Wyndham Vacation Ownership, Inc. et al v. The Montgomery Law Firm, LLC et al

Filing 339

ORDERED: Plaintiffs' Motion to Dismiss Montgomery Defendants' Amended Counterclaims and Incorporated Memorandum of Law 283 is granted in part, and Counts I and III of the Amended Counterclaim are dismissed without prejudice. In all ot her respects, the motion to dismiss is denied. Plaintiffs' Motion to Strike Certain of the Montgomery Defendants' Amended Affirmative Defenses and Incorporated Memorandum of Law 284 is granted in part and denied in part. The Lawyer Defen dants are granted leave to amend their Affirmative Defenses and Counterclaim. Second Amended Affirmative Defenses and Counterclaim due on or before 2/24/2021. See Order for further details. Signed by Judge Charlene Edwards Honeywell on 2/17/2021. (JDE)

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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
WYNDHAM VACATION
OWNERSHIP, INC., WYNDHAM
VACATION RESORTS, INC.,
WYNDHAM RESORT
DEVELOPMENT CORPORATION,
SHELL VACATIONS, LLC, SVCWEST, LLC, SVC-AMERICANA,
LLC and SVC-HAWAII, LLC,
Plaintiffs,
v.

Case No: 8:19-cv-1895-CEH-CPT

THE MONTGOMERY LAW FIRM,
LLC, MONTGOMERY &
NEWCOMB, LLC, M. SCOTT
MONTGOMERY, ESQ., W. TODD
NEWCOMB, ESQ., CLS, INC.,
ATLAS VACATION REMEDIES,
LLC, PRINCIPAL TRANSFER
GROUP, LLC, DONNELLY
SNELLEN, JASON LEVI
HEMINGWAY, MUTUAL
RELEASE CORPORATION, DAN
CHUDY, MATTHEW TUCKER and
CATALYST CONSULTING FIRM
LLC,
Defendants.
___________________________________/
ORDER
This matter is before the Court on the Plaintiffs’ Motion to Strike Certain of the
Montgomery Defendants’ Amended Affirmative Defenses and Incorporated
Memorandum of Law (Doc. 284), the Lawyer Defendants’ Response in Opposition to

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Plaintiffs’ Motion to Strike (Doc. 285), Plaintiffs’ Motion to Dismiss Montgomery
Defendants’ Amended Counterclaims and Incorporated Memorandum of Law (Doc.
283), and Lawyer Defendants’ Response in Opposition to Plaintiffs’ Motion to
Dismiss Counterclaim (Doc. 288). Plaintiffs seek to strike the affirmative defenses
numbered 2, 5, 6, 7, 11, 15, 16, 17, 20, 21, 23, and 25 contained in the Amended
Affirmative Defenses and Counterclaim (Doc. 281) filed by the Montgomery Law
Firm, LLC; Montgomery & Newcomb, M. Scott Montgomery, and Todd Newcomb
(collectively the “Montgomery Defendants” or the “Lawyer Defendants”).1 Doc. 284.
In the motion to dismiss, Plaintiffs argue that the Lawyer Defendants’ counterclaims
in Counts I, II, and III remain deficient and should be dismissed with prejudice
because they fail to state a claim. Plaintiffs further argue the Lawyer Defendants lack
standing to bring a Lanham Act claim in Count IV. Doc. 167. A hearing on the
motions was held February 10, 2021. The Court, having considered the motions, heard
argument of counsel, and being fully advised in the premises, will grant in part and
deny in part Plaintiffs’ motions.
I.

FACTUAL BACKGROUND2

The two law firms and two individual lawyers refer to themselves as the “Lawyer
Defendants;” Plaintiffs refer to these four Defendants as the “Montgomery Defendants.”
2
The following statement of facts is derived from the Counterclaim (Doc. 281), the allegations
of which the Court must accept as true in ruling on the instant Motion to Dismiss. Linder v.
Portocarrero, 963 F.2d 332, 334 (11th Cir. 1992); Quality Foods de Centro Am., S.A. v. Latin Am.
Agribusiness Dev. Corp. S.A., 711 F.2d 989, 994 (11th Cir. 1983).
1

