ORLANDO, FL – April 28, 2020 – Greenspoon Marder LLP has secured a major victory for its client Westgate Resorts with the reversal of a summary judgment ruling that was previously hailed by Reed Hein & Associates, LLC d/b/a Timeshare Exit Team (“TET”) president and founder Brandon Reed as a “significant defeat for the timeshare industry.” But Monday’s ruling will ensure a jury decides Westgate’s claim that TET, a Washington-based company, engages in deceptive business practices by advertising its timeshare “exit” scam nationwide and collecting thousands of dollars from consumers without providing any legitimate services.
In an Order entered April 27, 2020, United States District Court Judge Gregory A. Presnell vacated summary judgment on Westgate’s claims for damages and injunctive relief against TET for violations of Florida’s Deceptive and Unfair Trade Practice Act (“FDUPTA”). Judge Presnell agreed his February 11, 2020, Order granting summary judgment on Westgate’s FDUPTA claim was a “clear error of apprehension,” granting Westgate’s Motion for Partial Reconsideration.
Specifically, the Court noted his Order inadvertently focused only on TET’s false advertising – as TET had argued in seeking summary judgment – and overlooked evidence from Westgate showing a wide range of other deceptive acts and practices by TET that supports Westgate’s claims for damages and injunctive relief under FDUTPA:
[I]n addressing Westgate’s FDUTPA claim, TET did not address any conduct outside of the Advertising Statements. Nor did it address Westgate’s prayer for injunctive relief. Instead, TET focused exclusively on the Advertising Statements and Westgate’s request for monetary damages. [citations omitted]. Following TET’s lead, the Court inadvertently failed to consider any conduct outside of the Advertising Statements that may have supported Westgate’s claim for monetary damages. The Court also inadvertently overlooked Westgate’s prayer for injunctive relief. As such, the Court reconsiders Westgate’s FDUTPA claim.
In its Amended Complaint, Westgate alleged claims against TET and its principals for tortious interference with existing contracts; violation of FDUTPA; civil conspiracy; and false advertising in violation of the Lanham Act. The Parties each moved for summary judgment in October 2019, and on February 11, 2020, the Court entered partial summary judgment dismissing all but two of TET’s affirmative defenses and Westgate’s claims under the Lanham Act and FDUTPA, while denying judgment as to Westgate’s remaining claims.
To support its claim that TET had engaged in unfair and deceptive acts and practices, Westgate presented 21 TET customers who testified that they stopped paying Westgate under their timeshare contracts specifically because TET instructed or encouraged them to stop paying. Court found those customers’ testimony compelling and illustrative of TET’s deceptive practices, summarizing their personal experiences at length in the Order and concluding:
Based on this testimony, and contrary to TET’s arguments otherwise, Westgate has proffered sufficient evidence from which a reasonably jury could find TET engaged in deceptive practices that caused Westgate actual damages. More specifically, a jury could find that TET engaged in deceptive practices by guaranteeing owners that it could legitimately exit them from their timeshare interests and instructing those same owners to stop making payments to Westgate, knowing that it would not actually negotiate with Westgate, that Westgate would likely foreclose, and that TET would simply claim that it had successfully “terminated” the owners’ timeshare interests without disclosing the foreclosure. Because the timeshare owners were current on their timeshare obligations before hiring TET and only stopped paying at TET’s direction, a jury could also reasonably find TET’s purported deceptive practices caused Westgate actual damages in the form of lost payments.
Accordingly, the Court agreed that summary judgment was not appropriate on Westgate’s FDUPTA claim, and vacated the Order’s entry of summary judgment on that claim.
Since filing this action on July 8, 2018, against TET and its principals, Brandon Reed, Trevor Hein, and Thomas Parenteau, Westgate has uncovered substantial evidence of deceptive business practices by TET, including false advertising, as Westgate demonstrated in seeking reconsideration. This evidence shows TET blankets the nation with radio advertising, spending up to $1 million a month and using paid celebrity endorsers such as consumer financial advisor Dave Ramsay. This creates the false and misleading impression that TET can safely and legitimately cancel an owner’s timeshare contract, which in fact they have no legitimate means of terminating lawful and valid timeshare contracts. Instead, timeshare owners, who hire TET and pay fees ranging on average from $5,000 to $15,000, are simply told to stop paying their timeshare contracts, resulting in substantial damages to Westgate. After collecting these exorbitant fees, TET representatives provide fraudulent email updates to customers on the status of their “exit” when in fact TET has performed no services whatsoever. TET also sends the customers “congratulation” letters taking credit for performing an “exit,” after the owner has actually been foreclosed upon, and in spite of the fact that TET has taken no action on behalf of the consumers.
Although TET widely advertises a “100% money-back guarantee,” it rarely issues a refund, resulting in hundreds of consumers complaints that prompted the Better Business Bureau to revoke TET’s membership in 2019 and the Washington Attorney General to file a lawsuit asserting that “[v]irtually every aspect of Defendants’ operation is deceptive and/or unfair.”
State of Washington v. Reed Hein & Associates, LLC, Case No. 20-2-03141-1 SEA, King County (Wash.) Sup. Ct., Complaint (Feb. 4, 2020) at ¶1.5.
Westgate’s claims against TET and its principals are scheduled for a two-week jury trial commencing on January 5, 2021. This action is one of several lawsuits against TET and other companies in the timeshare ”exit” business brought by Westgate and other timeshare developers. The majority of the cases are pending in the Middle District of Florida in Orlando, and Greenspoon Marder represents a substantial number of the timeshare developers in these cases.
The Greenspoon Marder team consisted of co-managing director,
Michael Marder, partners Richard Epstein, Jeffrey Backman, Brian Cummings, and Olga Vieira, senior counsels Eliot New and Roy Taub, associates Michelle Durieux, Julia Stepanova and Gregg Strock.