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Hoyt v. Marriott Vacations Worldwide Corporation

United States District Court, D. Minnesota

February 7, 2014

Steven B. Hoyt and Bradley A. Hoyt, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
Marriott Vacations Worldwide Corporation, Marriott Ownership Resorts, Inc. d/b/a Marriott Vacation Club International, The Ritz-Carlton Hotel Company, L.L.C., The Ritz-Carlton Management Co., L.L.C., The Ritz-Carlton Development Co., Inc., and The Ritz-Carlson Sales Company, Inc., Defendants.

Anne T. Regan, Esq., Charles S. Zimmerman, Esq, Bradley C. Buhrow, Esq. and Zimmerman Reed, PLLP, counsel for plaintiffs.

Philip R. Sellinger, Esq. and Greenberg Traurig, LLP, and Courtney E. Ward-Reichard, Esq. and Nilan, Johnson, Lewis PA, counsel for defendants.

ORDER

DAVID S. DOTY, District Judge.

This matter is before the court upon the motions to dismiss by defendants.[1] Based on a review of the file, record and proceedings herein, and for the following reasons, the court grants the motion in part.

BACKGROUND

This real estate dispute arises out of the purchase of fractional interests in condominiums by plaintiffs Steven and Bradley Hoyt (collectively, plaintiffs). In 2003, Steven Hoyt purchased a fractional interest in a condominium at the Ritz-Carlton Bachelor Gulch resort in Beaver Creek, Colorado (Bachelor Gulch). Am. Compl. ¶ 1. That same year, Bradley Hoyt purchased a fractional interest at the Ritz-Carlton Aspen Highlands resort in Aspen, Colorado (Aspen Highlands). Id . ¶ 2, 24. Purchasers of fractional interests, including plaintiffs, are required to pay condominium association fees. Id . ¶ 42.

The fractional interest purchased by Steven Hoyt entitled him to use of his Bachelor Gulch unit for 21 days each year. Id . ¶ 5. Bradley Hoyt's fractional interest entitled him to 28 days of use per year at Aspen Highlands. Id . ¶ 6. Through an exchange program (Membership Program), plaintiffs could each exchange their usage for days at another resort.[2] Id.

The plaintiffs signed contracts (Purchase Agreements) memorializing their purchases. Marx Decl. Exs. A(1)-(2). The Purchase Agreements incorporate by reference several other agreements - namely, the resorts' respective Affiliation Agreements, Reservation Procedures Agreements and Declarations of Condominium.[3] See id. Exs. B-1, B-2, C-1, C-2, D-1, D-2. By signing the Purchase Agreements, the plaintiffs acknowledged that they had received all of the incorporated documents. See, e.g., id. Ex. A-1, at ¶ 26(d).

On April 28, 2009, Ritz-Carlton announced a new membership option (Portfolio Membership), which allowed individuals to stay at Ritz-Carlton resorts without having to purchase fractional interests. Am. Compl. ¶¶ 44-46. Instead, Portfolio Members purchased points to exchange for stays at Ritz-Carlton resorts and were not obligated to pay condominium association dues or fees. Id . ¶ 47. The plaintiffs' fractional interests were converted to "Home Club" memberships, which Ritz-Carlton represented were identical to fractional interest ownership. Id . ¶ 45. The plaintiffs allege that the introduction of Portfolio Membership decreased the secondary market for fractional interests, rendered the resorts less exclusive and limited their ability to reserve time at other Ritz-Carlton properties. Id . ¶¶ 47-48, 52, 64, 69.

In July 2012, Ritz-Carlton announced that Winding Bay and Kapalua Bay would no longer be affiliated with the Membership Program. Id . ¶ 13. That same month, Ritz-Carlton affiliated with Marriott Vacation Club Destinations (MVC) resorts, allowing MVC members to use points to access Ritz-Carlton resorts. Id . ¶ 56.

On March 19, 2013, the plaintiffs filed an amended complaint, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment and claims under the state consumer protection statutes of California, Florida, Colorado and Hawaii. The plaintiffs also seek a declaratory judgment that defendants' conduct was unlawful. Defendants move to dismiss.

DISCUSSION

I. Standard of Review

To survive a motion to dismiss for failure to state a claim, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Braden v. Wal-Mart Stores, Inc. , 588 F.3d 585, 594 (8th Cir. 2009) (citations and internal quotation marks omitted). "A claim has facial plausibility when the plaintiff [has pleaded] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 129 S.Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556 (2007)). Although a complaint need not contain detailed factual allegations, it must raise a right to relief above the speculative level. See Twombly , 550 U.S. at 555. ...


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