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Plaintiffs, Wyndham Vacation Ownership, Inc.; Wyndham Vacation Resorts,
Inc.; Wyndham Resort Development Corporation; Shell Vacations, LLC; SVC-West,
LLC; SVC-Americana, LLC; and SVC-Hawaii, LLC (collectively “Plaintiffs”), filed
this action against numerous Defendants, including the Lawyer Defendants. Doc. 1.
Plaintiffs are dealers in timeshare interests who entered into contracts with individuals
(“owners”) that purchased timeshare interests. In a nine-count Complaint, Plaintiffs
assert claims for violations of the Lanham Act (Counts I–IV), tortious interference
with contractual relations (Count V–VII), civil conspiracy (Count VIII), and violations
of Florida’s Deceptive and Unfair Trade Practices Act (Count IX). The Lawyer
Defendants are sued in Counts IV through IX. Id.
On August 19, 2019, the Lawyer Defendants filed a Consolidated Answer,
Affirmative Defenses, and Counterclaims (Doc. 149). Plaintiffs moved to dismiss the
counterclaims and to strike the Lawyer Defendants’ affirmative defenses. Docs. 166,
167. The Court granted Plaintiffs’ motions and granted the Lawyer Defendants leave
to amend their Affirmative Defenses and Counterclaims. Doc. 275. In their amended
pleading, the Lawyer Defendants allege twenty-seven affirmative defenses and assert
four claims against Plaintiffs: tortious interference with business relationships (Count
I); trade libel (Count II); common law unfair competition (Count III); and false
advertising under the Lanham Act (Count IV). Doc. 281.
In Count I of the Counterclaim, the Lawyer Defendants allege that they possess
existing and prospective relationships with specific clients and customers that
purchased timeshare properties or timeshare points from Plaintiffs. Id. ¶ 16. The
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Lawyer Defendants assert that Plaintiffs have sought to intimidate the clients and
customers of the Lawyer Defendants and to undermine their existing contractual
relationships in which the Lawyer Defendants represent “dissatisfied and aggrieved”
Wyndham timeshare owners. Id. ¶ 18. The Lawyer Defendants allege significant
injurious interference has occurred via Plaintiffs’ false, misleading, and libelous
advertising and marketing. Id. ¶ 19. Specifically, they claim Plaintiffs make statements
on their websites that “timeshare exit attorneys,” which Lawyer Defendants would be
defined as according to Plaintiffs, are offering and engaging in unlawful services. Id. ¶
21. The Lawyer Defendants plead that Plaintiffs’ representations are false, misleading,
and deceptive, and are being made for the purpose of interfering with prospective
business relationships by discouraging Wyndham timeshare owners from retaining
counsel. Id. ¶ 25. The Lawyer Defendants seek injunctive relief and money damages.
Id. ¶ 26.
In Count II, the Lawyer Defendants assert Plaintiffs committed trade libel
through publication of false statements intentionally disparaging the quality of services
provided by the Lawyer Defendants and seeking to induce timeshare owners not to
deal with the Lawyer Defendants. Id. ¶¶ 28–30. The Lawyer Defendants allege they
have suffered special damages, including attorney’s fees, lost income, and lost sales.
Id. ¶ 31. They seek money damages, but they also request the Court enjoin Plaintiffs
from continuing to cause them irreparable injury in the form of lost customers,
revenues, and goodwill. Id.

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Count III alleges claims against Plaintiffs for common law unfair competition.
The Lawyer Defendants plead that Plaintiffs claim they compete with the Lawyer
Defendants for a common pool of customers, and that Plaintiffs are engaging in
conduct that constitutes unfair competition. Id. ¶¶ 15, 33, 34. The Lawyer Defendants
allege they have been damaged as a direct result of Plaintiffs’ unlawful acts. Id. ¶ 35.
They seek damages and injunctive relief. Id. ¶ 36.
In the final Count of the Counterclaim, the Lawyer Defendants sue Plaintiffs
for false advertising under the Lanham Act. Id. ¶¶ 37–68. The Lawyer Defendants
allege that Plaintiffs misrepresent and falsely advertise that Plaintiffs offer viable
options to timeshare owners to transition out of timeshare ownership (through their
Ovation program), that Plaintiffs offer alternative solutions for owners who feel a
timeshare no longer meets their travel needs, and that Plaintiffs are purportedly
protecting owners from unethical, resale, rental, and cancellation options offered by
other companies. Id. ¶¶ 39, 41, 45. The Lawyer Defendants allege that Plaintiffs’
representations are false, misleading, and deceptive. Id. ¶¶ 40, 42, 46. Further, the
Lawyer Defendants state that Plaintiffs’ representations that a non-lawyer entity who
is a co-party to a contract is prohibited from contacting another layman co-party is a
false statement that unethically seeks to discourage timeshare owners from retaining
counsel. Id. ¶ 48. They allege that Plaintiffs’ false and misleading statements are
material and likely to influence the purchasing decisions of timeshare owners, that
Plaintiffs’ conduct has been willful and wanton, and that Lawyer Defendants have

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been damaged as a result. Id. ¶¶ 65–67. The Lawyer Defendants seek money damages
and injunctive relief. Id. ¶¶ 67–68.
II.

