# [2016 - Lennen v. Marriott]



## taffy19 (May 21, 2016)

This never seems to stop. 

http://therealdeal.com/miami/2016/0...-illegal-timeshare-scheme-seeks-class-action/

PS.  I really should add that I am against class action lawsuits in general.  They mostly do not benefit anyone but these lawyer outfits.


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## kds4 (May 21, 2016)

This is an interesting argument that I have not previously seen. 

It will be interesting to see if the court agrees with their argument that the DC Points Program is nothing more than a financial 'get of jail free' card that Marriott Corporate developed to 'recycle' unsold/foreclosed weeks inventory by selling imaginary title to non-existent real estate while charging costs associated with owning actual real-estate, like closing costs, title insurance, etc.. 

Is there something rotten in Denmark?

Cue suspenseful music ...


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## dioxide45 (May 21, 2016)

It doesn't even look like the plaintiffs own beneficial interests in the trust. GIven that, I think the case would be thrown out. They are not monitarilly injured by the DC program.


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## classiclincoln (May 21, 2016)

Sounds like the suit alleges that they were "duped" into buying an interest in a physical property but in reality were not.  I'm not a lawyer, but I think it's not gonna fly because (while I have never seen the points contract) I doubt the points contract says anything like that.  

Yup, lawyers will end up getting enough to buy some of those points and the owners are gonna get "ugatz"....


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## larryallen (May 21, 2016)

iconnections said:


> PS.  I really should add that I am against class action lawsuits in general.  They mostly do not benefit anyone but these lawyer outfits.




Agreed generally but don't forget that class action lawsuits are aimed at avoiding future bad conduct by that defendant and preventing others. So even if the direct class action doesn't significantly benefit each class participant maybe they will help people in future. There is a public benefit is all I am saying.


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## mjm1 (May 21, 2016)

I can't see this going anywhere either. 

They even refer to legacy owners not being able to exchange their units like they used to. While it has been discussed here whether the DC program has affected our ability to trade, there have been many trades completed, either into other Marriott's or non-Marriott's.

Mike


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## Fairwinds (May 21, 2016)

Well this part of the claim is certainly false ....... “The scheme also harms owners of Marriott’s traditional week-to-week timeshares whose interests have been subordinated in favor of the far more profitable and competing points program. In fact, those traditional timeshare owners must now also buy into the points program in order to take advantage of exchange rights they used to enjoy.”


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## BocaBoy (May 21, 2016)

iconnections said:


> I really should add that I am against class action lawsuits in general.  They mostly do not benefit anyone but these lawyer outfits.


I  could not disagree more.  There are examples, of course, of the class action vehicle being misused, but also many, many examples of the public good being served by such suits.  Individual plaintiffs usually do not have the resources to pursue valid claims based on a cost/benefit analysis.  And individual plaintiffs often do benefit from class action verdicts or settlements.  As one personal example, a couple years ago I personally won a nearly $30,000 award in a securities fraud class action jury verdict.  The case took 12 years to litigate, appeal, etc ., because of the delaying tactics of the defendants.  No individual plaintiff could have persevered on his o her own.


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## BocaBoy (May 21, 2016)

Technically, I think the trust points are legally a share of deeded real estate so I suspect the suit will be dismissed.  However, I am sympathetic to the substance of the argument because in reality I think it nails the operational reality (if not the technicalities) of the points program.  Heck, if I understand correctly, the "owners" of points don't even have the right to vote their own shares of the trust.


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## mj2vacation (May 22, 2016)

mjm1 said:


> I can't see this going anywhere either.
> 
> They even refer to legacy owners not being able to exchange their units like they used to. While it has been discussed here whether the DC program has affected our ability to trade, there have been many trades completed, either into other Marriott's or non-Marriott's.
> 
> Mike



That is true, however, if they had a recording of a sales presentation where they were told, as many have before, that they need to have points to fully utilize he program, that would be an issue for Marriott. 

On our one and only presentation, the sales guy started down that path, and when he essentially said "what you used to do through interval, you can't do anymore unless you supercharge with trust points", I responded that well, if that were true, why would I trust MVC to not screw me in the future to make me buy something else?   

As someone who has trained professional sales people, I always stress the importance of not getting into a box that you can't get out of. I actually use that example in my training. He brought the box and tape, I just closed it for him....

We did enroll our existing weeks, and have one external bought after the cut off, and really do like the flexibility.  However, I have no interest in buying more points from them.


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## Dean (May 22, 2016)

BocaBoy said:


> Technically, I think the trust points are legally a share of deeded real estate so I suspect the suit will be dismissed.  However, I am sympathetic to the substance of the argument because in reality I think it nails the operational reality (if not the technicalities) of the points program.  Heck, if I understand correctly, the "owners" of points don't even have the right to vote their own shares of the trust.


I too suspect it will be dismissed.  Isn't this essentially the essence of buying a TIMESHARE.  Any damages would be to things covered legally up front including the fact that much of the resort was converted to the trust and thus not available to book.  But one signs that they understand this possibility up front.



mj2vacation said:


> That is true, however, if they had a recording of a sales presentation where they were told, as many have before, that they need to have points to fully utilize he program, that would be an issue for Marriott.


Since it's illegal in FL to record without notification, I doubt it'd be admissible and might get the owners in legal trouble if that were the case.


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## kds4 (May 22, 2016)

dioxide45 said:


> It doesn't even look like the plaintiffs own beneficial interests in the trust. GIven that, I think the case would be thrown out. They are not monitarilly injured by the DC program.



Even if they aren't enrolled, which they may not be, they also appear to be making an argument that their ownership as weeks owners has been damaged by the loss of ability to book weeks at other MVCI resorts that have been placed into the 'points trust' unless they submit to enrolling in the points program to regain access to them.

Again, interesting if held to be the case that only by being an enrolled owner can one access weeks that are now placed into the 'points trust'. They either have to enroll or lose this 'benefit' that was previously available to them under their existing weeks ownership.

