Westgate Resorts, Ltd. et al v. Castle Law Group, P.C. et al
Filing
89
ORDER granting in part and denying in part 66 Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 67 motion to dismiss. Signed by Judge Gregory A. Presnell on 12/20/2017. (ED)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
WESTGATE RESORTS, LTD., et al.,
Plaintiffs,
v.
Case No: 6:17-cv-1063-Orl-31DCI
CASTLE LAW GROUP, P.C., JUDSON
PHILLIPS, CASTLE MARKETING
GROUP, LLC, CASTLE VENTURE
GROUP, LLC, RESORT RELIEF, LLC,
WILLIAM MICHAEL KEEVER, KEVIN
HANSON and SEAN AUSTIN,
Defendants.
ORDER
T his matter comes before the Court on two motions to dismiss: the first (Doc. 66) filed by
Defendants Castle Law Group, P .C. (henceforth, “Castle Law”) and Judson P hillips (“Phillips”),
and the other (Doc. 67) filed by Defendant Sean Austin (“Austin”). In resolving these motions,
the Court has also considered the response in opposition (Doc. 74) filed by the P laintiffs.
I.
Background
According to the allegations of the Second Amended Complaint (Doc. 65), which are
accepted in pertinent part as true for purposes of resolving the instant motion, the Plaintiffs are a
group of 11 timeshare developers (the “Westgate Developers”) and 15 timeshare owners’
associations (the “Associations”). Each Plaintiff has “Westgate” as part of its name. Anyone
who purchases a timeshare interest from one of the Westgate Developers (henceforth, “Westgate
Owners”) signs a contract agreeing to pay maintenance fees and property taxes to one of the
Associations; some Westgate Owners also obtain financing from a Westgate Developer, in which
case the Westgate Developer holds a promissory note. (Doc. 65 at 15-16).
Defendant Castle Venture Group, LLC (“Castle Venture”) funds Defendant Castle
Marketing Group, LLC (“Castle Marketing”). (Doc. 65 at 18). Along with Defendant Resort
Relief, LLC (“Resort Relief”), Castle Marketing solicits timeshare owners, including Westgate
Owners, who wish to get out of their contracts. (Doc. 65 at 18-19). Such owners are directed to
retain Defendant Castle Law. 1 (Doc. 65 at 19). As one step in the process of getting out of their
contracts, Westgate Owners who retain Castle Law are encouraged to stop paying maintenance
fees and taxes and to stop making payments on any promissory note. (Doc. 65 at 24-25).
T he instant case was filed on June 12, 2017. (Doc. 1). On August 7, 2017, the Plaintiffs
filed their Second Amended Complaint (Doc. 65), which consists of six counts: tortious
interference with existing contracts (Count I); tortious interference with advantageous business
relationships (Count II); civil conspiracy (Count III); violation of Section 721.121, Florida
Statutes (Count IV); violation of Florida’s Deceptive and Unfair T rade P ractices Act, Fla. Stat.
§ 501.201 et seq. (“FDUTPA”) (Count V); and temporary and permanent injunctive relief (Count
VI). T he statutory claim in Count IV is asserted against Resort Relief, Hansen and Austin. T he
remaining counts are asserted against all of the Defendants.
By way of the instant motions, Austin seeks dismissal of all six counts, while Castle Law
and P hillips seek dismissal of the five counts asserted against them. Because the arguments raised
in both motions are, for the most part, identical, they will be addressed together.
1
T he four individual defendants in this matter are associated with the four business entity
(P .C./LLC) defendants. Defendant Phillips is the sole owner of Castle Law; Defendant Austin is
the sole member of Castle Marketing; Defendant William Keever is the sole member of Castle
Venture; and Defendant Kevin Hanson is the sole member of Resort Relief. (Doc. 65 at 12-13).
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II.
Legal Standards
Federal Rule of Civil P rocedure 8(a)(2) requires “a short and plain statement of the claim
showing that the pleader is entitled to relief” so as to give the defendant fair notice of what the
claim is and the grounds upon which it rests, Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 103,
2 L.Ed.2d 80 (1957), overruled on other grounds, Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A Rule 12(b)(6) motion to dismiss for failure to state a
claim merely tests the sufficiency of the complaint; it does not decide the merits of the case.
Milburn v. United States, 734 F.2d 762, 765 (11th Cir.1984). In ruling on a motion to dismiss,
the Court must accept the factual allegations as true and construe the complaint in the light most
favorable to the plaintiff. SEC v. ESM Group, Inc., 835 F.2d 270, 272 (11th Cir.1988). T he
Court must also limit its consideration to the pleadings and any exhibits attached thereto. Fed. R.
