Wyndham Vacation Resorts, Inc. v. The Consulting Group, Inc. et al

Filing 215

MEMORANDUM. An appropriate order will enter. Signed by District Judge Aleta A. Trauger on 5/15/14. (xc:Pro se party by regular and certified mail.)(DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(tmw)

UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NORTHEASTERN DIVISION
WYNDHAM VACATION RESORTS, INC.,

)
)
Plaintiff,
)
)
v.
)
)
THE CONSULTANT GROUP, SMOKEY
)
MOUNTAIN GETAWAYS, LLC, MOUNTAIN )
GETAWAYS, LLC, JEFF EARLE, SUPERIOR )
VACATIONS, INC. d/b/a SUPERIOR
)
TIMESHARE CLOSING, RAY SPIGNER,
)
MICHAEL DEAN SPIGNER, CHARLES
)
SIMERKA, JUDITH McGINTY, DANIEL
)
GARRETT, and CHRISTAL FRANKLIN,
)
)
Defendants.
)

Case No. 2:12-cv-00096
Judge Aleta A. Trauger

MEMORANDUM
Plaintiff Wyndham Vacation Resorts, Inc. (“WVR”) has filed a Motion for a Preliminary
Injunction (Docket No. 198), which requests injunctive relief against all defendants.1 In essence,
WVR seeks an order barring the defendants from continuing to facilitate the transfer of WVR
timeshare deeds to certain sham purchasers. Defendants Jeff Earle and Smokey Mountain
Getaways at Town Square, LLC (“SMG”) have filed a Response in opposition to the motion as it
to applies to them only. The remaining defendants have not responded to the motion within the
applicable time limitations.2

1

In a separate accompanying Order, the court has dismissed purported claims by Wyndham
Vacation Management, Inc.
2

WVR filed its motion on April 24, 2014. Under Fed .R. Civ. P. 6(c)(1) and M.D. Tenn. Local
Rule 7.01(b), a party opposing a motion must file responsive materials within 14 days after
service of the motion. Accounting for an extra three days under Fed. R. Civ. P. 6(d) and Rule
5(b)(2), responses to the motion were due by May 12, 2014, at the latest.
1

BACKGROUND
I.

Procedural History

According to the Amended Complaint (Docket No. 84), the defendants are involved in a
conspiracy that defrauds WVR timeshare owners and unlawfully damages WVR in the process.
The basic allegations are set forth in the court’s previous opinion granting WVR’s request for
leave to amend and in the court’s Memorandum concerning Rule 12 motions filed by two sets of
defendants, familiarity with which is assumed.
WVR has moved for a preliminary injunction against all defendants, seeking an order that
(1) enjoins the defendants from continuing to facilitate fraudulent transfers to (a) individuals who
have not consented to the transfer and/or to (b) “sham” individuals or entities (i.e., entities that
are not bona fide transferees); (2) enjoins the defendants from charging or quoting upfront fees
for the sale or transfer of WVR deeds without having a legitimate, non-sham, third-party
purchaser in place; and (3) holding themselves out to the public as employees, agents, or
representatives of WVR.
II.

Supporting Materials

In support of its motion, WVR has filed a Memorandum of Law (Docket No. 199) and
supporting evidence, including: (1) affidavits and other exhibits filed in support of WVR’s
Second Supplement to RICO Statement (Docket No. 191), which include the Declaration of
Thomas Garrett (id., Attachment No. 2), and evidence of fraudulent signatures and fraudulent
notarizations on conveyance documents relating to the deeds at issue in this lawsuit (id.,
Attachment Nos. 3-20); (2) an Affidavit of Howard Hamilton, filed in support of WVR’s Third
Supplement to RICO Statement (Docket No. 193, Ex. 2); (3) deposition transcript excerpts from

