Dear Sunchaser Vacation Villas Owner:
As we updated you on March 18, 2016, the Resort was successful on all issues in the JEKE (the plaintiff) v. Northmont “test-case” for the benefit of all owners. With the helpful guidance of the British Columbia Supreme Court, all owners now have a clear understanding of their contractual obligations and should be resolving their delinquency.
Unfortunately, the plaintiff has chosen to appeal the action. While we had hoped to avoid this step to save delinquent owners from further cost and the Resort from unnecessary delay, it is all part of the process despite the fact that, in our opinion, it has no reasonable chance of success.
There are a few conclusions one could draw from the unnecessary appeal. We can appreciate owners who think the plaintiff‘s appeal is a desperate attempt to save its reputation and avoid lawsuits from owners they advised to default on their contractual obligations on the basis of allegations it ultimately couldn’t produce evidence in support of, let alone prove. We can also appreciate owners who think the plaintiff’s appeal is just continued arrogance and the refusal to accept a position other than its own no matter how overwhelming the evidence.
However, we are not willing to draw those conclusions yet. The plaintiff is acting on legal advice and therefore we presume the decision making is based more on logic than emotion. Legal counsel’s role is to prevent emotional decisions and to ground their clients in the legal practicalities of a situation. Further, the plaintiff’s legal bills are being paid by the delinquent owners so we expect the appeal is being driven by the collective.
As such, our position at this time is that the appeal is a negotiating tactic. The delinquent group knows that if it did not file an appeal, it would have zero leverage and summary judgments against each member were inevitable. By filing an appeal, they believe they add uncertainty back into the process to force a more favorable outcome.
The strongest evidence of this is that the appeal was not filed by their lead counsel, but by the law firm that lost the test-case in January. Based on the feedback we have seen and received, the delinquent group is livid the law firm they hired did not argue the test-case. Though in reality the test-case was lost on the facts and merits and had nothing to do with legal counsel, in their mind it is the sporting equivalent of benching their high-priced star player for the championship game.
Both sides know the lead law firm has to argue the appeal. The delinquent owners are not going to let their star player be benched again. Nor will they accept the lead law firm is acting reasonably if they lose a third time with the legal firm that argued the test-case while the lawyer they paid for watches from the sidelines.
So the appeal is a negotiating tactic and we will address it accordingly. However, it has been our position throughout this process that any fair settlement will protect our owners who honored their contractual obligations from the costs of those who did not. We have already made a fair and reasonable settlement offer that owners should accept and the filing of the appeal does not change our position.
On the positive side, the appeal provides us two great opportunities to highlight the abuse of process this entire exercise has been by the delinquent group. First, the plaintiff is forced to obtain and disclose the entire transcript of the trial in 60 days. As soon as it does so, we will be putting a copy of the transcript or at least the critical elements on the Resort website for all owners to see just how unwarranted the legal action has been. Second, if they do not settle prior to the appeal, it will give us another impenetrable judgment in our favor.
While we continue to hope for a reasonable settlement and continue to seek an alternative that is fair for all parties, we look forward to arguing the appeal if necessary because we have the fullest confidence we will be victorious.
Does the appeal alter operations?
For the most part it does not. A judgment remains in effect during an appeal unless the appellant obtains a stay (a standstill) of the judgment from the Court of Appeal. They have not attempted to do so and it is highly unlikely they would succeed given the absence of merit to their appeal. As appeals work on fairly regimented timelines, we are confident that if the appeal does get heard, judgment will be received before the 2017 maintenance fees are issued.
We will operate with the guidance provided by the test-case judgment. This will include pursuing summary judgment against owners in their individual claims and working towards a commonality of contractual rights as contemplated by the agreements. As more information becomes available, we will update owners.
Once again, we want to thank our owners who have patiently let this process work its way through the system. While we are disappointed with the possibility we may have to fight an unnecessary appeal, our resolve to defend the Resort and our owners from unwarranted legal action remains high. We look forward to another successful judgment for the Resort to bring this process to its end.
Should you have any general questions with this communication, please do not hesitate to contact our Vacation Ownership Services (VOS) team at 1-877-451-1250. Should you have any questions of a legal nature, please seek appropriate legal advice.
