Hoyt et al v. Marriott Vacations Worldwide Corporation, Inc. et al
Filing
124
ORDER granting 107 Motion for Judgment on the Pleadings; the objections to the order granting in part the motion to compel discovery are sustained re 111 ORDER RE: APPEAL/OBJECTION OF MAGISTRATE JUDGE DECISION to District Judge (Written Opinion). Signed by Senior Judge David S. Doty on 11/6/2014. (PJM)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 12-3093(DSD/JJK)
Steven B. Hoyt and Bradley A.
Hoyt, on behalf of themselves
and all others similarly situated,
Plaintiffs,
ORDER
v.
Marriott Vacations Worldwide
Corporation, Marriott Ownership
Resorts, Inc. d/b/a Marriott
Vacation Club International,
The Ritz-Carlton Hotel Company,
L.L.C., The Ritz-Carlton
Management Co., L.L.C., The
Ritz-Carlton Development Co.,
Inc., and The Ritz-Carlson Sales
Company, Inc.,
Defendants.
Anne T. Regan, Esq., Charles S. Zimmerman, Esq, Bradley
C. Buhrow, Esq. and Zimmerman Reed, PLLP, 1100 IDS
Center, 80 South Eighth Street, Minneapolis, MN 55402,
counsel for plaintiffs.
Philip R. Sellinger, Esq., Ian S. Marx, Esq. and
Greenberg Traurig, LLP, 200 Park Avenue, Florham Park, NJ
07932 and Courtney E. Ward-Reichard, Esq. and Nilan,
Johnson, Lewis PA, 120 South Sixth Street, Suite 400,
Minneapolis, MN 55402, counsel for defendants.
This matter is before the court upon the motion for judgment
on the pleadings or to clarify under Rule 54(b) by defendants.
Based on a review of the file, record, and proceedings herein, and
for the following reasons, the court grants the motion.
BACKGROUND
The background of this action is fully set out in the court’s
previous order dated February 7, 2014, and the court recites only
those facts necessary for disposition of the instant motion.
In
2003, plaintiffs Steven and Bradley Hoyt purchased fractional
interests in Ritz-Carlton resorts in Beaver Creek and Aspen,
Colorado, respectively. Am. Compl. ¶¶ 1, 2, 24. Plaintiffs signed
contracts with The Ritz-Carlton Development Co., Inc. and The RitzCarlton Sales Company, Inc. (Contracting Defendants).
Exs.
A(1)-(2).
plaintiffs
to
Among
other
things,
the
exchange
their
allotted
days
contracts
at
the
properties for days at other participating resorts.
¶¶ 5-6.
Marx Decl.
allowed
Colorado
Am. Compl.
In 2009, Ritz-Carlton restructured its membership program
to include points-based access to Ritz-Carlton properties and to
allow affiliate Marriott Vacation Club members access to RitzCarlton properties.
See id. ¶¶ 9-12, 14.
Ritz-Carlton also
eliminated certain properties from its portfolio.1
See id. ¶ 13.
Plaintiffs allege that these changes impaired their ability to
enjoy their properties and diminished the value of their fractional
interests.
See id. ¶¶ 15-16.
Plaintiffs sued the Contracting
Defendants and their affiliates, defendants Marriott Vacations
Worldwide Corporation, Inc., Marriott Ownership Resorts, Inc., the
1
Specifically, Winding Bay (the Bahamas) and Kapalua Bay
(Hawaii) were deleted from the membership program.
Am. Compl.
¶ 13.
2
Ritz-Carlton Hotel Company, LLC, and Ritz-Carlton Management Co.,
LLC (Non-contracting Defendants), alleging breach of contract,
unjust enrichment, and violation of state consumer protection
statutes.
In its prior order, the court dismissed all of plaintiffs’
claims except (1) the portion of the contract claim relating to the
deletion of resorts2 and (2) the unjust enrichment claim against
the Non-contracting Defendants.
ECF No. 76, at 10-11, 13-15.
In
declining to dismiss the unjust enrichment claim, the court noted
that the existence of an applicable contract does not bar an unjust
enrichment claim as to non-contracting parties.
Id. at 15, n.8.
The parties did not address, and the court did not determine,
whether
an
unjust
enrichment
claim
is
viable
against
non-
contracting parties when the conduct underlying the claim is
authorized
by
contract.
Defendants
now
move
to
dismiss
the
portions of the unjust enrichment claim that correspond to the
dismissed portions of the breach-of-contract claim.
In other
words, defendants ask the court to limit the unjust enrichment
claim to plaintiffs’ grievance regarding the deletion of resorts.
2
Plaintiffs also based their contract claim on the
introduction of the points-based system and allowing affiliate
members to access Ritz-Carlton properties. Am. Compl. ¶ 86. The
court determined that those changes were permitted under the
contract. ECF No. 76, at 8-10.
3
DISCUSSION
I.
Standard of Review
The same standard of review applies to motions under Federal
Rules of Civil Procedure 12(c) and 12(b)(6). Ashley Cnty., Ark. v.
Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009).
Thus, to survive
a motion for judgment on the pleadings, “a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.”
Braden v. Wal–Mart Stores,
Inc., 588 F.3d 585, 594 (8th Cir. 2009) (citation and internal
quotation marks omitted).
“A claim has facial plausibility when
the plaintiff [has pleaded] factual content that allows the court
to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 663
(2009).