2

multiple party witnesses;3 (4) sworn declarations from third parties;4 (5) discovery responses
(Ex. 8, Superior responses to interrogatories); (6) record evidence (id., Exs. 11, 12, 21, and 25);
(7) a chart and other materials relating to civil and criminal actions that concern fraudulent
timeshare transactions (Exs. 28-31); and (8) the Declaration of Eric Haley, a WVR Senior
Director, which attaches WVR records relating to the transfer of WVR deeds to sham purchasers.
(Docket No. 197.) Notably, none of the evidence references Earle or SMG.
In response, Earle and SMG filed the Declaration of Jeff Earle (Docket No. 206, Ex. 1),
which essentially denies that Earle and SMG ever knew about or contemplated that Superior or
any other defendant would process or otherwise facilitate a transfer to a sham purchaser. With
the exception of that affidavit, which pertains only to Earle and SMG’s purported lack of
involvement in the transactions at issue, the factual materials filed by WVR are unrebutted.
III.

Facts

The facts show that the Consultant Group (“TCG”), Ray Spigner, Dean Spigner, and at
least one of TCG’s employees, Casey Hardegree, have held themselves out to WVR owners as
Wyndham employees, have otherwise given the impression, at least initially, of being affiliated
with Wyndham, and/or have falsely claimed that they are employees of facilities that host
timeshare owners. (See Declarations of Charles Helle, Jeanette Helle, and Dianne Byrd.)5 TCG

3

(See Docket No. 199, Exs. 1, 9, and 10 (Daniel Garrett); 5, 13, 15, and 19 (Dean Spigner); 14
and 16 (Ray Spigner); 17 (Karen Roque); 18, 22, 23, and 26-27 (Charles Simerka); and 20
(Amanda Farmer).)

4

(See Docket No. 199, Exs. 2 (Declaration of Charles Helle), 3 (Declaration of Jeannette Helle),
4 (Declaration of Dianne Byrd), and 24 (Declaration of Mark Graber).)

5

The Byrd Declaration relates to a non-Wyndham facility, where TCG falsely represents to
customers that it is affiliated with that facility.
3

and the Spigners utilize these deceptive practices to lure Wyndham timeshare owners into a highpressure sales presentation, in which Dean Spigner and others make false and/or misleading
representations about the owners’ timeshare obligations in an effort to convince the owners to
transfer their WVR deeds (in return for a fee) and to purchase a substitute a “Mountain
Getaways” vacation club package from TCG.
For example, in June 2012, at the Fairfield Plantation in Villa Rica, Georgia, TCG
employees greeted a husband and wife, Mr. and Mrs. Mark Graber, upon their check-in. The
TCG employees wore “Wyndham” attire with Wyndham logos, the lobby had a Wyndham
banner, and an employee named “Karen” (presumably Karen Roque of TCG) informed the
family that “they” (not identifying themselves as TCG) were conducting presentations to assist
Wyndham owners in reducing or eliminating their maintenance fees. The couple attended the
presentation upon their belief that the presentation was being conducted by Wyndham to assist
Wyndham owners. During the presentation, “the owner” (presumably either Ray Spigner or
Dean Spigner) informed the audience that he was a former high-level Wyndham employee who
had retired.6 According to Mr. Graber, the presentation was a “high pressure sales pitch trying to
persuade us to transfer our Wyndham contracts and purchase Consultant Group’s vacation
product.” TCG’s sales presentation “attempted to convince me that my Wyndham contracts
were worthless, my maintenance fees would ‘sky-rocket,’ my timeshare could never be sold[,]
and that my children and grandchildren would be struck with my valueless Wyndham contracts.”

6

In fact, Dean Spigner had retired on June 3, 2012, which is fewer than 30 days from the
presentation that this particular couple attended. WVR alleges, among other things, that Dean
Spigner’s conduct violated the terms of a non-competition and non-solicitation clause in his
“Salesperson Agreement” with WVR, which purported to apply for 12 months from the date of
his termination.
4

