Wyndham Vacation Ownership, Inc. et al v. The Montgomery Law Firm, LLC et al

Middle District of Florida, flmd-6:2018-cv-02121

MEMORANDUM in opposition re 127 Motion to Compel filed by Montgomery & Newcomb, LLC, M. Scott Montgomery, Esq., W. Todd Newcomb, Esq. Modified on 7/12/2019

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2 PageID 1989 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION WYNDHAM VACATION OWNERSHIP, INC.) a Delaware corporation; WYNDHAM) VACATION RESORTS, INC., a Delaware) corporation, WYNDHAM RESORT) DEVELOPMENT CORPORATION; an Oregon) Corporation; SHELL VACATIONS, LLC, an) Arizona limited liability company; SVC-WEST,) LLC, a California limited liability company;) SVC-AMERICANA, LLC, an Arizona limited) CIVIL ACTION NO. liability company; and SVC- HAWAII, LLC, a) Hawaii limited liability company,) 6:18-cv-02121-RBD-LRH Plaintiffs,) v.) THE MONTGOMERY LAW FIRM, LLC, a) Missouri limited liability company;) MONTGOMERY & NEWCOMB, LLC, a) LAWYER DEFENDANTS' BRIEF Missouri limited liability company; M. SCOTT) IN OPPOSITION TO MONTGOMERY, ESQ., an individual; W.) WYNDHAM'S FOURTH MOTION TODD NEWCOMB, ESQ., an individual; CLS,) TO COMPEL INC. d/b/a ATLAS VACATION REMEDIES) and also d/b/a PRINCIPAL TRANSFER) GROUP, a Missouri corporation; ATLAS) VACATION REMEDIES, LLC, a Missouri) limited liability company; PRINCIPAL) TRANSFER GROUP, LLC, a Missouri limited) liability company; DONNELLY SNELLEN, an) individual; JASON LEVI HEMINGWAY, an) individual; MUTUAL RELEASE) CORPORATION a/k/a 417 MRC LLC, a) Missouri limited liability company; DAN) CHUDY, an individual; MATTHEW TUCKER,) an individual; and CATALYST CONSULTING) FIRM LLC, a Missouri limited liability company,) Defendants.) 1 2 PageID 1990 I. The Court May Wish to Defer Ruling on the Pending Motion to Compel. The Defendants' have filed a Motion to Stay General Discovery, which ordinarily should take precedence over any consideration of Wyndham's Fourth Motion to Compel Discovery. (See Doc. 128, filed 7/1/2019)1. II. Wyndham Seeks Another Inequitable Fee Windfall. Wyndham's 136-page Fourth Motion is yet another burden that Wyndham has imposed on the Court. Many judges choose to handle clearly-defined disputes with a telephone call. If the Court wishes to utilize this effective procedure, obviously the Defendants have no objection. On the established Record, Wyndham hopes to exhaust the financial resources of its smaller opponents, and to "win a piece of it" -- so that Wyndham can then claim, without equity or apportionment, a grant of attorney's fees2. Fortunately, the provisions of Rule 37 (a)(5)(A) FRCP, and Rule 37(a)(5)(C) FRCP are to the contrary. Rule 37 (a)(5)(A) states: But the court must not order this payment if: (i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust. And, Rule 37(a)(5)(C) FRCP provides: 1 In response to the co-pending motion to stay, Wyndham has argued the non sequitur that the Court had previously ruled that general discovery was "open". (See Doc. 130, filed 7/11/2019). But, obviously such a ruling does not foreclose a motion to stay such "open" discovery – and, particularly (i) where stay is often granted in the 11th Circuit (citing 15 cases in the Florida federal courts); and (ii) where the reasons for such a stay have not been previously adjudicated in this case. 2 Thus far, nearly every paper filed by Wyndham includes the attempted intimidation of a request for attorney's fees. 2 2 PageID 1991 (c) If the Motion is Granted in Part and Denied in Part. If the motion is granted in part and denied in part, the court may issue any protective order authorized under Rule 26(c) and may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion.(Emphasis added). In point of fact, the Defendants objections are well-made, and should be sustained. III. Background of the Dispute – Wyndham's Continuing Attack on the Legal Profession. The Lawyer Defendants here (as well as lawyers in many jurisdictions) have filed suit against a plurality of "timeshare companies" (including Wyndham) alleging fraudulent sales practices. Specifically, the general industry practice has been alleged to be that, after inducing the presence of the "Prospect" with promises of a free meal, or other inducement, a group "meeting presentation" is held -- extolling the virtues of purchasing a timeshare. Then, the "Qualified Prospects" – i.e., attendees who have money to spend – are broken-out, and referred to an individual "Closer", in individual carrels. Upon information and belief, the remarks of these "Closers" are not recorded, scripted or otherwise monitored – i.e., the Closers are free to make any "off-the-record" promises, as they may find useful or necessary. The timeshare companies are aware that the Prospects are not represented by counsel at this point, and as laymen are likely unaware of the presence of an Integration Clause in the timeshare sales contract that they are signing. Of course, the "Closers" are experienced, timeshare-trained commissioned salesmen – and, their sole goal and mission is to induce the timeshare Purchaser to part-with $30-100K, or more. As a result, a huge number of lawsuits have been filed, nationally, against timeshare companies for these insidious practices. Accordingly, as in the present case, Wyndham and other timeshare pitch companies have filed a number of lawsuits against lawyers who will accept such "timeshare release" cases -- often on a contingent fee basis. Here, Wyndham's only "false advertising"-related count against the Lawyer 3 2 PageID 1992 Defendants is Count IV, which for so-called "contributory false advertising", which alleges – not that the lawyers themselves had falsely advertised – but rather, that the lawyers had accepted clients who had been "referred" by a timeshare release company that itself had purportedly committed "false advertising": 196. The Montgomery Law Defendants explicitly or implicitly encourages the false advertising because it accepts legal representation of the consumers deceived by the false advertising. Without the Montgomery Law Defendants' willingness to accept those consumers as clients, the TPE Defendants could not advertise what they do. A perhaps interesting theory – but, rift with significant "proximate cause" problems. One other obvious problem with Wyndham's speculative theory is that there are nearly one-half million lawyers in the United States, a substantial number of whom are available to handle timeshare fraud cases against Wyndham and other timeshare companies. IV. Wyndham's Requests Constitute Harassment. Wyndham's lack of equities aside, the technical questions here are whether Wyndham is entitled to receive: (1) all "Timeshare Owners" documents, including those that have nothing to do with Wyndham's alleged causes of action, for (a) tortious interference, and (2) false adverting, because they purportedly "show a pattern"3; and (2) a "privilege log" for every document in the Lawyer Defendants' files. Wyndham's full remarks on the abusive "privileged log" subject are: 3 Like probably everything else in the Universe that can be post hac deemed to have shown a "pattern" -- of one kind or another…. 4 2 PageID 1993 C. The Court Should Compel the Montgomery Defendants to Provide a Privilege Log and Produce the Documents as Specified in the Requests To the extent the Montgomery Defendants object because certain documents are privileged, the Court should compel them to produce a privilege log. See DE 80 at 7-8. Several of the Requests are designed to determine whether there is any attorney-client relationship between the Montgomery Defendants and their purported clients. Thus, a privilege log is necessary so that Wyndham can assess the viability of the claim4. Wyndham then argues something that is not in dispute: Moreover, Montgomery's response claims that his entities will allow for inspection and copying at the offices of such entities. The Requests specified that any electronic documents be produced in their native format on cd or dvd. Accordingly, any electronic files should be produced in that format. Fed. R. Civ. P. 34(b)(2)(E)(ii). (emphasis added). Obviously, the Lawyer Defendants do not object to producing any legitimate documents in the format in which they are kept in the ordinary course of business. V. Only Upon Being Forced, Does Wyndham (Albeit Belatedly) Define its Over-Reaching Request. In any event, and well after-the-fact, Wyndham defined the (albeit different) term "timeshare owners" – thus, in effect creating either (i) a new Request, or (ii) a Request that was defined for the first time on June 25th, as follows: "a timeshare owner is one with a timeshare contract". (See Email from Daniel Barsky, Esq. 6/25/2019 at 11:07 AM). 