If I understand correctly, there is still II availability for MVCI exchanges, but now it is greatly reduced and only based on individual owner deposits. The large corporate deposits that Marriott once made to II are now being withheld and managed internally by Marriott through it's own exchange mechanism as part of the points program. 

If you don't own points, you can no longer get to these previously unsold/foreclosed weeks that were previously available as part of your week's ownership.

Is that 'harm' to a legal standard? We'll have to see.


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## kds4 (May 22, 2016)

Fairwinds said:


> Well this part of the claim is certainly false ....... “The scheme also harms owners of Marriott’s traditional week-to-week timeshares whose interests have been subordinated in favor of the far more profitable and competing points program. In fact, those traditional timeshare owners must now also buy into the points program in order to take advantage of exchange rights they used to enjoy.”



This is what I was referring to. There may be something here, depending on how Marriott's governing docs were written at the time the plaintiff purchased their weeks as well as past corporate practice. Governing docs are the strongest, but pattern and practice also carries some legal weight.

If they can no longer exchange in a manner provided for in their governing docs without having to enroll in the points program because all of the 'corporate owned' weeks are now inside the points trust now and no longer available through II ...


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## TheTimeTraveler (May 22, 2016)

*Why now?*



iconnections said:


> This never seems to stop.
> 
> http://therealdeal.com/miami/2016/0...-illegal-timeshare-scheme-seeks-class-action/
> 
> PS.  I really should add that I am against class action lawsuits in general.  They mostly do not benefit anyone but these lawyer outfits.





Next month, June 20, 2016 will mark the 6th anniversary of the Marriott Destination Club program, and I guess my question is why did the Plaintiff wait six years to file this?

With that said, I wonder if this potentially could be thrown out just because of untimely filing?

This will be interesting to watch......






.


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## BocaBoy (May 22, 2016)

TheTimeTraveler said:


> Next month, June 20, 2016 will mark the 6th anniversary of the Marriott Destination Club program, and I guess my question is why did the Plaintiff wait six years to file this?
> 
> With that said, I wonder if this potentially could be thrown out just because of untimely filing?


I doubt that it could be thrown out on that basis.  The statute of limitations is likely 10 years (although I have not researched this) and more importantly, the damage (if there is any) is continuing, which typically resets the statute of limitations.  If the statute were 5 years, for example, the damages would normally be limited to the past 5 years, but if the "illegal" practices are continuing, a suit for the most recent 5 years would still be timely.


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## Ty1on (May 22, 2016)

iconnections said:


> This never seems to stop.
> 
> http://therealdeal.com/miami/2016/0...-illegal-timeshare-scheme-seeks-class-action/
> 
> PS.  I really should add that I am against class action lawsuits in general.  They mostly do not benefit anyone but these lawyer outfits.



This suit will fail, because MVC Corporation does not own the real estate and give right-to-use to club members.  The club itself holds the real estate in trust for its members.


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## jeepie (May 22, 2016)

BocaBoy said:


> Heck, if I understand correctly, the "owners" of points don't even have the right to vote their own shares of the trust.


Yes, trust points owners do have the right to vote their shares. Cheers.


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## tennvol (May 25, 2016)

*Marriott sued for racketeering*

Marriott and First American have been sued in Orlando for racketeering based on their points program.

http://www.orlandosentinel.com/busi...s-marriott-timeshare-rico-20160524-story.html

Thoughts?


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## PeterS (May 25, 2016)

tennvol said:


> Marriott and First American have been sued in Orlando for racketeering based on their points program.
> 
> http://www.orlandosentinel.com/busi...s-marriott-timeshare-rico-20160524-story.html
> 
> Thoughts?



It looks like it is focused on MVC calling DC points a real estate investment including taxes and closing costs, when DC points owners only have a recorded interest in the real estate, but no ownership.

Does it seem strange, that this is what Disney Vacation Club has always done?
Could DVC be next?

Is it really illegal or just the way it is marketed?

Pete


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## Fairwinds (May 25, 2016)

kds4 said:


> This is what I was referring to. There may be something here, depending on how Marriott's governing docs were written at the time the plaintiff purchased their weeks as well as past corporate practice. Governing docs are the strongest, but pattern and practice also carries some legal weight.
> 
> If they can no longer exchange in a manner provided for in their governing docs without having to enroll in the points program because all of the 'corporate owned' weeks are now inside the points trust now and no longer available through II ...



Just my opinion but: I've never read any part of a contract that guaranteed any availability in II and a pattern of bulk deposits can't set a requirement. By that reasoning if MVC had successfully sold all their weeks as they clearly intended to do and all or most owners occupied their home unit wouldn't MVC then also be liable for diminished trading. I just don't think I have lost anything or been harmed by the Club. I believe (as advertised) that I have just been offered additional options. And in fact, if one decides to enroll doesn't access likelihood improve?


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## l0410z (May 25, 2016)

When you have a front line sales structure that is not held accountable for telling the truth during the sales process, it leads to misunderstanding and confusion on the product.  

The industry is regulated and the point system too widespread for the suit to have  merit. It doesn't mean that a smart lawyer will not find a tee not crossed or an i not dotted.  

I hope what comes out of it is more responsibility and transparency by Marriott during the sales and inventory/trading processes.  

Not a fan of the point program but a big fan of the Marriott brand to feel anything illegal is going on.


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## Dean (May 25, 2016)

Fairwinds said:


> Just my opinion but: I've never read any part of a contract that guaranteed any availability in II and a pattern of bulk deposits can't set a requirement. By that reasoning if MVC had successfully sold all their weeks as they clearly intended to do and all or most owners occupied their home unit wouldn't MVC then also be liable for diminished trading. I just don't think I have lost anything or been harmed by the Club. I believe (as advertised) that I have just been offered additional options. And in fact, if one decides to enroll doesn't access likelihood improve?


The legal paperwork specifically says exchange options are not guaranteed and/or can change.


