Benedict et al v. Diamond Resorts Corporation et al

Filing 91

FINAL CLASS ACTION SETTLEMENT APPROVAL ORDER AND JUDGMENT. Signed by JUDGE DAVID ALAN EZRA on 06/06/2013. (eps) -- The Court hereby dismisses this action with prejudice and without costs, except as provided for in the Settlement and except as specifically provided for in this Order and the Court's separate fee order. Without affecting the finality of this Judgment in any way, administration and consummation of the Settlement shall be under the authority of this Court. The Court shall retain jurisdiction to protect, preserve and implement the Settlement. The Court expressly retains jurisdiction to enter such further orders as may be necessary or appropriate in administering and implementing the terms and provisions of the Settlement. CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
Bruce Benedict; Joe Williams;
Joseph Baglino; James Brown; and
Adrienne Schmadeke, on behalf of
themselves and all others similarly
situated,
Plaintiffs,
v.
Diamond Resorts Corporation;
Diamond Resorts Parent, LLC;
Diamond Resorts Holdings, LLC;
Resort Management International,
Inc.; Stephen J. Cloobeck; Kathy
Wheeler; Frank Goeckel; and Jason
Toste,
Defendants.

Case No. CV 12-00183 DAE BMK
FINAL CLASS ACTION
SETTLEMENT APPROVAL ORDER
AND JUDGMENT
CLASS ACTION

FINAL CLASS ACTION SETTLEMENT APPROVAL
ORDER AND JUDGMENT
On May 15, 2013, the Court heard argument on the Motion by Plaintiffs
Bruce Benedict, Joe Williams, Joseph Baglino, James Brown and Adrienne
Schmadeke (collectively, “Plaintiffs”) for: (i) final approval of the proposed
Settlement (filed as Exhibit 1 to the Joint Declaration of Jonathan K. Levine, Andrew
N. Friedman, and William M. McKeon), resolving class claims asserted in the
litigation against Defendants Diamond Resorts Development Corporation, Diamond
Resorts Parent, LLC; Diamond Resorts Holdings, LLC; Resort Management
International, Inc.; Stephen J. Cloobeck; Kathy Wheeler; Frank Goeckel and Jason

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Toste (“Defendants”) (Plaintiffs and Defendants are referred to collectively as the
“Parties”) on behalf of a Settlement Class (defined below); and (ii) final certification
of the Settlement Class preliminarily certified in this Court’s December 12, 2012
order granting preliminary approval of the Settlement. (Doc. # 64.) Due and
adequate notice having been given of the proposed Settlement by direct mail as
required by the Court’s December 12, 2012 order, Rule 23 of the Federal Rules of
Civil Procedure, and the Class Action Fairness Act, 28 U.S.C. § 1715(b), and the
Court having considered all papers filed and proceedings had herein, IT IS
HEREBY ORDERED, ADJUDGED AND DECREED:
1.

Capitalized terms not otherwise defined shall have the same meaning as

set forth in the Settlement;
2.

The Court finds and concludes that the Settlement Class preliminarily

certified in the Court’s December 12, 2012 Order—and defined as:
All persons and entities who: (1) are current deeded owners in Poipu
Point or former Deeded Owners who received a Water Intrusion
Assessment; and/or (2) are current members of the Hawaii Collection or
former members of the Hawaii Collection who received a Water
Intrusion Assessment. Excluded from the Settlement Class are: (i) those
former or current Deeded Owners who received a Water Intrusion
Assessment and who submit a valid Request for Exclusion in accordance
with the procedures ordered by the Court; (ii) those former or current
members of the Hawaii Collection who received a Water Intrusion
Assessment and who submit a valid Request for Exclusion in accordance
with the procedures ordered by the Court; (iii) the Association of
Apartment Owners of Poipu Point (AOAO); (iv) the Diamond Resorts
Hawaii Collection Members Association (DRHCMA); and (v)

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Defendants, and their parents, affiliates, successors, predecessors,
employees, officers and directors.
—satisfies all of the requirements of Rule 23(a) and (b)(3) of the Federal Rules of
Civil Procedure for the same reasons set forth in the Court’s December 12, 2012
Order granting preliminary certification of the Settlement Class. (See doc. # 64 at 9–
14, 20–21.) The Court therefore GRANTS final certification of the Settlement Class.
3.

The Court finds and concludes that notice has been given to all members

of the Settlement Class known and reasonably identifiable, that the notice given was
the best notice practicable under the circumstances, and that it included written notice
sent to Settlement Class members by first-class mail. Such notice fully satisfied the
requirements of due process, Rule 23 of the Federal Rules of Civil Procedure, and
this Court’s December 12, 2012 Order.
4.

