Class Action lawsuit Filed against Diamond Resorts

[Jasonb334 Member Find all posts View Profile Close Jasonb334]

I guess that small group in Poipu was organized enough to actually get a case filed in the United States District Court for the District of Hawaii.

My assumption was that they would be suing the AOAO but this is actually against Diamond, Cloobeck and DRI employees on the board of the associations.

It's rewarding to see the little guy take on the cooperate giant and the group has one of the best law firms in the country representing them.
Girard Gibbs, LLP out of San Francisco has already won several cases against timeshare developers and joined forces with the law firm in Maui, MCKEON IMLAY MEHLING that filed the case.

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

I guess that small group in Poipu was organized enough to actually get a case filed in the United States District Court for the District of Hawaii.

My assumption was that they would be suing the AOAO but this is actually against Diamond, Cloobeck and DRI employees on the board of the associations.

It's rewarding to see the little guy take on the cooperate giant and the group has one of the best law firms in the country representing them.
Girard Gibbs, LLP out of San Francisco has already won several cases against timeshare developers and joined forces with the law firm in Maui, MCKEON IMLAY MEHLING that filed the case.

In my opinion, Gerard Gibbs is essentially a professional extortion company.

Their general mode of action is to file a lawsuit such as this. They are skilled at creating enough of an annoyance that the defendant is willing to pay a tidy sum to make them go away. They take a nice cut of the settlement, making a generous profit for their partners. They make sure that whoever signed as the plaintiff on the case is well compensated for their efforts as well.

The actual corrective action by the defendant is of little or no concern to them as they are not really in the case seeking "justice".

The end result of this will be a moderately sized legal bill, that will be passed on to thee owners at Point at Poipu in some fashion, which we will pay for through special assessments. Gerard Gibbs and the Hawaii attorneys will make out thieves. The plaintiffs will make out OK. And there will be no significant change in the end. Maybe DRI will graciously consent to not having any more than two positions on the Boards of Directors filled with people who are directly linked to DRI through current or past employment or by blood or marriage. Of course that will not prevent DRI from voting its blocks of shares for whatever candidates it likes.

****

That's how almost all of these suits play out. Oh, sure. You say this one will be different. That's exactly what was said about the RCI lawsuit - even had a TUGger as one of the plaintiffs who was committed to real reform and would only settle for "real reform". Right.

The rules of this game are set up to reward the attorneys, not to create justice. Because the frickin' attorneys write the rules and run the game.

I would like to believe this will be different, but over forty years of watching these types of things play out I don't give this any more than a 1% of chance of accomplishing anything other than lining the pockets of the attorneys, increasing fees charged to owners to cover the costs of the litigation, and in the best case, a slap on the wrist for DRI.

[JLB Please excuse me, I'm a Dick. Not a moron just a Dick Find all posts View Profile Close JLB]

There are normally only two happy people/parties in lawsuits.

[bnoble Senior Member Find all posts View Profile Close bnoble]

I don't give this any more than a 1% of chance

I see you have become something of an optimist...

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

What really needs to happen is for legislative bodies, Congress and the State legislatures, to tie approved legal fees to the degree to which injunctive relief obtained cures the problems cited in the complaint. Getting mindless trinkets for the class should count for zero in terms of legal fees being awarded. Also, if there is not meaningful discovery, as there was not in either RCI case, the court should not award legal fees because the attorneys have no valid basis upon which to determine how strong a case they had and therefore whether the settlement was reasonable. However, if part of what the plaintiffs insisted on the attorneys procuring was a membership list for the resort, that alone may be worth it, as it will then give them the tools to take down the DRI developer dictatorship at this resort.

[Jasonb334 Member Find all posts View Profile Close Jasonb334]

The end result of this will be a moderately sized legal bill, that will be passed on to thee owners at Point at Poipu in some fashion, which we will pay for through special assessments.

****Moderate.... I think it may be a pretty hefty sized legal bill but could be viewed as moderate considering the coffers of the company being sued. It's nice to see that the suit is directly against the company and it's employees versus the association, which will make it more difficult for the fee to be "passed on" to the owners at Poipu, but you do say "in some fashion" but regardless, it will come out of "profit" of the corporate animal.

The rules of this game are set up to reward the attorneys, not to create justice. Because the frickin' attorneys write the rules and run the game.

The attorneys do write the rules and run the game and are rewarded handsomely. But this may be a little different...ok I am being the optimist.

I would like to believe this will be different, but over forty years of watching these types of things play out I don't give this any more than a 1% of chance of accomplishing anything other than lining the pockets of the attorneys, increasing fees charged to owners to cover the costs of the litigation, and in the best case, a slap on the wrist for DRI.

