Lennen et al v. Marriott Ownership Resorts, Inc. et al

MOTION to Certify Class

M.D. Fla.October 1, 2018

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION ANTHONY LENNEN, et al., Plaintiffs, v. MARRIOTT OWNERSHIP RESORTS, INC., et al., Defendants. CASE NO.: 6:16-cv-00855-CEM-TBS PLAINTIIFFS’ MEMORANDUM OF LAW IN SUPPORTOF MOTION FOR CLASS CERTIFICATION THE POLASZEK LAW FIRM, PLLC Christopher S. Polaszek 3407 W. Kennedy Blvd. Tampa, FL 33609 (813) 574-7678 chris@polaszeklaw.com NEWMAN FERRARA LLP Jeffrey M. Norton 1250 Broadway, 27th Fl. New York, NY 10001 (212) 619-5400 jnorton@nfllp.com Soomi Kim, Esq. 2400 South College Drive High Point, NC 27260 (336) 471-8769 soomiwork@gmail.com Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 1 of 33 PageID 4646 TABLE OF CONTENTS Page No. TABLE OF AUTHORITIES ..................................................................................................... ii I. INTRODUCTION .........................................................................................................1 II. SUMMARY OF RELEVANT FACTS ..........................................................................3 III. ARGUMENT .................................................................................................................8 A. The Classes are Adequately Defined and Ascertainable ........................................10 B. The Classes Satisfy the Prerequisites of Fed. R. Civ. P. 23(a) ............................... 11 1. Numerosity ....................................................................................................... 11 2. Commonality.................................................................................................... 11 3. Typicality .........................................................................................................15 4. Adequacy of Representation ............................................................................17 C. The MVC Trust Owners Class and the Legacy Owners Subclass Satisfy the Prerequisites of Fed. R. Civ. P. 23(b)(2) ..............................................18 D. The MVC Trust Owners Class and Legacy Owners Class Satisfy the Prerequisites of Fed. R. Civ. P. 23(b)(3) ................................................................21 1. Common Issues Predominate ...........................................................................21 2. Superiority and Manageability .........................................................................24 IV. CONCLUSION ......................................................................................................25 Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 2 of 33 PageID 4647 ii TABLE OF AUTHORITIES Cases Page No. Allapattah Serv., Inc. v. Exxon Corp., 333 F. 3d 1248 (11th Cir. 2003) .........................................................................................12 Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998) ..............................................................................................20 Andreas-Moses v. Hartford Fire Ins. Co., No. 617CV2019ORL37KRS, 2018 WL 3015010 (M.D. Fla. June 18, 2018) .....................8 Ash v. Tyson Foods, Inc., 546 U.S. 454 (2006) ...........................................................................................................15 Baez v. LTD Fin. Servs., L.P., No. 615CV1043ORL40TBS, 2016 WL 3189133 (M.D. Fla. June 8, 2016) ..................... 11 Belcher v. Ocwen Loan Servicing, LLC, No. 8:16-CV-690-T-23AEP, 2018 WL 1701963 (M.D. Fla. Mar. 9, 2018) .................24, 25 Bilotta v. Citizens Info. Assocs., LLC, No. 8:13-CV-2811-T-30TGW, 2014 WL 2050853 (M.D. Fla. May 19, 2014) ..................19 Cooper v. Southern Co., 390 F.3d 695 (11th Cir. 2004) ............................................................................................15 Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546 (11th Cir. 1986) .......................................................................................... 11 DeBremaecker v. Short, 433 F.2d 733 (5th Cir. 1970) ..............................................................................................10 De Leon v. Bank of Am., N.A. (USA), No. 609CV1251ORL41KRS, 2015 WL 13640499 (M.D. Fla. July 10, 2015) ................. 11 Gazzara v. Pulte Home Corp., No. 616CV657ORL31TBS, 2016 WL 4529526 (M.D. Fla. Aug. 30, 2016) ............... 11, 12 Graham v. Pyramid Healthcare Sols., Inc., No. 8:16-CV-1324-T-30AAS, 2017 WL 2799928 (M.D. Fla. June 28, 2017) ..................15 Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 3 of 33 PageID 4648 iii Grillasca v. Hess Corp., No. 805CV1736T17TGW, 2007 WL 2121726 (M.D. Fla. July 24, 2007) ..................16, 17 Heffner v. Blue Cross & Blue Shield of Alabama, Inc., 443 F.3d 1330 (11th Cir. 2006) ..........................................................................................20 Herman v. Seaworld Parks & Entm't, Inc., 320 F.R.D. 271 (M.D. Fla. 2017) ........................................................................... 11, 17, 22 Holmes v. Continental Can Co., 706 F.2d 1144 (11th Cir.1983 ...........................................................................................8, 9 Jones v. TT of Longwood, Inc., No. 606CV651ORL19DAB, 2007 WL 2298020 (M.D. Fla. Aug. 7, 2007) ......................19 Karhu v. Vital Pharm., Inc., 621 F. App’x 945 (11th Cir. 2015) .....................................................................................10 Kerr v. City of West Palm Beach, 875 F.2d 1546 (11th Cir. 1989) ..........................................................................................22 Kirkpatrick v. J.C. Bradford & Co., 827 F.2d 718 (11th Cir. 1987) ............................................................................................18 Klay v. Humana, Inc., 382 F.3d 1241 (11th Cir. 2004) ..........................................................................................22 Licari Family Chiropractic Inc. v. Eclinical Works, LLC, No. 8:16-CV-3461-T-35JSS, 2017 WL 5705793 (M.D. Fla. Nov. 27, 2017) ....................18 Little v. T-Mobile USA, Inc., 691 F.3d 1302 (11th Cir. 2012) ..........................................................................................10 Martin v. Behr Dayton Thermal Prod. LLC, 896 F.3d 405 (6th Cir. 2018) .............................................................................................24 Nelson v. Mead Johnson Nutrition Co., 270 F.R.D. 689 (S.D. Fla. 2010) ........................................................................................12 PB Prop. Mgmt., Inc. v. Goodman Mfg. Co., L.P., No. 3:12-CV-1366-HES-JBT, 2016 WL 7666179 (M.D. Fla. May 12, 2016)...............8, 20 Pickett v. Iowa Beef Processors, 209 F.3d 1276 (11th Cir. 2000) ..........................................................................................17 Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 4 of 33 PageID 4649 iv Pierluca v. Quality Res., Inc., No. 8:16-CV-1580-T-30AEP, 2016 WL 6650746 (M.D. Fla. Nov. 10, 2016) ...................15 Rigney v. Livingston Fin., LLC, No. 612CV617ORL37TBS, 2014 WL 12625790 (M.D. Fla. Mar. 6, 2014) ......... 11, 22, 25 Sacred Hearth Health Sys., Inc. v. Humana Military Healthcare Servs., Inc., 601 F.3d 1159 (11th Cir. 2010) ..........................................................................................24 Shady Grove Orthopedic Assoc., P.A. v. Allstate Ins. Co., 559 U.S. 393 (2010) .............................................................................................................8 Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) .......................................................................................................24 Valley Drug Co. v. Geneva Pharm., Inc., 350 F.3d 1181 (11th Cir. 2003) ..........................................................................................17 W. Morgan-E. Lawrence Water & Sewer Auth. v. 3M Co., No. 17-12381, 2018 WL 2473831 (11th Cir. June 4, 2018) ..............................................20 Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) .....................................................................................................12, 19 Williams v. Mohawk Indus., Inc., 568 F.3d 1350 (11th Cir. 2009) ......................................................................................9, 12 Statutes and Rules Fed. R. Civ. P. Rule 23(a)................................................................................................. passim Fed. R. Civ. P. Rule 23(b)(1)(A) ................................................................................................9 Fed. R. Civ. P. Rule 23(b)(1)(B) ................................................................................................9 Fed. R. Civ. P. Rule 23(b)(2) ............................................................................................ passim Fed. R. Civ. P. Rule 23(b)(3) ............................................................................................ passim Fed. R. Civ. P. Rule 23(g) ........................................................................................................10 Fla. Stat. § 689.010 (2010).......................................................................................................14 Fla. Stat. § 718.01 ......................................................................................................................7 Fla. Stat. § 721.01 ................................................................................................................7, 14 Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 5 of 33 PageID 4650 v Fla. Stat. § 721.03(7) (2010) ....................................................................................................13 Fla. Stat. §721.03(10)...............................................................................................................13 Fla. Stat. § 721.05(30)................................................................................................................3 Fla. Stat. § 721.05(21)(2010) ...............................................................................................3, 14 Fla. Stat. § 721.08 ....................................................................................................................13 Fla. Stat. § 721.15 ....................................................................................................................13 Fla. Stat. §721.56 .....................................................................................................................13 Fla. Stat. § 721.552 ..................................................................................................................13 Fla. Stat. § 895.01 ......................................................................................................................7 Fla. Stat. § 895.02 ....................................................................................................................13 Fla. Stat. § 895.05 ....................................................................................................................13 Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 6 of 33 PageID 4651 Pursuant to Fed. R. Civ. P. 23, Plaintiffs Anthony and Beth Lennen (“Plaintiffs” or the “Lennens”), on their own behalf and on behalf of all similarly situated individuals, respectfully submit this memorandum of points and authority in support of their motion for an order certifying the proposed classes in the above-captioned action (the “Action”), appointing Plaintiffs as Class Representatives, and appointing Plaintiffs’ counsel, Newman Ferrara LLP, as Class Counsel. I. INTRODUCTION This Action involves claims against Defendants Marriott Ownership Resorts, Inc. (“MORI”), Marriott Resorts Hospitality Corporation (“Marriott Hospitality”), Marriott Resorts Travel Company, Inc. (“MVC Exchange Company”), Marriott Resorts Title Company, Inc. (“Marriott Title”) (collectively, “Marriott” or the “Marriott Defendants”), MVC Trust Owners Association, Inc. (“MVCTOA”), First American Trust, FSB, First American Title Co., and First American Financial Corporation (collectively, “First American” or the “First American Defendants”), and Orange County, Florida (“Orange County” or the “County”), for their roles in creating, selling, and perpetuating the unlawful timeshare scheme known as Marriott Vacation Club Destinations Trust Points Program (the “MVC Trust”). The facts and law applicable to this case make class treatment not only an appropriate and superior means of adjudication but, arguably, the only means. Indeed, because this case concerns the legal core of the MVC Trust, declaratory and injunctive relief sought by Plaintiffs will be dispositive of the interests of all similarly situated individuals. By the same token, individual actions could lead to conflicting interpretation and application of Florida law and inconsistent results for both plaintiffs and defendants in those actions. Plaintiffs will demonstrate that the MVC Trust scheme violates virtually every aspect of applicable property and timeshare law – law which exists to protect the rights of real property Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 7 of 33 PageID 4652 - 2 - owners in perpetuity. Like the Plaintiffs, thousands of individuals maintain ownership in the MVC Trust (i.e., “MVC Trust Owners”) – a defective timeshare plan based on illusory property interests that are unmarketable for resale, where owners’ use rights diminish with each additional sale of the product, and where annual maintenance costs continue to rise. Due to the MVC Trust’s irreparable structure, only class-wide, injunctive relief will undo the wrongs of the past and prevent future harm. The harm arising from the MVC Trust scheme is not limited to its purchasers. In fact, because the scheme involves transferring legal title of thousands of timeshare estates, physically located in Marriott properties throughout the country (i.e., “Component Sites”), to a Florida land trust, it is also causing irreparable harm to the indivisible real property interests of those timeshare owners at the Component Sites (i.e., “Legacy Timeshare Owners”). All Legacy Timeshare Owners, including the Plaintiffs, continue to suffer harm because the MVC Trust timeshare plan, which was surreptitiously layered on top of their pre-existing timeshare plan, conflicts with governing Condo Declarations, and chips away at their legitimate ownership rights. To be sure, nothing about this case is individualized with the exception of the magnitude (but not the composition) of potential damages. The claims in Plaintiffs’ Amended Class Action Complaint (the “Amended Complaint”) call almost exclusively for legal determinations and statutory remedies, and involve no individualized issues of reliance, knowledge, or belief. Consequently, each of Plaintiffs’ claims can be pled for any member of the proposed classes and subclass, making a class-wide relief the superior and appropriate means of adjudication. Plaintiffs propose certification of two classes and one subclass. First, Plaintiffs seek to represent a class of MVC Trust Owners (the “MVC Trust Owners Class”), on whose behalf they seek a declaration as to the specific statutory violations enumerated in the Amended Complaint, Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 8 of 33 PageID 4653 - 3 - an injunction directing the immediate cessation of MVC Trust sales, dissolution of the MVC Trust program, and an order rendering all MVC Trust sales to date void ab initio, together with disgorgement of all sums collected by Defendants from class members in connection with their purchase and ownership of the MVC Trust product.1 Second, Plaintiffs seek to represent a class of Legacy Timeshare Owners (the “Legacy Timeshare Owners Class”), on whose behalf they seek a declaration that the MVC Trust unlawfully impedes on their real-property ownership rights, and a declaration as to the invalidity of MVC Trust program and its governing instruments.2 In addition, on behalf of the Legacy Timeshare Owners Class, Plaintiffs seek an assessment of damages based on a statistically-established and uniform metrics. Finally, on behalf of a subclass of current Legacy Timeshare Owners (the “Legacy Timeshare Owners Subclass”), Plaintiffs seek an injunction directing Marriott to dissolve the MVC Trust program and to abide by governing Component Site Condo Declarations and timeshare plans. II. SUMMARY OF RELEVANT FACTS The MVC Trust was born in 2010 when Marriott devised a points-based, nonspecific, multisite timeshare product, marketed as a timeshare estate and an interest in a Florida land trust. AC ¶ 41.3 The MVC Trust uses a Florida land trust construct whereby Marriott executes deeds purporting to convey legal and equitable title to its corporately-owned, fee-simple timeshare estates (i.e., “Legacy Timeshare Estates”), physically located in Marriott-run condominium resorts throughout the country, to First American Trust, who serves as the land trust trustee. AC ¶ 46. Pursuant to an unrecorded trust agreement (i.e., the MVC Trust Agreement), the above transaction purports to vest legal title to trust property in First American Trust and vest beneficial ownership 1 MVC Trust Owners are “purchasers,” as defined in Fla. Stat. § 721.05(30). 