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## JIMinNC (May 25, 2016)

Fairwinds said:


> Just my opinion but: I've never read any part of a contract that guaranteed any availability in II and a pattern of bulk deposits can't set a requirement. By that reasoning if MVC had successfully sold all their weeks as they clearly intended to do and all or most owners occupied their home unit wouldn't MVC then also be liable for diminished trading.



I think you are correct. The only "Right" any timeshare week owner owns is the right to occupy their home week in their home season (or their owned week in the case of a fixed week owner). Any opportunity to exchange is an added benefit, but it is not an owned right. I believe the legal documents all state that there is no legal obligation for the developer/program manager to even maintain an exchange program, so if exchange options just diminish, I can't see how that would violate any terms of the contract.

Somewhat similarly, in the Points system, every owner has a legal right to book something with the points they own, so there is guaranteed to be an adequate supply of potential bookings for every point owned. But there is no guarantee of any specific date or any specific location/unit.

Since the weeks and points systems are managed separately, there are two pools of inventory, each of which should have a balance of available weeks/points and owned weeks/points.


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## Wahorn (May 25, 2016)

I agree with the article.  The value of my Manor Club week went down substantially after the points system was introduced.  They said they wanted to add flexibility, however, my week was devalued by Marriott.  I used to trade for another Marriott annually.  Now, with the points I get from Marriott, I can trade for another Marriott every other year.  I also notice that is is much harder to get another week as most are probably not trading anymore.  Plus, my maintenance fees have increased from $546 (2001) to $1,261 (2016) per year!!!  Hopefully something comes out of the lawsuit.  I feel like I'm being held captive by Marriott since they can raise price/point at anytime and change what my week is worth anytime as well.


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## rthib (May 25, 2016)

JIMinNC said:


> I think you are correct. The only "Right" any timeshare week owner owns is the right to occupy their home week in their home season (or their owned week in the case of a fixed week owner). Any opportunity to exchange is an added benefit, but it is not an owned right. I believe the legal documents all state that there is no legal obligation for the developer/program manager to even maintain an exchange program, so if exchange options just diminish, I can't see how that would violate any terms of the contract.
> 
> Somewhat similarly, in the Points system, every owner has a legal right to book something with the points they own, so there is guaranteed to be an adequate supply of potential bookings for every point owned. But there is no guarantee of any specific date or any specific location/unit.
> 
> Since the weeks and points systems are managed separately, there are two pools of inventory, each of which should have a balance of available weeks/points and owned weeks/points.



Right on. The weeks owners have no rights to point weeks, the same as a you do not have a right to my week. The docs are pretty well written from a lawyer standpoint in that almost nothing is guaranteed. 

As for the point above about recording or anything that was said, the docs also include language that you agree that only what is written is what is promised and no oral promises are binding.

The said part is that even though this will get thrown out or lose, it is still costing lawyer time.  
Also, even if for some reason they lose, Companies don't pay class action lawsuits, their customers do.  All these things do is raise maintenance fees.


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## JIMinNC (May 25, 2016)

Wahorn said:


> I agree with the article.  The value of my Manor Club week went down substantially after the points system was introduced.  They said they wanted to add flexibility, however, my week was devalued by Marriott.  I used to trade for another Marriott annually.  Now, with the points I get from Marriott, I can trade for another Marriott every other year.  I also notice that is is much harder to get another week as most are probably not trading anymore.  Plus, my maintenance fees have increased from $546 (2001) to $1,261 (2016) per year!!!  Hopefully something comes out of the lawsuit.  I feel like I'm being held captive by Marriott since they can raise price/point at anytime and change what my week is worth anytime as well.



Your week has not been devalued as you imply. As an enrolled owner, you do not have to elect for points. You can continue to use or trade your week as you always have through II.

Secondly, the II exchange option is not, and never has been, a "right" of ownership. The legal documents clearly state that it is an enhancement to the base owner rights and can be changed or eliminated at Marriott's option. The only true legal right you have is to use your week at Manor Club in your season. Anything else is a special benefit that Marriott is free to offer or remove at any time. It would certainly be unfortunate if Marriott eliminated the exchange benefit (not likely), but they are 100% free do do this per the contracts we all signed at purchase. I don't see how any "devaluation" of trading benefits is something that can be successfully challenged in court. There never was an absolute legal right to trade.

Your maintenance fee increase comes to a little over 5% a year, which is in line with other Marriotts. The maintenance fee issue has been beat to death recently in This Thread.

I don't think you are being held captive at all. You can always sell your week if you think it is no longer working for you. Before we bought Marriott we owned in another system that no longer worked for us, so we sold it and bought Marriott.


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## Lv2Trvl (May 25, 2016)

JiminNC - I agree with your summation. Our weeks are just as valuable as before the points were added. We all read and understood  (or should have) what we were purchasing. In our case, we think the points have added value to our weeks.


Sent from my SAMSUNG-SM-G920A using Tapatalk


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## Ralph Sir Edward (May 25, 2016)

JIMinNC said:


> Your week has not been devalued as you imply. As an enrolled owner, you do not have to elect for points. You can continue to use or trade your week as you always have through II.
> 
> Secondly, the II exchange option is not, and never has been, a "right" of ownership. The legal documents clearly state that it is an enhancement to the base owner rights and can be changed or eliminated at Marriott's option. The only true legal right you have is to use your week at Manor Club in your season. Anything else is a special benefit that Marriott is free to offer or remove at any time. It would certainly be unfortunate if Marriott eliminated the exchange benefit (not likely), but they are 100% free do do this per the contracts we all signed at purchase. I don't see how any "devaluation" of trading benefits is something that can be successfully challenged in court. There never was an absolute legal right to trade.
> 
> ...



I concur from just the opposite perspective. I found that post points, availability of my home weeks became a problem. So I sold my Marrriotts back to Marriott, and bought Bay Clubs with the proceeds. (one annual and two EOYs). Net cost was about $1600, plus a bump in MFs of about $800 a year. (But I'm in Hawaii in the winter!)

