Cullum v. Wyndham Hotels & Resorts Corp.

1

SANDRA L. CULLUM and DEIRDRE SALEH, Plaintiffs, v. WYNDHAM HOTELS & RESORTS CORP., WYNDHAM DESTINATIONS INC., MR. GEOFFREY A. BALLOTTI, WYNDHAM HOTELS WH & RESORTS, INC., MS. ELISABETH GALE, DBA WYNDHAM CORPORATE OFFICE & HEADQUARTERS, BROADRIDGE CORPORATE ISSUER SOLUTIONS, Defendants.

No. 1:22-CV-09700-LTS-SN

United States District Court, S.D. New York

February 12, 2024

MEMORANDUM ORDER AND OPINION

LAURA TAYLOR SWAIN, United States District Judge.

Plaintiffs Sandra Cullum and Deirdre Saleh (“Plaintiffs”) proceeding pro se and putatively on behalf of a class, bring this action against Defendants Wyndham Destinations, Inc. (“WDI”),^[1] Broadridge Corporate Issuer Solutions (“Broadridge”), Elisabeth Gale,^[2] as well as Wyndham Hotels & Resorts, Inc. (“WHR”)^[3] and Geoffrey A. Ballotti (“Mr Ballotti”) (the “WHR Defendants,” and with WDI, Broadridge, and Elisabeth Gale, collectively “Defendants”) asserting various federal and state law claims arising out of a timeshare contact. (Docket entry no. 15 (the “Amended Complaint” or “AC”) at 9.) Plaintiffs seek $367,000 in compensatory damages, $15.4 billion in class relief, and a permanent injunction preventing Defendants from “engaging in the unlawful activities and practices complained of.” (AC at 9, 18.) The Court has jurisdiction of certain of the federal claims in this action pursuant to 28 U.S.C. section 1331. The Court does not appear to have diversity jurisdiction of Plaintiffs' state law claims.

Before the Court are three motions to dismiss (the “Motions to Dismiss”) the Amended Complaint. The WHR Defendants move for dismissal pursuant to Federal Rule of Civil Procedure 12(b)(2) and, alternatively, under Federal Rule of Civil Procedure 12(b)(6), arguing that the Court cannot exercise personal jurisdiction over them and contending that the Amended Complaint fails to allege facts plausibly supporting any cause of action pleaded against them. (Docket entry no. 24 (“WHR Defs. Mem.”).) Defendant WDI separately moves for dismissal pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. section 1 et seq. and, alternatively, under Federal Rule of Civil Procedure 12(b)(6), arguing that the agreement pursuant to which Plaintiffs purchased time share points includes a broad arbitration clause and that the Amended Complaint fails to allege facts plausibly supporting any cause of action pleaded against WDI and fails to plead its fraud causes of action with particularity. (Docket entry no. 30 (“WDI Mem.”).) Defendant Broadridge moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), also arguing that fraud is not pleaded with particularity and asserting that no facts are pleaded that plausibly provide support for any cause of action against Broadridge. (Docket entry no. 34 (“Broadridge Mem.”).) The Court has reviewed the parties' submissions thoroughly. For the reasons set forth below, WDI's and Broadridge's motions to dismiss the Amended Complaint as against those defendants are granted in their entirety. WHR Defendants' motion to dismiss the Amended Complaint as against them for lack of personal jurisdiction is also granted. The Court grants Plaintiffs 30 days' leave to file a Second Amended Complaint clearly setting forth the factual basis of their claims against the remaining unserved defendant, Elisabeth Gale, should they wish to continue to pursue claims against her.

Background

The following summary of facts is drawn from the Plaintiffs' Amended Complaint, and their response in opposition to Defendants' motions to dismiss^[4] (docket entry no. 37 (“Pl. Mem.”)), the well-pleaded nonconclusory factual content of which are taken as true for purposes of this motion practice. The Court also considers the Retail Installment Contract that is attached to the Certification of Caitlin C. Conklin (docket entry no. 31-1 (“Retail Installment Contract”)) because it is “incorporated by reference in the complaint.” DiFolco v. MSNBC Cable LLC, 622 F.3d 104, 111 (2d Cir. 2010). The Court notes, at the outset, that Plaintiffs' extensive allegations, which refer to “Defendants” generally, consist mainly of general allegations of falsehoods and trickery and assertions that numerous laws and disclosure duties have been violated.