The sales pitch was successful: although Mr. Graber did not want to transfer his Wyndham
contracts before he entered the presentation, TCG persuaded him to purchase TCG’s vacation
product for $5,800. The next day, Mr. Graber attempted to cancel his purchase, but TCG
refused. Mr. Graber thereafter learned that he had 14 days in which to cancel his contract, at
which point he sent a notarized letter to TCG asking to cancel the contract. TCG’s “owner”
(presumably Ray Spigner or Dean Spigner) called Mr. Graber, refused to cancel the contract, and
threatened to sue Mr. Graber and his wife. The owner convinced Mr. Graber to settle the
“dispute” for a return of half of the purchase price, or $2,900.
The notes from a TCG presentation, the first slide of which references “Dean Spigner,”
“Ray Spigner,” and “The Consultant Group,” reflect the high-pressure sales tactics designed to
facilitate a “reverse sale” of an alternative vacation club package. (See, e.g. Docket No. 199, Ex.
25 at pp. 2 (“Let’s eliminate sky-rocketing maintenance fees! Let’s get you the same vacation
for less! Let’s stop the INSANITY! ------ You need a REAL EXIT STRATEGY TODAY FOR
TOMORROW!”) and 3 (“Eliminate your [maintenance fees] without irreversible CREDIT
DAMAGE”).)
In order to “bait and switch” consumers into substituting the alternate vacation club
product (the reverse sale), TCG must be able to locate a third-party purchaser for the owner’s
timeshare interest. The evidence shows that TCG works with Superior Timeshare Closings
(“Superior”), a company that purports to conduct title transfers, to effectuate the transfers.
Superior does not actually have bona fide third-party purchasers in place: instead, Superior
routinely processes fraudulent conveyances in the following ways: (1) transferring deeds to
individuals without their knowledge; (2) conveying the deeds to “sham” individuals; or (3)

5

holding the deeds in one of seven account numbers corresponding to Daniel Garrett or Superior.7
In all or nearly all cases, the sham transferee defaults on any maintenance fee obligation and
does no further business with WVR.
To accomplish this scheme, Superior commits serious legal violations: it forges
signatures and, incredibly, falsely notarizes signatures on many transfer-related documents. This
fraudulent activity is ongoing. For example, Howard Hamilton, who is an 82-year disabled
widower living with his daughter in Texas, had 19 Wyndham deeds in his name when the lawsuit
was filed, and Superior has since transferred an additional 30 deeds to Hamilton. Hamilton was
the victim of fraud: he did not consent to these transactions and was never aware of them.
Thomas Garrett is the victim of similar fraudulent activity by Superior, which has transferred 26
deeds into his name without his knowledge or consent. These are just two examples. Superior
transmits documents reflecting the fraudulent transfers to WVR (which is none the wiser) and
often lists false addresses and/or phone numbers for the sham transferees. Superior’s sham
transferee names have evolved over time – they more recently began transferring deeds to sham
purchaser “Danny Joe Spurling,” for example – presumably in an effort to evade detection.
Assuming that Hamilton and Garrett are being truthful, the degree of Superior’s outright fraud is
stunning.
Notably, when TCG accosts WVR timeshare owners, TCG presents “Superior” real
estate transfer documents to those owners. TCG explains the Superior contracts, has the
customers initial a detailed checklist concerning the process by which Superior purportedly will

7

For purposes of linguistic simplicity, the court will refer to these entities collectively herein as
“sham” purchasers or “sham” transferees. The relevant point is that they are not bona fide thirdparty purchasers.
6

process the transaction (in return for a fee), and then TCG signs a “Superior” contract as an
“authorized representative” of Superior.
The evidence also shows that TCG entered into a suspicious arrangement with a property
manager at the Wyndham Plantation in Villa Rica, Georgia. Under the arrangement, the
property manager permitted TCG to solicit non-fixed week owners (in return for a 10% kickback
to the property manager), provided that TCG not target fixed week owners, who regularly paid
maintenance fees. In other words, TCG would not target owners who regularly paid their
maintenance fees, presumably because everyone involved knew that the transaction facilitated by
TCG and ultimately processed by Superior would be fraudulent, and the property manager did
not want paying accounts to go into default upon the “transfer.”
WVR has also provided evidence regarding the types of damages it suffers from the
fraudulent conveyances. The court addresses that evidence in the “irreparable harm” section
herein.
RULE 65 STANDARD
Under Fed. R. Civ. P. 65, the court may issue a preliminary injunction under appropriate
circumstances. In assessing whether an injunction is appropriate, the court applies the following
standard:
A plaintiff seeking a preliminary injunction must establish that he is likely to
succeed on the merits, that he is likely to suffer irreparable harm in the absence of
preliminary relief, that the balance of the equities tips in his favor, and that an
injunction is in the public interest.
Obama for Am. v. Husted, 697 F.3d 423, 428 (6th Cir. 2012) (citing Winter v. Natural Res. Def.
Council, Inc., 555 U.S. 7, 20 (2008)). “These four considerations are ‘factors to be balanced and
not prerequisites that must be satisfied.’” Nat’l Viatical, Inc. v. Universal Settlements Int’l, Inc.,
7