HGVC's point system suits me perfectly. I have no problem with availability in the owner's only window, which is all I care about.

Choose the system that best fits your needs - you'll be happier in the long run. . .


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## answeeney (May 25, 2016)

Like most posters, I think that the lawsuit will fail. The DC system also works for me so I have a vested interest in not wanting it damaged.

However, I do think the lawsuit is yet another an indication of how, despite much regulation, timeshare sales are still too much like the wild west.

I also feel a bit uncomfortable about the alacrity with which many tuggers point to the small print in support of Marriott's bad sales practices. Yes, it is absolutely correct that legally speaking the buyer of a week is only entitled to the week in their season but this is definitely, absolutely, not what the vast majority of them (not being knowledgable tuggers) thought they were buying. 90% of every presentation focuses on all those other resorts and locations that buying a week can gain you access to, whether through MRPs or II. The week you purchase is just your entry fee to the club. And yet when these options are devalued or removed the answer is always - you should have read the small print.

Imagine if investments were sold on the basis that they can only go up in value. Do you think the salesman would get a free pass by just pointing at some small print?


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## JIMinNC (May 25, 2016)

answeeney said:


> Imagine if investments were sold on the basis that they can only go up in value. Do you think the salesman would get a free pass by just pointing at some small print?



That's why virtually every piece of marketing material that a licensed investment broker uses is required to contain language (generally at the bottom, and not always in prominent places) that discloses that investments can and do lose value. Most investment sales people emphasize the historical performance gains over time. They don't focus on the bad years - but like timeshare contracts, the information is there if you read the prospectus and do your homework. So it's sorta in the fine print there too - "Past performance is no guarantee of future returns."


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## answeeney (May 25, 2016)

JIMinNC said:


> That's why virtually every piece of marketing material that a licensed investment broker uses is required to contain language (generally at the bottom, and not always in prominent places) that discloses that investments can and do lose value. Most investment sales people emphasize the historical performance gains over time. They don't focus on the bad years - but like timeshare contracts, the information is there if you read the prospectus and do your homework. So it's sorta in the fine print there too - "Past performance is no guarantee of future returns."



The warnings for investments are not in the fine print but are far more prominent e.g. key features documents. My point is that timeshare sales can get away with burying the risks and putting a spotlight on features that can be removed at any time.


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## davidvel (May 25, 2016)

The biggest problem with these lawsuits (class actions aside) is what is evident in these threads: the attorneys know little to nothing about the underlying governing docs, disclosures, etc. I've personally spoken to more than one of these [proposed class] counsel.  

Nearly all the people on TUG know 100x what they do about the structure, and just glom onto the 'devalued my interest" theory.


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## BocaBoy (May 26, 2016)

It seems to me that many of the posts here are missing a critical point of the lawsuit, namely that this is not a real estate investment but is marketed as one.  Not to argue to merits of the case, because I really do not know, but a layman's common sense says this is an ownership interest in a trust that happens to own real estate.  Why, the laymen might say, is that different from an investment in a REIT that happens to own real estate?  Shareholders in a REIT do not have a real estate investment.  It may well be that the trust vehicle passes through that ownership as a technical matter where a REIT does not, and that is technically why the lawsuit may fail.  But I have sympathy for the plaintiff's argument.


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## BocaBoy (May 26, 2016)

jeepie said:


> Yes, trust points owners do have the right to vote their shares. Cheers.


In the sense that I meant?  I doubt it.  Voting for trust officers or Board members is not the same as voting as an owner of real estate on the issues at each property, which is what you would be able to do if you were really an owner there.


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## dioxide45 (May 26, 2016)

Sit is often the small print and T&C that get companies in to trouble in these lawsuits. You can't market your product one way and then have your small print and T&C say something else just to get around how you are marketing the product. If Marriott is selling the DC trust as a real estate investment and the plaintiffs can prove it, then they likely have a very good case regardless of what the small print and contracts say.


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## SueDonJ (May 26, 2016)

We've talked about a few lawsuits filed since the DC related to selling practices, perceived devaluations and limited exchange opportunities.  Don't know if these are still making their way through the courts or if they've been resolved but I'm dropping the links here for reference:

Lawsuit against Marriott over forced title insurance [McIntyre v. Marriott]

lawsuit sterman v marriott - any more info?

class action suit [Desantis v. Marriott]  (The Orlando Sentinel article linked upthread about this newest lawsuit says this Desantis action, "was tossed out by Orlando U.S. District Judge Gregory Presell.") 

New class action suit [Abramson v. Marriott]


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## SueDonJ (May 26, 2016)

davidvel said:


> The biggest problem with these lawsuits (class actions aside) is what is evident in these threads: the attorneys know little to nothing about the underlying governing docs, disclosures, etc. I've personally spoken to more than one of these [proposed class] counsel.
> 
> Nearly all the people on TUG know 100x what they do about the structure, and just glom onto the 'devalued my interest" theory.



I agree it seems the one thing they all seem to have in common is that the lawyers get an education as they go, rather than reviewing the docs in preparation.  Seems a waste of their clients' time and money.


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## Fairwinds (May 26, 2016)

BocaBoy said:


> It seems to me that many of the posts here are missing a critical point of the lawsuit, namely that this is not a real estate investment but is marketed as one.  Not to argue to merits of the case, because I really do not know, but a layman's common sense says this is an ownership interest in a trust that happens to own real estate.  Why, the laymen might say, is that different from an investment in a REIT that happens to own real estate?  Shareholders in a REIT do not have a real estate investment.  It may well be that the trust vehicle passes through that ownership as a technical matter where a REIT does not, and that is technically why the lawsuit may fail.  But I have sympathy for the plaintiff's argument.



Right you are. And although I think it's interesting I chose not to dive in on the primary complaint because I knew I would be in deep water very quickly. This is a first for me and I'm quite proud.