LEGAL STANDARD

A.

Motion to Dismiss

To survive a motion to dismiss under Rule 12(b)(6), a pleading must include a
“short and plain statement of the claim showing that the pleader is entitled to relief.”
Ashcroft v. Iqbal, 556 U.S. 662, 677–78 (2009) (quoting Fed. R. Civ. P. 8(a)(2)). Labels,
conclusions, and formulaic recitations of the elements of a cause of action are not
sufficient. Id. (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Furthermore,
mere naked assertions are not sufficient. Id. A complaint must contain sufficient
factual matter, which, if accepted as true, would “state a claim to relief that is plausible
on its face.” Id. (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted).
The court, however, is not bound to accept as true a legal conclusion stated as a
“factual allegation” in the complaint. Id.
B.

Motion to Strike

Federal Rule of Civil Procedure 12(f) provides that, upon motion, the court may
order stricken from a pleading an insufficient defense or an immaterial matter. District
courts have broad discretion in ruling on a motion to strike. OMS Nat’l Ins. Co. v.
Turbyfill, No. 3:14cv622-MCR-CJK, 2015 WL 11109377, at *1 (N.D. Fla. July 22,

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2015). However, a court will not exercise its discretion under the rule to strike a
pleading unless the matter sought to be omitted has no possible relationship to the
controversy, may confuse the issues, or otherwise prejudice a party. Poston v. Am.
President Lines, Ltd., 452 F. Supp. 568, 570 (S.D. Fla. 1978); Bazal v. Belford Trucking
Co., 442 F. Supp. 1089, 1101 (S.D. Fla. 1977); Augustus v. Bd. of Pub. Instruction, 306
F.2d 862, 868 (5th Cir. 1962).
III.

DISCUSSION
A.

Motion to Dismiss

In their motion to dismiss, Plaintiffs argue that the motion is due to be granted
as to the Lawyer Defendants’ counterclaims for tortious interference, trade libel, and
unfair competition (Count I–III) because they are predicated on the incorrect notion
that Plaintiffs’ advertising is false. Doc. 283 at 5–6. Plaintiffs claim that their
statements are objectively true, and therefore the Lawyer Defendants’ claims fail. Id.
This argument is unavailing. As discussed at the hearing, the Court must accept the
well-pleaded factual allegations of the Counterclaim as true for purposes of the instant
motion to dismiss. Therefore, Plaintiffs’ argument that their statements are true does
not provide a basis for dismissal of the counterclaims. Accordingly, the motion is due
to be denied on this ground.
Plaintiffs next argue that Count I fails because the Lawyer Defendants do not
allege specific relationships with customers beyond the general public as required to
state a tortious interference claim. Doc. 283 at 7. The Court previously found the
tortious interference claim lacking for the Lawyer Defendants’ failure to provide any
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specificity. See Doc. 275 at 10. The deficiencies in the amended tortious interference
claim have not been remedied. The Lawyer Defendants still fail to adequately specify
the business relationship upon which they rely for their claims. Thus, Count I is due
to be dismissed for this reason, but the Court will permit leave to amend. At the
hearing, Plaintiffs also raised an issue about insufficient damage allegations. The
Lawyer Defendants submit this argument was raised for the first time at the hearing.
As the Lawyer Defendants will be given the opportunity to amend, they may add
additional allegations regarding damages as they deem necessary in their amended
pleading.
Regarding the claim for unfair competition in Count III, Plaintiffs argue Count
III fails to state a claim. At the hearing, counsel for the Lawyer Defendants
acknowledged that the unfair competition Count was weak as it did not allege or
incorporate any ultimate facts regarding the “foregoing actions” as generally alleged
in Count III. As discussed at the hearing, Count III only incorporated a few general
allegations and did not incorporate any facts regarding Plaintiffs’ alleged “unlawful
conduct” as referenced in that Count. Accordingly, Count III will be dismissed with
leave to amend.
In Count IV, Plaintiffs challenge the Lawyer Defendants’ standing to bring a
Lanham Act claim. Plaintiffs argue that the Lawyer Defendants fail to plead the causal
link between the Plaintiffs’ Ovation program and any possible damage to the Lawyer
Defendants. Further, Plaintiffs argue that the allegations that their statements are false
and misleading are conclusory. In response, the Lawyer Defendants argue they are
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harmed by the misrepresentations of the Ovation program because it deprives them of
clients. The Lawyer Defendants argue that Plaintiffs’ false statements about
“timeshare exit attorneys” are directly aimed at them. Although some of the
allegations, such as those based “on information and belief” are conclusory, the Court
finds that the Lawyer Defendants have sufficiently alleged a claim for false advertising
under the Lanham Act, and the Court cannot say at this stage of the proceedings that
the Lawyer Defendants have no standing to bring this claim. Accordingly, the motion
to dismiss Count IV is due to be denied without prejudice to the Plaintiffs to challenge
standing, if appropriate, on summary judgment.
B.