Civ. P . 10(c); see also GSW, Inc. v. Long County, Ga., 999 F.2d 1508, 1510 (11th Cir. 1993).
T he plaintiff must provide enough factual allegations to raise a right to relief above the
speculative level, Twombly, 550 U.S. at 555, 127 S.Ct. at 1966, and to indicate the presence of the
required elements, Watts v. Fla. Int’l Univ., 495 F.3d 1289, 1302 (11th Cir. 2007). Conclusory
allegations, unwarranted factual deductions or legal conclusions masquerading as facts will not
prevent dismissal. Davila v. Delta Air Lines, Inc., 326 F.3d 1183, 1185 (11th Cir. 2003).
In Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 173 L.Ed.2d 868 (2009), the Supreme
Court explained that a complaint need not contain detailed factual allegations, “but it demands
more than an unadorned, the-defendant-unlawfully-harmed-me accusation. A pleading that offers
labels and conclusions or a formulaic recitation of the elements of a cause of action will not do.
Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement.”
Id. at 1949 (internal citations and quotations omitted). “[W]here the well-pleaded facts do not
permit the court to infer more than the mere possibility of misconduct, the complaint has alleged –
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but it has not ‘show[n]’ – ‘that the plaintiff is entitled to relief.’” Id. at 1950 (quoting Fed. R.
Civ. P . 8(a)(2)).
III.
Analysis
A.
Count I – tortious interference with contract
In the first count, the Plaintiffs allege that the Defendants tortiously interfered with the
contracts between the Plaintiffs and the Westgate Owners. Under Florida law, the tort of
contractual interference occurs when: (1) a contract exists; (2) a third party has knowledge of the
contract; (3) the third party intentionally interferes with a party’s rights under the contract; (4)
there is no justification or privilege for the interference; and (5) there are damages. Mariscotti v.
Merco Group At Akoya, Inc., 917 So. 2d 890, 892 (Fla. 3d DCA 2005).
Castle Law, P hillips, and Austin (collectively, the “Movants”) do not challenge the
existence of the first, fourth, and fifth elements here. Instead, they seek dismissal of Count I on
the grounds that, as agents of the Westgate Owners, they were not third parties to any contracts
between the Westgate Owners and the P laintiffs and therefore could not be liable for tortious
interference. Generally speaking, one cannot tortiously interfere with a contract to which it is
a party. Ethyl Corp. v. Balter, 386 So.2d 1220, 1224 (Fla. 3d DCA 1980). Consequently,
an agent generally cannot be held liable for tortiously interfering with the contract of its
principal because the agent is privileged to act in the best interest of the principal. Sloan v.
Sax, 505 So.2d 526, 528 (Fla. 3d DCA 1987).
Based on the allegations of the Second Amended Complaint, the Movants were agents of
the Westgate Owners. However, an agent’s “privilege to interfere” with the contracts of its
principal is not absolute. Id. at 528. T he privilege afforded to an agent who gives honest advice
that it is in his principal’s best interest to breach an existing relationship is not available when an
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agent acts solely with ulterior purposes and the advice is not in the principal’s best interest.
Scussel v. Balter, 386 So. 2d 1227, 1228-29 (Fla. 3d DCA 1980). In this case, the P laintiffs
allege that the recommendations to breach were made “for purely selfish and mercenary reasons so
as to earn and retain [a] large pre-paid retainer” rather than to aid the Westgate Owners in
successfully ending their contracts with the P laintiffs. (Doc. 60 at 29-30). If the P laintiffs can
show that the Movants acted solely with this ulterior motive, their status as agents of the Westgate
Owners would not protect them from liability for tortious interference with contract. T he motions
will be denied as to Count I.
B.
Count II – tortious interference with advantageous relationships
In their second count, the Plaintiffs contend that the Defendants interfered with the
business relationships between themselves and the Westgate Owners, which might have resulted
in additional purchases in the future. T he P laintiffs note that Westgate Owners with existing
contracts “have equity interests which may be used as credits toward the purchase of an upgraded
timeshare interest” such as a larger unit or a “more premium” season. (Doc. 65 at 31).
Under Florida law, the elements of tortious interference with a business relationship are:
(1) the existence of a business relationship, even if not evinced in a formal written agreement; (2)
that the defendant knew of the relationship; (3) the defendant intentionally and unjustifiedly
interfered with the relationship; and (4) damage to the plaintiff as a result of the breach of the
relationship. Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So.2d 812, 814 (Fla.1994). T he
Movants seek dismissal of this count on the same basis as Count I – i.e., that as agents they were
not third parties to the relationship between the Plaintiffs and the Westgate Owners. T hat
argument fails with regard to Count II for the same reason that it failed in regard to Count I.