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## JimC (May 26, 2016)

SueDonJ said:


> I agree it seems the one thing they all seem to have in common is that the lawyers get an education as they go, rather than reviewing the docs in preparation.  Seems a waste of their clients' time and money.



Hopefully for the clients it is a contingent fee case, so clients pay nothing unless they win.


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## freediverdude (May 30, 2016)

In DVC, you actually own a piece of a leasehold condominium as the contract, whereas in this Marriott thing it looks like you only own points, no mention of owning a percentage interest in unit X of property Y, etc.  There's a thread over on the Disboards discussing it and quoting pieces of the contracts.  I agree that if you only own points to make reservations, there shouldn't have been a deed and closing costs, etc. if I understand this correctly.


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## SueDonJ (May 30, 2016)

freediverdude said:


> In DVC, you actually own a piece of a leasehold condominium as the contract, whereas in this Marriott thing it looks like you only own points, no mention of owning a percentage interest in unit X of property Y, etc.  There's a thread over on the Disboards discussing it and quoting pieces of the contracts.  I agree that if you only own points to make reservations, there shouldn't have been a deed and closing costs, etc. if I understand this correctly.



For those interested, here's a link to the DISboards.com thread:  New Lawsuit Against Marriott Vacation Club

And thanks to that thread, a link to nflip.com where the Complaint can be downloaded:  Newman/Ferrara LLP - _Lennen v. Marriott Ownership Resorts, Inc., et al._


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## davidvel (May 30, 2016)

freediverdude said:


> In DVC, you actually own a piece of a leasehold condominium as the contract, whereas in this Marriott thing it looks like you only own points, no mention of owning a percentage interest in unit X of property Y, etc.  There's a thread over on the Disboards discussing it and quoting pieces of the contracts.  I agree that if you only own points to make reservations, there shouldn't have been a deed and closing costs, etc. if I understand this correctly.


Yes these are the core allegations. Having read the entirety of the Complaint, I think they make a very cogent argument on this issue at least.


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## SueDonJ (Feb 23, 2017)

SueDonJ said:


> We've talked about a few lawsuits filed since the DC related to selling practices, perceived devaluations and limited exchange opportunities.  Don't know if these are still making their way through the courts or if they've been resolved but I'm dropping the links here for reference:
> 
> Lawsuit against Marriott over forced title insurance [McIntyre v. Marriott]
> 
> ...



This thread's _Lennen v. Marriott_ topic came up today in the thread about VAC's 2016 4th qtr filing.  I'm wondering if any of the lawyers here can find the latest info related to the above 4 lawsuits?  Thanks!


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## Boom-chaka (Feb 23, 2017)

I just sat through the relentless sales pitch for the first time and was told that any interest on loans for the MVC fees and points were tax-deductible because the product is a share in a land-based trust.

Sounds like this case is stating otherwise?


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## vacationtime1 (Feb 23, 2017)

Boom-chaka said:


> I just sat through the relentless sales pitch for the first time and was told that any interest on loans for the MVC fees and points were tax-deductible because the product is a share in a land-based trust.
> 
> Sounds like this case is stating otherwise?



Ask the sales staff to put that tax advice in writing as part of the purchase documents; they won't.  Which gives you your answer.


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## Dean (Feb 23, 2017)

Boom-chaka said:


> I just sat through the relentless sales pitch for the first time and was told that any interest on loans for the MVC fees and points were tax-deductible because the product is a share in a land-based trust.
> 
> Sounds like this case is stating otherwise?


As I understand it, any loan would have to be written as a mortgage to be deductible among other requirements.  They'd have to send out a 1098 to do so.


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## dioxide45 (Feb 23, 2017)

Dean said:


> As I understand it, any loan would have to be written as a mortgage to be deductible among other requirements.  They'd have to send out a 1098 to do so.


DC points financing are written as mortgages and mortgages are recorded against the deed.


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## Talent312 (Jul 20, 2017)

_[Threads merged.]_

I'm not a MVC owner or buyer, but I thought those who participate here might be interested in this news story:

"Time-share law change at heart of Florida lawsuit involving Marriott Vacation Club"

See: http://www.orlandosentinel.com/busi...share-legislation-20170719-story.html?ref=yfp

.


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## KarenP (Jul 20, 2017)

Sounds like the law is giving more separation between the ownership rights of weeks based owners and owners of points.


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## Theiggy (Apr 4, 2019)

Someone posted this on an MVC Facebook group. Uh oh.
https://www.nyrealestatelawblog.com...tral-claims-in-suit-ag/#.XKZAISFvVH0.facebook


Sent from my iPhone using Tapatalk

_[Threads merged]_


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## DannyTS (Apr 4, 2019)

"While Marriott, First American, and others have profited greatly from sales of the MVC Product, purchasers of the MVC Product continue to suffer the consequences of the deception. For one, MVC Owners are deprived of any of the benefits of real-property ownership while shouldering all the burdens, costs, and fees as if they had such title. Moreover, purchasers continue to suffer harm as a result of Marriott's opaque and discretionary point-valuation process, which results in significant dilution and lacks any reliable metric for tracking their so-called beneficial interests, as well as Marriott's unfettered process of adding and restricting access to properties in the underlying land trust."

Hard to argue that the developers are the main beneficiaries of the point systems


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## rthib (Apr 4, 2019)

If you go look at what happened vs the press release from the law firm "A Florida federal judge has partly granted Marriott Ownership Resorts Inc. and related entities’ bid to toss a proposed class action accusing them of duping timeshare purchasers into invalid real estate deals, but he preserved the case’s primary claim that consumer deeds attached to the properties are void."