2 Legacy Owners are “interestholders” as defined in Fla. Stat. § 721.05(21)(2010). 3 Referenced to paragraphs in the Amended Complaint are cited as: “AC ¶ __.” References to exhibits attached to the Amended Complaint are cited by name, followed by “AC Ex. __.” Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 9 of 33 PageID 4654 - 4 - and total control of all of the trust property in Marriott. AC ¶ 46; MVC Trust Agreement, AC Ex. M. Sometime thereafter, a Marriott-concocted instrument called a Notice of Addition (“NOA”) is recorded. AC ¶ 57; Sample NOA, AC Ex. G. The NOA is a document that purports to list all recently-added, Marriott-owned timeshare properties deeded to the trust, along with an aggregate point value that Marriott has assigned to those properties. Id. These NOAs are indexed against another unauthorized, Marriott-concocted instrument known as the Trust Memorandum. AC ¶ 5; Trust Memorandum, AC Ex. I. The Trust Memorandum is a recorded document which purports to summarize the material terms of the formal (but unrecorded) MVC Trust Agreement. Using that framework, Marriott and First American created a base from which Marriott can sell use-rights (i.e., points) to consumers that appear to be sales of real property. Marriot sells the contractual use-rights in units of 250 points called Beneficial Interests (“BI”). AC ¶¶ 5, 95. BI (an intentional misnomer) is purported to represent some undefined and undiscernible beneficial interest in the land trust. However, the unrecorded MVC Trust Agreement makes clear that the points do not actually represent an interest in the trust properties, providing expressly that purchasers “shall not have any right, title, or interest in or to any portion of the legal and equitable title to the Trust Property.” AC ¶ 70; see also MVC Trust Agreement, AC Ex. M (at p. 10, Sec. 4.1(c)) (emphasis added). And, according to that same unrecorded instrument, the rights of purchasers to reserve properties in the trust are confined to a subset of trust properties that Marriott, in its sole discretion, decides to make available pursuant to another unrecorded, Marriott- concocted instrument called a Notice of Use Rights (“NOU”). AC ¶¶ 58-59; Sample NOU, AC Ex. G. Sales of BI/points are memorialized with a purchase agreement and, critically, with the Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 10 of 33 PageID 4655 - 5 - delivery of a special warranty deed (i.e., the MVC Trust Consumer Deed), executed not by the First American Trust – the land trust trustee who ostensibly holds legal title to all trust property – but by Marriott (MORI), which is identified as the “Grantor.” AC ¶ 5; Sample MVC Trust Consumer Deed, AC Ex. C. The MVC Trust Consumer Deed, which purports to convey title to an untraceable, non-specific allotment of points (the corpus of which were deemed added to the trust by way of NOA), is then recorded in the official records of Orange County. AC ¶ 60. In the space provided for a legal description of the property conveyed, the MVC Trust Consumer Deed identifies no discernable property, whatsoever. Instead, where a description would typically be found, the deed provides alphanumeric codes that purport to represent units of BI (i.e., 250 points) conveyed. AC ¶¶ 5, 60, 148. Notably, the alphanumeric codes are proprietary numbers, made up by Marriott, and used exclusively for Marriott’s internal “administrative” purposes. AC ¶¶ 70, 150. These codes appear in no other public document, and cannot be traced to any parcel of real property in the trust, or anywhere else. Id. Marriott’s use of codes, as opposed to a real property description, underscores the gravamen of this action: Marriott does not actually convey real property, let alone a timeshare estate, to would-be MVC Trust Owners. In fact, Marriott is not conveying even a bona fide interest in real property or any timeshare interest whatsoever. Rather, BI are nothing more than an annually- replenished, inexhaustible supply of vacation club points that provide contractual use rights to access certain (but not all) MVC Trust property owned and controlled by Marriott. AC ¶ 70. The BI/points given to MVC Trust Owners do not reflect a percentage ownership interest in the MVC Trust, and, in fact, are incapable of reflecting a percentage interest because point values and supplies are continually in flux at the whim of Marriott. AC ¶ 70. Even more telling is the fact that Marriott reserves the right to terminate the MVC Trust at any time – causing the “real Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 11 of 33 PageID 4656 - 6 - property” to which MVC Trust Owners supposedly hold “title” to simply vanish. AC ¶ 71. Packaging the MVC Trust as a real property transaction allows Marriott to charge a hefty premium for points, earn substantial revenue from annual costs and fees, and shift its own real property costs to MVC Owners while continuing to profit off its underlying assets. AC ¶ 79. For First American, the MVC Trust scheme means all profit with zero risk as it earns fees for its various “trustee” roles, premiums for claim-proof, cookie-cutter title insurance policies on every MVC Trust sale, and the protection of full indemnity from Marriott for any violations of law related to its participation in the scheme (including the claims asserted in this Action). AC ¶¶ 80-81. For its part, either knowingly or unwittingly, Orange County plays a vital role in the MVC Trust scheme. Indeed, because a central aspect of the scheme involves creating the perception of a legitimate real property transaction, having the County record facially defective deeds and other unauthorized MVC Trust instruments is critical. Thus, without the County’s material aid in recording instruments that make points look like real property, the MVC Trust scheme would not exist. MVC Trust Owners are not the only victims of the MVC Trust scheme as the harm spreads to Legacy Owners as well. All Legacy Timeshare Condominiums share the same essential characteristics; i.e., a resort property where divided fractional ownership interests (i.e., Legacy Timeshare Estates) are sold to purchasers. AC ¶ 84. Each Legacy Timeshare Condominium (and each Legacy Timeshare Estate associated therewith) is subject to a specific Condo Declaration and timeshare plan. AC ¶ 84. As described in the Condo Declarations, these fractional interests also include indivisible appurtenant beneficial interests and use-rights in the total accommodations and facilities – interests that cannot be partitioned further without amending the Condo Declaration. AC ¶ 86. By deeding Legacy Timeshare Estates into the MVC Trust, Marriott is not only breaching Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 12 of 33 PageID 4657 - 7 - the Condo Declarations and infringing upon Legacy Owners’ legal rights and restricting the use of their properties, but also significantly reducing Legacy Owners’ properties’ marketability and value. Further, Marriott’s efforts to promote higher-revenue generating sales of the MVC Trust product, while subordinating the interests of and interest in Legacy Timeshare Estate ownership, has resulted in significant devaluation of the Legacy Timeshare Estates values. Such efforts include: (a) reduced sales and marketing efforts by Marriott related to Legacy Timeshares Estates; (b) through corporate acquisition, removing large amounts of Legacy Timeshare Estate inventory from intra-condominium availability; (c) making Marriott the only viable resale option by enforcing rights of first refusal, coupled with the exclusion of third-party buyers from the exchange system, and the imposition high fees on third-party sales; (d) increasing the burdens and costs associated with Legacy Timeshare Estate reservations; and (e) stripping benefits and rights associated with Legacy Timeshare Estate ownership. As alleged in the Amended Complaint, Defendants’ scheme not only violates the Florida Vacation and Timeshare Act, Fla. Stat. § 721.01, et seq., and Florida Condominium Act, Fla. Stat. § 718.01, et seq., but also gives rise to claims under the Florida Racketeer Influenced and