Timeshare wars: no Lanham Act standing for property owner

Wyndham Vacation Ownership v. Reed Hein & Assoc., LLC, 2019
WL 2232241, No. 18-cv-02171-GAP-DCI (M.D. Fla. May 23, 2019)
Somebody seriously needs to write a story about the
litigation war going on between timeshare companies and firms that sue timeshare
companies. Wyndham is a timeshare company, and Reed Hein is “a timeshare exit
company” directed and controlled by non-lawyer defendants, Reed, Hein, and
Paranteau. Wyndham alleged that defendants ran false and misleading advertising,
purporting to have “safe,” “legitimate,” or “guaranteed” means of “exiting”
Wyndham owners from their timeshare contracts. “After successfully luring
Wyndham Owners into paying exorbitant fees for its services, [defendant] TET instructs
them to stop making payments on their timeshare contracts, which they do,” but
TET doesn’t disclose the adverse consequence of breach. TET then would hire the
lawyer defendants “to engage in fruitless negotiations with Wyndham for a fixed
fee.” The lawyers allegedly would send boilerplate demand letters to Wyndham,
demanding that it stop communicating with their client, but never work with any
Wyndham entity to legitimately terminate a timeshare contract. Instead, they
allegedly used “deceptive and unlawful” strategies such as having the owner execute a quitclaim on the timeshare
interest without Wyndham’s knowledge or consent. Afterwards,
or after the timeshare contracts are foreclosed on, TET and the lawyer
defendants allegedly falsely tell their clients that they successfully
cancelled or transferred their timeshare contracts.
Wyndham sued for false advertising in violation of the Lanham
Act, contributory false advertising in violation of the Lanham Act, tortious
interference with contractual relations, violation of Florida’s Deceptive and
Unfair Trade Practices Act (FDUTPA), and civil conspiracy to commit tortious
interference.
Lanham Act standing: Not present.  The injury alleged came because owners
stopped making payments on their timeshare contracts, but that injury didn’t
flow directly from TET’s advertising. None of the ads allegedly included
instructions to stop paying, and the complaint alleged that the instructions occurred
after TET solicited owners. The injury was too remote. This also got rid of
contributory false advertising.
Tortious interference: Defendants argued that, as counsel
for Wyndham owners, they were agents with privilege to interfere, but this was
an affirmative defense that didn’t clearly appear on the face of the complaint.
To the contrary, the complaint alleged that defendants weren’t agents.
Likewise, the complaint didn’t indicate that the owners were predisposed to
commit a breach; rather, they were allegedly deceived into doing so.
FDUTPA: Same problem as the Lanham Act claim. [There was no
analysis of the relevant statutory language, even though it is not limited to “commercial
advertising or promotion” and otherwise is worded quite differently; FDUTPA
is an FTCA-analogue rather than a Lanham Act analogue and on its face looks to cover far more commercial conduct than advertising, which affects whether the covered conduct is the cause of the harm.  Courts don’t like to do two analyses of the
same basic claim, but I think they probably should in this situation.]

from Blogger http://bit.ly/2Kjyigr

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