Here is the conclusion of the order - Not so good for the Ambulance chaser

Based on the foregoing, it is ORDERED and ADJUDGED as follows:
1. Marriott Defendants’ Dispositive Motion to Dismiss (Doc. 134) is GRANTED in part and DENIED in part.
2. Defendant MVC Trust Owners Association, Inc.’s Dispositive Motion to Dismiss (Doc. 135) and First American Defendants’ Motion to Dismiss (Doc. 136) are GRANTED.
3. Defendant Orange County’s Motion to Dismiss (Doc. 144) is DENIED.
4. Counts II and VI, to the extent Plaintiffs assert that timeshare estates cannot be offered in a multisite timeshare plan, are DISMISSED with prejudice.
5. Counts III, V, VII, VIII, IX, X, XI, XII, XIII, Florida Rico Counts I & II, and Plaintiffs’ punitive damages claim are DISMISSED without prejudice.
DONE and ORDERED in Orlando, Florida on March 31, 2019.


What the judge ruled was that on only one count did the lawyer even get close to making a claim. Not that the claim was valid or correct but that there was even something to talk about. From reading the filings, don't think they will win on that one either. And since the County could not get out of Suit that means the lawyers are going against MVCi and the government of a county that gets a lot of money from timeshares.


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## rthib (Apr 4, 2019)

Also, they also messed up on filing

"C. Leave to Amend Plaintiffs have not requested leave to amend their Amended Complaint. “A district court is not required to grant a plaintiff leave to amend his complaint [sua sponte] when the plaintiff, who is represented by counsel, never filed a motion to amend nor requested leave to amend before the district court.” Wagner v. Daewoo Heavy Indus. Am. Corp., 314 F.3d 541, 542 (11th Cir. 2002). Moreover, Plaintiffs were already given one opportunity to amend their Complaint. Thus, Plaintiffs will not be granted leave to amend"


Judge has some pretty harsh conclusions too:
The Court is not required to accept Plaintiffs’ conclusory allegations. Accordingly, Plaintiffs have failed to state a claim as to Count V.

Plaintiffs do not allege otherwise, and therefore, Count IX fails to state a claim

Such conclusory allegations are insufficient to state a claim, and therefore, Count X will be dismissed.


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## rthib (Apr 5, 2019)

Also, found this order the day after that hearing:

"This case comes before the Court without a hearing on Plaintiffs’ Motion to Certify Class (Doc. 184) and Motion for Leave to File Class Certification Reply Brief (Doc. 202).
The motion to certify is no longer seasonable in light of the Order on the motions to dismiss (Doc. 221).
The motion to certify class and to file a reply brief are therefore DENIED without prejudice to renewal if, and when, appropriate.
DONE and ORDERED in Orlando, Florida on April 1, 2019.


So don't think Marriott is too worried


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## ocdb8r (Apr 5, 2019)

...I dont know.  Granted the firm filing the complaints seemed to have missed the mark on several counts, the claim sustained by the court could attract more (competent) sharks.  Out of pure fascination I would love to see this properly litigated.  It's a very interesting proposition that as documented, the MVC points trust doesn't properly constitute real property.


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## jmhpsu93 (Apr 5, 2019)

ocdb8r said:


> ...I dont know.  Granted the firm filing the complaints seemed to have missed the mark on several counts, the claim sustained by the court could attract more (competent) sharks.  Out of pure fascination I would love to see this properly litigated.  It's a very interesting proposition that as documented, _*the MVC points trust doesn't properly constitute real property.*_



I just had this conversation with my mortgage broker; he was asking for the address of my 2nd mortgage property and I had no idea.  I looked up the deed in the Orange County FL database and it's real vague and the only address is a PO Box for MVCI.  My weeks at Grande Vista are much more clear, "week XX unit XXX".


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## Luvtoride (Apr 5, 2019)

I haven't gone back and checked my sales documents, but I never felt as if I was buying Real property when purchasing DC points from Marriott.  What damages are the Plaintiffs seeking?  Recission of the contracts?  Seems like alot of trouble to go through to Rescind.


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## ecwinch (Apr 5, 2019)

Luvtoride said:


> I haven't gone back and checked my sales documents, but I never felt as if I was buying Real property when purchasing DC points from Marriott.  What damages are the Plaintiffs seeking?  Recission of the contracts?  Seems like alot of trouble to go through to Rescind.


Like all of these type of class action lawsuits.... the lawyers are seeking a settlement payday. The class action members will get some shiny baubles... a free night and better disclosure in the documents.


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## rboesl (Apr 5, 2019)

To me what stood out was the following quote from the article:

"When contacted by _Law360 _about the decision, Newman Ferrara partner Jeffrey Norton, attorney for the Plaintiffs, explained that “because the MVC consumer deed is the basis for the conveyance of purported timeshare interests in the MVC Trust, a declaration voiding the instrument would mean every conveyance is void and would entitle purchasers to rescission.”  "

If I read that right anyone involved in the class action would have the right to rescind their original purchase. If that's the case, I believe, Marriott would be on the hook to return original purchase dollars and any maintenance fees collected since original purchase.


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## JIMinNC (Apr 5, 2019)

rboesl said:


> To me what stood out was the following quote from the article:
> 
> "When contacted by _Law360 _about the decision, Newman Ferrara partner Jeffrey Norton, attorney for the Plaintiffs, explained that “because the MVC consumer deed is the basis for the conveyance of purported timeshare interests in the MVC Trust, a declaration voiding the instrument would mean every conveyance is void and would entitle purchasers to rescission.”  "
> 
> If I read that right anyone involved in the class action would have the right to rescind their original purchase. If that's the case, I believe, Marriott would be on the hook to return original purchase dollars and any maintenance fees collected since original purchase.



Just remember what rthib posted above, the link posted by the OP was basically a news release by the plaintiff's law firm, so you are reading their spin on the case, not an objective assessment of the merits of the entire case.


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## Theiggy (Apr 5, 2019)

Thank you to all of you who have shed some light on this. 


