Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-7_11-cv-03960/USCOURTS-alnd-7_11-cv-03960-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

WESTERN DIVISION

WILLIAM SPEARMAN, et al.,

Plaintiffs;

vs.

WYNDHAM VACATION

RESORTS, INC., et al.,

Defendants.

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7:11-cv-3960-LSC

MEMORANDUM OF OPINION

I. Introduction

Before the Court is Defendants’ “Motion to Dismiss, Transfer Venue or, in the

Alternative, Motion for Summary Judgment” filed on January 24, 2012. (Doc. 8.) For

the reasons described below, the Motion to Dismiss is due to be GRANTED in part

and DENIED in part, the Motion to Transfer Venue is due to be DENIED, and the

alternative Motion for Summary Judgment is due to be DENIED with leave to refile

at the close of discovery.

II. Factual Background and Procedural History

Defendant Wyndham Vacation Resorts, Inc. (“WVR”) is a wholly-owned

subsidiary of Wyndham Vacation Ownership (“WVO”; collectively “Wyndham”),

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one of the world’s largest timeshare companies. Wyndham develops, markets, and

sells vacation ownership interests, and provides consumer financing to owners.

Ownership interests are reflected by an allocation of “points” proportionate to each

owner’s interest. These points can then be used to make reservations at various

resorts. 

Plaintiffs are among Wyndham’s top point holders, and belong to the highest

level of a three-tiered VIP Program. They claim to have been enticed to the highest

levels of ownership by Wyndham’s repeated promises about the benefits that would

come with additional points. Plaintiffs complain that Wyndham has altered or

eliminated many of these expected benefits, including the promise of unlimited guest

certificates and the ability to sell or transfer points to other owners. Additionally,

Plaintiffs allege that the merger of Wyndham’s point program with Resort

Condominiums International, LLC (“RCI”), has diluted the value of Wyndham

ownership and has made it difficult or impossible to make some reservations. Plaintiffs

contend that deceptive sales practices, changes to benefits, and devaluing of

ownership are all part of a “systematic scheme”directed at VIP owners like Plaintiffs.

(Doc. 1 at 8.)

Plaintiffs filed a complaint in this case on November 18, 2011, against WVO,

WVR, and RCI (collectively “Defendants”). (Doc. 1.) The complaint contains

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thirteen separate claims for relief:fraud; fraud in the inducement; suppression; breach

of contract; wantonness; breach of fiduciary duty; negligence; negligent hiring,

training, supervision, and retention; wanton hiring, training, supervision, and

retention; unjust enrichment; a claim for an accounting; a claim for injunctive relief;

and a claim for civil conspiracy to commit fraud, fraudulent inducement, and

suppression. (Id.) 

The allegations and claims for relief in Plaintiffs’ complaint are virtually

identical to those stated in complaints filed in three other cases currently pending

before this Court: Sirmon v. Wyndham Vacation Resorts, Inc., 7:10-cv-02717-LSC;

Yaeger v.Wyndham Vacation Resorts, Inc., 7:11-cv-3958-LSC; and Brouwer v.Wyndham

Vacation Resorts, Inc., 7:11-cv-3959-LSC. The initial complaint in Sirmon was filed

approximately 13 months before this action, and the complaints in Yaeger and Brouwer

were filed simultaneously with the one in this case. Defendants in this action are also

the named defendants in each of the other three cases. The only paragraphs that differ

among these complaints are the ones identifying the parties on the plaintiff side and

the paragraph identifying specific representations made to the individual plaintiffs. 

The Sirmon case has set the tone and tempo for the three cases that followed.

On December 1, 2011, Defendants moved this Court to dismiss all of the claims raised

in the Sirmon complaint. Sirmon v.Wyndham Vacation Resorts, Inc., No. 10-2717, Docs.

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62 & 64. On April 17, 2012, this Court issued an order denying dismissal as to the

fraud-based claims (counts 1-3 of the Complaint), granting dismissal as to the claim

for injunctive relief (count 12), and deferring its ruling on the remaining counts until

the Sirmon plaintiffs had an opportunity to file an addendum to their complaint.

Sirmon, No. 10-2717, Doc. 100. The Court’s order on the remaining counts in Sirmon

is being issued herewith.

On January 24, 2012, while the motions to dismiss were still pending in Sirmon,

Defendants filed the presentMotion to Dismiss, Transfer Venue, or in the alternative,

for Summary Judgment. (Doc. 8.) The arguments in the present motion relating to

dismissal are virtually identical to the arguments raised in the pending Sirmonmotion.

Thus, the portion of this Opinion addressing Defendants Motion to Dismiss will

pattern and reference the opinion being issued in Sirmon. However, unlike the

motions in Sirmon, which only contained arguments relating to dismissal, the motion

in this case also includes arguments regarding venue and summary judgment. (Doc.

8.) These issues are addressed in the Court’s Opinion below.

