Diamond May Continue Litigation Seeking to Hold Schroeter Goldmark Bender Liable for Preying on Timeshare Owners
MAR. 15, 2021 (LAS VEGAS, Nev.) – Diamond Resorts®, a global leader in the hospitality, vacation ownership and entertainment industries, announces another legal victory in Diamond v. Timeshare Exit Team (formerly known as Reed Hein), Schroeter, Goldmark & Bender P.S. (“SGB”), and attorney Mitchell Reed Sussman. A U.S. District Court Judge has denied SGB’s motion to dismiss the lawsuit for false advertising under the Lanham Act, tortious interference, numerous violations of Nevada Deceptive and Unfair Trade Practices Act and conspiracy. The lawsuit alleges that the defendants use false and misleading advertising to induce timeshare owners to stop making payments on their timeshare contracts, while charging the unsuspecting victims thousands (and sometimes tens of thousands) of dollars in upfront fees in exchange for no legitimate service.
Timeshare Exit Team falsely presents a “legal” solution to cancel a timeshare, a deception furthered by the use of law firm SGB to send perfunctory representation letters to falsely suggest active involvement of a licensed attorney. Rather, as Diamond alleges, Timeshare Exit Team’s exit services amount to nothing more than instructing timeshare owners to cease making payments leading to foreclosure or loan default, damaging the owners’ credit – hardly a solution worth the many thousands of dollars of fees these defendants charge for it. SGB pointed to these token letters claiming they amounted to protected activity for which it could not be sued.
The Court disagreed, finding first that Nevada’s Anti-Strategic Lawsuit Against Public Participation (anti-SLAPP) statute does not apply to Diamond’s Lanham Act claim. Then the Court found that SGB did not show that Diamond’s state law claims attacked “good faith” communication in furtherance of a protected right. Indeed, the Court noted that SGB “did not state that each (or even any) of the representation letters were sent in anticipation of litigation…” Finally, the Court concluded that Diamond has a probability of prevailing on SGB’s litigation privilege defense because “Diamond presented prima facie evidence that no litigation was anticipated or under serious contemplation by the owners or SGB on the owners’ behalf…”
“We’re unfortunately seeing a significant rise in the number of exit company scams that are preying on timeshare owners,” said Mike Flaskey, CEO of Diamond Resorts. “Our top priority is protecting our members from unscrupulous companies who try to take advantage of them.”
Diamond Resorts reminds its owners that Attorneys General are also warning consumers and working to stop the deceptive acts of these companies. In addition to Washington Attorney General Bob Ferguson’s lawsuit against Timeshare Exit Team, Missouri Attorney General Eric Schmitt filed two separate lawsuits against timeshare exit companies. Numerous other agencies have also warned consumers about timeshare cancellation companies including the Better Business Bureau (BBB).
Diamond Resorts encourages timeshare owners who may be interested in adjusting their contracts to contact their developer for options. To learn more about red flags and report possible fraudulent third-party exit activity, visit TimeshareCancellationAwareness.com or responsibleexit.com.
About Diamond Resorts
Diamond Resorts® offers destinations, events and experiences to help members make a habit of breaking from the routine. From unforgettable getaways to exclusive concert series to VIP receptions and dinners, members turn to Diamond to recharge, reconnect and remind each other what matters most. Our focus on quality resorts, customer service and flexibility means members can return to a favorite resort, book a cruise to explore new countries or attend a once-in-a-lifetime event with the same level of confidence and anticipation. With access to a world of entertainment and activities, a Diamond membership ensures that people are always looking forward to vacation.
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