Sent from my iPhone using Tapatalk


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## rthib (Apr 5, 2019)

rboesl said:


> To me what stood out was the following quote from the article:
> 
> "When contacted by _Law360 _about the decision, Newman Ferrara partner Jeffrey Norton, attorney for the Plaintiffs, explained that “because the MVC consumer deed is the basis for the conveyance of purported timeshare interests in the MVC Trust, a declaration voiding the instrument would mean every conveyance is void and would entitle purchasers to rescission.”  "
> 
> If I read that right anyone involved in the class action would have the right to rescind their original purchase. If that's the case, I believe, Marriott would be on the hook to return original purchase dollars and any maintenance fees collected since original purchase.



Except the Judge ruled on April against certifying a class, so there is no class action lawsuit.
Marriott filing on the case state that there is parol evidence that has the exact survey that relates to the filed paperwork and that the county agreed that was easier for them.
Ambulance chaser have filed a motion to reconsider class. Will see what happens but based on the judge ruling in favor of Marriott on the claim of a shotgun pleading, I wouldn't expect much.


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## jerseyfinn (Apr 6, 2019)

Landsharks  abound as America is now a Me-Too blame society out for $$ at the drop of a hat. Out here in AZ there's lawyers placing TV ads that literally say if you're in a car accident, call a lawyer first, & then your insurance company as insurers are not trust-worthy. Yeah, right! Sad part is there's plenty of folks who buy into "sue-you." 

No surprise the link takes us to the law firm's self-serving site. 

Marriott of course has thought this thing out before jumping to points. Not sure what Marriott is selling with points, but so long as you get your destination travels in & enjoy the resort, it's a moot point quid pro quo. 

Then again, lots of us are legacy folks who do indeed own deeded weeks and tangible assets. Of course conveniently written down by Marriott who then pegs the DC points value to the high point of what deeded weeks sold for just before the recession . . .  some creative accounting there, but then again it could be worse. If you lived in a high-tax failing state like NJ where govt picks your pocket daily & wastes your money, Marriott looks like an amateur as we do indeed get something for our money. ( one reason we move to AZ). 

Bottom line for we legacy owners who enroll our weeks ( or even buy some points ) is to learn the new dynamics and keep traveling within the Marriott system. TS points systems were out there long before DC points and like anything else in life it's about buyer beware & keep it moving.

travel safe & enjoy Life

barry


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## e.bram (Apr 6, 2019)

Move to AZ and loose your access to NYC!


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## ocdb8r (Apr 6, 2019)

jerseyfinn said:


> Marriott of course has thought this thing out before jumping to points. Not sure what Marriott is selling with points, but so long as you get your destination travels in & enjoy the resort, it's a moot point quid pro quo.



I agree with the sentiment here.  However, this little wrinkle (which as many rightfully point out may fade away or be completely ironed out) could have interesting implications for the other raging raft of (court and other legal) battles going on regarding the "timeshare exit" industry.  The developers are taking a very aggressive stance at the many predatory companies that are peddling creative ways to get out of your timeshare.  While I applaud their efforts to tackle the shills, I don't see that they're doing anything to address the overall problem - timeshares as structured create a problem when they perpetually obligate owners to maintenance fees without any reasonable form of exit.  I don't know any other "real estate" asset that creates such a problem and I think the developers should not just be fighting against these exit companies, but offering some reasonable exit to owners.  I at least find the case at discussion in this thread an interesting tactic to push back against the developers (and what I see as a bit of "abuse" in selling of "real estate").


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## JIMinNC (Apr 6, 2019)

ocdb8r said:


> While I applaud their efforts to tackle the shills, I don't see that they're doing anything to address the overall problem - timeshares as structured create a problem when they perpetually obligate owners to maintenance fees without any reasonable form of exit.  I don't know any other "real estate" asset that creates such a problem and I think the developers should not just be fighting against these exit companies, but offering some reasonable exit to owners.



It's very true that the lack of exit options is one of the biggest issues with timeshares. Having said that, I wonder if it is really the responsibility of the developer to offer the exit options. When you buy a house from Pulte, Lennar, or Toll Brothers, you are obligating yourself to the costs of maintaining that house until you sell it, and none of those companies offer an exit plan. The exit alternative for homes is the robust resale market. The real problem with timeshares, in my opinion, is the lack of an organized and well-known resale marketplace.


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## CalGalTraveler (Apr 6, 2019)

JIMinNC said:


> It's very true that the lack of exit options is one of the biggest issues with timeshares. Having said that, I wonder if it is really the responsibility of the developer to offer the exit options. When you buy a house from Pulte, Lennar, or Toll Brothers, you are obligating yourself to the costs of maintaining that house until you sell it, and none of those companies offer an exit plan. The exit alternative for homes is the robust resale market. The real problem with timeshares, in my opinion, is the lack of an organized and well-known resale marketplace.



Completely agree on the need for an organized resale marketplace.

There are huge differences between home developers and TS developers because TS developers are actively involved AFTER the sale by operating the property and collecting MF. Most importantly they create rules which limit property owner rights and shape the development of the resale market with ROFR, mandatory etc. This would be akin to Pulte or Toll Brothers operating your neighborhood or building HOA, assessing the HOA fees, maintaining your property, and changing the rules every year telling you what you can and cannot do with your property affecting your property owner rights.  They also don't buy or take back your property if you don't pay and try to resell it again.


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## JIMinNC (Apr 6, 2019)

CalGalTraveler said:


> Completely agree on the need for an organized resale marketplace.
> 
> There are huge differences between home developers and TS developers because TS developers are actively involved AFTER the sale by operating the property and collecting MF. Most importantly they create rules which limit property owner rights and shape the development of the resale market. This would be akin to Pulte or Toll Brothers operating your neighborhood or building HOA, assessing the HOA fees, maintaining your property, and changing the rules every year telling you what you can and cannot do with your property affecting your property owner rights.  They also don't buy or take back your property if you don't pay and try to resell it again.



Very good points. The fact that timeshare developers are so involved after the initial sale, does make it very different than home builders.