716 F.3d 952 (6th Cir. 2013) (citing Am. Imaging Servs., Inc. v. Eagle-Picher Indus., Inc.., 963
F.2d 855, 859 (6th Cir. 1992)); Performance Unlimited v. Questar Pubs., Inc., 52 F.3d 1373,
1381 (6th Cir. 1993). A district court is required to make specific findings concerning each of
the four factors, unless fewer are dispositive of the issue. Questar, 52 F.3d 1373, 1381 (6th Cir.
1995).
ANALYSIS
I.

Likelihood of Success

The unrebutted facts show that TCG and Superior have conspired and continue to
conspire to defraud WVR timeshare owners and to draw business away from WVR based on
false pretenses. TCG draws in customers (the “bait”) by holding itself out as part of
“Wyndham,” then pivots and, in the context of a high-pressure sales presentation, reveals that it
is actually not affiliated with Wyndham (the “switch”). Superior and its employees plainly forge
signatures, bear false “witness” to those signatures, and forge notarizations to perform fraudulent
transfers to third parties that are not bona fide purchasers. TCG signs documents on behalf of
Superior, procures fees for itself and Superior in the process, and transmits those documents to
Superior, which in turn processes fraudulent conveyances and submits documentation reflecting
those fraudulent conveyances to WVR. The sheer volume of these transactions defies
coincidence. In the absence of any contrary evidence, it appears that TCG and Superior are
coordinating their efforts as part of this scheme.
Unfortunately, WVR’s brief lacks any discussion of the specific claims that it believes
this fraudulent conduct supports, and why. WVR cites only to a decision by another judge in this
district, in which the court granted an unopposed Rule 56 motion by WVR in a case bearing
some similarities to the circumstances presented here. Furthermore, WVR fails to draw any
8

distinctions among the defendants here, even though there are relevant distinctions among many
of them. Dean Spigner and Ray Spigner can be grouped with TCG (collectively, the “Spigner
Defendants”), a company that (a) they owned and/or operated, and (b) that allegedly engaged in
and continues to engage in tortious conduct relative to WVR owners and, arguably less directly,
to WVR. Dan Garrett and Christal Franklin can be grouped with Superior (collectively, the
“Superior Defendants”), a company that (a) they operated and/or were employed by, and (b) that
engaged in and continues to engage in patently fraudulent conduct, including transmitting
fraudulent transfer documentation to – and actively deceiving – WVR. Earle and SMG allegedly
(1) introduced the entire scheme to the Spigner Defendants, and (2) in conjunction with Superior,
targeted WVR owners in the same fashion as the Spigner Defendants. Finally, as best the court
can discern, Simerka and McGinty allegedly assisted TCG for a brief period in June 2012.
As Earle and SMG point out, for purposes of the Rule 65 motion, WVR’s failure to
distinguish among these defendants is improper. Even as alleged, the claims apply differently to
each group of defendants. Moreover, the evidence presented to the court only implicates certain,
but not all, defendants in the alleged scheme. WVR should have tailored its arguments
accordingly.8
Notwithstanding WVR’s cursory approach, the court finds that, relative to certain
defendants, WVR has demonstrated that it is likely to succeed on the merits of at least some
claims against certain defendants. First, the evidence shows that the Superior Defendants

