Class Action lawsuit Filed against Diamond Resorts

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

They are also going to assume the expense of the defaults ($4M) as they are also collecting the deeds on those intervals.

Wow!

That sounds like an exit strategy. It seems like a fair one; pay nothing to get back something someone paid $25,000 for, so they can sell it again.

[Jasonb334 Member Find all posts View Profile Close Jasonb334]

From the settlement:


Translated out of legal talk - they had mediation sessions, in which Diamond pretty much established that the plaintiff's case was pretty weak. Plaintiff's then had an opportunity to conduct additional discovery to investigate and check the accuracy of what DRI said in the mediation. After conducting the additional discovery, plaintiffs concluded that DRI's defense was solid enough that it wasn't worth continuing their efforts.

Not sure where you get that translation from the prior post. The only thing that is correct on your comment above is that they had mediation sessions. Other than that I do not read anywhere that the Plaintiff's case was pretty weak and DRI's defense was solid. The real translation is that they concluded with all the delays and tactics in our legal system it would take years to litigate. IMHO, the plaintiffs were not fully informed or maybe they just weren't the best plaintiffs to move the case forward.

So they got DRI to agree to some changes which are basically burrs under the saddle.

Small burrs at best!

And there is no structural change that would dilute in any significant manner DRI's ability to dominate the resort HOA Board of Directors via it's sheer voting power.

Yeah - there are now procedures that will inhibit DRI's ability to sanitize and limit owner communications. I'm not sure what the practical effect is when DRI controls nearly 50% of the voting power.

Practical effect is a joke especially in light of the fact that they do control more than 50% of the voting.

[Jasonb334 Member Find all posts View Profile Close Jasonb334]

Wow!

That sounds like an exit strategy. It seems like a fair one; pay nothing to get back something someone paid $25,000 for, so they can sell it again.

No JLB, it's even better than that. Some owners actually were convinced to pay the assessment as part of an agreement so DRI would take their deed off their hands. Kiss that $25K goodbye!

[Jasonb334 Member Find all posts View Profile Close Jasonb334]

I think that when the facts came out there was not much to the lawsuit.

The facts NEVER came out.....unfortunately it was settled in mediation before discovery!

As angry as the owners were, they would not have let up if there was any type of opening for them to stick it to DRI. What did they get in this agreement? Not much at all. That's because in my opinion all they had was anger with very little substance. They were not being denied anything they were entitled to and believe me if they were or there was something DRI was doing wrong, they would have stuck it to them.

Unfortunately a lot of the initial angry owners were either refunded money for their deed or they were considered to be to aggressive to represent the Class by the attorneys.
In the long run all the came out are some minor improvements to the structure, restructured payment arrangements, some needed oversight, and some big bucks to the attorneys.

If you believe there was no wrongdoing, why would DRI agree to pay out close to $1M (not including what they had to pay to their own attorneys) when they could have cleared their name and recouped attorney fees.

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

If you believe there was no wrongdoing, why would DRI agree to pay out close to $1M (not including what they had to pay to their own attorneys) when they could have cleared their name and recouped attorney fees.

Corporations pay out money to clear nuisance lawsuits all of the time. If you're not aware of that and think that confers legitimacy on a lawsuit - well, I don't really know what to say.

Also they couldn't recoup legal fees. When you defend yourself, you eat the costs. Recovery of attorney fees is allowed only in situations where specifically allowed by statute, and this isn't one of them.

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

The facts NEVER came out.....unfortunately it was settled in mediation before discovery!

And that is also not true. It was settled after mediation and discovery.

Mediation was held, and the plaintiffs did post-mediation discovery. They dropped the suit after doing that discovery. The strong implication is that after doing discovery the plaintiffs realized they didn't have much of a case.

[Jasonb334 Member Find all posts View Profile Close Jasonb334]

Corporations pay out money to clear nuisance lawsuits all of the time. If you're not aware of that and think that confers legitimacy on a lawsuit - well, I don't really know what to say.

No I wouldn't think that shelling out $1M confers the legitimacy and paying out money to clear lawsuits happens everyday. But since they have agreed to make changes doesn't that make the lawsuit legitimate and necessary considering nothing (big or small) would be changed without it?

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

It is actually more of a takeover strategy, getting DRI over 50% control so they can screw the members at their leisure, and not have to worry about rigging the elections like they did in the past.

