LiMandri & Jonna LLP – Welk v. Aviara Trial Victory
LiMandri & Jonna LLP – Trial Victory
California Judge Rules that Timeshare Resort’s Rule Limiting the Number of Concurrent Reservations per week is “Reasonable”
Timeshare Interval Dispute/Breach of Contract
San Diego Superior Court
Verdict: Complete Defense
LiMandri & Jonna LLP is pleased to announce that it obtained a complete defense verdict for its client, Four Seasons Aviara, in a hard-fought case filed by Welk Resort Group, which sought millions of dollars in damage. The ruling was issued by Judge Robert P. Dalquist, following a two-week bench trial. Charles S. LiMandri was lead trial counsel for Four Seasons Aviara. The case arose after the Four Seasons Aviara Owners Association adopted a rule limiting the number of concurrent timeshare units that could be reserved at one time at the Four Seasons Aviara timeshare resort. The ruling resolves key issues of first impression in the timeshare resort industry.
Welk Resort Group—a large timeshare developer—bought more than 730 timeshare intervals in the Aviara timeshare resort. The Aviara CC&Rs required Welk to pay assessment fees and prohibited owners from profiting from renting timeshare intervals to others. Welk nonetheless began to rent out its timeshare intervals for profit in violation of the Aviara CC&Rs. Aviara had adopted a rule that limited the number of “concurrent” reservations that any owner can make to six per week. Consequently, Welk refused to pay the timeshare assessment fees and continued to use other timeshare intervals in a commercial manner, in violation of the Aviara CC&Rs. Welk subsequently sued Aviara, claiming that Aviara’s adoption of its rule violated Aviara’s governing documents, breached fiduciary duties, constituted fraud and “unfair competition,” and violated various statutes governing timeshare operations and common interest developments—including California’s Vacation Ownership and Timeshare Act of 2004 and the Davis-Stirling Act. Further, Welk claimed that it did not owe Aviara the assessment fees because the adoption and implementation of the Aviara rule was invalid and deprived it of its use of all its intervals.
Judge Dahlquist ruled completely in favor of Aviara, denying Welk all the relief they requested and ruling that Welk coercively withheld from Aviara over $1,000,000 in assessments. The Court also held that Aviara’s rule limiting timeshare interval reservations was reasonable, valid, and enforceable and was enacted in good faith for the benefit of all of Aviara’s members. Furthermore, the Court ruled that Welk had violated the Aviara CC&Rs and other written agreements by renting its Aviara timeshare intervals for profit and placing them on an international timeshare exchange. Additionally, the Court ruled that Welk failed to pay the assessments that were due on a majority of the Aviara intervals that it owned. Lastly, the Court held that the rest of Welk’s claims had fatal deficiencies, Welk had breached its contract with Aviara, and that Welk had failed to prove any harm.
LiMandri & Jonna LLP is led by a team of experienced and aggressive trial attorneys. The firm handles complex business litigation, real estate litigation, investment disputes, insurance disputes, and serious personal injury matters. To learn more about LiMandri & Jonna LLP, or to schedule a free consultation, please visit www.limandri.com.