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However, under Florida law, a mere offer to sell does not give rise to sufficient legal rights
to support a claim of intentional interference. Lake Gateway Motor Inn, Inc. v. Matt’s Sunshine
Gift Shops, Inc., 361 So. 2d 769, 772 (Fla. 4th DCA 1978). An action for intentional interference
with a business relationship will lie “if the parties’ understanding would have been completed if
the defendant had not interfered.” Charles Wallace Co. v. Alternative Copier Concepts, Inc., 583
So. 2d 396, 397 (Fla. 2d DCA 1991). In this case, the P laintiffs have alleged that the Westgate
Owners had “equity interests” that could have been used to upgrade their timeshares. T aken at
face value, this does not even rise to the level of an offer to sell. It appears to be merely a
statement that the Westgate Owners could have made another purchase from one of the Westgate
Developers, if they wished. Even if one were to characterize this allegation to mean that the
Westgate Developers had a standing offer to sell upgrades to existing timeshare owners, such an
offer is not a “business relationship” as required to support a claim for intentional interference
with advantageous business relationships. Count II will therefore be dismissed without prejudice
as to the Movants.
C.
Count III – civil conspiracy
A civil conspiracy claim requires: (1) an agreement between two or more parties (2) to do
an unlawful act or to do a lawful act by unlawful means, (3) the doing of some overt act in
furtherance of the conspiracy, and (4) damage to plaintiff as a result of the acts done under the
conspiracy. Charles v. Florida Foreclosure Placement Center, LLC, 988 So. 2d 1157, 1159-60
(Fla. 3d DCA 2008). T he Movants argue that all of the substantive counts in the Second
Amended Complaint are due to be dismissed and therefore the second element is not present here.
As noted above, the Movants have not prevailed in obtaining dismissal of Count I. T herefore the
Movants’ argument fails as to Count III.
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D. Count IV – violation of Florida Statute § 721.121
In Count IV, the P laintiffs allege that Resort Relief, Hanson, and Austin violated a
recordkeeping obligation under Florida’s Vacation P lan and T imesharing Act (“FVPTA”), Fla.
Stat. §§ 721.02-721.98. T he Plaintiffs allege that Austin is a “lead dealer,” which is defined by
the FVP T A in pertinent part as
any person who sells or otherwise provides a resale service provider
or any other person with personal contact information for five or
more owners of timeshare interests. In the event a lead dealer is not
a natural person, the term shall also include the natural person
providing personal contact information to a resale service provider
or other person on behalf of the lead dealer entity.
Fla. Stat. § 721.05(42). T he Act defines “personal contact information” as
any information that can be used to contact the owner of a specific
timeshare interest, including, but not limited to, the owner’s name,
address, telephone number, and e-mail address.
Fla. Stat. § 721.05(43). T he Act requires that lead dealers maintain the following records for five
years after obtaining personal contact information:
(a) T he name, home address, work address, home telephone number,
work telephone number, and cellular telephone number of the lead
dealer from which the personal contact information was obtained.
(b) A copy of a current government-issued photographic
identification for the lead dealer from which the personal contact
information was obtained, such as a driver license, passport, or
military identification card.
(c) T he date, time, and place of the transaction at which the personal
contact information was obtained, along with the amount of
consideration paid and a signed receipt from the lead dealer or copy
of a canceled check.
(d) A copy of all pieces of personal contact information obtained in
the exact form and media in which they were received.
(e) If personal contact information was directly researched and
assembled by the resale service provider or lead dealer and not
obtained from another lead dealer, a complete written description of
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the sources from which personal contact information was obtained,
the methodologies used for researching and assembling it, the items
set forth in paragraphs (a) and (b) for the individuals who performed
the work, and the date such work was done.
Fla. Stat. § 721.121(1).
Any use by a lead dealer of personal contact information that was wrongfully obtained is to
be considered “wrongful use” by that entity. Fla. Stat. § 721.121(3). In any civil action relating
to the wrongful possession or wrongful use of personal contact information by a resale service
provider or lead dealer, any failure to produce the records required by Section 721.121 results in a
presumption that the personal contact information was wrongfully obtained. Fla. Stat.
§ 721.121(2). Any party who establishes that personal contact information was wrongfully
obtained or used “with respect to owners of a timeshare plan or members of an exchange program”
can recover $1,000 for each owner whose information was wrongfully obtained or used. Fla.