4i.e., Wyndham argues the abuse that: "Let's demand all of a lawyer's attorney-client privileged documents -- so that we can wrangle-out a privilege log, to determine whether they are privileged or not". 5 2 PageID 1994 In addition to being overly-broad, and defining a term different from the "Timeshare Owner" term-of- art used in the Requests, Wyndham's curt definition is also ambiguous. But, presumably it means that: (1) any "one" constituting (a) individual person(s), or (b) other entity; (2) who has (a) owned, or (b) does own; (3) a timeshare real estate interest, as set forth (a) in a contract (for redeemable "points" or real property, per se), and/or (b) in a filed deed; and (4) that has been (A) inherited, or (B) purchased; (5) from anyone, including a (a) timeshare company directly, or (b) on the secondary market, from (i) a timeshare company, or (ii) a person, or (iii) an intermediary brokerage entity; and (5) at any time – would qualify as a "timeshare owner". The Lawyer Defendants have adopted this as a working definition. In view thereof, the Defendants diligently served the following proper Supplemental Response(s) the next day on June 26th: Supplemental Response: More than a month after serving its Requests, Wyndham has defined the term "timeshare owner", which is not the term used in the above Request, as follows: "a timeshare owner is one with a timeshare contract". (See Email from Daniel Barsky, Esq. 6/25/2019 at 11:07 AM). 6 2 PageID 1995 Assuming arguendo that Wyndham also intends that this (albeit belated) definition should to be applied to the different term-of-art "Timeshare Owner" that is used in the Requests hereof, the following Supplemental Objection is made to the above Request asking for production of documents regarding a "Timeshare Owner" (a genus), who is not a "Wyndham Owner" (a species) (referred to hereinafter as a "non-Wyndham Owner"): Further objected to on the basis that Wyndham's Request above seeks documents that are unrelated to any dealings with a customer/purchaser of the Plaintiffs. Accordingly, does Wyndham inappropriately seek documents regarding irrelevant "non-Wyndham Owners". Thus, any such documents are beyond any legitimate scope of (i) relevancy to any party's claim or defense; and/or (ii) proportionality to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. (See Rule 26(b) FRCP). Specifically, Wyndham's Complaint charges the Defendant named above with (i) false advertising, and (ii) tortious interference – but only as to activities involving "Wyndham Owners". In contrast, Wyndham's newly-coined term "Timeshare Owners" does not appear anywhere in the Complaint. Accordingly, Wyndham cannot demonstrate that it is entitled to be protected against interference, if any, with the contracts of "non-Wyndham Owners" – for the seminal reason that Wyndham has no contract with such entities. Secondly, Wyndham cannot demonstrate that it has been damaged by any so-called "false advertising" directed to "non-Wyndham Owners" -- because, by definition, Wyndham has done no business with such persons. Accordingly, the present attempts by Wyndham to take discovery on Wyndham's manufactured, aberrant, and plainly irrelevant propositions constitutes discovery abuse and harassment, subjecting Wyndham to appropriate penalties and sanctions. Finally, Wyndham's attempt to take such general discovery before there has been any pleading on the lack of merit of Wyndham's Complaint, are inappropriate – because, after the Court renders a decision on the subject of personal jurisdiction of these Defendants, a pleading will be filed on the merits moving to dismiss the Complaint on the basis that: (1) the Court is without subject matter jurisdiction; (2) Wyndham lacks standing; (3) there is no case or controversy; and (4) Wyndham's Counts for false advertising must be dismissed; each