8

WVR is on notice that the court will have little patience with future failures to distinguish
among the defendants and to make tailored arguments with respect to each of them. Presumably
as a function of the breadth and duration of the alleged underlying conspiracy, WVR is pursuing
a sprawling lawsuit that ropes in many different actors, involves hundreds of transactions, and
asserts numerous claims against a diverse array of defendants that are not identically situated.
“One size fits all” arguments will not suffice in this case.
9

actively defrauded WVR directly by processing and submitting fraudulent transfer
documentation to WVR for approval. Second, the evidence shows that TCG and the Superior
Defendants engaged in deceptive practices in an effort to (1) draw business away from WVR
under false pretenses, and (2) cause WVR owners to break (or unknowingly abandon) their
contracts with WVR.9 The evidence also tends to show that TCG and Superior also knew that
the fraudulent conveyances would inevitably (1) cause a default in any maintenance fee
obligations that run with a deed (whether by operation of the deed or by operation of a separate
agreement with the timeshare owners’ association), and (2) end any real business relationship
between WVR and the holder of the deed. For example, in processing deeds to Howard
Hamilton, Superior knew that Hamilton lacked knowledge of (and had not consented to) the
transfer of any deeds to his name and that Hamilton would, of course, never pay any
maintenance fees or do business with WVR (as the transferor would have). In light of these
facts, the court finds that WVR is likely to succeed on the merits of its claims against the Spigner
Defendants and the Superior Defendants for RICO violations, procurement of breach of contract,
tortious interference with contractual or business relations, common law civil conspiracy, and/or
violations of the TCPA.10

9

As the court has explained in the Memorandum addressing the Rule 12 motions, the
relationships among WVR, timeshare owners, and timeshare owners’ associations/trusts are
complex. Be that as it may, the court is satisfied that, for purposes of the Rule 65 motion, WVR
maintained a direct contractual relationship with timeshare owners and TCG actively marketed
its services as a means of terminating that relationship, at least from the transferors’ perspective.
10

The court has dismissed WVR’s fraud claims. Also, the court expresses no opinion
concerning the breach of contract claims against Dean Spigner, Judith McGinty, and Charles
Simerka, which related only to the 12-month period following the respective dates of their
termination from WVR and, therefore, cannot be the subject of the instant motion.
10

On the other hand, WVR has presented no evidence relating to Earle and SMG. The
court therefore finds, based on the record before it, that there is no basis to conclude that WVR is
likely to prevail on any of its claims against Earle and SMG.11
With respect to Simerka and McGinty, WVR has not presented sufficient evidence to
support a finding that it is likely to prevail against them. At any rate, even as alleged, Simerka
and McGinty at most played only a brief and limited role in the alleged conspiracy in June 2012.
There is no evidence of any continuing violations by Simerka and McGinty relative to the deeds
at issue in this lawsuit.
In sum, the court finds that WVR is likely to prevail on one or more claims against the
Spigner Defendants and the Superior Defendants. The court’s analysis of the remaining Rule 65
factors therefore relates only to the claims against the Spigner Defendants and the Superior
Defendants.
II.

Irreparable Harm

“An injury is not fully compensable by money damages if the nature of the plaintiff’s loss
would make damages difficult to calculate.” Basicomputer Corp. v. Scott, 973 F.3d 507, 511
(6th Cir. 1992). “The loss of customer goodwill often amounts to irreparable injury because the
damages flowing from such losses are difficult to compute.” Id. at 512; Henkel Corp. v. Cox,
386 F. Supp. 2d 898, 904 (E.D. Mich. 2005) (finding that loss of customer goodwill was
“inherently difficult to calculate” and that it was “sufficient to support an injunction”); Int’l Sec.

11

Earle and SMG are apoplectic that WVR is pursuing claims against them, and, in the context
of their Response to WVR’s Rule 65 motion, urged the court to consider the lack of evidence
(with respect to the Rule 65 motion) when the court addressed WVR’s then-pending Rule 12
motion. Of course, weighing the actual evidence would have been inappropriate with respect to
the Rule 12 motion. If Earle and SMG believe that they have been sued in bad faith, they have
other means of asserting that issue. See, e.g., Fed. R. Civ. P. 11.
11