Stat. § 721.121(3). 2
Austin argues that there are no factual allegations in the Second Amended Complaint that
show him to be a “lead dealer” and therefore subject to the recordkeeping requirements of Section
721.121. (Doc. 67 at 8). As to this argument, Austin is correct. T he Plaintiffs allege that
Austin is the “true owner” of Resort Relief. (Doc. 65 at 19) T hey also allege that Resort Relief
compiles timeshare owners’ personal contact information and provides it to Castle Law. (Doc. 65
at 35). But the P laintiffs never assert that Austin himself ever provided personal contact
2
It is not clear (a) that the instant case can properly be considered a “civil action relating
to the wrongful possession or wrongful use of personal contact information” so as to make
Austin’s recordkeeping a matter of judicial concern, or (b) that, if so, the P laintiffs are the proper
parties to bring this type of claim. Neither side has addressed these issues in their briefs, and
there are very few published opinions dealing with this section of the FVP TA. For purposes of
resolving the instant motion, the Court will assume without deciding that the Plaintiffs can
properly bring such a claim here.
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information to anyone, either individually or on behalf of Resort Relief, so as to qualify as a lead
dealer. 3 Count IV will therefore be dismissed without prejudice as to Austin.
E.
Count V – violation of FDUTPA
T he Plaintiffs allege in Count V that the Defendants violated The Florida Deceptive and
Unfair T rade P ractices Act by (1) soliciting the Westgate Owners through ads that deceived them
into thinking that they could unilaterally cancel their timeshare interests; (2) by misrepresenting to
the Westgate Owners that Castle Law could legally represent them in Florida courts; and (3) and
by falsely informing clients who were Westgate Owners that their timeshare matters had been
resolved even though they had not been. (Doc. 65 at 38). FDUTPA provides in pertinent part
that “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive
acts or practices in the conduct of any trade or commerce are hereby declared unlawful.” Fla.
Stat. § 501.204(1). A claim for damages under FDUT P A has three elements: (1) a deceptive act
or unfair practice; (2) causation; and (3) actual damages. Caribbean Cruise Line, Inc. v. Better
Business Bureau of Palm Beach County, Inc., 169 So. 3d 164, 167 (Fla. 4th DCA 2015).
T he Movants argue that Count V fails to state a claim because the P laintiffs are not
consumers who were damaged by these alleged misrepresentations. (Doc. 61 at 5-6). T he
P laintiffs respond that the statute’s protections are not limited to consumers. (Doc. 69 at 16-18).
While true, this misses the point. T he misrepresentations set forth in the Second Amended
3
Austin also argues that the Plaintiffs did not state a claim because there are no factual
allegations that he failed to keep proper records. However, the Plaintiffs allege on information and
belief that Resort Relief, Hanson, and Austin failed to maintain records as required under Fla. Stat.
§ 721.121. (Doc. 65 at 36). P leading based on information and belief sometimes requires
supporting factual allegations, such as in fraud cases where the information at issue is “peculiarly
within the defendant’s knowledge or control.” Hill v. Morehouse Medical Associates, Inc., No.
02-14429,2003 WL 22019936, at *4 (11th Cir. Aug. 15, 2003). In other cases, however, pleading
based on information and belief is generally permitted. 5 Charles Alan Wright et al., Federal
Practice & Procedure § 1224 (3d ed.).
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Complaint would have caused harm, if at all, to the consumers that they targeted – the Westgate
Owners, who were (allegedly) solicited and retained under false pretenses – rather than the
P laintiffs. T he motions will be granted as to Count V.
F.
Count VI – injunctive relief
Count VI is solely a claim for “temporary and permanent injunctive relief”. (Doc. 65 at
40). Injunctive relief is a remedy, not a cause of action. See, e.g., Klay v. United Healthgroup,
Inc., 376 F. 3d 1092, 1097-98 (11th Cir. 2004). Count VI will be dismissed.
IV.
Conclusion
In consideration of the foregoing, it is hereby
ORDERED that the motions to dismiss filed by Defendants Castle Law Group, P .C. and
Judson P hillips (Doc. 66) and by Defendant Sean Austin (Doc. 67) are GRANTED IN PART
AND DENIED IN PART, as set forth above. Counts II and V are dismissed without prejudice
as to the Movants. Count IV is dismissed without prejudice as to Austin. Count VI is dismissed.
In all other respects, the motions are DENIED. Should the P laintiffs wish to file an amended
pleading, they must do so on or before January 2, 2018.
DONE and ORDERED in Chambers, Orlando, Florida on December 20, 2017.
Copies furnished to:
Counsel of Record
Unrepresented P arty
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