timeshare exit lawyer wins a round: no harm causation shown

Club Exploria, LLC v. Aaronson, Austin, P.A., No. 18-cv-576-Orl-28DCI,
2020 WL 6585802 (M.D. Fla. Nov. 10, 2020)

Another timeshare v. timeshare exit lawyer case that goes
much better for the defendant than some others. Briefly, the plaintiff seems to
have relied heavily on favorable precedents without developing enough evidence
that this specific firm did the same bad things.

Defendant law firm specializes in timeshare owner grievances
against developers; its websites contain colorful statements and media aimed at
optimizing internet visibility, and clients are emailed a link to one of the
sites when their retainer agreement is sent to them. Exploria alleged that
Aaronson uses false and misleading website advertisements to convince timeshare
owners that they can easily cancel their timeshare contracts if they hire
Aaronson. Aaronson allegedly then advises owners to stop paying their loan and
fee obligations.

An example of the website statements:

Timeshare ownership often feels
like entrapment. At the Aaronson Law Firm, we know this because we hear our
Clients’ stories.

….

But chances are good that your
timeshare developer is exposed legally in ways that are relatively
straightforward and provable. You owe it to yourself to hire experienced,
competent counsel. At the Aaronson Firm, we have over 80 years of combined
legal experience. And we are willing to sue, if necessary, in the interest of
getting your timeshare cancelled….

YOUR LEGAL PROBLEMS ARE NOT
INSURMOUNTABLE!

If you need to cancel your
timeshare, the timeshare Attorneys of the Aaronson Law Firm stand ready and
able to help you!

The sites also explained that they would use formal demand
letters to “initiate” recission, with an attached proposed civil complaint in a
carrot/stick arrangement.

Its blog stated that “[q]uite often, one’s signature on a timeshare
contract is obtained by fraud.… But to address it properly, it is imperative
that you retain a licensed attorney.” Experienced counsel, it stated, “will
know how to exploit other points of vulnerability. For example, the developer
may well be perpetrating an ongoing conflict of interest. Improper handling of
trust funds are [sic] also a major issue.”

Its websites contained videos purporting to be testimonials
of Aaronson’s clients, but actors and Aaronson employees played the roles of
lawyers and owners. “In both instances, the role players read statements of
actual unhappy timeshare owners.” [Generally ok, if disclosed.] However, “[o]ne
of the websites also included two printed testimonials that were written by the
web designer and an Aaronson employee but attributed to timeshare owners.” [Not
ok.] The websites did mention some timeshare developers by name, but not Exploria,
and the court indicated that the focus of the criticism was the timeshare
industry in general.

Aaronson represented at least 22 Club Exploria owners
attempting to cancel their timeshare contracts, but Exploria sought damages for
six in particular. The court found, based on deposition testimony, that the
owners who stopped making payments did so of their own accord, without
instruction from the firm or before hiring the firm.

Tortious interference: Aaronson knew of the contract between
the parties, but Exploria didn’t show that defendants intentionally caused the
contract to be breached. Whether Aaronson’s legal theories were good ones didn’t
matter without causation. Exploria’s primary evidence was testimony given by a
different person in an unrelated litigation who testified that Aaronson advised
him to cease making payments as part of a legal strategy to terminate a
timeshare with Diamond Resorts. The fact that two of the six owners stopped
paying after hiring Aaronson wasn’t enough for a reasonable jury, especially
given the testimony of the only owners deposed that no one from the law firm told
them to stop paying, that they chose to stop paying for other reasons, and that
letters Aaronson sent to Exploria on their behalf did not lead them to believe
that they had been relieved of their payment obligations. Many Aaronson
retainer agreements stated: “To avoid the possibility of a counterclaim, it is
important that you remain current on your payments with the developer.”  Prior cases involved very different evidence,
and indeed Aaronson fixed one mess made in the unrelated Westgate
litigation.

FDUTPA prohibits “unfair or deceptive acts or practices in
the conduct of any trade or commerce.” The court concluded that, though nonconsumers
do have standing under FDUTPA, the practice of law was not “trade or commerce.”
While lawyers are not per se exempt from FDUTPA, lawyers acting to exercise a
legal remedy are typically not considered to be engaged in trade or commerce. That
was the case here with Aaronson’s website ads and representation of clients.
Aaronson actually went to litigation on a regular basis, unlike the lawyer in Westgate
who, the court there found, “actively avoid[ed] judicial involvement through
all of his work.”

Lanham Act: No showing of proximate causation: there wasn’t evidence
that the website ads caused owners to withhold business from Exploria.

The court nonetheless addressed other elements of the Lanham
Act claim. There were genuine issues of material fact on
falsity/misleadingness. Rather than deeming the accusations against the
timeshare industry as a whole to be puffery (“fraud,” “pack of lies,” “improper
handling of trust funds,” sociopathic sales associates, “ongoing conflicts of
interest,” and the owners “being taken for a ride”) the court found it couldn’t
determine the truth of those statements at this stage. And there was record
evidence that the sites’ claims that the timeshare developers are likely
“exposed legally in ways that are relatively straightforward and provable” and
that Aaronson’s strategies give timeshare owners “the best chance to have
[their] timeshare successfully rescinded” were false. The evidence was that, of
the 100–150 timeshare cases the lawyer has taken to litigation, the contracts
were found unenforceable roughly six times. And there was no record evidence
that any of the Affected Owners’ contracts were successfully rescinded. That
didn’t show there were no legal grounds to dispute the agreements or
that Aaronson was never successful, but a jury could find that Aaronson’s
website “falsely or misleadingly stated timeshare developers’ legal
vulnerability as well as the availability of remedies like rescission.” [There
is a line of cases about when legal claims are falsifiable v. puffery, but the
court does not cite them and might not have been directed by the parties to
them.]

Likewise, a jury might find the claims literally false; if
they found them misleading, the case would fail because Exploria had no
evidence of consumer reaction.

However, Exploria’s failure to show materiality was fatal
regardless. There was no expert testimony or other evidence that the website
advertisements were likely to be material to consumer purchasing decisions. The
record didn’t even show that every owner found Aaronson through its websites;
only one of the 6 named did so, and she wasn’t deposed. The rest were referred
by another lawyer. One had no recollection of visiting the site, and another’s
spouse told her nothing about the site. “Clearly the website statements were
not material to these owners even if they did indeed view them.”

Trade libel: also failed for want of materiality.

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