Coconut Plantation vs MVW litigation

[Winthelawsuit]

Have you seen the latest from the Coconut Cove Board of Directors regarding the litigation? Here is the relevant portion"

In an executive session, from which one board member recused herself, our legal counsel gave an update on the current litigation surrounding the land sale by MVW last year and MVW no longer contributing approximately 72% of the annual shared area expenses (over 2 million dollars in 2022). The suit is scheduled for mediation this May and failing a settlement, a trial in August. We are told that only a small percentage of this type of litigation will actually go to trial as pretrial settlement is normally reached. Our legal team is assembling a number of expert witnesses that will give testimony on the case. Naturally, the board will provide additional updates as they occur in the next few months.

The Board's trial counsel told the Board that there is a mediation for the lawsuit scheduled for May and "failing a settlement" their trial counsel told them that "only a small portion of this type of litigation will actually go to trial as pretrial settlement is normally reach."

Basically, their trial counsel is saying they will "surrender" and grab their legal fees because we were incompetent and didn't assert any claim that the the property was sold to Kersey Smoot before the "deletion" was was implemented (so no legal right to delete) and that there is an implied fiduciary obligation for PLV/MVW to continue to pay its 72% portion of "Shared Expenses." Will these issues be addressed in the mediation? Probably not - - the mediation will be limited to the Complaint. If they are addressed, the mediator will allow these issues to be addressed but in making the recommendation for settlement, these issues will be ignored because they are not in the Complaint.

And the Board appears to have no plan to ask the membership whether the members want to go to trial or settle via the mediation. I favor trial if the Complaint is amended. If they settle, they better get a lot more than the $7 million previously offered and rejected.

I still wonder why the Board hasn't created a "litigation" committee of some members who are lawyers and could make sure that a better is job is done than by the lawyers currently handling the lawsuit.

It's a sorry situation and the outcome will be that members will see at least a 25% increase in annual fees.

 

[Winthelawsuit]

Our Board is always saying that MVW sold the property, or that MVW is no longer contributing 72% annual shared expenses, etc. Did MVW "really" sell the property or contribute 70% of shared expenses. Obviously, MVW did not sell the property; Pelican Landing Timeshare Ventures ("PLV") sold the property because it owned the property. Very likely, PLV, as the Declarant, not MVW, contributed the 72% shared expenses. But if MVW was involved in the sale of the property or approved the sale of the property because the income from the sale would be reflected in its financial statements, then I think that MVW should have been added to the Complaint.

However, our trial counsel, Becker and Poliakoff ("B&P") did not name MVW as a defendant and B&P was not astute enough to find out whether MVW was involved in the sale or approved the sale of the property to Kersey Smoot so it could possibly add MVW to the Complaint. At the recent timeshare Board meeting I asked Mr. Whelihan, MVW Vice President of Resort Operations, whether MVW was involved in the business decision to sell the property and sent him an email confirming my question on March 6th:

"Good morning Mr. Whelihan. At the recent Coconut Plantation Condo Association meeting I asked you the question of whether any Marriott Vacations Worldwide employees were involved in Pelican Landing Timeshare Ventures' business decision to sell the undeveloped property to Kersey Smoot. I look forward to receiving your response."

Mr. Whelihan promptly responded on March 6th, "I just wanted to verify that I received your email and am actively working on the action item from the Board meeting. I hope to report back to you and the Board soon."

On March 21st (two weeks later) I sent a reminder email to Mr. Whelihan: "Have you made any progress in finding out whether any Marriott Vacations Worldwide employees were involved in Pelican Landing Timeshare Ventures' business decision to sell the undeveloped property to Kersey Smoot? To expedite your investigation you may want to start with Mr. Geller since he should have been involved in the business decision regarding the sale of the property. I look forward to hearing from you soon."

Will I receive a response? Why am I doing this instead of B&P lawyers? Will this be addressed in the upcoming May mediation? Will the B&P lawyers be able to question Mr. Guthrie (Defendants trial lawyer) what is meant in our Master Declaration that he prepared in 2003 since he is not on the "Expert Witness" list? Will the Wilson Miller firm, who prepared the land related documents, testify what is meant that their work is "Subject to easements and restrictions of record?" There must be some place that says what the "easements" cover - - the easements are what our Complaint is limited to.