Wow!

That sounds like an exit strategy. It seems like a fair one; pay nothing to get back something someone paid $25,000 for, so they can sell it again.

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

Wonder how much the attorneys got paid? In the RCI class action lawsuit, RCI essentially paid a wad of money to the class action attorneys, buying them off, to make the lawsuit go away, while giving nothing at all meaningful to the plainiff class. I suspect that might be part of the chemistry here, although it appears that the plaintiff class did get a bit more in this lawsuit than in the RCI one.

One major tort reform that I would favor is for class actions tying the legal fees that are approved to real changes that are achieved that benefit the plaintiff class, not the stupid trinkets that are the typical relief obtained. Too many class action attorneys only pursue these things until they get to the point that they can collect a big fee, and then they grab it and cut and run, and defendants know that.

From what is presented here the ''post mediation discovery'' was apparently limited to certain items, not full discovery. Also, to effectively represent your side in mediation, it is almost essential to have already done discovery by then.

And that is also not true. It was settled after mediation and discovery.

Mediation was held, and the plaintiffs did post-mediation discovery. They dropped the suit after doing that discovery. The strong implication is that after doing discovery the plaintiffs realized they didn't have much of a case.

[Jasonb334 Member Find all posts View Profile Close Jasonb334]

Wonder how much the attorneys got paid?
In the RCI class action lawsuit, RCI essentially paid a wad of money to the class action attorneys, buying them off, to make the lawsuit go away, while giving nothing at all meaningful to the plainiff class. I suspect that might be part of the chemistry here, although it appears that the plaintiff class did get a bit more in this lawsuit than in the RCI one.

It appears that the attorneys will collect somewhere close to $860,000. The agreed upon settlement is not to exceed $865,000 of which 5 class reps will receive $1,000 each.

Too many class action attorneys only pursue these things until they get to the point that they can collect a big fee, and then they grab it and cut and run, and defendants know that.

IMHO it looks like that is the case with this one. The attorneys had the leverage to expose DRI and get paid along the way but it looks like they took the easy way out and off to the next one.

From what is presented here the ''post mediation discovery'' was apparently limited to certain items, not full discovery.

Discovery was limited at best. I seriously doubt DRI turned over anything to the plaintiffs counsel and there was never a motion filed to obtain documentation for discovery. It appears that defendants counsel made claims that they have a legal challenge to every allegation (which is normal) and the plaintiffs counsel elected to sway the plaintiffs to cut and run. It would be nice to know if the plaintiffs were actually in the mediation sessions and not just the plaintiff's counsel. The plaintiffs are receiving $1,000 each which does not seem like it would be fair compensation if they actually attended the mediation in "San Francisco" on two different dates, regardless if their expenses were paid. And that does not even include any time that the plaintiffs spent after mediation consulting with counsel. My "guess" is that they were not present...... Not sure the legality on that one.

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

No I wouldn't think that shelling out $1M confers the legitimacy and paying out money to clear lawsuits happens everyday. But since they have agreed to make changes doesn't that make the lawsuit legitimate and necessary considering nothing (big or small) would be changed without it?

What I find quite intriguing is your apparent surprise that it turned out this way.

As to attorney's getting a cut and running - so what else is new?

But, I take the perspective that the attorneys try to cut the deal at the point where they perceive they will get the biggest return for the time they've invested. In practical terms, that means that if it looks as if their clients have a good case, they either push for a big early settlement or they keep the case moving along so that they can continue to rack up fees that will ultimately recover when the case settles.

The only time that class action attorneys push for a limited or modest settlement early in the case is when they don't believe the case is strong enough to justify keeping it alive. That's when they push for an early settlement so they can recover something for their efforts, instead of going to trial where they figure they going to lose. That's what it looks like happened in this situation.

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

Wrong! Class action attorneys are known for taking the easiest out they can. If there is any chance of losing, and in any lawsuit, especially one that goes to a jury, there is always that chance even if slim, then knowing they will get a fat fee even if they leave potentially bigger fees on the table, at least allows them to know they will get the fee, while fighting it all the way out carries risk of more of their time and resources involved and no fee at all. It does not take a big risk of that to incentiivize them to cave.

IMHO the only way to make class action lawyers honest is to base fees on the degree to which they actually changed the practices complained of in the complaint. Obtaining meaningless trinkets for the class in a sellout / settlement as in the RCI class action should only net them meaningless trinkets in terms of legal fees.