Although a complaint need not contain detailed factual
allegations, it must raise a right to relief above the speculative
level.
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
“[L]abels and conclusions or a formulaic recitation of the elements
of a cause of action” are not sufficient to state a claim.
Iqbal,
556 U.S. at 678 (citation and internal quotation marks omitted).3
3
Defendants alternatively move under Rule 54(b) for
clarification of the court’s prior order. Because the issue raised
here was not squarely presented in the previous motion, the court
declines to clarify its order and instead will consider the motion
under Rule 12(c).
4
II.
Unjust Enrichment
Under Colorado law,4 “[t]he claim of unjust enrichment is a
judicially-created remedy designed to undo the benefit to one party
that comes at the unfair detriment of another.”
Lewis v. Lewis,
189 P.3d 1134, 1141 (Colo. 2008) (citation omitted).
“[I]t is an
equitable remedy and does not depend on any contract, oral or
written.”
Id. (citation omitted).
“[A] party claiming unjust
enrichment must prove that (1) the defendant received a benefit
(2) at the plaintiff’s expense (3) under circumstances that would
make it unjust for the defendant to retain the benefit without
commensurate compensation.”
Id. (citation omitted).
Defendants argue that plaintiffs cannot establish the required
injustice because, as the court has already held, the conduct at
issue was contractually permitted.
Plaintiffs respond that their
unjust enrichment claim is broader than their contract claim.
The
court disagrees. The complaint does not include allegations unique
to the non-contracting defendants.
Nor is the unjust enrichment
claim substantively broader than the contract claim.
Furthermore,
the court has already rejected this argument, specifically finding
that
“plaintiffs’
allegations
of
unjust
enrichment
contractual, rather than extra-contractual matters.”
concern
ECF No. 76,
at 14-15.
4
Colorado law applies to the parties’ dispute.
at 6.
5
ECF No. 76,
Plaintiffs also argue that the court should apply the general
rule
that
an
unjust
enrichment
claim
can
proceed
defendant that was not a party to the contract.
against
a
See MidCities
Metro. Dist. No. 1 v. U.S. Bank Nat’l Ass’n, No. 12-cv-03322-LTB,
2013 WL 3200088, at *8 (D. Colo. June 24, 2013).
presented is more limited, however.
The issue
The question is whether
contractually permitted conduct can serve as the basis for an
unjust enrichment claim against non-contracting parties.
There is little case law in Colorado on this narrow question
and the cases relied on by defendants are not squarely on point.
See Cross Country Land Servs., Inc. v. PB Telecomms., Inc., 276 F.
App’x 825, 833-35 (10th Cir. 2008) (affirming dismissal of unjust
enrichment claim
as a “repackaging” of the plaintiff’s dismissed
contract claim because the contract claim was inconsistent with
plaintiff’s choice of rescission as a remedy); First Horizon Merch.
Servs. v. Thoma Cressey Fund VI, LP, No. 02-cv-3831, 2006 WL
3877834, ¶¶ 1, 106-08 (Colo. Dist. Ct. Apr. 24, 2006) (dismissing
plaintiff’s unjust enrichment claim against non-contracting parties
after determining that the contract claim failed because defendants
were not alter egos of the now-defunct contracting party).
The
court nevertheless agrees with defendants that, in general, conduct
authorized
by
contract
enrichment
claim
against
cannot
form
third
the
parties.
basis
of
See
Monus
an
unjust
v. Colo.
Baseball 1993, Inc., 103 F.3d 145 (Table), 1996 WL 723338, at *15
6
(10th Cir. Dec. 17, 1996) (rejecting unjust enrichment claim
because “[h]aving received the benefit of the bargain he agreed to,
plaintiff
has
made
no
showing
that
there
are
inequitable
circumstances justifying his claim of unjust enrichment.”). Where,
as here, plaintiffs have failed to sufficiently allege improper
underlying conduct, there is no injustice and no claim for unjust
enrichment.
See Cleary v. Philip Morris Inc., 656 F.3d 511, 517
(7th Cir. 2011) (“[I]f an unjust enrichment claim rests on the same
improper
conduct
alleged
in
another
claim,
then
the
unjust
enrichment claim will be tied to this related claim - and, of
course, unjust enrichment will stand or fall with the related
claim.”); Noble Sys. Corp. v. Alorica Cent., LLC, 543 F.3d 978, 987
(8th
Cir.
2008)
(dismissing
unjust
enrichment
claim
where
underlying tort claims had been dismissed); Steamfitters Local
Union 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 937
(3d Cir. 1999) (dismissing unjust enrichment claim where court had
dismissed underlying tort claims upon which it was based).
The court concludes that plaintiffs’ unjust enrichment claim
is limited to their grievance regarding the deletion of resorts.
Consistent
with
that
determination,
the
court
also
sustains
defendants’ objections to Magistrate Judge Jeffrey J. Keyes’s July
18, 2014, order granting in part the motion to compel discovery.
Discovery shall be limited to the grievance regarding the deletion
of resorts.
7
CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that:
1.
The motion for judgment on the pleadings [ECF No. 107] is
granted as set forth above; and
2.
The objections to the order granting in part the motion
to compel discovery [ECF No. 111] are sustained.
Dated:
November 6, 2014
s/David S. Doty
David S. Doty, Judge
United States District Court
8
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