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Judge OKs Class Action Against Welk Resorts

SAN DIEGO (CN) - Time-share owners may proceed with class action claims accusing The Welk Group of hiding water leaks that led to the growth of serious mold and fungus throughout the resort originally opened by Lawrence Welk in 1964.

Judge Michael Anello of the U.S. District Court for the Southern District of California allowed lead plaintiff Hermenegildo Martinez' habitability and property disclosure requirement violations claims against The Welk Group and the Welk Resort Group to survive summary judgment.

Anello dismissed Martinez' breach of contract claim and breach of fiduciary duty claim against two other defendants, noting that Martinez did not show that the Welk Music Group and Soleil Communications share control, ownership and profits from the resort with The Welk Group and the Welk Resort Group.

But Anello let The Welk Group remain as a defendant with the Welk Resort Group, since Martinez said The Welk Group worked on the resort as a "developer, contractor, builder and manager," had ownership interest in the properties and shared profits from time-share sales with the Welk Resort Group.

Anello also refused to dismiss the class' private nuisance claim, finding that a question of fact separated The Welk Group's claim that the time-share agreement did not give members any real property rights from the class' assertion that the time-share agreement gave members property rights similar to those conferred in a lease agreement.

Anello allowed the class' breach habitability claim for similar reasons, concluding that the issue of whether the time-share owners have a real property interest in the resort units should be determined at a later stage in the litigation.

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