Law Firms

Judges refuse to toss suits claiming law firm ads interfered with timeshare contracts

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Federal judges in Tennessee and Florida have refused to completely dismiss lawsuits claiming two law firms sought to interfere with timeshare contracts through ads seeking clients who want to dump their timeshares.

Both suits were filed by Diamond Resorts International, a timeshare developer managing more than 420 membership resorts, according to Law360 stories here and here.

The Florida suit was filed against Orlando lawyer Austin Aaronson and his firm Aaronson, Austin. In a Jan. 26 ruling, U.S. District Judge Roy Dalton Jr. of Orlando tossed RICO and malicious prosecution claims by Diamond Resorts, but allowed claims for false advertising under the Lanham Act, tortious interference with contract, trade libel and deceptive trade practices.

Diamond Resorts had claimed Aaronson and his law firm solicited timeshare members in an advertising campaign that weaves a false narrative, causing timeshare members to stop contract payments and subjecting Diamond Resorts to baseless arbitration proceedings.

Aaronson had claimed his firm’s advertising was not false or misleading because it constituted opinion or puffery. Dalton said the issue could not be resolved at the pleading stage.

The Tennessee suit was filed against the Castle Law Group, its partner Judson Phillips and related entities and people. In a Jan. 24 decision, District Judge U.S. District Judge Aleta Trauger of Nashville denied a motion to dismiss by Sean Austin, a nonlawyer who was chief operations officer at the Castle Law Group, according to a Diamond Resorts press release.

The Tennessee suit claims the law firm promises timeshare owners relief from timeshare operations when those promises are not kept. Lured by the promises, timeshare owners stop making their contractual payments, the lawsuit alleges.

Austin responded that the defendants gave consumers accurate information. Trauger said Austin had raised a fact issue that can’t be determined in a motion to dismiss.

The Tennessee suit alleges interference with contract, interference with business relations, civil conspiracy, Lanham act violations, violation of Tennessee consumer law, and inducement of breach of contract.

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