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## BocaBoy (Apr 6, 2019)

Don't be too quick to discount the seriousness of this case.  Forget the counts that Marriott succeeded in getting tossed.  It seems to me that the central claim was not tossed and it looks to me to be a sound one.  It alone has the potential to destroy the way the business model operates.  I am a lawyer by training (although not a real estate lawyer) and I believe Marriott should be sweating bullets about now.  This is not a frivolous case and I think it is misguided to call the plaintiffs' lawyers ambulance chasers.


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## csalter2 (Apr 6, 2019)

BocaBoy said:


> Don't be too quick to discount the seriousness of this case.  Forget the counts that Marriott succeeded in getting tossed.  It seems to me that the central claim was not tossed and it looks to me to be a sound one.  It alone has the potential to destroy the way the business model operates.  I am a lawyer by training (although not a real estate lawyer) and I believe Marriott should be sweating bullets about now.  This is not a frivolous case and I think it is misguided to call the plaintiffs' lawyers ambulance chasers.



Personally, I don’t know what to think about this. However, if Marriott goes down, so will Disney, Diamond, Worldmark and others.


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## CalGalTraveler (Apr 6, 2019)

Disney and Mexican resorts are RTU with a fixed time horizon. HGVC has underlying property deeds conveyed to the owner with specific points attached.  So none of these will not be affected by this.

The core of the lawsuit is that MVC characterized and sold the trust as deeded property without conveying the underlying land associated with a deed so it looks like a points based vacation club with access rights to properties (aka RTU or a license to use).

What has always mystified me about these trusts is that they can change the composition of the underlying trust without explicit owner approval thus affecting maintenance fees. That is like saying, "I am going to automatically add this parcel of land into your property deed and then you will have to pay the real estate taxes and maintenance on this new parcel without gaining your permission."  They may have circumvented this by having trust owners sign a limited POA upon purchase to approve these trust changes. But IMO that's shaky ground because you would expect each trust would be issued as a block of fixed properties with owner (shareholder) voting rights for composition changes.

The fact that owners/shareholders don't even know what specific property units are in the trust they own and cannot vote on what's in it is problematic.

This points to another lawsuit which could follow arguing that the MVC Trust should be under the auspices of the SEC because this is an REIT (Real Estate Investment Trust) with shareholder access rights because trust owners are fundamentally shareholders in a TS REIT. 

An argument could be made that REIT shares were sold to consumers without the proper disclosure of historical investment performance and risk of capital loss i.e. MVC failed to follow SEC shareholder reporting disclosing the properties in the trust (REIT), investment risks, holding annual meetings and compliance with shareholder annual voting requirements.

I agree with @BocaBoy. This is a big deal.  (I am not a lawyer nor expert on REITs, but have been involved in many business and real estate transactions.) Watch this space.


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## rthib (Apr 6, 2019)

If you read Marriott’s response in the lawsuit, there is an actual piece of property associated with every trust unit. The one standing claim is on a legal technicality that the deed the owner gets points to another document that has the actual listing for the property and if that is proper under Florida law.  Since the county agreed to it, doubt the plaintiff will get much relief and doubt it will every get certified as a class.


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## davidvel (Apr 6, 2019)

rthib said:


> If you read Marriott’s response in the lawsuit, there is an actual piece of property associated with every trust unit. The one standing claim is on a legal technicality that the deed the owner gets points to another document that has the actual listing for the property and if that is proper under Florida law.  Since the county agreed to it, doubt the plaintiff will get much relief and doubt it will every get certified as a class.


The point the lawsuit and bocaboy are making is that they purport to give DC points buyers a deed to real property, but the deed given is not to real property. The properties are owned by the trust, who holds the deeds.  You simply have a beneficial interest in the trust, but no direct ownership of the underlying land. 

It's like someone selling stock in Microsoft (who owns land) and then issuing a document called a deed to shareholders for the land that Microsoft actually owns.  

Some will think this is form over substance, but it's hard to argue that the "deeds" that are given to DC buyers are legitimate.


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## CalGalTraveler (Apr 7, 2019)

What's the difference between the MVC Trust and an REIT?  Both own shares of a portfolio of real estate holdings that are sold by a management company. Both have risk and rewards with owning real estate holdings to share in the upside and downside. Why shouldn't owners/shareholders be given the same rights to SEC mandated reporting and voting as an REIT owner?  

If MVC Trust is designated as a private REIT, they have violated SEC rules because those are only allowed to be sold to institutional or accredited investors.


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## ocdb8r (Apr 7, 2019)

I agree that the remaining claim _could _be a big deal for Marriott.  Yes, there is an element of form over substance here. But let's be clear, the Orange County Recorder of Deeds does NOT make the law.  Just because they've interpreted the the law in a way that legitimized the MVC Points scheme does not make any claim bulletproof.  This is the precise reason the plaintiff's firm is also going after the County in its claim.  The Courts could very well conclude that the scheme does not comport with law and that both Marriott and the OC recorder of deeds erred.  Short term this would have serious consequences for the trust.  Long term, it is likely something will be resolved to legitimate the scheme.  I would guess the FL legislature is likely to be just as friendly to Marriott as the Orange County Recorder of Deeds has been and would make whatever statutory changes necessary to allow the trust to exist as structured (or with minor adjustments).  However, the case could still provide an "out" for anyone who purchased to date.

I'll return again to the comment I made before - part of what makes this interesting to me is the context of the broader debate on timeshares.  IF courts were to invalidate the trust under the current law and IF the battle surrounding timeshare "exits" heats up, it _could _result in a shift in attitude toward developers like Marriott (which could make legitimizing the trust more difficult).

Finally, complete agree with many of the previous comments about the unique nature of these timeshares and why I think there is some responsibility for developers to create a legitimate out.  There is an enormous imbalance in power the way timeshares are structured; developers often maintain the largest single block of voting power used to determine how the property is used, improved and what fees are incurred.  This, coupled with the lack of a viable market mechanism for exit, creates a real long term problem.  I would venture to say that as the baby boomers retire in big numbers, their shift to fixed incomes will exacerbate this issue.


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