III. Motion to Dismiss

A. Legal Standard

A defendant may move to dismiss a complaint pursuant to Federal Rule ofCivil

Procedure 12(b)(6) if the plaintiff has failed to state a claim upon which relief may be

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granted. “When considering a motion to dismiss, all facts set forth in the plaintiff’s

complaint ‘are to be accepted as true and the court limits its consideration to the

pleadings and exhibits attached thereto.’” Grossman v. Nationsbank, N.A., 225 F.3d

1228, 1231 (11th Cir. 2000) (quoting GSW, Inc. v. Long County, 999 F.2d 1508, 1510

(11th Cir. 1993)). In addition, all “reasonable inferences” are drawn in favor of the

plaintiff. St. George v. Pinellas County, 285 F.3d 1334, 1337 (11th Cir. 2002). 

To survive a 12(b)(6) motion to dismiss for failure to state a claim, the

complaint “does not need detailed factual allegations;” however, the “plaintiff’s

obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than

labels and conclusions, and a formulaic recitation of the elements of a cause of action

will not do. Factual allegations must be enough to raise a right to relief above the

speculative level, on the assumption that all the allegations in the complaint are true

(even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)

(internal citations omitted). The plaintiff must plead “enough facts to state a claim 1

that is plausible on its face.” Id. at 570. Unless a plaintiff has “nudged [his] claims

In Bell Atlantic Corp. v. Twombly, the U.S. Supreme Court abrogated the oft-cited standard

1

that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt

that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief”

set forth in Conley v. Gibson, 355 U.S. 41 (1957). Bell Atl. Corp., 550 U.S. at 560-63. The Supreme

Court stated that the “no set of facts” standard “is best forgotten as an incomplete, negative gloss

on an accepted pleading standard: once a claim has been stated adequately, it may be supported by

showing any set of facts consistent with the allegations in the complaint.” Id. at 563. 

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across the line from conceivable to plausible,” the complaint “must be dismissed.”

Id.

“[U]nsupported conclusions of law or of mixed fact and law have long been

recognized not to prevent a Rule 12(b)(6) dismissal.” Dalrymple v. Reno, 334 F.3d 991,

996 (11th Cir. 2003) (quoting Marsh v. Butler County, 268 F.3d 1014, 1036 n.16 (11th

Cir. 2001)). And “where the well-pleaded facts do not permit the court to infer more

than the mere possibility of misconduct, the complaint has alleged—but it has not

‘show[n]’—‘that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679

(2009) (quoting Fed. R. Civ. P. 8(a)(2)). Therefore, the U.S. Supreme Court

suggested that courts adopt a “two-pronged approach”when considering motions to

dismiss: “1) eliminate any allegations in the complaint that are merely legal

conclusions; and 2) where there are well-pleaded factual allegations, ‘assume their

veracity and then determine whether they plausibly give rise to an entitlement to

relief.’” American Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)

(quoting Iqbal, 556 U.S. at 664). Importantly, “courts may infer from the factual

allegations in the complaint‘obvious alternative explanation[s],’ which suggest lawful

conduct rather than the unlawful conduct the plaintiff would ask the court to infer.”

Id. (quoting Iqbal, 556 U.S. at 682).

B. Discussion

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There is a great deal of homogeneity between this case and Sirmon v. Wyndham

Vacation Resorts, Inc., No. 10-2717, which is also pending before this Court. Indeed,

hundreds of pages of the briefs filed by both parties in this action have been replicated

word for word from briefs and other documents previously filed in Sirmon. The Court

recognizes that going to great lengths to reproduce the same analysis already

expressed elsewhere is not in the best interest of judicial economy. Given the

similarity between these two actions, the portion of this Opinion relating to

Defendants’ Motion to Dismiss parallels the equivalent opinion being simultaneously

issued in Sirmon. See Sirmon, No. 10-2717, Doc. 149. This Opinion, however,

expresses the ultimate decision without repeating the underlying reasoning.

Therefore, for the same reasons expressed in this Court’s Order of April 17,

2012, in Sirmon, Defendants’ Motion to Dismissis due to be DENIED as to Plaintiffs’

fraud based claims (counts 1-3 of the complaint), and due to be GRANTED as to

Plaintiffs’ claim for injunctive relief (count 12). See Sirmon, No. 10-2717, Doc. 100.

Likewise, for the reasons expressed in the Sirmon opinion being issued herewith, 

Defendants’ Motion to Dismiss is due to be DENIED as to the remaining counts of

Plaintiffs’ complaint. See Sirmon, No. 10-2717, Doc. 149.

The Court acknowledges the omission of a procedural step in this action which

it required in Sirmon. In both Sirmon and the present action, Defendants’ motions to

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dismiss argue that the respective complaints utilized impermissible “shotgun” style

pleading. In Sirmon, this Court remedied this problem by requiring the plaintiffs to file

an addendum to their complaint“identifyingwhich specific factual paragraphs [were]

being offered in support of which specific claims.” Sirmon, No. 10-2717, Doc. 100 at

14. It was only after that addendum was filed that this Court concluded Defendants’

motions to dismiss were due to be denied. See Sirmon, No. 10-2717, Doc. 149. The

Court finds no need to repeat this procedural step in the instant action. The only

difference between the Sirmon complaint and the one in this case are the parties listed

in the initial paragraphs. Given this similarity, it will be relatively easy for Defendants

to use the addendum to the complaint in Sirmon to clarify any questions raised by the

blanket incorporations used in the pleadings in this case. See Sirmon, No. 10-2717,

Doc. 110.

