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Brian Grant, et al v. Darryl J. Turner

May 6, 2011

BRIAN GRANT, ET AL., PLAINTIFFS,
v.
DARRYL J. TURNER, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Brown, Chief Judge

NOT FOR PUBLICATION

MEMORANDUM OPINION

This matter comes before the Court upon the renewed Motion to Dismiss (Doc. Nos. 126, 102) the Second Amended Complaint of the defendants Darryl T. Turner, Allen Bernstein, Jackie Bork, Five Points Travel, Dream Vacations International, Inc., Dreamworks Vacation Club, Dreamworks Vacations, Dreamworks, Destination Vacations International, Bentley Travel, Modern Destinations Unlimited, Vacation Clubs, LLC and La Bonne Vie Travel; the renewed Motion to Dismiss the Second Amended Complaint (Doc. Nos. 127, 103) of the defendant Bank of America/FIA Card Services; the renewed Motion to Dismiss the Second Amended Complaint (Doc. Nos. 125, 105, 112) of the defendant Bluegreen Vacations Club, Inc.; and the renewed Motion to Dismiss the Second Amended Complaint (Doc. Nos. 128, 110) of the defendant Resort Condominiums International ("RCI"), LLC.*fn1 The Court has considered the parties' submissions in addition to the Civil RICO Case Statement ("Case Statement") filed by the putative class action plaintiffs Brian Grant, Chenel Grant, Martin Pribush, Diane Pribush, Larry Kaliner, Lois Kaliner, Robert Pinto, Bonnie Pinto, Benjamin M. Cohan, Leonard Schonfeld, Morris Seavey, and all persons similarly situated (collectively "Plaintiffs"). (Doc. No. 123.) The Court has decided the matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons that follow, the Court will grant Defendants' Motions to Dismiss with prejudice.*fn2

I. BACKGROUND

This dispute involves a group of putative class action Plaintiffs who bring suit against various individual and corporate defendants herein referred to as the Travel Club Defendants.*fn3

been filed timely and will address each accordingly in this memorandum opinion and accompanying order. (See Doc. Nos. 130, 131, 132, 133, 134, and 135.)

Plaintiffs allege that the Travel Club Defendants were involved with fraudulent travel clubs and swindled Plaintiffs and those similarly situated by convincing Plaintiffs to buy memberships in the various travel clubs without receiving the benefits which they were promised.*fn4 Part of this scheme involved the reference to and participation by the Credit Card Defendants, which are "otherwise ostensibly legitimate business entities," and the Travel Club Defendants used these entities to "lend an air of legitimacy to the fraudulent operations of the Travel Club Defendants by providing . . . 'point of sale' financing for the sale of memberships in their bogus 'travel clubs.'" (Second Amended Compl. ¶ 4.) Plaintiffs assert that the "Credit Card Defendants [were] aware of the fraud being perpetrated by the Travel Club Defendants, yet they continue[d] to willingly participate in their fraudulent scheme." (Id.)

The specifics of the scheme alleged are as follows. The Travel Club Defendants sell memberships in their respective clubs and promote "exclusive and substantial discounts for travel-related services," but Plaintiffs state that "the promised discounts and other rewards simply do not exist." (Id. at ¶ 2.) In an effort to promote these discounts, the Travel Club Defendants "circulate[] mailings through the U.S. mail" that "contain false promises of free rewards and/or benefits, such as free airline tickets, free car rentals, or free gas cards." (Id. at ¶ 43.) On these mailings, "Defendants falsely employ the trademark, service mark or trade name of well-known and legitimate business enterprises, including Jet Blue Airlines, United Airlines, American Airlines, U.S. Airways, Spirit Airlines, Southwest Air Lines Co., Delta Airlines, Marriot, Sheraton, Ritz-Carlton, Enterprise Rent-A-Car, Avis Budget Group, Inc., Dollar Rent A Car, Hertz, Olive Garden, Red Lobster, Bahama Breeze and Freeman Hicks." (Id.) Defendants did not have permission to use these trademarks, service marks, or trade names, but they nevertheless use these marks "to lend legitimacy to their false and fraudulent promises." (Id. at ¶¶ 43, 44.)

Plaintiffs assert a number of examples in their Second Amended Complaint where each of the Plaintiffs have received a mailing from the Travel Club Defendants that offered a gift. Each mailing directed the recipient to call a toll free number to claim the gift, and that if the recipient called within 72 hours, he or she would receive a bonus prize. (Id. at ¶¶ 45, 46, 47, 48, 49, 50.) "The plaintiffs called the phone numbers as instructed and were told that to claim their rewards, they needed to attend a sales presentation." (Id. at ¶ 51.) However, "[n]one of the plaintiffs who attended the sales presentations as instructed received the promised "[rewards]". (Id. at ¶ 52.) "Instead, the plaintiffs received certificates and vouchers that had to be submitted to various third-party providers" that "required that the certificates and vouchers be submitted according to an elaborate set of procedures which made the 'free' travel rewards unobtainable and anything but free." (Id. at ¶ 53.) The Second Amended Complaint provides examples of these conditions that were not disclosed prior to attendance at the sales presentations. (Id. at ¶¶ 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64.)