May will be an interesting month!

 

[dioxide45]

Our Board is always saying that MVW sold the property, or that MVW is no longer contributing 72% annual shared expenses, etc. Did MVW "really" sell the property or contribute 70% of shared expenses. Obviously, MVW did not sell the property; Pelican Landing Timeshare Ventures ("PLV") sold the property because it owned the property. Very likely, PLV, as the Declarant, not MVW, contributed the 72% shared expenses. But if MVW was involved in the sale of the property or approved the sale of the property because the income from the sale would be reflected in its financial statements, then I think that MVW should have been added to the Complaint.

However, our trial counsel, Becker and Poliakoff ("B&P") did not name MVW as a defendant and B&P was not astute enough to find out whether MVW was involved in the sale or approved the sale of the property to Kersey Smoot so it could possibly add MVW to the Complaint. At the recent timeshare Board meeting I asked Mr. Whelihan, MVW Vice President of Resort Operations, whether MVW was involved in the business decision to sell the property and sent him an email confirming my question on March 6th:

"Good morning Mr. Whelihan. At the recent Coconut Plantation Condo Association meeting I asked you the question of whether any Marriott Vacations Worldwide employees were involved in Pelican Landing Timeshare Ventures' business decision to sell the undeveloped property to Kersey Smoot. I look forward to receiving your response."

Mr. Whelihan promptly responded on March 6th, "I just wanted to verify that I received your email and am actively working on the action item from the Board meeting. I hope to report back to you and the Board soon."

On March 21st (two weeks later) I sent a reminder email to Mr. Whelihan: "Have you made any progress in finding out whether any Marriott Vacations Worldwide employees were involved in Pelican Landing Timeshare Ventures' business decision to sell the undeveloped property to Kersey Smoot? To expedite your investigation you may want to start with Mr. Geller since he should have been involved in the business decision regarding the sale of the property. I look forward to hearing from you soon."

Will I receive a response? Why am I doing this instead of B&P lawyers? Will this be addressed in the upcoming May mediation? Will the B&P lawyers be able to question Mr. Guthrie (Defendants trial lawyer) what is meant in our Master Declaration that he prepared in 2003 since he is not on the "Expert Witness" list? Will the Wilson Miller firm, who prepared the land related documents, testify what is meant that their work is "Subject to easements and restrictions of record?" There must be some place that says what the "easements" cover - - the easements are what our Complaint is limited to.

May will be an interesting month!

The address of Pelican Landing Timeshare Ventures is the same as Marriott Vacations Worldwide. I was under the understanding that Pelican Landing Timeshare Ventures was a wholly owned subsidiary of Marriott Vacations Worldwide. So yes, MVW did sell the land, in a roundabout way. MVW was the ultimate decision maker.

 

[Winthelawsuit]

The address of Pelican Landing Timeshare Ventures is the same as Marriott Vacations Worldwide. I was under the understanding that Pelican Landing Timeshare Ventures was a wholly owned subsidiary of Marriott Vacations Worldwide. So yes, MVW did sell the land, in a roundabout way. MVW was the ultimate decision maker.

The law says that each company is a separate legal entity. That's why big companies are set up with so many subsidiaries and and joint ventures - - to protect the parent company from legal liability while still including the income from the sub or JV in the parent's income if it owns over 50% of the subsidiary or joint venture. So, legally Pelican Landing Timeshare Ventures is not the same as Marriott Vacations Worldwide, even if they both have the same address. Marriott Vacations Worldwide is not a Defendant in the lawsuit. If we should win the lawsuit, Marriott Vacations Worldwide has no liability to us for any part of the judgement because it is not a Defendant. Only Pelican Landing has liability (ignoring Kersey Smoot). Take a look at the Special Warranty Deed which says that only Pelican Landing Timeshare Ventures transferred the property to Kersey Smoot.