Plaintiffs allege that “[t]he defendants' actions have caused substantial harm to . . . elderly citizens who have fallen victim to their predatory tactics” and “suffered significant financial losses, harassment, and intimidation.” (Docket entry no. 37 (“Pl. Mem.”) at 10.) On January 21, 2019, Plaintiffs attended a timeshare sales presentation conducted by Defendants at a Wyndham hotel property in midtown Manhattan. (AC at 2.) Plaintiffs allege that they were told that the presentation would take ninety minutes but it instead lasted three to six hours or longer. (Pl. Mem. at 16.) According to Plaintiffs, “Defendants at Wyndham market and sell[] vacation ownership interests in the form of points, property & other action, provide consumer financing in connection with the sale of point issues, provide property management & . . . develop and acquire[] vacation ownership resorts.” (AC at 17.) Participants purchase points, which are used as currency to book a stay at Wyndham resort properties. (Id.) Plaintiffs further allege that they were subjected to “high pressure sales employing a tag-team format” and were presented with “[v]olumes of documents with little time to review before signing.” (Pl. Mem. at 16.) According to attachments in the Amended Complaint reproducing certain pages of a Retail Installment Contract between Plaintiffs and Wyndham Vacation Resorts, Plaintiffs purchased Wyndham timeshare interests on December 5, 2019, and also concurrently took out loans to finance the purchase. (See Retail Installment Contract.) The Contract includes the following provision requiring disputes to be subject to binding arbitration:

PLEASE READ THIS PROVISION OF THE AGREEMENT CAREFULLY. IT PROVIDES THAT CERTAIN DISPUTES MUST BE RESOLVED BY BINDING ARBITRATION. IN ARBITRATION YOU GIVE UP THE RIGHT TO GO TO COURT, INCLUDING THE RIGHT TO A JURY AND THE RIGHT TO PARTICIPATE IN A CLASS ACTION OR SIMILAR PROCEEDING. IN ARBITRATION, A DISPUTE IS RESOLVED BY AN ARBITRATOR INSTEAD OF A JUDGE OR JURY. ARBITRATION PROCEDURES ARE SIMPLER AND MORE LIMITED THAN COURT PROCEDURES, AND ARE SUBJECT TO VERY LIMITED REVIEW.

34. Dispute Resolution/Arbitration. Any Disputes between the Parties shall be resolved as follows:

(a) Definition of Disputes. The Parties agree that any dispute, claim, suit, demand or controversy arising out of or relating to this Agreement (any “Dispute”) shall be determined exclusively and finally by individual arbitration, except as specified below. “Dispute” includes, without limitation, any claim regarding any breach, termination, enforcement, interpretation or validity of this Agreement, any claim arising out of or related to the marketing, purchase and/or use of Owner's Ownership, Owner's use of Seller's properties, and/or Owner's participation in any activities/events sponsored, organized, or made available by Seller or any of its affiliates.

(Id. at 31.) Plaintiffs do not contend that any exceptions are applicable here. The contract further provides that arbitration shall be held in Florida. (Id.)

Having purchased the points, Plaintiffs found it difficult to book access to the resort properties because the the properties were not available for Plaintiffs' requested dates. (AC at 13, 17.) Defendants informed Plaintiffs that problems related to availability “can only be fixed by buying more points.” (Pl. Mem. at 16.) At some unspecified date, Plaintiffs also attended an “Owner's Update” meeting, which turned out to be another sales presentation in which they claim to have been “subjected to another high-pressure sales pitch.” (AC at 17.) In the period spanning February 2019 to February 2023, Plaintiffs were charged $143,201.65 through monthly assessments, at least some of which they allege to have been unauthorized. (See id. at 4, 8-9.) Attempts to contact Defendants about the foregoing issues via letters or customer service inquiries were unsuccessful. (Id. at 5.)

Plaintiffs allege that, at some point in the course of these events, unspecified Defendants, through unspecified representatives or agents, made false and misleading representations to Plaintiffs. (AC at 16.) Plaintiffs were told that the “timeshare is an investment opportunity” and that Plaintiffs “could sell their timeshare for a profit.” (Id. at 8, 17.) Plaintiffs were also presented with “false or misleading statements about the ability to rent or resell the timeshare,” “what [they] would receive as part of ownership,” “the benefits or value of a timeshare purchase,” and “false sales data & wrongful information.” (Id. at 13; Pl. Mem. at 16.)

The AC does not specify the statements it characterizes as false and misleading, nor does it identify particular speakers in connection with these allegations.

Procedural Background

Plaintiffs commenced this action by filing their original Complaint against Defendants on November 14, 2022. (Docket entry no. 1 (“Original Complaint”).) Because the Original Complaint lacked specific factual support and did not conform to the pleading requirements of Rule 8 of the Federal Rules of Civil Procedure, by order dated December 20, 2022, Judge Ronnie Abrams, sua sponte, granted Plaintiffs leave to filed an amended complaint within sixty days. (Docket entry no. 5 (“Order to Amend”) at 5, 7.) Judge Abrams also dismissed for lack of subject matter jurisdiction “any claims in which Plaintiffs seek the criminal prosecution of any of the Defendants.” (Id. at 3-4, 6-7.)

Plaintiffs filed their Amended Complaint on February 8, 2023. In it they assert a...