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Monique Crete and David Giustiniani v. Resort Condominiums International

February 14, 2011

MONIQUE CRETE AND DAVID GIUSTINIANI INDIVIDUALLY, AND FOR ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
RESORT CONDOMINIUMS INTERNATIONAL, LLC;
AND FIA CARD SERVICES, N.A., DEFENDANTS.



The opinion of the court was delivered by: Sheridan, U.S.D.J.

NOT FOR PUBLICATION

OPINION

SHERIDAN, U.S.D.J.

This matter involves four parties: Plaintiff Monique Crete ("Ms. Crete") and Plaintiff David Giustiniani ("Mr. Giustiniani") (collectively, "Plaintiffs"), and Defendant Resort Condominiums International, LLC ("RCI") and Defendant FIA Card Services, N.A. ("FIA") (collectively, "Defendants"). This matter comes before the Court on two motions: (1) RCI's motion to dismiss, or alternatively, to compel joinder of Lifestyles Holidays Vacation Club Management, S.A. ("LHVC") ("RCI's Motion"); and (2) FIA's motion to dismiss ("FIA's Motion"). On April 22, 2010, Plaintiffs filed a second amended class action complaint ("Plaintiffs' Second Amended Complaint").*fn1 Plaintiffs' Second Amended Complaint sets forth four causes of action: (1) a violation of the New Jersey Consumer Fraud Act (the "NJCFA"); (2) unjust enrichment; (3) fraud;*fn2 and (4) a violation of RICO (at 18 U.S.C. § 1962(c)).*fn3 For the reasons set forth below, this Court grants RCI's Motion and grants FIA's Motion.

I. Statement of the Facts

Plaintiffs set forth the following allegations in Plaintiffs' Second Amended Complaint. Ms. Crete is an individual residing in Vermont and is a customer of both RCI and LHVC. Mr. Giustiniani is an individual residing in New York and is a customer of RCI, LHVC, and FIA.*fn4

RCI is a limited liability company and maintains its principal place of business in New Jersey. RCI is a "timeshare organizer" and provides services to millions of members. These members currently have access to approximately 3,700 vacation resorts, including six Dominican Republic vacation resorts operated under LHVC. FIA is a wholly-owned subsidiary of NB Holdings Corp. of Bank of America Corporation, and maintains its principal headquarters in Delaware. FIA maintains a partnership with RCI. Under this partnership agreement, FIA provides financing assistance to RCI's customers through co-branded credit cards.

Plaintiffs generally contend that RCI, FIA, and LHVC "clearly act[ed] in concert" in convincing Ms. Crete and Mr. Giustiniani to purchase LHVC memberships (the "Memberships"). Plaintiffs allege that FIA "co-brands" credit cards with RCI for customers to use at LHVC-operated facilities. LHVC salesmen promote these co-branded credit cards specifically for the financing of customers' purchases of the Memberships. Furthermore, LHVC markets LHVC resorts as RCI-affiliated resorts that maintain access to RCI's networks and perks. According to Plaintiffs, RCI benefits from listing LHVC resorts as vacation options for RCI members. In addition, Plaintiffs maintain that RCI benefits from the significant profits that RCI derives from Membership fees that LHVC collects from members.

Ms. Crete's Allegations Against RCI and FIA

In April of 2008, Ms. Crete traveled to a LHVC-affiliated resort in the Dominican Republic. At one point during Ms.Crete's stay in the Dominican Republic, various LHVC salesmen induced Ms. Crete to purchase a Membership by falsely making statements regarding: (1) availability; (2) customer service; (3) guarantees regarding prices and accomodations; (4) amenities and activities; (5) takeover of timeshares; (6) the opportunity to turn a profit; and (7) the refund policy. One of these LHVC salesmen promised Ms. Crete that if Ms. Crete purchased a Membership, Ms. Crete would be able to speak regularly and quickly with Ms. Crete's own personal representative.

Moreover, according to Ms. Crete, this same LHVC salesman promised Ms. Crete that purchasing a Membership would provide Ms. Crete with easy access to an entire network of RCI-supported resorts. This same LHVC salesman assured Ms. Crete that the Membership could be resold, and that Ms. Crete could actually make money on such a sale. Furthermore, the LHVC salesman reassured Ms. Crete that -- at any point over the following year -- Ms. Crete could cancel the plan if she so desired. The LHVC salesman also convinced Ms. Crete to purchase the Membership by offering to take over Ms. Crete's existing timeshare, pay the maintenance fees on this existing timeshare, and resell Ms. Crete's existing timeshare.