I previously told the Board (and posted here) that Marriott Vacations Worldwide is the Property Manager for us, and as provided in paragraph 7 of the Management Contract re Fiduciary Duty it is provided, “The Management Company [i.e., MVW] shall act in a fiduciary capacity with respect to the proper protection of and the accounting for the Association’s assets. In this capacity, the Management Company shall deal at arm’s length with all third parties and shall serve the Association’s interests at all times . . .” It appears to be that Marriott Vacations Worldwide did not serve the Association's interest at all times by its involvement in, and/or its approval of the sale. That would provide a basis to amend the contract to add Marriott Vacations Worldwide to the Complaint alleging that its involvement constitutes breach of the Management Contract and therefor Marriott Vacations Worldwide must pay an amount (I suggested $50 million) for the breach of contract. I think that it is essential to name Marriott Vacations Worldwide as a Defendant. Without additional allegations in the Complaint, we lose a lot of our negotiating power. Why would the Defendants settle for anything less than a few dollars when the only allegation in the Complaint concerns the easements. Wouldn't you settle for a lot more if you were facing a Complaint that alleged breach of contract and fiduciary duty by Marriott Vacations Worldwide, and implied breach of fiduciary duty by not paying 72% of shared expenses and transfer of the property before the "deletion" was implemented (so no right to delete the property from the Master Declaration) by Pelican Landing Timeshare Ventures? Don't you think that trial lawyers should know the importance of alleging everything possible in the Complaint to make sure you have a strong negotiating position? Apparently, ours don't.

 

[Winthelawsuit]

I sent the below email to our Board on April 15 - - still no answer from our Board.

"A few questions have come to my mind while reading the Board's report this morning.

1. Looking ahead to the mediation, has the Board determined what it will accept to end the current litigation in the upcoming mediation or continue to the trial stage? My issue is that the Complaint only contains the "easement" issue requiring Association approval. If the mediator limits the mediation to that issue and pushes for settlement because on the undeveloped land transferred to Kersey Smoot there are no buildings, so there are no owners on the affected property, so consequently there are no easements. Essentially, saying that the Defendants are correct and our Association is wrong. Will the Complaint be amended to include what I suggested - - implied fiduciary obligations of continued payment of $2M of PLV to the Association; and that the "Deletion" from the Master Declaration was done AFTER the land was transferred to Kerry Smoot so it is invalid on its face - - or will a low ball offer be accepted? I urge that the Board make tentative decisions of what it will do under different scenarios in the mediation. I personally think that B&P law firm will want to settle.

2. The Management Agreement must be cancelled by August of this year or it will be extended for another 10 years. Has the Board made any decisions as to whether it will cancel, renew or amend the Management Agreement? At a minimum, I urge the Board to amend the Management Agreement so that it is valid for only one year and must be extended in writing in the future for any additional one year terms. The Association needs to look out for its interests and not MVW's interests. If MVW won't accept such an amendment, I urge the Board to cancel the Management Agreement. Time is running short in case there is a need to find a new Management company.

3. I remember that there is one Association Director who is an MVW/PLV appointed director. Since MVW's subsidiary PLV had declared that our condo/timeshare is "completely built out," is there a basis that such Director must relinquish being a Director of our Association, or is there a provision stating that the MVW Director appointment can continue to be a Director?"

 

[PerryKing]

It seems that the property wasn't a big seller. Aren't there two older buildings and two newer ones? It seems that sales were very sluggish and it would take them far too long to sell 10 buildings worth of unit weeks. They deemed there was more value form selling the land in a quick cash sale vs taking years and years to sell the whole resort as timeshare.

The resort is okay, but it isn't anything special. It isn't on the beach and access to the beach isn't ideal. This probably made it a hard resort to sell to perspective buyers.

Just a side note: I think the original plans for the Hyatt Coconut Plantation originally called for building a total of 12 Buildings, and that it was reduced to 10 when the developer gave up the right to build 12 buildings to just 10 buildings in exchange for being able to build 2 of the remaining 10 buildings with 6 stories instead of 4, thus give those two buildings with 2 extra stories and thus "with Ocean Views". Does anyone else remember that change in plans as I once heard? Or was it just a rumor?

And YES !, it appears that no MVW/PLV appointed director should still be on the Board of Directors of our Coconut Plantation Master Association especially at this critical point in our history and current legal situation.