I also beleive that when class action lawyers sell out their clients in such cut and run ''settlements'' without meaningful discovery, then the clients should file ethics complaints with the appropriate state bar. There is simply no way that attorneys can competently evaluate a case until they have had full discovery. In the RCI case, they caved without any discovery at all. I would love to see an organized effort to get ethics complaints filed against these class action attorneys.

What I find quite intriguing is your apparent surprise that it turned out this way.

The only time that class action attorneys push for a limited or modest settlement early in the case is when they don't believe the case is strong enough to justify keeping it alive. That's when they push for an early settlement so they can recover something for their efforts, instead of going to trial where they figure they going to lose. That's what it looks like happened in this situation.

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

Wrong! Class action attorneys are known for taking the easiest out they can. If there is any chance of losing, and in any lawsuit, especially one that goes to a jury, there is always that chance even if slim, then knowing they will get a fat fee even if they leave potentially bigger fees on the table, at least allows them to know they will get the fee, while fighting it all the way out carries risk of more of their time and resources involved and no fee at all. It does not take a big risk of that to incentiivize them to cave.

I think you are wrong. In my experience, and in the experience of the attorneys with whom I work who actually defend class action cases, class action attorneys are very well known for playing the case as long as they can, up to the point where they don't push the defendant so far that the case actually goes to trial.

Generally neither the defendant nor the plaintiff wants the case to go to actually go to trial, because the risks are too great on either side. When and where settlement occurs generally depends on the positions of the parties. And competent class action counsel never settles early if they have a good case because it's so easy to milk the case for fees. The only time settlement happens early is when plaintiffs have a good case is when the defendant knows they are in weak position and put forward an extremely generous offer (which I have seen happen on a number of occasions).

That, obviously, was not the case here. But in the case at hand, from what I can determine from the information available, this looks more like a case of class action attorneys bailing early because they perceived that the defendants were quite ready to litigate the case all the way if they didn't cut and run.

****

You, obviously, have different experiences so this is just a difference of opinion between us. While I respect your experience as an attorney, I will place more weight on the comments and opinions of attorneys with whom I have a professional working relationship and who make their livings defending public action and class action lawsuits, as well as my personal experiences on such cases when plaintiffs attorneys have consistently had no interest in any kind of substantive settlement bargaining until after discovery was completed and trial preparations were beginning.

[Jasonb334 Member Find all posts View Profile Close Jasonb334]

I will say this with a lot of confidence "there is no way in hell that DRI wanted this to go to trial"
There is no way in hell that they wanted to risk the board member that was intimidated (as referenced in the complaint) taking the stand or their former employees that cut and run when the sh9t was getting thick. They didn't even do depositions yet and that alone would scare the sh9t out of DRI (the defendant) and the plaintiffs had absolutely nothing to lose during that process.

"What I find quite intriguing is your apparent surprise that it turned out this way."

You probably have me on that statement. But I will qualify it by saying that I "strongly" believe that if they had stronger Class reps, the outcome would have produced more meaningful concessions. Unfortunately the strongest ones were not selected because some of them were too vocal and the Defendant's counsel would have played that against them and from what I heard from a reliable source, some of these stronger reps had received documented inside information that would have compromised the source.

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

I Don't Think Soo.

I will say this with a lot of confidence "there is no way in hell that DRI wanted this to go to trial"
There is no way in hell that they wanted to risk the board member that was intimidated (as referenced in the complaint) taking the stand or their former employees that cut and run when the sh9t was getting thick. They didn't even do depositions yet and that alone would scare the sh9t out of DRI (the defendant) and the plaintiffs had absolutely nothing to lose during that process.

"What I find quite intriguing is your apparent surprise that it turned out this way."

You probably have me on that statement. But I will qualify it by saying that I "strongly" believe that if they had stronger Class reps, the outcome would have produced more meaningful concessions. Unfortunately the strongest ones were not selected because some of them were too vocal and the Defendant's counsel would have played that against them and from what I heard from a reliable source, some of these stronger reps had received documented inside information that would have compromised the source.

I am sorry, but I have to disagree with your point of view. DRI must have had a strong enough defense to answer the owners. The facts would have been the facts. If during discovery there was that much evidence to support the owners then they would have gone for it. I don't think there was anything more but lots of allegations and that's it.