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Wednesday, July 17, 2024 | Back issues
Courthouse News Service Courthouse News Service

Timeshare Giant Wants Class Action Dumped

SAN DIEGO (CN) - A state court judge on Wednesday entertained arguments whether a class action against a timeshare company that elderly clients say swindled them into paying more for vacation rentals they had little access to should be dimissed.

Defendant Diamond Resorts International laid out its case as to why claims brought by lead plaintiff Sharon Ferraro - that the company violated the Vacation Ownership and Timeshare Act of 2004 and committed financial elder abuse - should be dismissed before San Diego Superior Court Judge Richard Strauss.

Ferraro says she originally purchased a timeshare from Pacific Monarch Resorts and paid $19,000.

Diamond later acquired Monarch and a sales representative contacted Ferraro to come to a meeting to purchase additional points to use toward her vacation rental. Ferraro went to a sales pitch meeting in Palm Springs in 2013, where she was told if she did not upgrade her timeshare eventually there would be few to no resorts for her to choose from.

Ferraro says she was also told during the sales pitch her quarterly maintenance fees would go down. But despite paying to upgrade her timeshare, Ferraro claims her timeshare has become worthless and the maintenance fees have actually increased monthly to a level she can't afford to pay.

The other plaintiffs in the case claim to have experienced similar jumps in fees they paid on top of paying for additional points or upgrades to their timeshare packages.

Diamond Resorts argued that Ferraro and the other plaintiffs could not possibly participate in one trial because there were 19 different timeshare transactions across 15 years and four states - all sold to the plaintiffs by different salespeople.

Each plaintiff interacted with a salesperson, contract person and manager who oversaw the transaction, with zero overlap in witnesses identified by Ferraro and the other plaintiffs, Diamond argued, and asked Strauss to sever the suit for separate trials.

Keeping track of the different people involved and different state laws could potentially confuse a jury, Diamond said.

"Imagine the jury's eyes glazing over as they try to understand laws from different states and try to apply it," Diamond's attorney Craig Marcus said. "An outright dismissal is the appropriate remedy."

Diamond said the plaintiffs claim a single scheme across three vacation rental sellers - Sunterra Corporation, Monarch and Diamond - took place. The company denied this, noting the sellers were independent companies. Diamond later acquired the other two vacation rental companies from whom many of the plaintiffs had originally purchased their vacation packages.

Ferraro argued while the purchases may have been facilitated by different salespeople at different companies, the contracts entered into by the plaintiffs were the same and their whistleblowers could attest to the deliberate ways Diamond swindled the timeshare owners out of money.

"There is a scheme that exists within Diamond to defraud people," Ferraro's attorney Veronica Aguilar said.

Strauss told the parties if later down the road there's a reason to settle claims brought by individual plaintiffs, they would discuss it when the time came.

A trial date has been set for April 29.

Other defendants include Diamond Resorts Financial Services, Diamond Resorts Hawaii Collection Development, Diamond Resorts International Club, Diamond Resorts International Marketing, Diamond Resorts Management, Diamond Resorts U.S. Collection Members Association, Diamond Resorts US Collection Development, ILX Acquisition, and Premiere Vacation Collection Owners Association.

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