"At the sales presentations, the Travel Club Defendants further promised the plaintiffs a variety of free trips and travel services, in return for their purchase of 'Travel Club' memberships, such as a free all-inclusive trip to Mexico, a free condominium stay, or a free cruise aboard a Celebrity or Royal Caribbean cruise line." (Id. at ¶ 65.) Plaintiffs who agreed to purchase the membership, however, did not receive the free incentives promised, and rather, "received certificates and vouchers that had to be submitted to various third-party vendors" who "required that the certificates and vouchers be submitted according to an elaborate set of procedures which made the 'free' travel rewards unobtainable and anything but free." (Id. at ¶ 66; see also ¶¶ 67, 68, 69, 70, 71.) In addition, at the sales presentations, "[P]laintiffs were told that by purchasing a membership . . . they would be entitled to a variety of travel-related services at substantially discounted prices not available to the general public, including substantially discounted prices for luxury four- and five-star hotel accommodations, airfare, car rentals, cruise vacations, vacation tours, golf and recreation, and all inclusive packages, for the remainder of their lives." (Id. at ¶ 72; see also ¶¶ 73, 74, 75, 76, 77, 78, 79, 80, 81.) Several of the Plaintiffs were "unable to book travel through the websites" operated by Defendants Vacation Travel Club or Destination Vacations International. (Id. at ¶ 82.) Further, "the Travel Club Defendants told the plaintiffs that they are members of the Better Business Bureau ("BBB") in good standing" but "[a]t all relevant times, none of the Travel Club Defendants were members in good standing with the BBB." (Id. at ¶ 83.)

In short, Plaintiffs assert that the exclusive travel discounts are not in fact discounts, and that "instead are prices that are the same as or even higher than the rates charged to customers who purchase the same travel services through other vendors" or "simply do not exist." (Id. at ¶ 3.) In addition, "once it becomes clear to the population in a particular area that their operations are an elaborate fraud, the Travel Club [D]efendants surreptitiously change names, or simply close their operations and move elsewhere." (Id.) Part of the Travel Club Defendants' scheme is to involve "otherwise ostensibly legitimate business entities," including the Credit Card Defendants, to "lend an air of legitimacy to the fraudulent operations of the Travel Club Defendants." (Id. at ¶ 4.) The Credit Card Defendants operate in conjunction with the Travel Club Defendants by "providing 'point of sale' credit card financing to prospective victims of the fraud" and "are aware of the fraud being perpetrated." (Id.) "The credit terms offered included interest-only payments for the first six months" and "[t]he credit cards issued by the defendants prominently display the letters 'RCI,'" RCI's trademark, and "the words 'bluegreen resorts,'" Bluegreen Vacation Club, Inc.'s trademark. (Id. at ¶ 89.) These credit cards are financed "through defendant FIA Card Services, d/b/a Bank of America," and "adds enough legitimacy to defendants' fraudulent operations to push prospective victims of their scheme onto the dotted line." (Id. at ¶¶ 89.) "FIA Card Services, unlike most other credit card companies, refuses to refund [Plaintiffs'] money or cancel the disputed charge" when Plaintiffs called with disputes, however, "in an obvious effort to undermine plaintiffs' collective effort to obtain class-wide relief for the victims of defendants' fraud, defendant FIA Card Services did provide refunds to 'certain' plaintiffs, such as Martin and Diane Pribush and Brian and Chenel Grant." (Id. at ¶ 91.) Others, however, were not refunded. (Id. at ¶¶ 92, 93, 71, 72.)*fn5

Plaintiffs originally filed a complaint on May 18, 2009, which the Honorable Joseph A. Greenaway dismissed on March 15, 2010, after having considered a number of motions to dismiss filed by the various defendants. (Doc. Nos. 93, 94.) Plaintiffs, pursuant to that memorandum opinion and order, filed an amended complaint on April 6, 2010. (Doc. No. 95.) This matter was reassigned to this Court on April 14, 2010. (Doc. No. 96.) However, Plaintiffs soon thereafter filed a second amended complaint, stating that they mis-identified one of the defendants. (Doc. Nos. 106, 107.) All Defendants thereafter respectively filed motions to dismiss, but the Court ordered Plaintiffs to file a RICO Case Statement and that after its filing the Defendants could renew their motions to dismiss. (Doc. Nos. 118, 119.) Plaintiffs filed their Case Statement on November 12, 2010. (Doc. No. 123.) Thereafter, each of the Defendants renewed their motions to dismiss. The Court herein considers these motions in light of the Case Statement.

II. DISCUSSION

A. Standard of ...


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