ORLANDO, FL — In a bizarre development that screams “twisted logic,” timeshare developer Diamond Resorts settled a lawsuit — rather than risk losing it — against an Orlando attorney whose firm has helped people get out of timeshare contracts for seven years. Then, on May 8, 2019, five days after Diamond moved to abort the case in mid-trial, the company announced in a press release on a national wire service that it was “pleased” with the outcome.
Here’s the factually-based truth about what happened…and it’s a tell-tale story for Diamond timeshare owners and others who are stuck with timeshare contracts they can no longer use.
Las Vegas-based Diamond is managed by Mike Flaskey, an aggressive CEO who publicly declared war last month against all exit companies. One of the company’s legal targets is attorney Austin N. Aaronson and his firm, Canceltimeshare.com. The case went to trial in federal court on April 30, 2019 representing the first of its kind to actually reach the judge-and-jury stage.
Diamond sued Aaronson for false advertising and other actions that, according to Diamond, damaged the company’s reputation and contracts with customers. One particular source of controversy: Aaronson posted an advertising video on his website that disparaged Diamond’s handling of maintenance fees. At trial, Diamond’s attorneys presented owners who testified they had been influenced by the video. They also presented executives who defended Diamond’s management of maintenance fees as well as a financial forensic analyst who estimated that Diamond suffered $4.5 million in damages as a result of the video.
The trial dynamic shifted, however, after US District Court Judge Roy Dalton Jr. dismissed the damage estimate as “speculative” and readied the jury for Aaronson’s attorneys to present their side of the case.
TRIAL ENDED ABRUPTLY AND AARONSON DID NOT HAVE TO PRESENT HIS CASE
They never got the chance. After a break in the proceedings, Diamond’s attorneys announced that a settlement had been reached. Case closed.
While terms of the settlement are confidential, legal experts and court observers described the outcome as a complete vindication for Aaronson. Diamond, which may have spent up to $1 million in preparation for the case, would never have settled if it expected to win, they said.
For Aaronson, it was all worth the fight to protect his reputation. “Whatever cloud we may have been under while the case was pending, has been lifted,” Aaronson told the Coalition to Reform Timeshare. “There should be no impact on our business whatsoever.”
Aaronson has practiced contract law for 31 years. In very general terms, he described the trial machinations. “They tried to make a big deal about the video, but it was never a big deal. We could re-post it today, if we wanted, and stand behind every word. There’s no prohibition against it.”
The real issue, he said, is that developers such as Diamond are going out of their way to crush exit companies and timeshare attorneys by litigating them to death, hoping they will go away. The Exit companies are necessary until our state and federal leadership does something to protect consumers by placing strict rules on an unregulated industry, such as the timeshare industry. The Coalition to Reform Timeshare is advocating for these regulations in a Bill of Rights it issued earlier this year.
DIAMOND USING LEGAL MANEUVERS TO PUNISH PEOPLE AND COMPANIES WHO HELP TIMESHARE OWNERS
Makes no difference whether they are ethical companies or bad. The industry, as a whole — based upon the recent statements from Flaskey and others — wants to eradicate the timeshare exit industry so it can maintain total control over longtime customers (and their money).
“One thing to take away from this is that we actually did go to trial. That sent the message that we’re not going to knuckle under,” Aaronson said. “They are trying to litigate us out of existence by making it (financially) impossible to defend ourselves. But at some point, you have to take a stand and say, ‘this is not right.’”
Irene Parker, a court observer, Diamond critic and volunteer advocate for timeshare owners, described the outcome as a personal victory for Aaronson and a huge victory, in general, for timeshare owners who seek legal help to get out of their timeshares. “This is very important for attorneys who provide exit services, but ultimately for consumers who need exit assistance.”
While careful not to divulge any details of the settlement, Aaronson said of the case: “I never dreamed it would be this confrontational, down and dirty, constant motions and requests for sanctions. If you’re not insured or flush with cash, this could easily put you out of business.”
Post-trial, Aaronson plans to continue helping customers, wiser for the experience.
