Club Exploria, LLC v. Aaronson

CLUB EXPLORIA, LLC and CLUB EXPLORIA MANAGEMENT, LLC, Plaintiffs, v. AARONSON, AUSTIN, P.A. and AUSTIN N. AARONSON, Defendants.

Case No: 6:18-cv-576-Orl-28DCI

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION

November 10, 2020

ORDER

Plaintiffs Club Exploria, LLC (Club Exploria) and Club Exploria Management, LLC (CEM) (collectively Exploria) brought this action against Defendants Aaronson, Austin, P.A. and Austin N. Aaronson (Austin) (collectively Aaronson) asserting claims arising from statements made on Aaronson's websites and Aaronson's representation of six specific Club Exploria timeshare owners. Exploria's claims include tortious interference (Count I), violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) (Count III), false advertising in violation of the Lanham Act (Count IV), and trade libel (Count V). (Am. Compl., Doc. 39).¹ The Court previously dismissed Exploria's RICO claim (Count II) with prejudice. (Order, Doc. 87). Aaronson now moves for summary judgment on all remaining claims, (Mot., Doc. 126), and Exploria moves for summary judgment on Counts I, III, andIV, (Mot., Doc. 129).² As set forth below, Aaronson's motion is granted and Exploria's motion is denied.

I. Background

Club Exploria sells timeshare interests (a/k/a "vacation interests"). The timeshare interests come in the form of club ownership or a resort stay during a designated week. (Baker Dep., Doc. 126-3, at 33).³ While club ownership involves points that may be used throughout the year to stay at various resorts within Exploria's network, (id.; Smith Dep., Doc. 126-18, at 12, 31), an interest in a designated week entitles a purchaser to occupy a specific resort unit for a specified week, (Doc. 126-3 at 33). Owners may finance these purchases through an Exploria affiliate. (Doc. 126-18 at 63-64).

CEM manages homeowners' associations at Club Exploria's resorts. (Lizotte Dep., Doc. 126-20, at 17). Owner-controlled homeowners' association boards set budgets for each resort. (Id. at 18). Based on the budgets, all owners are required to pay annual maintenance fees in addition to any loan payments that they may owe. (Doc. 126-18 at 44-45).

Austin is no stranger to Exploria because he owns and operates a law firm—Defendant Aaronson, Austin, P.A.—specializing in timeshare owner grievances against developers. (Austin Dep., Doc. 126-22, at 32). Disgruntled owners sometimes find the firm through attorney referral services, (id. at 66), but they also find the firm through its websites, which contain colorful statements and media aimed at optimizing internetvisibility, (id. at 65-66, 92). Even if new clients do not locate the firm through the websites, they are emailed a link to one of the sites when their retainer agreement is sent to them. (Id. at 76).

Exploria asserts that Aaronson uses false and misleading website advertisements to convince timeshare owners that they can easily cancel their timeshare contracts if they hire Aaronson. According to Exploria, Aaronson then advises owners to stop paying their loan and fee obligations, causing damages to Exploria in the form of lost principal, interest, and maintenance fee payments.

A. The Website Statements

Defendants spend approximately $100,000 per year on website development and maintenance, (id. at 95-96), and another $100,000 per year on Google search optimization, (id. at 103-04). The Aaronson websites contain testimonials, blog posts, a book, and videos designed to attract dissatisfied timeshare owners. For example, the following statement appeared on one of the sites:

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.

So please contact us using one of our three convenient methods to receive a free consultation to discuss your situation. You can:

1. Call us free of charge,

2. Use our Contact Form above, or

3. Live Chat with a person ready to assist you.

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!

(Doc. 132-8 at 2). The sites also contained an explanation of the process that the firm uses to help clients "cancel" their timeshare contracts:

The Aaronson Law Firm consists of a number of Attorneys and Support Staff who are solely dedicated to helping you cancel your timeshare contract. It is all we do. That fact allows us to be focused on your direct timeshare cancellation needs, giving you the best chance to have your timeshare successfully rescinded.

How do we do this?