Affirmative Defenses

The Lawyer Defendants raise twenty-seven affirmative defenses. Doc. 281.
Plaintiffs challenge twelve of the defenses. “An affirmative defense is defined as ‘[a]
defendant’s assertion raising new facts and arguments that, if true, will defeat the
plaintiff’s or prosecution’s claim, even if all allegations in the complaint are true.’”
Ayers v. Consol. Const. Servs. of SW Fla., Inc., 207CV123FTM29DNF, 2007 WL
4181910, at *1 (M.D. Fla. Nov. 26, 2007) (quoting Saks v. Franklin Covey Co., 316 F.3d
337, 350 (2d Cir. 2003)). “An affirmative defense will only be stricken if the defense is
insufficient as a matter of law . . . .” OMS Nat’l Ins. Co., 2015 WL 11109377, at *1
(quoting Beaulieu v. Bd. of Trs. of Univ. of W. Fla., No. 3:07cv30, 2007 WL 2900332, at
*5 n.7 (N.D. Fla. Oct. 2, 2007)). Bare-bones, conclusory allegations are insufficient to
support an affirmative defense. Niagara Distributors, Inc. v. N. Ins. Co. of N.Y., 10-61113-

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CIV, 2011 WL 13096637, at *1 (S.D. Fla. Apr. 11, 2011) (citing Microsoft Corp. v. Jesse’s
Computers & Repair, Inc., 211 F.R.D. 681, 684 (M.D. Fla. 2002)).
As discussed at the hearing, the Court finds a number of the affirmative defenses
are deficient due to the Lawyer Defendants’ failure to clearly identify to which claims
the defenses are directed and to clearly identify the legal basis for the defense so as to
put the opposing party on notice as to the exact defense being asserted. Additionally,
some of the defenses are duplicative and lack specificity. For the reasons stated on the
record, the Court will grant in part and deny in part the Plaintiffs’ motion to strike
affirmative defenses. Accordingly, it is hereby
ORDERED:
1.

Plaintiffs’ Motion to Dismiss Montgomery Defendants’ Amended

Counterclaims and Incorporated Memorandum of Law (Doc. 283) is granted in part,
and Counts I and III of the Amended Counterclaim are dismissed without prejudice.
In all other respects, the motion to dismiss is denied.
2.

Plaintiffs’ Motion to Strike Certain of the Montgomery Defendants’

Amended Affirmative Defenses and Incorporated Memorandum of Law (Doc. 284) is
granted as to affirmative defenses numbered 2, 5, 6, 7, 11, and 20. The motion to strike
is denied as to affirmative defenses numbered 16, 17, 21, and 25.3 Affirmative defense
numbered 15 is stricken per agreement.

The motion to strike directed to affirmative defense numbered 23 was withdrawn by
Plaintiffs’ counsel.
3

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3.

The Lawyer Defendants are granted one final opportunity to amend their

Affirmative Defenses and Counterclaim to cure the deficiencies discussed at the
hearing and in this Order. The Lawyer Defendants shall file their Second Amended
Affirmative Defenses and Counterclaim on or before February 24, 2021. Failure to
file within the time provided will result in this case proceeding with the affirmative
defenses that were not stricken by this Order and without counterclaims.
DONE AND ORDERED in Tampa, Florida on February 17, 2021.

Copies to:
Counsel of Record
Unrepresented Parties, if any

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