“We’re not getting anything out of this settlement other than the opportunity to live another day,” he said. That future includes dealing with scores, if not hundreds, of longtime timeshare owners who are struggling with their timeshares.
“During the past five to seven years, it seems that things have become decidedly worse for timeshare consumers,” Aaronson said. “We see a lot of older folks who were really happy with their timeshares until they got upsold a bill of goods. These folks feel like they’re trapped in perpetuity. They can’t sell it or rent it or use it on a cost-effective basis. They call us and just want out.”
REFORM COALITION REPRESENTS ALL TIMESHARE OWNERS
Brandon Reed, owner of Timeshare Exit Team and founder of the Coalition to Reform Timeshare, shares Aaronson’s fire about the need to fight back against abusive developer lawsuits.
“It’s very costly to battle five lawsuits, but we have to do it,” said Reed (Diamond is one of the companies). They are targeting larger companies, like Timeshare Exit Team, but it’s very much a David-vs-Goliath story. If you’re not prepared and insured, you’re not going to make it. That’s why we’re fighting back with the Coalition, to shine a light on a very dark industry. We want consumers to know the truth about timeshare.”
DIAMOND TRIES TO PUT A WINNING SPIN ON A LOSING CASE
There’s not a lot of “truth about timeshare” in the comments Diamond distributed in the wake of its settlement with Aaronson and his law firm. It took all of five days for Diamond to figure out a public posture, when it announced in a press release that Diamond was “pleased” with the settlement.
In the release, Diamond reiterated its allegations against Aaronson, but shed no light on what happened to those claims in court. In fact, they were all dismissed, with prejudice, which means Diamond cannot use them in any future case against Aaronson.
Diamond also touted the fact that it won some positive rulings against Aaronson, prior to trial, but those were all rendered moot by the case’s dismissal, too.
Finally, Flaskey, the public face of Diamond’s timeshare empire, weighed in, claiming that the case was pursued as part of Diamond’s “efforts to protect members from a disturbing new rise of unscrupulous companies — marketing themselves as ‘timeshare exit companies’ — that prey on timeshare owners. These fraudulent companies charge owners thousands of dollars in upfront fee but don’t fulfill on their promises, leaving consumers deeper in debt and with damaged credit histories.”
Funny, but that’s what timeshare developers do, too, charging consumers $20,000 or more in upfront fees for the privilege of buying an interval week via a one-sided contract that locks them into a timeshare for life. These people have no time to review their contracts and are forced into a decision. Timeshare companies don’t always fulfill their vacation promises to customers, either, and they are quick to threaten foreclosure and credit problems on owners who fall behind on their fees.
“We’re very concerned about members being preyed upon by third parties, often through scare tactics,” Flaskey said of the settlement. “This is a very positive outcome that will help protect our members. The vast majority of our members love their vacations, but we also know that sometimes life’s circumstances can change. If any of our members want to transition or modify their vacation ownership, we work to help them in a safe way.”
Diamond has filed 12 other cases in federal courts against timeshare exit companies and their attorneys. So far, the company claims to have won seven and gotten at least one attorney disbarred. These are all part of an industry-wide campaign, led by the big developers, to sue exit firms and end an industry that is truly advocating for consumers!
The irony of these actions and Flaskey’s statement, of course, is that Diamond and other timeshare companies “created” the timeshare exit industry in the first place. Their deliberate refusal, for years, to provide genuine exit options effectively drove customers into the arms of attorneys and others who would help get them out of their timeshares. Diamond, Wyndham and other leading timeshare companies now claim to have in-house exit programs for customers, but these programs are new and not available to all members.
“It’s a crazy situation,” said Reed, founder of the Coalition to Reform Timeshare. “The industry is throwing good money after bad, suing companies that are trying to help ‘their’ customers. Well, those customers are ‘my’ customers, too, which is why we’re dedicated to helping them out of their timeshares. We are not going away! We’re only going to get louder until the industry does what’s right for consumers and the government offers more rights to consumers. Go see our Bill of Rights for what we’re advocating for and let’s help the millions of people who want out of their timeshare, now.”