Actions Against Developers Resulting in Damage Awards
The timeshare industry has been plagued by allegations of fraud, deception and preying on the elderly. These are some of the cases that have been tried and resulted in damage awards in favor of the individuals.
Case # CGC-12-526187 | THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SAN FRANCISCO
This is an order filed in the case of Williams v Wyndham, a whistle-blower complaint brought by Patricia Williams. The judge was asked to rule on Wyndham’s motion for new trial and to reduce the jury’s award of damages. Williams is a former Wyndham employee who presented evidence to a San Francisco jury that she was fired in retaliation for reporting fraud when working at a Wyndham sales office.
After the jury entered a verdict in William’s favor, Wyndham sought to reduce the jury’s punitive damages award from $18.6 million to $130,000. The jury based its punitive damages award on evidence that Wyndham defrauded customers and sold elderly consumers more time than they could reasonably use before death. The evidence presented to the jury included sales representatives telling customers that Wyndham would buy back the timeshares it sold and that maintenance fees would not increase. Additionally, the jury heard evidence that sales persons opened credit cards for customers without their permission. In denying Wyndham’s motion for new trial, the court ruled that Wyndham’s conduct was “highly reprehensible,” and the jury’s award was “dispassionately sound.”
Based on due process considerations, however, the judge reduced the jury’s punitive damages award to $12.8 million.
Case # E2014-00303, TENNESSEE COURT OF APPEALS
In this lawsuit, timeshare owners Nathan and Patricia Overton successfully sued Westgate to get out of their $39,280 timeshare contract (rescission). The timeshare owners testified at trial that at a sales presentation that lasted almost eight hours, Westgate sales manager had promised they could book unlimited “Owners’ Nights” at any Westgate resort for $49-$69 per night and to book a reservation for the same week in December each year at Westgate’s Gatlinburg resort for an annual trip with their extended family to celebrate Christmas and their wedding anniversary. They testified that the sales manager had also promised to purchase a Foosball table to be kept at the resort for them, and to refund a portion of the commission he received on the sale of the timeshare. After the sale, they learned that they did not have unlimited “Owners’ Nights” privileges, and were unable to confirm the promised December reservation. They testified that even after multiple calls to the timeshare developer, and a written request to rescind the contract, Westgate refused to let the Overtons out of their timeshare.
The judge ruled after trial that Westgate was guilty of fraud, and that Westgate knowingly trained its salespersons to promise unlimited Owners’ Nights, even though written documents provided to purchasers did not mention the program. The court granted rescission of the contract, and ordered Westgate to refund the money the Overtons had paid. The judge additionally ordered Westgate to pay the Overtons punitive damages due to the reprehensibility of Westgate’s conduct.
Westgate appealed, challenging the trial court’s refusal to force the Overtons to litigate in Florida, and arguing that the punitive damages award of $600,000 was improper or excessive. On appeal, the reviewing court found that an award of punitive damages was warranted, given the trial court’s findings. The court additionally found that the punitive damages award was reasonable, however, due to the state’s statutory cap, reduced the award to $500,000.
Disclaimer: While the Coalition to Reform Timeshare’s summaries attempt to concisely reflect timeshare owners’ and whistleblowers’ allegations, for full context and accuracy, the reader is encouraged to review the court-filed pleadings that are linked for the reader’s reference to the caption for each lawsuit.
The Coalition to Reform Timeshare is dedicated to reforming the timeshare industry. We advocate that timeshare companies should be subject to a strict code of ethics and transparency in their sales techniques.
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