homer Glen, Illinois. AnnaMarie works for the Will County Assessor’s Office, having previously worked as a paralegal for law firms including Neal, Gerber and Eisenberg in Chicago. Her husband works for the federal government in the Office of Personnel Management. He retired from the military after 29 years in the U.S. Army and the Oklahoma National Guard.
Erin Munoz has worked as a Chicago Police Officer since 1999. She is assigned to a citywide tactical team targeting gangs and high-crime areas. Her husband Paul Munoz is a Sergeant with the Cook County State’s Attorney’s Office Investigations Bureau. He investigates homicides, narcotics and other felonies.
Critics and some attorneys general offices are quick to blame the consumer. AARP Staff writer Doug Shadel, in his book, Outsmarting the Scam Artists, explains that no one is smart enough to outsmart a scam artist. Clearly, the plaintiffs above are not gullible people. One week three attorneys reached out to us, all reporting how they were deceived by sales agents working for the same timeshare company.
Material Omissions in the Deneen case (as opposed to oral misrepresentations)
- Nothing was said about problems with availability of units once they purchased.
- Nothing was said about the fact that points would expire if not used.
- Nothing was said about maintenance fees increasing.
- Nothing was said about having to book one year in advance.
- Nothing was said about the number of points needed in high versus low season.
- Nothing was said about the fee involved if points were transferred to RCI, a Wyndham affiliate.
WYNDHAM SALES PRESENTATIONS
Prospects are not told upfront that they will be attending a lengthy high-pressure Wyndham timeshare sales meeting;
Purchasers are lied to about how long the meeting will last;
Whenever someone shows resistance, the salesperson leaves to consult with a manager and then comes back to offer special bonus points, some type of additional prize or gift, and the offer of a higher level of membership;
Wyndham makes it difficult for people to leave by the threat of losing their prizes, and other tactics such as checking in purses and transporting attendees in vans to off-site locations so they have no simple way to return;
A false sense of urgency is created with the repeated use of phrases such as “one-time offer” and “today only” to create the impression that prospects can never have the same opportunity again.
The Blame-Game up-sell
Subsequently, the Munoz’s were at Six Flags Great America in Gurnee, Illinois, and stopped by a Wyndham sales booth. They were offered a certificate for a free two-night hotel stay if they attended a meeting at the Wyndham Grand Chicago Riverfront Hotel. This meeting turned into another lengthy sales presentation. Erin and Paul Munoz were told that the solution to the problem they were having with availability was to spend another $20,000 to buy more points.
MEMORANDUM Opinion and Order Signed by the Honorable Ronald A. Guzman on 2/12/2020: For the reasons explained below, the Court grants Wyndham’s motion to dismiss for lack of personal jurisdiction. Civil case terminated.
Lawsuit #2 STEVEN ERIC KIRCHNER, ELIZABETH LEE KIRCHNER, and NAZRET Z. GEBREMESKEL vs. Wyndham Vacation Resorts, Inc., filed March 27, 2020, in Delaware, Civil Action No. 20-436-CFC
This case is about one identical arbitration clause in Wyndham and WorldMark contracts and a single, common fraudulent omission by Wyndham and WorldMark.
Counsel for Plaintiffs: Herbert Weiswasser Mondros, RIGRODSKY LAW, P.A., Wilmington, Delaware; Howard B. Prossnitz, LAW OFFICES OF HOWARD PROSSNITZ, Oak Park, Illinois; Adam Szulczewski, Chicago, Illinois,
Counsel for Defendant: Matthew Denn, DLA PIPER LLP, Wilmington, Delaware; David S. Sager, DLA PIPER LLP (US), Short Hills, New Jersey
Gebremelskel settled, so an amended complaint was filed on March 26, 2921, replacing Gebremeskel with Marcia Richards as the plaintiff.
Kirchner First Amended Complaint, filed April 26, 2921, Civil Action No. 20-436-RGA
Steven Eric KIRCHNER, Elizabeth Lee Kirchner, and Marcia Richards, individually and on behalf of all other persons similarly situated, Plaintiffs, v. WYNDHAM VACATION RESORTS, INC., Defendant
Marcia Richards was dismissed as a plaintiff as untimely.
A Second Amended Kirchner Complaint substituted Robert Grant Weston for Marcia Richards as lead plaintiff. Mr Weston represents plaintiffs alleging that Wyndham violated the Tennessee Timeshare Act. The Kirchners represented Plaintiffs alleging violation of the Nevada Deceptive Trade Practices Act (NDTPA) until the judge dismissed claims of fraud in Nevada.
STEVEN ERIC KIRCHNER, ELIZABETH LEE KIRCHNER, and ROBERT GRANT WESTON, individually and on behalf of all other persons similarly situated, Plaintiffs, V. WYNDHAM VACATION RESORTS, INC., Defendant. Civil Action No. 20-436-RGA
A Third Amended Complaint was filed on July 18, 2022. A third count (Count One) was added:
Count One: Fraudulent Inducement by Omission
Count Two: Violation of the Nevada Deceptive Trade Practices Act (NDTPA) (Dismissed due to Delaware Judge Richard Andrews deciding timeshares are not goods and services in Nevada.
Count Three: Violation of the Tennessee Timeshare Act
The Status Quo
In a recent Better Business Report that voiced concerns about timeshare sales, marketing, lending and exit practices, industry lobbyists responded that problems of deceptive and high-pressure sales have improved. After Inside Timeshare has seen no decrease in the volume of complaints and the law firms I reached out to say their volume of contacts has not declined. According to court documents, 200 Wyndham members reached out to the law firm representing the Kirchner Plaintiffs and 500 Wyndham members reached out to the attorneys representing the Archambeault family (Lawsuit #4).
Lawsuit #3, Buxton vs Wyndham Vacation Resorts, an unrelated case, but was cited in the Kirchner lawsuit complaint. A Florida judge allowed claims of fraud to proceed based on the Federal Rule of Civil Procedures Rule 9 (b).
case text (Kirchner v Wyndham Vacation Resorts)
Bedgood vs Wyndham Oral Arguments, one of three Wyndham lawsuits in which judges denied Wyndham’s Motion to compel arbitration. Wyndham’s arbitration clause requires the American Arbitration Association (AAA) to appoint an arbitrator, but the AAA refuses to arbitrate Wyndham disputes due to Wyndham not complying with the AAA’s rules and/or policies.
Kirchner vs Wyndham Vacation Resorts – Timeshares are not “goods or services”
Once again Irene has brought together cases from several courts in different jurisdictions which echo each other, from this it is becoming apparent that judges are taking a different approach to timeshare. It is similar to the period before the first Supreme Court ruling in Spain, with different jurisdictions and rulings that were at odds with each other, and then a pattern began to emerge.
This pattern was in the rulings in favour of consumers, more and more judges began to see through the developer’s defence, it should also be noted that in the jurisdictions where there was a very heavy timeshare presence, rulings tended to be in favour of developers. But the end was in sight, the first Supreme Court put paid to that with a flurry of cases one after the other all found in favour of the consumer. The tide had turned.
We have seen what this has caused in Europe, a product with no credibility, tainted by criminality and fraud, no wonder sales plummeted, sales decks closed and a flurry of people wanting out of their contracts. This in turn has created another industry, the bogus claims and exit companies.
Timeshare today is not what was first envisaged, it lost its way due to greed, it is now an industry that brings misery rather than joy to many of its members. That is no way to run a business.
That is all for this week, due to other commitments we are publishing a day early, but we wish you all a great weekend. Baby Dog has been waiting patiently up till now, he is giving me those looks.