under the holding of the governing case of Lexmark Intern. v. Static Control, 134 S. Ct. 1377 (2014), which holds, inter alia, that non-competitors (such as Wyndham, here) lack the required standing to sue. 7 2 PageID 1996 [Footnotes in Original, as follows:]] 1Unfortunately, and in order to proliferate paper-work and to create an unnecessary burden on the Defendants and the Court, Wyndham has served a plurality of identical Requests to Produce on the several Lawyer Defendants. Accordingly, one unified response is given in these Supplemental Reponses, thereby to include each of Defendants M&N LAW, MONTOGMERY LAW, M. SCOTT MOTNGOMERY, and W. TODD NEWCOMB. 2 The terms "Timeshare Owner" and "Timeshare Owner's" have been emphasized with both bold font and underline in each of Wyndham's Requests Nos. 1-22 hereof -- in order to demonstrate that the Supplemental Response given to each is not a generalized, trite or hackneyed expression, but rather is specific to the "Timeshare Owner" and "Timeshare Owner's" terms that are used in each of the proliferated Requests Nos. 1- 22. See, for example, Diehl v. Bank of Am. Corp., No. 3:09-cv-1220-J-25MCR, 2010 WL 3340565, at *3 n.4 (M.D. Fla. Aug. 23, 2010); see also Calderon v. Reederei Claus-Peter Offen GmbH & Co., No. 07-61022-CIV, 2008 WL 4194810, at *2 (S.D. Fla. Sept. 11, 2008). Thus, the Defendants' comprehensive Response is entirely justified. VI. The Court's Clarified Ruling is Instructive. In July 2nd, and after the filing of Wyndham's' precipitous Fourth Motion on June 27th, the Court clarified its prior rulings, as follows: ____________________________________________________________________________ Because there appears to be a bona fide dispute as to what the Discovery Order required Defendants to produce, and what the Discovery Order excepted as far as "non-Florida documents," the Court will take the opportunity to clarify. Defendants' specific objection to the request for production was to produce "non-Florida documents." See Doc. No. 87, at 8. Based on that objection, the Court ultimately ordered Defendants to produce responsive documents with the exception of "non-Florida documents." Id. at 11. The Court did not sustain an objection to production related to "non-Florida clients."6 See id. Accordingly, Defendants are required to respond to the requests for production as written, with the exception that Defendants shall not be required to produce non-Florida documents, which are documents related to their non-Florida customers who do not have, or did not have during the relevant period, timeshare interests in Florida. Stated differently, Defendants are required to produce customer files and documents related to (1) timeshare exit contracts entered into between Defendants and their clients in the state 8 2 PageID 1997 of Florida; as well as (2) customers of Defendants who currently have, or had/obtained during the limitations period applicable to this case, a timeshare interest in Florida, regardless of the customers' state of residence.7 [[The Court's Footnote 7]] 7 To be even more clear, this means Defendants must produce customer files and documents related to timeshare exit contracts they entered into with buyers or sellers who actually resided in Florida during the applicable limitations period, as well as documents related to customers who reside, for example, in Montana or Timbuktu, but obtained a timeshare interest in Florida during the applicable limitations period. And "timeshare interest in Florida" means that the property is located within the State of Florida. (Emphasis added (Doc. 129, filed 7/2/2019; pages 10-11). __________________________________________________________________________________ Stated differently, other, non-lawyer Defendants (who are brokers -- not lawyers – and, thus who are differently situated) have been required to produce customer files and documents related to: (1) timeshare exit contracts entered into between Defendants and their clients in the State of Florida; as well as (2) customers of Defendants who currently have, or had/obtained during the limitations period applicable to this case, a timeshare interest located in Florida, regardless