Judge: Glenda Sanders, Case: 30-2019-01117294, Date: 2023-01-05 Tentative Ruling

Defendants SVC – West, LLC, Shell Vacations LLC, Shell Owners Association – Napa, Inc., Wyndham Vacation Resorts, Inc., and Wyndham Vacation Ownership, Inc. seek summary judgment, or in the alternative, summary adjudication on each cause of action in the operative First Amended Complaint of Plaintiffs Michael Glover and Cosette Glover (collectively, Plaintiffs).

Plaintiffs’ request for judicial notice is GRANTED.

Defendants’ Objections: OVERRULED as to Nos. 1, 2, 3, 5, 6, 7, 13, 14, 15, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28 to the Glover Declaration, SUSTAINED as to Nos. 4, 9, and SUSTAINED as to Nos. 10, 11, 12, 15, 16 to the extent that Mr. Glover testifies about his wife’s feelings or beliefs.

Defendants’ Objection to Nos. 29-30 to the Sussman Declaration are OVERRULED and No. 31 is SUSTAINED.

Defendants’ Objections to Nos. 32 to the Benjamin Declaration are OVERRULED and No. 33 is SUSTAINED.

Defendants’ Objection to No. 34 to the Request for Judicial Notice is OVERRULED.

Defendants’ Objection to No. 35-51 to the Plaintiffs’ Additional Material Facts is OVERRULED.

A motion for summary judgment shall be granted when “all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c(c).) A moving defendant is entitled to judgment as a matter of law when the defendant shows without rebuttal that one or more elements of the plaintiff's case cannot be established or there is a complete defense to that cause of action. (Id., subds. (a), (o); Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 356, 100 Cal.Rptr.2d 352, 8 P.3d 1089.)

“A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contending that the cause of action has no merit, that there is no affirmative defense to the cause of action. . . . . . .A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc. §437c(f)(1).) A moving plaintiff meets his or her “burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action.” (Code Civ. Proc. § 437c(p)(1).) Once that burden is met, the burden shifts to defendant to show that a triable issue of one or more material facts exists as to the cause of action. (Ibid.)

3^rd and 4^th COAs for Declaratory Relief: The Court DENIES the Motion as to the 3^rd and 4^th COAs. The Court previously granted summary adjudication in favor of Plaintiffs on the 3^rd COA and Plaintiffs have dismissed the 4^th COA. ROA 222, RJN, Exs. 2 and 3.

1^st COA for Fraud: Defendants contend they are entitled to summary adjudication on the First Cause of Action for Fraud on the grounds that (1) Plaintiffs cannot show any false statements, (2) the TPA is a written, integrated agreement that disclosed the true facts of Plaintiffs’ purchase and controls, (3) Plaintiffs could not reasonably rely on alleged oral misrepresentations because of conflicting provisions in the TPA, (4) Plaintiffs could not reasonably rely on any alleged misrepresentations because they had a statutory right to rescind the contract within 7 days, and (5) this claim is barred by the 3-year statute of limitations;

Defendants have presented evidence that the Timeshare Purchase Agreements (TPAs) were entered into in November 2013 (ROA 214, UMF No. 2), August 14, 2015 (ROA 214, UMF No. 10) and November 12, 2015 (ROA 214, UMF No. 11). The Complaint in this matter was not filed until December 10, 2019 (ROA 2), or over four years after Plaintiffs entered into the last TPA. 

The operative complaint alleges that Defendants made four misrepresentations: (1) that the points purchased would increase their stake in the properties, (2) their time-share interests were saleable on the secondary market and (3) were financial investments and a real property asset granting them ownership in Defendants’ properties, and (4) they would receive booking exclusivity and other privileges over non-purchasing vacationers. FAC, ¶¶40-53. Plaintiffs’ discovery responses confirmed that Plaintiffs’ fraud claim is based on these four alleged misrepresentations and added a new misrepresentation, i.e. the points would "auto renew and could be carried over from year to year.” ROA 166, Walker Decl., Ex. 8, Resp. to SI No. 1; ROA 214, UMF No. 16.

Defendants present undisputed evidence that the auto renew representation fails to support fraud because it was a true statement. ROA 214, UMF No. 41. Therefore, the auto renew representation cannot be the basis for fraud.

Similarly, Plaintiffs admit that the representation that the points purchased would increase their stake in the properties owned and/or maintained by Defendants is true. ROA 216, Benjamin Decl., Ex. A, p. 97:12-21. As such, this representation cannot be the basis for fraud.

The undisputed evidence shows the booking exclusivity representation cannot support fraud. The Contract Documents explain that members are given a reservation window to use the time-share that is earlier and longer than that given to nonmembers. ROA 214, UMF No. 40. Thus, members do have the first opportunity to book reservations. ROA 167, Orben Decl., Ex. 1, p. 12, ¶14 and ¶15.  During their depositions, neither Plaintiff contended that this representation was false. Mrs. Glover was not involved in booking (ROA 214, UMF Nos. 38, 39), and as far as Mr. Glover knew, this was not a false statement. ROA 216, Ex. A, p. 57:4-8 and p. 100:13-15 [“Right, no evidence it was false because we were able to get, you know, reservations at time frames that we thought were adequate.”]

