Westgate Resorts, Ltd. v. Sussman
387 F. Supp. 3d 1318
M.D. Fla.2019Background
- Westgate Resorts sells deed-based timeshares; owners owe recurring maintenance fees and mortgages and transfers are subject to a strict Right of First Refusal in the Declaration.
- Mitchell R. Sussman, a California real-estate lawyer, marketed "timeshare exit" services: he sent form demand letters alleging fraud, instructed owners to stop paying, and recorded deeds (quitclaims) either back to resorts or to associates/third parties; many clients came via "exit companies."
- Westgate uniformly rejected Sussman’s resignation/deed methods, sent notices denying acceptance, recorded corrective deeds and non-acceptance notices, and in many cases initiated foreclosure or collection actions against owners.
- Discovery sanctions against Sussman resulted in certain facts being deemed admitted: among them, that Sussman directed owners to stop payments without investigating contracts, and that he solicited Florida counsel to record unilateral deeds based on false representations of Westgate’s acceptance.
- Westgate sued for tortious interference with contracts and violations of Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA); the court entered a preliminary injunction limiting Sussman’s practices and the case proceeded on cross-motions for summary judgment.
Issues
| Issue | Plaintiff's Argument (Westgate) | Defendant's Argument (Sussman) | Held |
|---|---|---|---|
| Whether directing owners to stop payments is tortious interference | Sussman intentionally induced owners to breach by instructing them to stop payments without review; conduct unjustified and caused damages | Sussman claimed agency/attorney privilege, litigation/Noerr immunity, and that owners were predisposed to breach | Court: Granted plaintiff summary judgment as to intentional, unjustified, non‑privileged interference by directing non‑payment (causation for many owners established); defenses rejected |
| Whether resignation, deed-to-associate, and deed-back methods tortiously interfered with contracts (and Right of First Refusal) | These methods induce nonpayment and bypass Westgate’s transfer rules (Right of First Refusal); some deeds recorded unilaterally based on false representations | Sussman argued acceptance can be inferred, claimed privileges/immunity, and disputed causation for some methods | Court: Deed-backs and cessation-of-payments found to support interference and causation for several owner victims; resignation and deed-to-associate lacked sufficient causation on summary judgment (triable issues remain) |
| Whether Sussman’s practices violate FDUTPA (deceptive/unfair acts in trade or commerce) | His business model and communications are objectively deceptive and likely to mislead reasonable consumers about being relieved of obligations | Sussman argued not trade/commerce, no solicitation, and various immunity defenses | Court: Granted plaintiff summary judgment on deceptive-practices element (practices were deceptive); causation and actual damages under FDUTPA remain contested and go to trial |
| Damages and causation quantification for interference and FDUTPA claims | Westgate’s expert quantified ~$3.84M in unpaid obligations tied to 411 owners | Sussman attacked causation and attribution; court found gaps in expert’s linkage and that not all damages were shown to be proximately caused by Sussman | Court: Refused to adopt expert’s total damages on summary judgment; damages and precise causation remain for trial |
Key Cases Cited
- Johnson Enters. of Jacksonville, Inc. v. FPL Grp., Inc., 162 F.3d 1290 (11th Cir. 1998) (elements of tortious interference with contractual relations)
- Celotex Corp. v. Catrett, 477 U.S. 317 (Sup. Ct. 1986) (summary judgment standard)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (Sup. Ct. 1986) (genuine dispute and reasonable jury standard at summary judgment)
- Scott v. Harris, 550 U.S. 372 (Sup. Ct. 2007) (court may disregard implausible factual narratives blatantly contradicted by record)
- Levin, Middlebrooks, Mabie, Thomas, Mayes & Mitchell, P.A. v. U.S. Fire Ins. Co., 639 So. 2d 606 (Fla. 1994) (Florida litigation privilege principles)