of the customers' state of residence. (Doc. 129, filed 7/2/2019; page 10). But, non-Florida documents were not required to be produced. And, by the same limiting logic, non-Wyndham documents should not be required here. VII. Wyndham's Requests are not Proper. Many of Wyndham's Requests directly and overtly seek production of attorney-client privileged documents. Wyndham's strategy is improper. Wyndham knew, full-well that when it asked 9 2 PageID 1998 for "Timeshare Owner" documents, that it was asking for virtually every document in the Lawyer Defendants' files – a prejudicial result which the Court has previously excluded by inference. Moreover, Wyndham gives no rational explanation why these "non-Wyndham" documents supposedly would have any relevancy to Wyndham's alleged causes of action for (i) tortious interference with Wyndham's customers, or (ii) false advertising affecting Wyndham's customers. VIII. Wyndham's Case Law is Inapposite. Wyndham misstates the facts of its cited case of ADT LLC v. Vivint, Inc., 2017 WL 5640723 (S.D. Fla. Oct. 4, 2017). There, the defendant Vivint had supposedly given sales pitches to customers - - at their door -- that falsely implied a connection with ADT. Thus, Plaintiff ADT sued for trademark infringement -- not false advertising, as here. ADT LLC v. Vivint, Inc., No. 17-CV-80432, 2017 WL 5640725 (S.D. Fla. Aug. 3, 2017). Yet further, ADT had alleged (i) a Lanham Act count, which does not provide for "punitive damages", and (ii) an unfair competition count, that does permit a claim for punitive damages. Wyndham argues to this Court that the ADT case is pertinent, because there the judge found that the sought "sales pitch documents" would "show intent for its punitive damage claim" – i.e., the unfair competition count. (Doc 127, page 11). Here, Wyndham does not allege an unfair competition count. And, Wyndham's Lanham Act count against the Lawyer Defendants cannot and does not request punitive damages. Wherefore, the ADT case is not in point. To reiterate, in the present case Wyndham does not sue for trademark infringement. Instead, the only "false advertising" count against the Lawyer Defendants is a "contributory false advertising" count (Count IV) (Doc. 1. file 12/10/2018; pages 53 et seq.). Moreover, Wyndham does not allege that the 10 2 PageID 1999 Lawyer Defendants had made the alleged "false sales pitches", but rather injects a post hoc ergo propter hoc "reach" that is designed to destroy the Practice of Law in this country: 196. The Montgomery Law Defendants explicitly or implicitly encourages the false advertising because it accepts legal representation of the consumers deceived by the false advertising. Without the Montgomery Law Defendants' willingness to accept those consumers as clients, the TPE Defendants could not advertise what they do. Accordingly, the exact same destructive argument could be leveled against any lawyer, who represents any client, in any case or controversy5. Conclusion. Wyndham's Fourth Motion to Compel is erroneous and should be denied out-of-hand. And, the same are respectfully solicited. Respectfully submitted this 11st day of July, 2019, /s/ Robert M. Ward Coleman W. Watson Robert M. Ward The Plaza (Admitted Pro Haec Vice) 189 S. Orange Avenue, Suite 810 3455 Peachtree Road NE, Floor 5 Orlando, FL 32801 Atlanta, GA 30326 Telephone: (404) 474-0592 Telephone: (404) 606-6480 Facsimile: (404) 965-3750 Facsimile: (404)606-6480 coleman@watsonllp.com rward@bmwiplaw.com Attorneys for Some of the Defendants /s/ Robert M. Ward Attorney for Some of the Defendants 5By way of illustration, it could just as easily be argued that, but-for the willingness of lawyers to defend it, no timeshare company would risk promulgating fraudulent timeshare sales pitches to members of the Public. 11 2 PageID 2000 CERTIFICATE OF SERVICE I do hereby certify that a true and correct copy of the foregoing was filed on the date set forth hereon electronically via CM/ECF in the United States District Court for the Middle District of Florida, with notice and copy of same being electronically served by the Court upon all counsel of record. /s/ Robert M. Ward Attorney for Some of the Defendants 12