Corrupt Organization Act (“Florida RICO”), Fla. Stat. § 895.01, et seq., and common law claims of negligence and breach of fiduciary duty. Thus, even assuming, arguendo, the MVC Trust product was not found to be void ab initio (resolving Counts I-III, as a matter of law), the elements of the MVC Trust timeshare plan would still violate multiple, specific statutory provisions of Florida law, run afoul of Component Site Condo Declarations and timeshare plans (Counts V-XIII), and Marriott and First American would still be liable under Florida RICO (RICO Counts I and II). III. ARGUMENT Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 13 of 33 PageID 4658 - 8 - To be certified as a class action, “[t]he suit must satisfy the criteria set forth in [Fed. R. Civ. P. 23] subdivision (a) (i.e., numerosity, commonality, typicality, and adequacy of representation), and it also must fit into one of the three categories described in subdivision (b).” Shady Grove Orthopedic Assoc., P.A. v. Allstate Ins. Co., 559 U.S. 393, 398 (2010). Rule 23(a) requires that: (1) the class be so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the representatives’ claims or defenses are typical of those of the class; and (4) the representatives will fairly and adequately represent the interests of the class. See Fed. R. Civ. P. 23(a). “Class certification under Rule 23(b)(2) is appropriate where ‘the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.’” PB Prop. Mgmt., Inc. v. Goodman Mfg. Co., L.P., No. 3:12-CV-1366-HES-JBT, 2016 WL 7666179, at *27 (M.D. Fla. May 12, 2016) (quoting Fed. R. Civ. P. 23(b)(2)). Rule 23(b)(3) requires that: questions of law or fact common to all class members predominate over individual issues, and that the class action mechanism be superior to other available means of adjudicating the controversy. See Fed. R. Civ. P. 23(b)(3); Andreas-Moses v. Hartford Fire Ins. Co., No. 617CV2019ORL37KRS, 2018 WL 3015010, at *4 (M.D. Fla. June 18, 2018), reconsideration denied, No. 617CV2019ORL37KRS, 2018 WL 3390341 (M.D. Fla. July 5, 2018). Plaintiffs respectfully request the Court certify the following classes and subclass: 1) MVC Trust Owners Class: a Rule 23(b)(2) class consisting of all current and former owners of the MVC Trust product from its inception in June 15, 2010, through and including the present;4 4 Because this class seeks class-wide injunctive and corresponding declaratory relief to remedy uniformly- applicable conduct, Plaintiffs submit that certification of the MVC Trust Owners Class is appropriate under Rule 23(b)(2). In the alternative, Plaintiffs submit that the MVC Trust Owners Class also meets the predominance, superiority, and manageability requirements for certification under Rule 23(b)(3). Further, under Holmes v. Continental Can Co., 706 F.2d 1144, 1158 n.10 (11th Cir.1983), when damages and injunctive or declaratory relief are sought, a “hybrid” Rule 23(b)(2) and (b)(3) suit may be maintained, where, as here, the case “can be fairly and effectively managed.” See also Williams v. Mohawk Inds., 568 F.3d 1350, 1359-60 (11th Cir. 2009). Finally, certification would also be appropriate under either subpart of Rule 23(b)(1) because “prosecuting separate actions by Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 14 of 33 PageID 4659 - 9 - 2) Legacy Owners Class: a Rule 23(b)(3) class consisting of all current and former owners of traditional weekly timeshare interests in Component Sites of the MVC Trust from June 15, 2010, to the present;5 and 3) Legacy Owners Subclass: a Rule 23(b)(2) class consisting of all those Legacy Owners Class members who currently own traditional weekly timeshare interests in Component Sites of the MVC Trust.6 Excluded from the proposed classes and subclass are Defendants, as well as any entity in which a Defendant has a controlling interest, along with Defendants’ legal representatives, officers, directors, assignees and successors. The classes and subclass proposed by Plaintiffs fall well within the requirements of Rule 23. First, each class is easily ascertainable and otherwise meets threshold requirements of numerosity, commonality, typicality, and adequacy of representation. Further, both the MVC Trust Owners Class and the Legacy Owners Subclass meet the requirements of Rule 23(b)(2) because Defendants have acted on grounds that apply generally to the class such that final injunctive relief and corresponding declaratory relief will prove uniform relief to the respective classes as a whole. The MVC Trust Owners Class also meets the requirements of Rule 23(b)(3) in that common questions of law and fact regarding the legality of the MVC Trust product predominate over any questions affecting only individual members (of which there are none), and a class action is or against individual class members would create a risk of” inconsistent results and “incompatible standards of conduct for [Defendants]” (23(b)(1)(A)), and because adjudication of Plaintiffs’ case would, “as a practical matter, [ ] be dispositive of the interests of” the members of the proposed class or “would substantially impair or impede their ability to protect their interests” (23(b)(1)(B)). 5 Because this class seeks monetary damages, in addition to declaratory relief, Plaintiffs submit that certification of the Legacy Owners Class is appropriate under Fed. R. Civ. P. 23(b)(3). As an alternative, this class too would be suitable for a “hybrid” class. See Holmes, 706 F.2d at 1158 n.10; Williams, 568 F.3d at 1359-60. 6 Because this subclass seeks only class-wide injunctive and corresponding declaratory relief to remedy uniformly- applicable conduct, Plaintiffs submit that certification of the Legacy Owners Subclass is appropriate under Fed. R. Civ. P. 23(b)(2). In the alternative, Plaintiffs submit that certification would likewise be appropriate under either subpart of Rule 23(b)(1) because “prosecuting separate actions by or against individual class members would create a risk of” inconsistent results and “incompatible standards of conduct for [Defendants]” (23(b)(1)(A)), and because adjudication of Plaintiffs’ case would, “as a practical matter, [ ] be dispositive of the interests of” the members of the proposed class or “would substantially impair or impede their ability to protect their interests” (23(b)(1)(B)). Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 15 of 33 PageID 4660 - 10 - superior to other available methods for fairly and efficiently adjudicating this matter. Likewise, the Legacy Owners Class meets the requirements of Rule 23(b)(3) because the same central questions regarding the legality of the MVC Trust product, coupled with questions regarding the infringed- upon legal rights of all Legacy Owners, predominate over any questions affecting only individual members, including whether members of the Legacy Owners Class may be entitled to differing levels of monetary relief. In addition, Plaintiffs respectfully submit that because they meet the requirements of Fed. R. Civ. P. 23(a)(3) and (4), they be appointed as Class Representatives for the proposed classes and subclass. Finally, because Plaintiffs’ counsel meets the requirements of Fed. R. Civ. P. 23(g), Plaintiffs respectfully request that Newman Ferrara LLP (“Newman Ferrara”) be appointed as Class Counsel. A. The Classes are Adequately Defined and Ascertainable “Before a district court may grant a motion for class certification, a plaintiff seeking to represent a proposed class must establish that the proposed class is ‘adequately defined and clearly ascertainable.’” Little v. T-Mobile USA, Inc., 691 F.3d 1302, 1304 (11th Cir. 2012) (quoting DeBremaecker v. Short, 433 F.2d 733, 734 (5th Cir.1970)). “In order to establish ascertainability, the plaintiff must propose an administratively feasible method by which class members can be identified.” Karhu v. Vital Pharm., Inc., 621 F. App’x 945, 947 (11th Cir. 2015). Here, the Class definitions are sufficiently specific in order to identify members of the proposed classes and subclass, and Defendants maintain databases which can be utilized to identify every single class member.7 For instance, the Marriott Defendants and First American Defendants, which control the MVC Trust, maintain records for every MVC Trust purchase. Norton Decl. ¶ 7. 7 Databases maintained by Defendants are both acceptable and “useful for identification purposes.” Karhu, 621 F. App’x at 947; Norton Decl. ¶ 7. Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 16 of 33 PageID 4661 - 11 - Likewise, First American maintains records for all title policies issued on the MVC Trust. Id. Marriott also maintains records for every Component Site and the identity of every unit owner. Id. Finally, Orange County maintains official records of every MVC Trust Consumer Deed recorded on behalf of every MVC Trust Owner. Accordingly, the classes and subclass are sufficiently defined and ascertainable. Id. B. The Classes Satisfy the Prerequisites of Fed. R. Civ. P. 23(a) 1. Numerosity “The numerosity requirement “imposes a ‘generally low hurdle’ and a plaintiff need not show the precise number of members of the class.” Herman v. Seaworld Parks & Entm't, Inc., 320 F.R.D. 271, 289 (M.D. Fla. 2017), appeal dismissed, No. 17-12223-DD, 2017 WL 5515837 (11th Cir. Aug. 28, 2017) (citation omitted). “[W]hile there is no fixed numerosity rule, generally less than twenty-one is inadequate, more than forty adequate, with numbers between varying according to other factors.” Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546, 1553 (11th Cir. 1986) (citations and internal marks omitted). Here, the classes and subclass far surpass the benchmarks of numerosity established by this Court.8 Indeed, the classes and subclass, respectively, consist of many thousands of individuals spread over more than eight years. Accordingly, the requirement of numerosity is met. 2. Commonality “Ordinarily, establishing commonality ‘is a relatively light burden that does not require that all the questions of law and fact raised by the dispute be common ... or that the common 8 See, e.g., Baez v. LTD Fin. Servs., L.P., No. 615CV1043ORL40TBS, 2016 WL 3189133, at *2 (M.D. Fla. June 8, 2016) (numerosity requirement “easily satisfied” for class with 34,717 potential members); De Leon v. Bank of Am., N.A. (USA), No. 609CV1251ORL41KRS, 2015 WL 13640499, at *2 (M.D. Fla. July 10, 2015) (Mendoza, J.) (preliminarily approval for settlement class of 11,013); Rigney v. Livingston Fin., LLC, No. 612CV617ORL37TBS, 2014 WL 12625790, at *3 (M.D. Fla. Mar. 6, 2014) (Smith, J.) (“The more than 4,000 members of the proposed Class are sufficient to satisfy the numerosity requirement”), report and recommendation adopted, No. 612CV617ORL37TBS, 2014 WL 12633494 (M.D. Fla. Mar. 13, 2014). Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 17 of 33 PageID 4662 - 12 - questions of law or fact predominate over individual issues.’” Gazzara v. Pulte Home Corp., No. 616CV657ORL31TBS, 2016 WL 4529526, at *3 (M.D. Fla. Aug. 30, 2016) (Smith, J) (quoting Nelson v. Mead Johnson Nutrition Co., 270 F.R.D. 689, 693 (S.D. Fla. 2010)). Commonality merely “requires that there be at least one issue whose resolution will affect all or a significant number of the putative class members.” Gazzara, 2016 WL 4529526, at *3 (quoting Williams, 568 F.3d at 1355); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 359 (2011) (“[F]or purposes of Rule 23(a)(2) even a single common question will do.” (internal quotation marks omitted)). Although the award of damages may vary slightly among class members, the Eleventh Circuit has held that the presence of individualized damages does not prevent a finding of commonality. See Allapattah Serv., Inc. v. Exxon Corp., 333 F. 3d 1248, 1261 (11th Cir. 2003). Here, while each of the classes and subclass proposed by Plaintiffs share at least one common, overriding question (i.e., whether the MVC Trust product is void ab initio under Florida law), each of the classes and subclasses share numerous additional common questions. For instance, for members of the MVC Trust Owners Class, the common questions include, but are not limited to whether: (a) the interests conveyed by Marriott qualify as factional ownership of real property; (b) the MVC Trust is a valid multisite timeshare estate under Florida law; (c) the MVC Trust Consumer Deeds are facially-defective and/or void; (d) NOAs and the Trust Memorandum are authorized instruments for recording under Florida law; (e) First American’s title coverage is triggered due to defects in title, encumbrances, and a defective right to occupy MVC Trust properties; (f) the County breached its official duties by improperly recording and indexing defective and/or unauthorized MVC Trust instruments; (g) the County breached its official duties by collecting transfer taxes on non-existent real properly transactions and/or real property located outside Orange County, Florida; (h) the MVC Trust fails to comply with various requirements of Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 18 of 33 PageID 4663 - 13 - the Florida Timeshare Act and the Florida Condominium Act; (i) adding Legacy Timeshare Estates to the MVC Trust by NOA violates the requirements of a multistate timeshare plan; (j) the MVCTOA improperly and unfairly calculated and collected common expenses from the MVC Trust Owners Subclass in violation of Fla. Stat. § 721.15; (k) Marriott and First American violated Fla. Stat. § 721.08 (2010) by intentionally exploiting the roles of the escrow agent and timeshare trustee; (l) Marriott and First American violated Fla. Stat. § 721.08 by failing to properly designate an appropriate trustee for the MVC Trust; (m) First American lacks independence and violated its escrow duties under Fla. Stat. §§ 721.08 and 721.03 (7) (2010); (n) Marriot and First American failed to properly effect transfer of property to the MVC Trust in violation of Fla. Stat. § 721.552(3)(b); (o) Marriott and MVCTOA failed to comply with the one-to-one nightly-use ratio in the MVC Trust codified in Fla. Stat. §721.03(10); (p) MVCTOA, as proxy for Marriott, is a proper managing entity for the MVC Trust and whether it fulfills its statutory duties; (q) Marriott, MVCTOA, and Marriott Exchange Company violated Fla. Stat. § 721.56 by failing to provide a statutorily compliant reservation system; (r) Marriott and First American (the “RICO Defendants”) violated Florida RICO, Fla. Stat. §§ 895.05(6), 895.02(1)(a)(21); (s) the RICO Defendants constituted an “Enterprise” under Fla. Stat. § 895.02(3); and (t) the RICO Defendants engaged in a pattern of “Racketeering” activity under Fla. Stat. § 895.02(4); and (u) the RICO Defendants conspired to violate Fla. Stat. § 721.08 (2010). Facts pertaining to MVC Trust Owners are common to all class members and are mostly undisputable. For instance, all MVC Trust Owners: (a) were delivered a deed and title policy without property description; (b) paid real estate closing costs, including a title search fee when no title search was undertaken; (c) paid Florida transfer tax for alleged interest located outside of the State of Florida; (d) are subject to a timeshare plan that is not structured to maintain one-to-one Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 19 of 33 PageID 4664 - 14 - use night ratio; (e) are subject to an owner’s association (i.e., the MVCTOA) that, by its very charter, is bound to prioritize financial interests of Marriott over theirs; and (f) improperly bear responsibility for maintenance costs on restricted properties in the MVC Trust. For the Legacy Owners Class and Subclass, their timeshare properties are the same as the corporately-owned properties Marriott transferred (and continues to transfer) to the MVC Trust. Legacy Owners have property ownership rights pursuant to recorded their respective Condo Declarations which, in turn, incorporate material terms of the respective, condo-specific timeshare plan. It is thus important to note that Plaintiffs, as Legacy Owners, are not bringing claims against Marriott in its capacity as the developer of their timeshare plan, but, rather as interested parties (or as statutory “interestholders” pursuant to Fla. Stat. § 721.05(21)(2010)), against Marriott as the developer of the MVC Trust. In that regard, like all Legacy Owners, Plaintiffs’ property-ownership rights were (and continue to be) harmed because the MVC Trust timeshare plan fails to comply with the applicable Florida law. Therefore, the principal common legal claims asserted on behalf of the Legacy Owners Class (and Subclass), and the MVC Trust Owners Class are the same; specifically, the failure of the MVC Trust timeshare plan to comply with the Florida common law, Fla. Stat. § 721 (2010), and Fla. Stat. § 689.010(2010). Other common questions for the Legacy Owners Class include whether: (a) the MVC Trust product violates, conflicts with, and interferes with the respective Component Site Condo Declarations and Timeshare Plans of Legacy Timeshare Estates; (b) MVC Trust properties are governed exclusively by the Component Site Condo Declarations and Timeshare Plans within the Component Site they are physically located; (c) the MVCTOA is improperly usurping the authority of the associations established at each Component Site; (d) the MVC Trust impedes the property ownership rights and legal rights of Legacy Owners vis-à-vis those associations; (e) the MVC Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 20 of 33 PageID 4665 - 15 - Trust interferes with Legacy Owners’ indivisible appurtenant beneficial interests and use-rights in the total accommodations and facilities of the Component Site which cannot be partitioned further without amending the Condo Declaration; and (f) Marriott unlawfully effected transfer of Component Site accommodations and facilities to the MVC Trust. Accordingly, the commonality requirement is satisfied. 