Mgm’t Grp., Inc. v. Sawyer, 2006 WL 1638537, at *9 (M.D. Tenn. June 6, 2006) (where plaintiff
“reasonably demonstrated” that loss of customer goodwill would be difficult to calculate, there
was a strong possibility of irreparable harm).
Also, injury to reputation is not fully compensable by money damages and, therefore, can
support a finding of irreparable harm. See United States v. Miami Univ., 294 F.3d 797, 819 (6th
Cir. 2002); Economou v. Physicians Weight Loss Ctrs. Of Am., 756 F. Supp. 1024, 1039 (N.D.
Ohio 1991); Compuserve Inc. v. Cyber Promotions, Inc., 962 F. Supp. 1015, 1027-28 (S.D. Ohio
1997).
WVR has established multiple means by which the Spigner Defendants and the Superior
Defendants caused, and continue to cause, irreparable harm to WVR. First, through deceptive
marketing practices and deceptive sales presentations, the Spigner Defendants lure in owners
who believe the Spigner Defendants are affiliated with WVR, at which point, through a “hard
sell” sales presentation, the Spigner Defendants proceed to disparage WVR and/or WVR’s
contractual relationship with timeshare owners. At least some consumers never learned the
identity of the company conducting the presentations. WVR’s reputation and goodwill suffers
when individuals purporting to be affiliated with WVR disparage the company’s relationship
with its timeshare owners.
Second, the presentations themselves are designed to convince owners that their contracts
with WVR are “valueless,” that the consumers risk irreparable credit damage by continuing to
hold the deeds, that the maintenance fees associated with those deeds (by whatever mechanism)
would skyrocket, and that consumers would never be able to sell them. The entire point of the
presentation is to convince WVR’s customers to cease doing business with WVR by disparaging

12

WVR’s timeshare “product” and the purported deleterious effect it has on the consumers and
their forbears for multiple generations.
Third, by essentially guaranteeing defaults by sham “transferees” on association fees
(generally owed to an association, not WVR), the remaining non-defaulting owners are forced to
pay higher maintenance fees to cover at least some of the deficiencies that accrue as a result of
the fraudulent conveyances. An increase in maintenance fees on the non-defaulting owners
naturally makes them unhappy, thereby damaging WVR’s reputation and goodwill. In fact, that
may be precisely the point: the remaining owners, who are forced to pay increasingly more with
each transaction that precipitates a default, will be more susceptible to TCG’s marketing of an
opportunity to reduce maintenance fees. In that way, the “bait and switch” scheme and the
“reverse sales process,” which requires an entity like Superior willing to process fraudulent
conveyances for TCG, is a downward spiral: the more fraudulent conveyances that TCG and
Superior conspire to create, the more business it can generate from remaining owners – except
for those owners that any canny (but perhaps unscrupulous) property managers have declared
“off limits.” Thus, through deception and fraud, the Spigner Defendants and Superior essentially
engineer increasing demand for their own “services.”12

12

On a final note, in briefing related to the Rule 12 motions, some defendants had suggested that,
if WVR is correct that the fraudulent conveyances are legally void, WVR should be pursuing the
otherwise innocent transferors, rather than the defendants. But what company would want to
garner a reputation for suing its own customers, where those customers were duped by
unscrupulous fraudsters into paying hundreds or thousands of dollars to process transactions that,
unbeknownst to the customers, were not legally binding? One wonders how this argument – that
WVR should be suing the victims – would play to a jury. Moreover, forcing WVR into this
position would be hopelessly complicated and pointless. To take just one example, the 49 deeds
fraudulently placed in Hamilton’s name are located in 14 states, which would require somewhere
between 14 and 49 actions against victims of the conspiracy (i.e., the transferors) in 14 states.
13

WVR has presented competent evidence showing that the Spigner Defendants and
Superior have continued to process fraudulent transfers during the pendency of this litigation.
The court finds that these violations are ongoing and, therefore, will continue to cause irreparable
harm to WVR’s reputation and goodwill for the reasons described in this section.
In sum, the court is persuaded that WVR has suffered, and will continue to suffer,
irreparable harm from the activities of the Spigner Defendants and the Superior Defendants.
III.