Initial Consultation: In our initial, free consultation with you, we discuss the details of your situation so that we can make sure that we have a full and accurate understanding of your case. We ask you questions that help us evaluate your case and ascertain how best we are able to help you while formulating the best course of action to move forwards toward a successful rescission.

. . . .

Rescission Predicate Correspondence (RPC): This is a formal legal demand letter that is created, initiating the rescission process. The "carrot" dangled therein often involves transfer of the timeshare back to the developer with no money changing hands, in spite of funds already spent by the client.

Civil Complaint: The civil complaint is drafted, attached to the RPC, referenced therein, and published to the Timeshare Developer with a view toward filing in a court of competent jurisdiction. This is the proverbial "stick" exposing the developer to potential liability.

(Doc. 132-9 at 2). Additionally, Aaronson used the site to direct viewers to its blog and stated:

Quite often, one's signature on a timeshare contract is obtained by fraud. And the debt that it creates generally outweighs any benefit to the owner. But to address it properly, it is imperative that you retain a licensed attorney.

You can complain ad nauseam about the pack of lies that you were told during the high pressure sales pitch, how the 'hour-long' presentation became four or five hours, about how they wore you down emotionally, andabout the rapid-fire signings of 'routine' closing documentation presented, as the salesman rifled through page after page.

And you can go on and on about the rude awakening when the first bill came in the mail, and the shock you felt when you finally had the chance to actually read the sales contract at home. And then there was the awful frustration of actually trying to book their [sic] vacation, only to be told that you didn't have enough 'points' or some other excuse.

But going over this disturbing series of events is not likely to carry much weight legally. After all, it's your word against there's [sic], and that contract you signed is chock full of waivers and disclaimers to protect the developer.

But experienced, competent counsel 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.

This is where the developer is most vulnerable. This is where your leverage is. And by far the best way to leverage this is through a licensed attorney who will have subpoena power over books and records.

(Doc. 131-8 at 2).

The Aaronson websites contained videos purporting to be testimonials of Aaronson's clients. On one website, professional actors posed as Aaronson lawyers and dissatisfied timeshare owners. (Doc. 126-22 at 127, 129). On another, Aaronson employees played the same roles. (Id. at 129). In both instances, the role players read statements of actual unhappy timeshare owners. (Id. at 127). One of the websites also included two printed testimonials that were written by the web designer and an Aaronson employee but attributed to timeshare owners. (Id. at 93-94). The websites mention some timeshare developers by name, but Exploria is not among them. The focus of the criticism is the timeshare industry in general.

B. The Affected Owners

Aaronson has represented at least 22 Club Exploria owners attempting to cancel their timeshare contracts. (Doc. 131-6 at 6-7). But Exploria's Amended Complaint (Doc.39) seeks damages for lost loan and fee payments for six specific Club Exploria owners (Affected Owners). The Amended Complaint does not identify the Affected Owners by name, but Exploria's responses to Aaronson's interrogatories provide names and details for each of the six Affected Owners. Oddly, Exploria's motion for summary judgment lists different owners as the Affected Owners. The Court disregards the new list because Exploria has not requested leave to amend its complaint or interrogatory answers.

Affected Owner 1 upgraded his vacation interest to access superior resort properties several times over the course of a decade and thus is familiar with the timeshare sales process and fee payment requirements. (D'Agostino Dep., Doc. 126-15, at 24, 25, 26, 28, 31, 36, 53-54). But he eventually became dissatisfied with the process and his purchases. (Id. at 15, 36, 46, 57, 58, 64). He sent a letter to Exploria asking for help, but no one responded. (Id. at 86-87). He tried to contact sales personnel while he was on property for vacations, but the personnel he sought were never available. (Id. at 45-46, 49). He also tried to call sales personnel, but they never returned his calls. (Id. at 58). On November 26, 2017, he sent a letter to Exploria attempting to cancel his contract. (Doc. 126-16).

Affected Owner 1 then retained Aaronson in December 2017 and ceased making payments in March 2018. (Doc. 126-36 at 6; Doc. 126-17 at 2). No one from...