Scott v. Bluegreen Vacations Unlimited, Inc., 1:19-cv-01807

In June and August 2015 Raymond and Carla Scott purchased two timeshare estates from Bluegreen, paying $27,850 and $30,850.50 and receiving 20,000 and 25,000 annual "Vacation Points."
The Purchase Contracts/Trust Agreement describe Vacation Points as giving the opportunity to "use and enjoy" resort accommodations, state points are non-transferable, and include an express purchaser acknowledgment that the purchase is for personal use and "not for any investment potential."
Plaintiffs allege pre‑contract sales representations that points would increase in value, be saleable, and be bequeathable; they also allege those representations were false and that there is no viable secondary market.
Plaintiffs first attempted to redeem points after May 2017 and discovered limitations; they filed suit asserting violations of the Securities Act and the California Corporate Securities Law.
Defendants moved to dismiss, arguing the transactions were not securities and claims were time‑barred; the Court took judicial notice of the Purchase Contracts attached to the motion.
The Court held the Purchase Contracts are not securities, dismissed Counts I–III (including control‑person claims) with prejudice as to all defendants, and closed the case because amendment would be futile.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Purchase Contracts are "securities" (Counts I & III)	The contracts are "investment contracts" under Howey; points were sold as appreciating, saleable interests	These are consumer timeshare transactions: contracts disavow investment, points non‑transferable, purchasers bought for personal use	Not securities. Purchase Contracts purchased for personal use; Howey elements not met. Counts I and III dismissed with prejudice
Control‑person liability (Count II)	Certain defendants exercised control and are liable under securities laws	Defendants noted primary securities claims fail; some confusion about who is implicated	Dismissed. Derivative control claims fail because no underlying securities violation; Count II dismissed with prejudice
Timeliness/statute of repose	Plaintiffs invoke California's delayed discovery rule to avoid time bars	Defendants argue claims are time‑barred (statute of repose)	Not reached on the merits. Court found securities laws inapplicable and therefore did not resolve statute‑of‑limitations arguments

SEC v. W. J. Howey Co., 328 U.S. 293 (U.S. 1946) (establishes investment‑contract test for what constitutes a "security")
United Housing Foundation, Inc. v. Forman, 421 U.S. 837 (U.S. 1975) (distinguishes securities from purchases for personal use/consumption)
Warfield v. Alaniz, 569 F.3d 1015 (9th Cir. 2009) (Ninth Circuit articulation of the three‑part Howey test)
Salameh v. Tarsadia Hotel, 726 F.3d 1124 (9th Cir. 2013) (affirming dismissal where plaintiffs did not plead sale of a security)
Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standards: courts need plausible factual allegations)
Parrino v. FHP, Inc., 146 F.3d 699 (9th Cir. 1998) (incorporation‑by‑reference doctrine for documents attached to motions to dismiss)