IV. Venue

Defendants argue that venue in the Northern District of Alabama is

inappropriate because a choice-of-forum clause in the FairShare Vacation Plan Use

ManagementTrust Agreement (“Trust Agreement”) mandates a Florida forum.The

referenced clause, entitled “Construction of Trust Agreement,” provides in

pertinent part:

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Any action brought to enforce the terms or interpret any provision of this

Trust Agreement or any other action in any manner relating to the Trust,

the Trustee, the Trust Properties or the Plan shall be brought in the State

Courts in Orange County, Florida or the Federal District Courts for the

Middle District of Florida.

(Doc. 13-1, § 14.01.) 

As an initial matter, for the same reasons stated in the opinion being

simultaneously issued in Sirmon, see Sirmon, No. 10-2717, Doc. 149, the Court does

not agree that the FairShare Vacation Plan Use Management Trust (the “Trust”) is

an indispensable party to this litigation. Indeed, the Court finds no reason why

complete relief cannot be accorded among the current parties to the lawsuit without

the inclusion of the Trust. The Trust Agreement, therefore, is arguably irrelevant to

this dispute. Nonetheless, even if the Trust Agreement is applicable, the forum

selection clause is drafted in a manner that excludes the conduct comprising the crux

of Plaintiffs’ complaint.

The forum selection clause is included within a paragraph captioned

“Construction of Trust Agreement” and appears to be directly targeting disputes

about the interpretation or enforcement of the Trust Agreement. This dispute, in

contrast, is about the allegedly fraudulent and deceptive sales tactics employed by

Defendants to entice Plaintiffs into higher levels of ownership. While Plaintiffs’

complaint mentions the Trust Agreement, the heart of this dispute relates to

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fraudulent oral representations that have nothing to do with the “Construction” of

the Trust Agreement. 

Defendants assert a broader interpretation of the forum selection clause than

the one accepted by this Court. Specifically, Defendants contend that this action falls

within the catchall provision of the forum selection clause which reaches “any other

action in any manner relating to the Trust.” This language, however, does not appear

to include claims for fraudulent misrepresentation and suppression, particularly since

the heading of the paragraph limits the scope to “Construction of [the] Trust

Agreement.”Ifthe forum selection clause was intended to have a broader application,

that intention should have been clearly stated. Furthermore, Alabama law directs that

any ambiguity is to be construed against the drafter. See Southtrust Bank v. Copeland

One, L.L.C., 886 So. 2d 38, 43 (Ala. 2003) (“It is a well-established rule of contract

construction that any ambiguity in a contract must be construed against the drafter of

the contract.”). Accordingly, Defendants’ request that the Court transfer this action

to Florida is due to be denied.

V. Motion for Summary Judgment

Defendants asked this Court to convert their motion into a Motion for

Summary Judgment to the extent any claims challenged in the Motion to Dismiss are

otherwise not disposed of by the Court. Plaintiffs responded by attaching to their

responsive brief an affidavit filed pursuant to Federal Rule of Civil Procedure 56(d),

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arguing that summary judgment is inappropriate without further discovery. (Percy

Badham Aff., Doc. 23-24.)

Rule 56(d) of the Federal Rules of Civil Procedure provides a mechanism for

relief where a party faced with a summary judgment motion does not have the facts

necessary to respond to it. The rule provides:

(d) When Facts Are Unavailable to the Nonmovant

If a nonmovant shows by affdavit or declaration that, for

specified reasons, it cannot present facts essential to justify

its opposition, the court may:

(1) defer considering the motion or deny it;

(2) allow time to obtain affidavits or declarations or to take

discovery; or

(3) issue any other appropriate order.

Fed. R. Civ. P. 56(d). In the present case, Plaintiffs seek further discovery regarding

(1) the creation, purpose and success of Extra Holidays, a division of Wyndham

dedicated to helping owners rent their points; (2) the creation, purpose, features and

implementation of Voyager, the new reservation system which may play a part in

inventory allotment and cancellations, and (3) the inventory allotment criteria and

priority. (Doc. 23 at 46.)

Plaintiffs have sufficiently established that, as of the date Defendants’ motion

was filed, further discovery was needed to develop the issues related to this matter.

The Court acknowledges that substantial discovery has occurred since the filing of

Defendants’ motion, and it fully anticipates that Defendants will soon file an actual

motion for summary judgment. Nevertheless, at this time, Defendants’ Motion for

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Summary Judgment is premature, and thus due to be DENIED with leave to refile at

the conclusion of discovery.

VI. Conclusion

For the reasons previously stated, the Motion to Dismiss is due to be

GRANTED in part and DENIED in part, the Motion to Transfer Venue is due to be

DENIED, and the alternative Motion for Summary Judgment is due to be DENIED

with leave to refile at the close of discovery. A separate order will be entered

consistent with this Opinion.

Done this 18th day of September 2012.

 

L. Scott Coogler

United States District Judge

[170956]

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