3. Typicality “Typicality requires that a class representative ‘possess the same interest and suffer the same injury as the class members.’” Pierluca v. Quality Res., Inc., No. 8:16-CV-1580-T-30AEP, 2016 WL 6650746, at *3 (M.D. Fla. Nov. 10, 2016) (quoting Cooper v. Southern Co., 390 F.3d 695, 713 (11th Cir. 2004), overruled on other grounds by Ash v. Tyson Foods, Inc., 546 U.S. 454, 457 (2006)). “Even if the fact patterns are unique to each claim, the typicality requirement will be satisfied if the class representative and class members experienced the same unlawful conduct” and “like commonality, Rule 23 does not require that all members of the class possess identical claims.” Graham v. Pyramid Healthcare Sols., Inc., No. 8:16-CV-1324-T-30AAS, 2017 WL 2799928, at *5 (M.D. Fla. June 28, 2017). Here, Plaintiffs’ claims are not just typical of those of both classes and the subclass, they are virtually identical. Plaintiffs are members of the MVC Trust Owners Class having purchased, and remaining owners of, four BI in the MVC Trust. See Joint Declaration of Anthony Lennen and Beth Lennen (“Lennen Decl.”), ¶¶ 4, 9-11. In addition, Plaintiffs are members of the Legacy Owners Class and Subclass having purchased, and remaining owners of, two weeks at Crystal Shores, a Component Site of the MVC Trust. See Lennen Decl., ¶¶ 4, 5-8. Like the members of the classes and subclass, Plaintiffs’ claims revolve around the illegality of the MVC Trust and the impact the MVC Trust has had (and continues to have) on Legacy Timeshare Estates. In this regard, Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 21 of 33 PageID 4666 - 16 - the harm claimed and the relief sought by Plaintiffs is typical of the claims and relief sought by the members of the respective classes and subclass. With regard to the MVC Trust Owners Class, Plaintiffs, like every other member of the class who own or have owned BI in the MVC Trust, entered into an agreement which conveyed illusory real property interests, were given a defective deed, paid an inflated purchase price for contractual use rights disguised as real property, paid enrollment fees, closing costs, recording fees, transfer tax, annual common expenses, and annual exchange fees. Lennen Decl. ¶ 11. In addition, in connection with their purchase of BI, Plaintiffs, like all class members, purchased the automatically-applied, uniform First American title insurance policy. Lennen Decl. ¶ 12. The First American title policy is identical for all purchasers of BI in the MVC Trust. Lennen Decl. ¶ 13. Finally, the relief sought by Plaintiffs is identical to that each and every MVC Trust Owner would be entitled to; i.e., a declaration that the MVC Trust product is void, that the MVC Trust be dissolved, and that all monies paid in connection with the MVC Trust be refunded. Accordingly, Plaintiffs claims are typical of those of each member of the MVC Trust Owners Class. With regard to the Legacy Owners Class and Subclass, Plaintiffs, like every member of the class and subclass, claim that the MVC Trust product unlawfully interferes with their actual real property ownership and legal rights. For this reason, Plaintiffs are entitled to the identical declaratory and injunctive relief sought by every member of the class and subclass; namely, a finding that the MVC Trust interferes with their real property ownership rights and violates the Condo Declaration and Timeshare Plan at their Component Site, and a determination that the MVC Trust product has diminished the value of their Legacy Timeshare Estates.9 And, like other 9 To the extent Plaintiffs may be entitled to a different degree of damages for any claim (albeit of the same composition), this does render them atypical. See Grillasca v. Hess Corp., No. 805CV1736T17TGW, 2007 WL 2121726, at *11 (M.D. Fla. July 24, 2007) (“typicality does not require that the class representatives’ claims be Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 22 of 33 PageID 4667 - 17 - members of the Legacy Owners Subclass, Plaintiffs seek an injunction preventing Marriott from doing further harm to their Legacy Timeshare Estate interests via the MVC Trust program. Accordingly, Plaintiffs satisfy the typicality requirement. 4. Adequacy of Representation “Under Rule 23(a)(4), Plaintiffs must show that, as class representatives, they will fairly and adequately protect the interests of the class.” Herman v. Seaworld Parks & Entm’t, Inc., 320 F.R.D. 271, 294 (M.D. Fla. 2017), appeal dismissed, No. 17-12223-DD, 2017 WL 5515837 (11th Cir. Aug. 28, 2017). When examining adequacy of representation, courts in this Circuit analyze: “(1) whether any substantial conflicts of interest exist between the representatives and the class; and (2) whether the representatives will adequately prosecute the action.” Valley Drug Co. v. Geneva Pharm., Inc., 350 F.3d 1181, 1189 (11th Cir. 2003). To the best of their knowledge, Plaintiffs have no conflicts with, or interests that are antagonistic to, members of the classes and subclass. Lennen Decl. ¶ 32. See Pickett v. Iowa Beef Processors, 209 F.3d 1276, 1280 (11th Cir. 2000) (explaining that “a class cannot be certified when its members have opposing interests or when it consists of members who benefit from the same acts alleged to be harmful to other members of the class”). In addition, Plaintiffs have vigorously prosecuted this action and will continue to do so. From the inception of this case, over two years ago, Plaintiffs have: (a) conferred with counsel regularly; (b) met in-person with counsel on multiple occasions; (c) assisted counsel in collecting and obtaining documents and information, and in responding to discovery requests directed to them; and (d) reviewed drafts and approved final versions of all pleadings (including the initial Complaint and the Amended Complaint), discovery requests and responses, motion papers, mediation statements, and other submissions. identical to those of class members, and differences in damages will not destroy typicality”), on reconsideration in part sub nom., No. CIV 805-1736T-17TGW, 2007 WL 2702334 (M.D. Fla. Sept. 14, 2007). Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 23 of 33 PageID 4668 - 18 - Lennen Decl. ¶¶ 23-25. Furthermore, in August of this year, Plaintiff Anthony Lennen traveled to Orlando, Florida with Plaintiffs’ counsel to partake in a full-day mediation session where he played an active role in the discussions. Lennen Decl. ¶ 26. Plaintiffs also have a strong understanding of the facts and legal claims asserted in the Amended Complaint and understand their duties and obligations as proposed Class Representatives. Among other things, Plaintiffs understand that this Action was brought by them in a representative capacity on behalf of a class (or classes) of similarly situated individuals who have common claims and have been injured in a similar way. Lennen Decl. ¶¶ 27-28. Moreover, Plaintiffs understand that: they cannot put their own interests before those of the members of the classes and subclass; they have the responsibility to monitor the activities of the Plaintiffs’ counsel; they may be required to testify at a deposition, hearings, and/or trial; and only the Court can approve a settlement or disposition made on behalf of the classes and subclass. Id. Plaintiffs’ Counsel should likewise be deemed adequate. To certify a class action, “[t]he court must determine whether ‘plaintiffs’ counsel are qualified, experienced, and generally able to conduct the proposed litigation.’” Licari Family Chiropractic Inc. v. Eclinical Works, LLC, No. 8:16-CV-3461-T-35JSS, 