Shortly after Ms. Crete returned home, Ms. Crete sent an e-mail to Ms. Crete's designated LHVC representative requesting that a friend be able to use Ms. Crete's Membership for an upcoming vacation. The LHVC representative did not respond to Ms. Crete's e-mail for three days, however, at which point Ms. Crete's friend was no longer able to make use of Ms. Crete's Membership.

In June of 2008, Ms. Crete herself sought to utilize her Membership in Scottsdale, Arizona. Ms. Crete, however, was denied access to any one or two bedroom apartments. Instead, Ms. Crete was offered access to a villa which cost three times the amount Ms. Crete would have paid for a two bedroom apartment. At the same time, Ms. Crete e-mailed her designated LHVC representative in order to request access to a resort in Hawaii for the end of October of 2008. According to Ms. Crete, no representative from LHVC ever responded to Ms. Crete's e-mail request.

Later, Ms. Crete questioned LHVC on whether LHVC would rent out Ms. Crete's Membership access. The LHVC sales representative with whom Ms. Crete spoke claimed that LHVC would not perform such an action. The sales representative stated that Ms. Crete was herself responsible for renting out her Membership.

In September of 2008, Ms. Crete decided to cancel her Membership. LHVC refused to cancel Ms. Crete's Membership, however, and instead informed Ms. Crete that Ms. Crete had made "too much use" of Ms. Crete's Membership to be permitted a refund. The LHVC sales representative stated that Ms. Crete's only option for disposing of Ms. Crete's Membership was to place the Membership in the "resale program," but that the LHVC sales representative was unaware of any customer who had ever successfully resold his/her Membership through this resale program.

According to Ms. Crete, LHVC has forced Ms. Crete to pay the full amount of Ms. Crete's contract.

Mr. Giustiniani's Allegations Against RCI and FIA

In October of 2008, Mr. Giustiniani spent time at a LHVC resort in the Dominican Republic while participating in a RCI-administered timeshare exchange program. At one point during this vacation, various LHVC salesmen induced Mr. Giustiniani to purchase a Membership by falsely making statements regarding: (1) availability; (2) customer service; (3) guarantees regarding prices and accomodations; (4) amenities and activities; (5) takeover of timeshares; (6) the opportunity to turn a profit; and (7) the refund policy. Mr. Giustiniani ultimately decided to purchase a Membership primarily because of a LHVC sales representative's promise that LHVC would take over Mr. Giustiniani's current timeshare in New York and assume all maintenance fees associated with this New York timeshare. The LHVC sales representative assured Mr. Giustiniani that Mr. Giustiniani would have easy access to LHVC villas (and RCI-affiliated resorts), would not need to book these villas and resorts far in advance, and there would be an unlimited availability of these villas and resorts.

Moreover, the LHVC sales representative assured Mr. Giustiniani that Mr. Giustiniani would be able to speak regularly and quickly with a personal LHVC representative. In addition, the LHVC sales representative indicated that Mr. Giustiniani could profit from his LHVC Membership by renting out use of his LHVC Membership to family, friends, and even strangers. The LHVC sales representative further stated that Mr. Giustiniani would be able to place his timeshare into a resale program and the fees that Mr. Giustiniani paid would be completely refunded if Mr. Giustiniani was dissatisfied with LHVC's services. After Mr. Giustiniani decided to purchase a Membership, the LHVC salesman checked Mr. Giustiniani's credit rating and registered Mr. Giustiniani for a FIARCI credit card with a $20,000.00 credit limit.

Soon after Mr. Giustiniani returned to New York, Mr. Giustiniani attempted to use Mr. Giustiniani's Membership for a vacation for Mr. Giustiniani's son. The LHVC sales representative with whom Mr. Giustiniani spoke, however, told Mr. Giustiniani that there existed an eight month waiting period for the villas that Mr. Giustiniani requested. At the time that Mr. Giustiniani purchased his Membership, a LHVC sales representative explicitly told Mr. Giustiniani that Mr. Giustiniani would have easy access to such villas. Moreover, according to Mr. Giustiniani, the LHVC salesman specifically promised Mr. Giustiniani access to a villa if Mr. Giustiniani booked such a villa ninety days in advance.

Mr. Giustiniani has sought to place his Membership in the LHVC resale program. Despite this, Mr. Giustiniani continues to be charged a monthly portion of the outstanding $20,000.00 that Mr. Giustiniani financed on Mr. Giustiniani's FIA-RCI credit card. Moreover, LHVC has never taken over Mr. Giustiniani's existing ...


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