Your 40 years of experience is what makes it great to read your posts and having your input on these timeshare issues.
But I think your 1% is underestimated. The huge factor is that for 39 of those 40 years, social media was either non-existent or did not have the power that it has now.

The fact that this case was filed and the group that is responsible for seeing it through to this point, is a direct result and example of power from social media and use of the internet. The Defendant will not be able to sustain a long drawn out court action due to the PR damage that will be spurred by the group and those new plaintiffs that come forward due to the announcement/notification of the Class Action. And now that the group has the knowledge of how to use social media, they will use it to their advantage and the news of this lawsuit will spread like wildfire. I have already found it on 4 websites and the postings are all dated in the past 2 days.

The existence of this case will need to be "disclosed" to all potential buyers and I'm sure people will make this point (disclosure) well known to officials that regulate timeshare sales, like the department of real estate in Hawaii and other states. If the sales manager of the resorts is made aware of the suit, he is also liable if he does not disclose a material issue or he too will be disciplined by the licensing agency in those states. Simply emailing them (the sales manager and sales staff) from their business cards will be proof that they are aware of the case.

The plaintiffs do have the leverage in this case "if" the attorneys allow them to use it to produce reform versus monetary gain. Obviously, monetary gain will be a given, but there is an opportunity to force changes through settlement or leverage during negotiations. The plaintiffs cannot forget who they represent which is "the class", and pennies on the dollar are not in the best interest of "the class". This is where the group and new members of the lawsuit need to monitor and keep hammering the issues that will make changes, "permanently" (well almost permanently), which as you know, is the separation of the voting of the Hawaii Collection which maintains the control of the board.

The case (in my opinion) is a failure if they do not break up the voting rights of the Collection by changing it to the Board of Directors of the actual resort. The votes will need to be divided evenly amongst the Board members and the settlement "must" include removing all DRI employees (except one as permitted under the bylaws) from the current board.

This is absolutely key!

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

The case (in my opinion) is a failure if they do not break up the voting rights of the Collection by changing it to the Board of Directors of the actual resort. The votes will need to be divided evenly amongst the Board members and the settlement "must" include removing all DRI employees (except one as permitted under the bylaws) from the current board.

I think that is an absolute pipe dream.

The Collection is a deeded owner at the resort. It pays all of the maintenance fees due on those deeds it owns. It also exercises voting rights with respect to those deeds. I would be very surprised if you can change the rules for one deeded owner without doing the same for all deeded owners.

*****

But for arguments sake let's say that suit were successful on that count - essentially making deeds owned by the Collection inferior to the deeds held by others. If I were on the side of that situation I would insist on receiving a reduction in fees I pay to compensate me for my loss of shareholder rights.

What it would come down to is that if I own 40% of the deeds at the resort but don't get 40% of the vote, there's no way that I accept that deal if I'm still on the hook for 40% of the maintenance fees.

[Jasonb334 Member Find all posts View Profile Close Jasonb334]

I think that is an absolute pipe dream.

The Collection is a deeded owner at the resort. It pays all of the maintenance fees due on those deeds it owns. It also exercises voting rights with respect to those deeds.

Only through the Board of Directors of the Collection that is comprised of DRI employees (majority of course).

*****

But for arguments sake let's say that suit were successful on that count - essentially making deeds owned by the Collection inferior to the deeds held by others. If I were on the side of that situation I would insist on receiving a reduction in fees I pay to compensate me for my loss of shareholder rights.

I agree, but the shareholders (individuals) really do not have "rights". If you get a chance read the Hawaii Collection documents and the "Club" documents. Amazing what those documents state and of course no one reads them at the time of purchase... basically all the rights (in my opinion) are held by BOD/developer/program operator and the lawsuit that was filed has this issue listed as one of the complaints/allegations.

Should be an interesting item to follow!

[singlemalt_18 Junior Member Find all posts View Profile Close singlemalt_18]

Maybe DRI will graciously consent to not having any more than two positions on the Boards of Directors filled with people who are directly linked to DRI through current or past employment or by blood or marriage. Of course that will not prevent DRI from voting its blocks of shares for whatever candidates it likes.

... and never mind that the board members are technically "elected" to serve. So would they then need to graciously consent to not run?

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

I agree, but the shareholders (individuals) really do not have "rights". If you get a chance read the Hawaii Collection documents and the "Club" documents. Amazing what those documents state and of course no one reads them at the time of purchase... basically all the rights (in my opinion) are held by BOD/developer/program operator and the lawsuit that was filed has this issue listed as one of the complaints/allegations.