2017 WL 5705793, at *2 (M.D. Fla. Nov. 27, 2017) (quoting Kirkpatrick v. J.C. Bradford & Co., 827 F.2d 718, 726 (11th Cir. 1987)). Here, Newman Ferrara is a firm with attorneys highly-experienced in complex class action cases such as this and the firm has litigated numerous cases to a successful result for class members. See Norton Decl., ¶¶ 3-4, Ex. A. Accordingly, Plaintiffs’ have satisfied Rule 23’s adequacy requirement. C. The MVC Trust Owners Class and the Legacy Owners Subclass Satisfy the Prerequisites of Fed. R. Civ. P. 23(b)(2) “Rule 23(b)(2) allows for certification when the defendant has ‘acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 24 of 33 PageID 4669 - 19 - relief is appropriate respecting the class as a whole.’” Bilotta v. Citizens Info. Assocs., LLC, No. 8:13-CV-2811-T-30TGW, 2014 WL 2050853, at *5 (M.D. Fla. May 19, 2014) (quoting Fed. R. Civ. P. 23(b)(2)). This Court has noted that “certification under Rule 23(b)(2) is reserved for those cases in which the relief sought is primarily injunctive or declaratory in nature.” Jones v. TT of Longwood, Inc., No. 606CV651ORL19DAB, 2007 WL 2298020, at *3 n. 2 (M.D. Fla. Aug. 7, 2007). With regard to the MVC Trust Owners Class, this action has a singular purpose: reveal the MVC Trust as an illegal timeshare scheme. Because each member of the MVC Trust Owner Class has been harmed in an identical manner and can be remedied in an identical manner (i.e., through an injunction unwinding the MVC Trust and invaliding all sales to date), Rule 23(b)(2) certification is appropriate. As explained by the Supreme Court in Wal-Mart Stores, Inc. v. Dukes, “Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class. It does not authorize class certification when each individual class member would be entitled to a different injunction or declaratory judgment against the defendant. Similarly, it does not authorize class certification when each class member would be entitled to an individualized award of monetary damages.” 564 U.S. 338, 360–61 (2011) (emphasis in original). Here, there are no “individualized” claims for relief. Indeed, certification is appropriate because a single declaration that the MVC Trust scheme is unlawful would apply uniformly to all class members, and each member of the MVC Trust Owners Class would automatically be entitled to the same injunction, including the incidental disgorgement/restoration of a fixed amount of funds that flow from such a declaration and injunction (i.e., purchase price of BI, enrollment fees, title insurance premiums, closing costs, recording fees, transfer tax, annual common expenses, and Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 25 of 33 PageID 4670 - 20 - exchange fees).10 See PB Prop. Mgmt., Inc. v. Goodman Mfg. Co., L.P., No. 3:12-CV-1366-HES- JBT, 2016 WL 7666179, at *27 (M.D. Fla. May 12, 2016) (explaining that “incidental damages should be only those to which class members automatically would be entitled once liability to the class (or subclass) as a whole is established” (quoting Allison v. Citgo Petroleum Corp., 151 F.3d 402, 415 (5th Cir. 1998)); c.f. Heffner v. Blue Cross & Blue Shield of Alabama, Inc., 443 F.3d 1330, 1333 (11th Cir. 2006) (finding class certification under Rule 23(b)(2) to be inappropriate where “in order to prevail each plaintiff must prove reliance”); W. Morgan-E. Lawrence Water & Sewer Auth. v. 3M Co., No. 17-12381, 2018 WL 2473831, at *8 (11th Cir. June 4, 2018) (declining to certify a class under Rule 23(b)(2) where each class member has individualized “mental-anguish claims”). Accordingly, certification of the MVC Trust Owners Class is appropriate under Rule 23(b)(2). With regard to the Legacy Owners Subclass, certification under Rule 23(b)(2) is appropriate because each member has been injured in an identical manner by the MVC Trust scheme and the remedy sought applies uniformly to the entire subclass. Specifically, the creation and sale of the MVC Trust product has infringed upon every Legacy Owners’ property rights. For example, by transferring Legacy Timeshare Estates into the MVC Trust, Marriott is actually transferring the indivisible property rights belonging Legacy Owners’ into the MVC Trust. Indeed, as described in the Amended Complaint, each Legacy Owner is not only the owner of their particular unit, but also the owner of indivisible appurtenant beneficial interests and use-rights in the total accommodations and facilities of their Component Site. AC ¶ 86. These interests that cannot be partitioned further without amending the Condo Declaration of the Component Site, something Marriott has neglected to do. AC ¶ 86. Thus, when Marriott transfers properties into the 10 For those class members who financed their BI purchases through MORI, additional incidental damages would include mortgage-related fees and costs. Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 26 of 33 PageID 4671 - 21 - MVC Trust, it is impermissibly transferring Legacy Owners’ interests in the total accommodations and facilities. Additionally, despite having been transferred to First American, Legacy Timeshare Estates in the MVC Trust remain subject to their Component Site Condo Declarations, and the MVC Trust timeshare instruments can have no legal effect on the underlying Legacy Timeshare Estates. AC ¶¶ 84-87. Despite this, once Marriott transfer Legacy Timeshare Estates into the MVC Trust, it unquestionably violates the respective Condo Declarations. For example, Legacy Timeshare Estates must be reserved in an undivided 7-day reservation window. AC ¶¶ 84, 87; Sample Condo Declaration, AC Ex. K; Reservation Procedures, AC Ex. E. However, under the Trust Reservation Procedures of the MVC Trust timeshare plan, a lesser 1-day reservation is possible. AC ¶ 92; Trust Reservation System, AC Ex. O. This procedure is a clear violation of the Condo Declaration, and thus, an unlawful infringement upon Legacy Owners’ property rights. Finally, Marriott’s failure to create a legitimate timeshare estate before selling MVC Trust allowed Marriott to over-sell use- licenses appurtenant to the Legacy Timeshare Condominiums. AC ¶ 273. That action has directly prevented Legacy Owners from using the Legacy Timeshare Condominium units according to the specific Condo Declarations. Because the only remedy available for every member of the Legacy Owner Subclass is an injunction preventing further harm resulting from the MVC Trust, certification is appropriate under Rule 23(b)(2). D. The MVC Trust Owners Class and Legacy Owners Class Satisfy the Prerequisites of Fed. R. Civ. P. 23(b)(3) 1. Common Issues Predominate The requirement that common questions of law or fact predominate means “the issues in the class action that are subject to generalized proof, and thus applicable to the class as a whole, Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 27 of 33 PageID 4672 - 22 - must predominate over those issues that are subject only to individualized proof.” Herman v. Seaworld Parks & Entm't, Inc., 320 F.R.D. 271, 295 (M.D. Fla. 2017), appeal dismissed, No. 17- 12223-DD, 2017 WL 5515837 (11th Cir. Aug. 28, 2017) (quoting Kerr v. City of West Palm Beach, 875 F.2d 1546, 1558 (11th Cir. 1989)); Rigney v. Livingston Fin., LLC, No. 612CV617ORL37TBS, 2014 WL 12625790, at *6 (M.D. Fla. Mar. 6, 2014) (“Common issues of fact and law predominate if they ‘ha[ve] a direct impact on every class member’s effort to establish liability and on every class member’s entitlement to injunctive and monetary relief.’”) (quoting Klay v. Humana, Inc., 382 F.3d 1241, 1255 (11th Cir. 2004)). This Court has stated that “even though the damages owed to class members may vary … [t]he fact that individualized damages issues will need to be resolved is not disqualifying of class certification.” Herman, 320 F.R.D. at 296. Here, common questions of law and fact (as detailed, supra) predominate over any individualized questions of law or fact. First, to the extent the MVC Trust Owners Class is deemed unsuitable for certification under Rule 23(b)(2), it nonetheless meets the predominance requirement of Rule 23(b)(3). Indeed, because each and every member of the MVC Trust Owners Class has suffered the identical type of injury (i.e., incurring costs associated with the purchase of BI – the product of a bogus timeshare program), the determination of liability for those injuries is determined by resolving the same issues (i.e., Are real property interests being conveyed? Are BI a valid multisite timeshare