Timeshare case: proof of causation/damages is difficult especially w/o grasp of Bayesian probability

Wyndham Vacation Ownership, Inc. v. Sussman, 2021 WL 4948099,
No. 6:18-cv-2171-GAP-DCI (M.D. Fla. Sept. 20, 2021)

In this timeshare exit false advertising litigation, the
court excludes Wyndham’s expert. Timeshare exit entities like defendant TET
used “online advertising and oral sales pitches to timeshare owners to convince
them to sign up for TET’s service.” TET then contracted with Sussman, an
attorney, who would receive a timeshare owner’s documents, send letters on
behalf of that owner to timeshare businesses, and communicate with those
businesses to get the owner out of his or her obligations. Wyndham claims that
TET and Sussman falsely advertised and induced timeshare owners to breach their
contracts with Wyndham by ceasing payments. Wyndham’s expert surveyed
timeshare owners who are not related to this case to gauge their responses to
TET’s advertisements. Scene-setting:

A repeated issue in all these cases
is how the timeshare companies can prove that the timeshare exit entities
caused their damages—i.e., did the entities induce each of the timeshare owners
at issue to stop making their timeshare payments. The most obvious route to
proving these cases would be to solicit testimony from the owners as to their
reason for breaching their contracts. However, these lawsuits have involved
hundreds of timeshare owners, and obtaining testimony from every owner would be
a labor-intensive effort. Hoping to avoid such a task, the timeshare companies
have attempted, with little success, to find a shortcut.

It’s not enough to add up the total of all missed payments
without a link between the defendants and the owners’ actions. In a previous
timeshare case, the court ruled that, “absent direct testimony from the owners
regarding their missed payments, [plaintiff] would not be permitted to proceed
to trial based on the expert’s testimony.” The court then “entertained the
possibility that statistical evidence, rather than direct testimony, might
support causation.” The plaintiff thus offered a statistical expert who used a
subset of “influenced” accounts and extrapolated those to the remaining
hundreds of accounts at issue.  “This
testimony was excluded as unreliable due to the +22% margin of error the
expert’s method produced, and significant issues with the way the expert
obtained his data.”

This time, Wyndham tried a consumer survey of timeshare
owners. Respondents saw a TET webpage, a video performance of TET’s sales
presentation script, and a welcome email that TET used. Survey questions
included whether respondents believed they were being told to stop making
timeshare payments and whether they would be inclined to stop making timeshare
payments. The expert opined that, based on the survey: (1) 32.2% of the
respondents believed the statements in the emails told them to stop making
timeshare payments; (2) 18.5% of those respondents were either very likely or
somewhat likely to act on those instructions and stop making payments; and (3)
the survey results “demonstrate that [TET] customers were likely misled by
[TET’s] sales practices and believed that it was appropriate to cease making
payments to their timeshare company.”

However, the expert did not perform any statistical or other
analysis comparing the sample population to Wyndham’s owners. He didn’t explain
explain why his methodology reliably enabled the trier of fact to apply his
results on causation to the owners at issue in this case. “[T]his
case is not about the average consumer. This case is about an identified set of
timeshare owners, every one of whom acted on facts and circumstances specific
to him or her. [The expert] may have analyzed timeshare owners in general but
his failure to connect his analysis to the Wyndham owners renders his remaining
opinions irrelevant to this case.” A jury couldn’t extrapolate the results to
the 270 defaulting Wyndham owners at issue, especially since, per the survey, only
16 of those 270 would likely stop making payments as a result of TET’s ads, and
it wasn’t clear which 16 to pick for purposes of calculating damages.

[This last bit seems like an error about the nature of the universe
of Wyndham owners at issue—as I understand it, the 270 did stop, one way or
another, so rather than the probability of whether someone who saw the ads would
rely on the ads to stop making payments, P[A|B], we really need to know whether
someone who stopped making payments did so because they saw the ads, P[B|A],
something that needs more information to be calculated even if we know P[A|B].
The survey is relevant to show P[A|B], which itself is relevant to the overall
question though insufficient on its own.] 

Wyndham Vacation Ownership, Inc. v. Sussman, 2021 WL 4949162,
No. 6:18-cv-2171-GAP-DCI (M.D. Fla. Sept. 27, 2021)

With the expert out, Sussman did much better on the
substantive causes of action. The remaining claims against him were for
contributory false advertising in violation of the Lanham Act; tortious
interference with existing contracts under Florida law; civil conspiracy to
commit tortious interference; and violations of Florida’s Deceptive and Unfair
Trade Practices Act.

The Lanham Act false advertising claim was based solely on
TET’s oral sales presentations (OSPs).  Such oral statements, if widely disseminated,
can be commercial advertising.  But there
wasn’t sufficient evidence that TET “routinely” told Wyndham’s timeshare owners
to stop making timeshare payments in the OSPs. TET’s script for the OSPs didn’t
contain an instruction to cease making timeshare payments. The owner testimony
wasn’t consistent—only one said she was told to stop making timeshare payments
during a sales presentation. TET officers’ testimony didn’t specify that any
instructions to stop payments were disseminated during a sales presentation. Thus,
Sussman got summary judgment.

Tortious interference: There was no testimony that Sussman
ever told a TET-referred client to stop paying. “In every owner deposition that
Wyndham submitted, the owner states they stopped paying because of TET, not
Sussman. In fact, when asked about Sussman, the owners stated that they had no
recollection of speaking with him or who he even was.” No tortious
interference.

Conspiracy to commit tortious interference: Was there an
agreement with TET? Not a written one, but “Sussman told TET that he would not accept any owner who had
not stopped or did not intend to stop making payments to his or her timeshare
company. Sussman explained that this was because he could not successfully
negotiate a release for any owner who continued to make payments on their
timeshare—i.e., carry out the service he was being paid to do.” Thus, a jury
could reasonably find an agreement that TET would interfere with Wyndham’s
contracts.

What about damage causation? Three relevant owners testified
that they stopped paying because of TET, so that created an issue of fact on
whether TET caused the breach for those three. But what about the other 247
relevant owners? There was only testimony about TET’s general practices in
communicating with clients, and the fact that 208 of the 250 relevant owners
stopped making their timeshare payments after hiring TET. “Wyndham’s
circumstantial evidence may permit a juror to infer that TET interfered with
some contracts, but no juror could reasonably infer from this evidence that TET
proximately caused Wyndham’s damages…. Without some form of direct testimony
from these owners or expert testimony to fill in the gaps between TET’s general
practices and the decisions of the individual owners, Wyndham cannot prove
causation.” TET’s CEO stated by affidavit that,while some company
representatives advised clients to stop making payments, TET did not have a
companywide policy of doing so,” and that “clients had varying reasons for not
wanting to pay; some had already planned to stop making payments and others
could not afford to pay anymore.” Without the owners’ testimony, a factfinder couldn’t
determine which owners would have stopped paying regardless of TET’s
involvement.

FDUTPA: Sending letters about the timeshares fell within
FDUTPA’s definition of trade or commerce. However, as to loss causation,
Sussman was entitled to summary judgment on the damages claim with respect to
any owner who didn’t testify about causation, though injunctive relief was
still possible. 

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