Atty Canʼt Leave Fla. Timeshare-Exit Contract Suit
ByLaw360 (January 7, 2019, 5;33 PM EST) -- A Florida federal judge has denied a lawyer's bid to escape a suit claiming he participated in a firmʼs conspiracy to encourage timeshare owners to break their contracts with a resort company, ruling that he has a personal stake in the case but doesnʼt have the privilege to interfere with contracts. U.S. District Judge Gregory A. Presnell denied a motion by Mitchell
Reed Sussman of Mitchell Reed Sussman & Associates for summary judgment on Friday in the suit brought by timeshare resort company Orange Lake Country Club Inc. and its financing arm, Wilson Resort Finance LLC, against Reed Hein & Associates LLC, which goes by Timeshare Exit Team.
Judge Presnell ruled that Sussman wrongly claimed that he is merely a vendor acting as an agent for Orange Lake owners at a fixed fee of $500 per file, and therefore cannot claim the privilege of interfering with their timeshare contracts. “The court cannot reasonably conclude that an agency relationship existed between Sussman and Orange Lake owners,” Judge Presnell
wrote. “Even if Sussman had an agency relationship with Orange Lake owners, his privilege to interfere with their contracts was not absolute. The privilege afforded to an agent is not available where the agent acts solely with ulterior purposes and the advice is not in the principalʼs best interest.”
Indeed, the judge asserted, Sussman was aware that his form letters and timeshare resignation notices to Orange Lake were false because he knew that the resort company did not accept any of his exit strategies — and he went on to tell owners they had been successfully exited from their timeshare agreements. As a result, Orange Lake filed foreclosure actions against hundreds of owners, subjecting them to negative credit reporting consequences, the judge said. Sussman also cannot claim that Orange Lakeʼs conspiracy allegation against him fails because he is an agent for Timeshare Exit Team, according to Judge Presnell, who wrote that Florida courts recognizethe “personal stake” exception to the intracorporate conspiracy doctrine, which provides that an agentʼs acts are a corporationʼs act and that a corporation cannot conspire with itself.
Sussman submitted his summary judgment motion to the court on Oct. 4, arguing that he merely wrote "boilerplate" letters as an outside contractor and should not be included in the suit. He said he is one of many vendors hired by Timeshare Exit Team to assist in the firmʼs mission of “exiting” owners from the financial burdens that are part of timeshare ownership.
“The uncontroverted facts are that he is not an employee of TET, he does not share profits or losses with TET, he is one of no less than four outside counsel who have been hired by TET, along with a host of other quasi-legal transfer companies, all charged with the purpose of seeking relief for embattled timeshare owners,” the motion said. In addition, Sussman said, he is named only in the latest complaintʼs third count, for civil conspiracy to commit tortious interference with existing contracts and tortious interference with advantageous business relationships. But, he asserted, judgment should be entered for him on the third count because he is acting as an attorney in the best interest of timeshare owners and thus is not a stranger to the contracts they are hoping to exit.
Sussmanʼs own lawyers, Michael McGirney and Cory Chandler of Spector Gadon & Rosen LLP, moved Nov. 5 to withdraw as his
attorneys, asserting that “defense counsel and the defendants have irreconcilable differences," while acknowledging that Sussman
objected when they advised him of their plans to withdraw. Their withdrawal would not cause any hardship or delay, McGirney and
Chandler said.
However, Orange Lake urged the court on Nov. 13 to deny the two attorneys' request to withdraw, saying the pair have too much
unfinished business in court. McGirney and Chandler had represented Sussman since Orange Lake filed suit in August 2017, according to the resort company. Their Nov. 5 motion to withdraw would leave six unresolved issues, including the pending motion for summary
judgment and deficient discovery responses, Orange Lake said. But on Nov. 19, Magistrate Judge Daniel C. Irick endorsed an order
granting the lawyersʼ bid to withdraw and terminated them as counsel.
On Nov. 20, attorney Elizabeth Olivia Hueber of Michael L. Feinstein PA submitted Sussmanʼs reply in support of his motion for summary judgment. Orange Lakeʼs suit against Timeshare Exit Team in August 2017 accused it of scheming to interfere in the valid contracts between the timeshare resort developer and property owners. The complaint alleged that although Timeshare Exit Team presents itself as a “consumer protection group” that relieves owners of their obligations, the firm isnʼt actually helping people get out of a situation in which a company did something illegal.
Rather, the suit said, Timeshare Exit Team simply wants to divert the property ownersʼ money to itself instead of toward paying the annual maintenance fees, taxes or mortgage payments for their timeshares.