Should be an interesting item to follow!

I have read them and I actually read them before I bought. Just as I read the documents for our first purchase (at Marriott Kauai Beach Club) during the rescind period and rescinded because of what I read.

I bought at Poipu resale and I obtained a copy of the documents before I started scouring for a resale. I knew what I was getting into.

The timeshare disclosure documents - going back to the mid-1990's were actually quite clear and explicit that there was little chance of owners ever effecting a change in management and that the developer was going to call the shots at the resort.

That's why much of this lawsuit essentially comes down to - "silly me. I really didn't read the documents at the time I purchased even though I signed a piece of paper that said I had. I know that was stupid of me. Please bail me out of my stupidity."

[drianswers Industry Representative Find all posts View Profile Close drianswers]

As a former employee of the company, I hope that they do badly in this. The costs are ridiculous and the way the owners have been treated throughout the process is totally unfair.

I sat in the briefing 12 months ago when this was explained to employees and we were told not to say a word to any customers about it.

[bebod Junior Member Find all posts View Profile Close bebod]

The timeshare disclosure documents - going back to the mid-1990's were actually quite

"The timeshare disclosure documents - going back to the mid-1990's were actually quite clear and explicit that there was little chance of owners ever effecting a change in management and that the developer was going to call the shots at the resort."


As I understand it those docs (Poipu) do provide for the owners list to be made available to candidates for the BOD for the purpose of soliciting proxies. The AOAO BOD, under DRI's control, has refused to release that list. If that list were made available at least the individual owners would have a fighting chance to determine who manages their resort.

[bebod Junior Member Find all posts View Profile Close bebod]

As a former employee of the company, I hope that they do badly in this. The costs are ridiculous and the way the owners have been treated throughout the process is totally unfair.

I sat in the briefing 12 months ago when this was explained to employees and we were told not to say a word to any customers about it.

In what capacity were you employed by DRI?

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

Personally, I always buy at member-controlled resorts, and that is one thing I look for in the beginning. The three resorts I own at currently in three countieis are all member-controlled. At one of them, the annual m/f and any special assessment are even required to be put to a vote by the membership.

Internal rules or contract terms are hardly decivise in a Consumer Protection lawsuit, as the rules or contract terms themselves may be what the court determines to be ''unfair or deceptive'' and thus stikes down.

I have read them and I actually read them before I bought. Just as I read the documents for our first purchase (at Marriott Kauai Beach Club) during the rescind period and rescinded because of what I read.

I bought at Poipu resale and I obtained a copy of the documents before I started scouring for a resale. I knew what I was getting into.

The timeshare disclosure documents - going back to the mid-1990's were actually quite clear and explicit that there was little chance of owners ever effecting a change in management and that the developer was going to call the shots at the resort.

That's why much of this lawsuit essentially comes down to - "silly me. I really didn't read the documents at the time I purchased even though I signed a piece of paper that said I had. I know that was stupid of me. Please bail me out of my stupidity."

[Jasonb334 Member Find all posts View Profile Close Jasonb334]

I have read them and I actually read them before I bought. Just as I read the documents for our first purchase (at Marriott Kauai Beach Club) during the rescind period and rescinded because of what I read.

I bought at Poipu resale and I obtained a copy of the documents before I started scouring for a resale. I knew what I was getting into.

The program documents for Poipu are quite simple and actually give some rights to the owner/member. I was referring to "The Club" documents and the "Hawaii Collection" documents. Have you actually read those? I have a copy if you would like me to email them to you. They are nothing like the program documents 14+ years ago.

That's why much of this lawsuit essentially comes down to - "silly me. I really didn't read the documents at the time I purchased even though I signed a piece of paper that said I had. I know that was stupid of me. Please bail me out of my stupidity."

T. R.... I don't think the lawsuit will come down to "silly me" or "shame on me for not doing my due diligence". The complaint touches on the subject but the real thrust deals with the manipulation that has gone on with the board and the issues at the resort. I really think it may come down to "shame on you" and "your actions are a blatant attempt to screw the consumer".
Based on your comments, I'm not sure you have read the actual complaint.
This is the only place that I could find a copy of the actual filing and the site has links to TS4MS so it's safe to include the link here

http://www.poipuowners.org/uploads/Lawsuit.pdf

Board members and ex-employees have jumped ship and based on the complaint and the rumors on the street, I can only speculate on which ship they jumped into.

It's probably better to let this be handled in a court of law instead of all of us playing Perry Mason and Judge Wapner on TS forums and you can always send me a pm.