Balance of the Equities

In assessing the balance of the equities, courts may consider the relative burdens on the
parties and third parties who may be affected by the preliminary relief sought. See, e.g., Obama,
697 F.3d 423, 436-37 (6th Cir. 2012) (comparing respective burdens of preliminary injunction on
voters, the State, and local election boards); Brake Parts, Inc. v. Lewis, 443 F. App’x 27, 33 (6th
Cir. 2011) (“[T]he district court must consider the harm that the injunction would cause the nonmovant”); see also Eberspaecher N. Am., Inc. v. Nelson Global Prods., Inc., No. 12-11045, 2012
WL 1247174, at *6 (E.D. Mich. Apr. 13, 2012) (weighing whether defendant had shown any
“concrete, countervailing harm” to itself or the public); Bokhari v. Metro. Gov’t of Nashville &
Davidson Cnty., No. 3:11-00088, 2012 WL 1165907 (M.D. Tenn. Apr. 9, 2012) (weighing
whether defendant had shown substantial harm to others). Notably, even where a preliminary
injunction could place the non-movant in financial peril, the court may grant the injunction if the
equities so require, such as where a defendant has “knowingly and illegally placed itself in the
position to be placed out of business.” Lewis, 443 F. App’x at 33.
Here, issuance of a preliminary injunction will benefit third parties, particularly WVR
timeshare owners who have been victimized by the Spigner Defendants and the Superior
Defendants. The injunction would prohibit the Spigner Defendants and the Superior Defendants
14

from engaging in fraudulent real estate transactions, pocketing money from third parties for sham
transfers that may not be legally binding, and (at least relative to the Spigner Defendants) from
falsely holding themselves out as affiliated with, or acting on behalf of, WVR. Third parties will
also benefit from preventing these defendants from clouding title to the timeshare property
interests of WVR owners. Of course, the injunction will impair the Spigner Defendants and the
Superior Defendants’ businesses, but it will only prevent them from engaging in unlawful
activity. The requested injunction will not preclude the Spigner Defendants and the Superior
Defendants from continuing to engage in lawful business activity, such as facilitating legitimate
transactions involving actual, bona fide third-party purchasers of timeshare interests.
IV.

Public Interest

The public interest would be served by issuing the injunction. The Spigner Defendants
and the Superior Defendants will be enjoined from clouding title to additional real estate
interests, perpetrating fraud, and, in some instances, from potentially committing crimes.
Similarly, Tennessee public policy, as embodied in the TCPA, strongly discourages and seeks to
punish entities that engage in fraudulent business practices, such as those at issue here.13 See,
e.g., Tenn. Code Ann. § 47-18-104(b)(3), (b)(5), (b)(8), and (b)(12). Finally, “the public has an
interest in the promotion of fair competition and the discouragement of unfair competition,”
Brake Parts, Inc. v. Lewis, 443 F. App’x 27, 33 (6th Cir. 2011) (brackets omitted), an interest
that granting the injunction would serve here.
V.

Summary

13

Even if WVR did not have standing to maintain the TCPA claims, the public is served by the
injunction for other independent reasons, as stated herein.
15

In determining whether a preliminary injunction is warranted, the court’s obligation is to
balance the four Rule 65 factors. Here, the court finds that WVR has not presented evidence
establishing that an injunction should issue relative to Earle and SMG – with respect to whom no
evidence has been presented – and Simerka and McGinty – with respect to whom no evidence of
involvement after June 2012 has been presented. Therefore, they have not demonstrated a
reasonable likelihood of success on the merits and/or that restraining those defendants would
prevent irreparable injury and serve the public interest. Accordingly, on balance, the court finds
that no injunction related to those defendants is warranted at this time.
However, with respect to the Spigner Defendants and the Superior Defendants, all four
factors favor WVR’s request for an injunction, and little balancing need be done. Therefore, the
court will issue a preliminary injunction that tracks the language of the relief requested in
WVR’s motion.
For the reasons stated herein, WVR’s Motion for a Preliminary Injunction (Docket No.
198) will be granted in part and denied in part.
An appropriate order will enter.
Enter this 14th day of May 2014.
_____________________________
ALETA A. TRAUGER
United States District Judge

16