The Court EXCLUDES from the Settlement Class each person who has

timely submitted an opt-out notice in accordance with the Court’s December 12, 2012
Order, which persons are identified as follows: Leah Anderson, Veronica Bauer,
Ronald and Barbara Bray, Linda Brown, Charles and Gloria Chapman, Gerald
Cushnyr, Robert and Barbara Da Silva, James and Patricia Dobbie, Nancy Gotcher,
Kenneth and Susan Hensley, Ryan Howe, James and Jeanne Howland, Michael and
Vera Hoyle, Mike and Judy Holliffe, Terese Krueger, Michael and Linda Link, Veta
and Lane Lohman, Rosemarie Maune, Paul and Kendra McCormick, Cheryl McNair,
Jerry and Michele McRae, Brenden and Cynthia Mendez, Kenneth Pennywell, Nancy
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Perkinson, Robert and Linda Peterson, Robert and Debra Placky, Lucy and Renato
Santos, Daniel and Melody Schrauben, Dawn Steimer, Scott David Trantina, Stephen
and Lesley Verity, and Dennis and Dana Wente.
5.

The Court approves the Settlement and finds that it is, in all respects,

fair, reasonable, and adequate in accordance with Rule 23 of the Federal Rules of
Civil Procedure in light of: (1) the strength of Plaintiffs’ case; (2) the risk, expense,
complexity and likely duration of further litigation; (3) the risk of being unable to
maintain class-action status throughout trial; (4) the amount offered in Settlement; (5)
the extent of discovery completed and the stage of the proceedings; (6) the experience
and views of Class Counsel; (7) the presence of a governmental participant; and (8)
the reaction of class members to the proposed Settlement. See Churchill Village,
L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004) (“Churchill”); see also
Almodova v. City and County of Honolulu, Cv. No. 10-00355 LEK-RLP, 2012 WL
3255140, at *3–*5 (D. Haw. Aug. 8, 2012) (granting final approval of class
settlement and applying the factors set forth above) (citing Hanlon v. Chrysler Corp.,
150 F.3d 1011, 1011 (9th Cir. 1998)). The Court has evaluated the relevant Churchill
factors in this case and finds that the proposed Settlement provides substantial
monetary and other benefits to Settlement Class members without the risk and delay
associated with further litigation. Accordingly, the Court now approves the

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Settlement as a fair, adequate, and reasonable resolution of the claims against
Defendants.
6.

The Court hereby overrules the objection of Erin Gleason to the

Settlement. Ms. Gleason’s objection—the only objection received out of more than
20,000 Class members—objects to the Settlement on the ground that it “does not go
far enough” and that Defendants “should be responsible for 100% of the water
intrusion repair costs.” The Court finds that Ms. Gleason’s objection does not raise
any question about the fairness, adequacy and reasonableness of the Settlement. See
Hanlon, 150 F.3d at 1027 (“[T]hat the settlement could have been better . . . does not
mean the settlement presented was not fair, reasonable or adequate.”).
Ms. Gleason also complains that the leadership structure of the AOAO
board should be changed in material respects and that maintenance fee increases
should be voted on by the entire membership. However, these proposals have little to
do with the claims asserted and the relief sought in the litigation. Moreover, the
changes Ms. Gleason seeks could not be implemented through a litigation settlement;
they must be implemented through changes to the Poipu Point governing documents,
which require a member vote. Accordingly, Ms. Gleason’s objection is overruled.
7.

The Court further approves the award of attorneys’ fees and litigation

expenses to Class Counsel—Girard Gibbs, LLP, Cohen Milstein Sellers & Toll
PLLC, and McKeon Imlay Mehling—and the service awards to the five named

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Plaintiffs as provided for in the Settlement and as addressed in the Court’s separate
fee order. The Court finds that such fee, litigation expense, and service awards are, in
all respects, fair and reasonable, that the Settlement was honestly negotiated, and that
the Settlement provides substantial relief to the Settlement Class.
8.

The Court hereby dismisses this action with prejudice and without costs,

except as provided for in the Settlement and except as specifically provided for in this
Order and the Court’s separate fee order.
9.

Without affecting the finality of this Judgment in any way,

administration and consummation of the Settlement shall be under the authority of
this Court. The Court shall retain jurisdiction to protect, preserve and implement the
Settlement. The Court expressly retains jurisdiction to enter such further orders as
may be necessary or appropriate in administering and implementing the terms and
provisions of the Settlement.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, June 6, 2013.

_____________________________
David Alan Ezra
Senior United States District Judge

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