estate? Is the MVC Trust scheme valid under Florida law?). Certification under Rule 23(b)(3) is thus warranted because once the Court resolves these common questions, individual class members will not need to submit substantial additional proof to recover damages. See Rigney, 2014 WL 12625790, at *6 (“Where, after adjudication of the classwide issues, plaintiffs must still introduce a great deal of individualized proof or argue a number of individualized legal points to establish most or all of the elements of their individual claims, such claims are not suitable for class Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 28 of 33 PageID 4673 - 23 - certification under Rule 23(b)(3)”). Indeed, should Plaintiffs prevail in this action, in order to recover damages, prospective members of the MVC Trust Owners Class would merely need to verify that they purchased BI in the MVC Trust, that they were issued a First American Title Policy, and that their account reflects payment of annual common expenses and exchange fees. An accounting by Defendants of monies received from MVC Trust Owners would further simply the recovery process.11 Second, with regard to the Legacy Owners Class, each and every member of the class has suffered the identical type of injury, i.e., the diminution of value of their Legacy Timeshare Estates. To reach that determination, the same common questions (detailed in the commonality discussion, supra) must be resolved for each member of the Legacy Owner Class. Additionally, the evidence proffered to establish liability will be the same for every member of the Legacy Owners Class, including, but not limited to: (a) Marriott’s failure to amend Component Site Declarations to account for MVC Trust conflicts; (b) Marriott’s concerted effort to drive down interest in Legacy Timeshare Estate sales and ownership through intensive marketing efforts related to the MVC Trust; (c) Marriott’s effort, through acquisition, to remove large amounts of Legacy Timeshare Estate inventory from intra-condominium availability; (d) the assertion of its right of first refusal for would-be sellers coupled with the exclusion of third-party buyers from the exchange system (a key benefit of fractional ownership), and the imposition high fees on third-party sales (thereby making Marriott the only viable sale option); (e) increasing the burdens, requirements, and costs associated with Legacy Timeshare Estate reservations; and (f) stripping the benefits associated with Legacy Timeshare Estate ownership. Defendants will likely argue that individual issues predominate because Legacy Owners 11 An “Estimated Association Common Expense Budget” is distributed by the MVCTOA annually which lists the amount of common expense “Per Beneficial Interest.” Norton Decl., Ex. B. Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 29 of 33 PageID 4674 - 24 - have Legacy Timeshare Estates for different times of the year and in different Component Sites. Such an argument would be specious, however, because Plaintiffs can demonstrate that Marriott’s conduct was uniform without regard to Component Site location or time of year. Further, assessing damages for the Legacy Owners will be based on a uniformly-applicable diminution of value theory which will minimize the amount of individualized issues. Plaintiffs intend to demonstrate by use of statistical and empirical data that, across the board, the value of Legacy Timeshare Estates has dropped throughout the Class Period, disproportionately to comparable timeshare estates in non-Marriott properties.12 Damages will be based on a uniform formula showing the difference between the present-day value of Legacy Timeshare Estates and the undiminished value.13 Accordingly, the availability of uniform and objective criteria to establish damages weighs in favor of certification.14 2. Superiority and Manageability “The second prong of Rule 23(b)(3) requires a court to determine whether ‘a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.’” Sacred Hearth Health Sys., Inc. v. Humana Military Healthcare Servs., Inc., 601 F.3d 1159, 1183 (11th Cir. 2010) (quoting Fed. R. Civ. P. 23(b)(3)). This Court, in Belcher v. Ocwen Loan Servicing, LLC, explained that “given the large number of claims, the relatively small amount of damages available, the desirability of consistently adjudicating the claims, the high probability that individual members of the proposed class and subclass would not possess a great interest in 12 See Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1046 (2016) (Supreme Court held that statistical evidence was admissible to prove liability and damages across a class, thereby allowing it to support class action certification). 13 For those Legacy Owners Class members who sold their Legacy Timeshare Estate, the same formula can be applied as of the date of sale. 14 While Plaintiffs submit that the Legacy Owners Class does not pose insurmountable individualized issues, regarding damages, it would be within the Court’s discretion to certify an issue class under Rule 23(c)(4). See Martin v. Behr Dayton Thermal Prod. LLC, 896 F.3d 405, 416 (6th Cir. 2018) (“Rule 23(c)(4) contemplates using issue certification to retain a case’s class character where common questions predominate within certain issues and where class treatment of those issues is the superior method of resolution.”). Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 30 of 33 PageID 4675 - 25 - controlling the prosecution of the claims, and the fact that it would be uneconomical to litigate the issues individually, a class action is the superior method.” No. 8:16-CV-690-T-23AEP, 2018 WL 1701963, at *13 (M.D. Fla. Mar. 9, 2018), report and recommendation adopted in part, No. 8:16- CV-690-T-23AEP, 2018 WL 1701964 (M.D. Fla. Apr. 2, 2018), appeal denied, No. 18-90011, 2018 WL 3198552 (11th Cir. June 29, 2018). Based on the fact that resolution of Plaintiffs’ claims in this Action will be dispositive and impact every class and subclass member in same way, coupled with the fact that individual actions carry the risk of inequitable and inconsistent results, class treatment is far superior to any other means of adjudication. Further, due to the substantial number of class and subclass members, each with claims for injunctive relief and/or damages that would not justify the significant costs associated with individual litigation, the superiority requirement is also satisfied. Finally, from a manageability perspective, certifying this matter as a class action will preserve judicial resources and ensure uniform adjudication of each class members’ claim. Indeed, the lack of significant individualized issues demonstrates that this case presents no manageability issues. See Rigney, 2014 WL 12625790, at *6 (“There is no difficulty in managing the Class as the individualized issues are almost non-existent.”). With regard to the MVC Trust Owners Class, there are no individualized issues at all because questions of law and fact are identical class-wide and damages are fixed for each class member. With regard to the Legacy Owners Class, questions of law and fact are substantially the same for every class member and damages can be calculated in a uniform and manageable fashion. Accordingly, the manageability element is satisfied. IV. CONCLUSION For the foregoing reasons, Plaintiffs respectfully request that their Motion for Class Certification be granted, that they be appointed Class Representatives, that Newman Ferrara be appointed Class Counsel, and for such other relief the Court deems just and proper. Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 31 of 33 PageID 4676 - 26 - DATED: October 1, 2018 Respectfully submitted, NEWMAN FERRARA LLP By: /s/ Jeffrey M. Norton Jeffrey M. Norton, Pro Hac Vice 1250 Broadway, 27th Fl. New York, NY 10001 (212) 619-5400 jnorton@nfllp.com Proposed Class Counsel THE POLASZEK LAW FIRM, PLLC Christopher S. Polaszek 3407 W. Kennedy Blvd. Tampa, FL 33609 (813) 574-7678 chris@polaszeklaw.com Soomi Kim, Esq. Soomi Kim, Pro Hac Vice 2400 South College Drive, High Point, NC 27260 soomiwork@gmail.com Counsel for Plaintiffs Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 32 of 33 PageID 4677 CERTIFICATE OF SERVICE I hereby certify that on October 1, 2018, I electronically filed the foregoing with the Clerk of the Court by using the CM/ECF system. /s/ Christopher S. Polaszek Christopher S. Polaszek Case 6:16-cv-00855-CEM-TBS Document 184 Filed 10/01/18 Page 33 of 33 PageID 4678