Nevertheless, Plaintiffs attempt to create a triable issue of material fact on this issue by pointing to the Blansit deposition in which he states rooms can be booked through a developer. ROA 220, Sussman Decl., Ex. B, at p. 31:12-16. But by itself, this evidence fails to demonstrate nonmembers are treated the same as members. As such, Plaintiffs have not demonstrated any false statement regarding booking exclusivity.

As for the representations regarding saleability of the timeshare, whether the timeshare is a real property asset and investment, and whether the points increased the stake in the properties, Defendants have shown that a fraud claim based on these representations is barred by the 3-year statute of limitations. 

An action for relief on the grounds of fraud or mistake must be commenced within three years. However, such action is not deemed accrued “until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (Code Civ. Proc., § 338, subd. (d).) The courts interpret discovery in this context to mean not when the plaintiff became aware of the specific wrong alleged, but when the plaintiff suspected or should have suspected that an injury was caused by wrongdoing. The statute of limitations begins to run when the plaintiff has information which would put a reasonable person on inquiry. A plaintiff need not be aware of the specific facts necessary to establish a claim since they can be developed in pretrial discovery. Wrong and wrongdoing in this context are understood in their lay and not legal senses. (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110–1111, 245 Cal.Rptr. 658, 751 P.2d 923.)

(Kline v. Turner (2011) 87 Cal. App. 4th 1369, 1373–74, emphasis added.)

Differently stated, in determining when a cause of action begins accruing, courts “look to whether the Plaintiffs have reason to at least suspect that a type of wrongdoing has injured them[,]” and not “whether the Plaintiffs suspect facts supporting each specific legal element of a particular cause of action[.]” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal. 4th 797, 807.) The statute of limitations begins to run on a fraud claim when the complaining party “learns, or at least is put on notice, that a representation was false.” (Brandon G. v.Gray (2003) 111 Cal. App. 4th 29, 35.)

Under the discovery rule, “constructive and presumed notice or knowledge are equivalent to knowledge. So, when the plaintiff has notice or information of circumstances to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to [her] investigation (such as public records or corporation books), the statute commences to run.’ (3 Witkin, Cal. Procedure [3d ed. 1985] Actions, § 454, pp. 484–485.)” (Id. at 1374.)

Although, in general, statute of limitations issues raise questions of fact, when the uncontradicted facts are susceptible of only one legitimate inference, summary judgment is proper. (Kline v. Turner, supra, 87 Cal. App. 4th at 1374.)

The undisputed material facts show that in connection with each of these purchases, Plaintiffs received the TPAs with the “Rescission Rights Notice” on the signature page, a Buyer Certification, which Plaintiffs signed, a Shell Vacations Club Purchase Proposal listing one-time and ongoing fees and costs arising from their purchase, and a DRE Report (collectively, Contract Documents). ROA 214, UMF Nos. 4-7, 13. With each of these purchases, Plaintiffs admit they were given an opportunity to review the Contract Documents, did review them, and received copies of the Contract Documents when they left the sales presentations. ROA 214, UMF Nos. 8-9, 13, 57 and 58.

The Contract Documents clearly and expressly tell Plaintiffs what they are purchasing and their rights and liabilities. In particular, the TPAs explain (1) that Plaintiffs are not purchasing any real property, but a right to use interest, (2) that Plaintiffs can sell or transfer their interest, (3) that Defendants will not assist in the sale of the timeshare, and (3) that the purchase is not for investment. ROA 167, Orben Decl., Ex. 1, pp. 5-6. The TPAs also included certain acknowledgments by Plaintiffs: 

13. Your Promises and Statements. You understand and agree that:

A. Membership. This agreement is evidence that you own your membership. Your membership gives you the right to use and occupy the vacation property on the terms contained in this agreement and in the home club documents. “Vacation property” means the property included in the home club program. The association in which you are member, and not you, owns or has the legal right to use all of the vacation property.

* * *

H. Personal Use and Enjoyment. You are purchasing the membership for no purpose other than for your recreational and social use and enjoyment. You are not purchasing the membership as an investment from which you hope to make a financial profit or gain. No one is permitted to tell you otherwise.

ROA 167, Orben Decl., Ex. 1, pp. 10-11. Similarly, the Buyer Certification, which requires Plaintiffs to initial each statement showing their understanding and acceptance, states, in pertinent part: 

2.         I promise the seller that I am buying my membership for my own personal vacation use and enjoyment and not for any resale value, income potential, tax advantages, or as an appreciating investment.

a.         I may sell my membership or rent my vacation period, but I must do it myself. The seller makes no representation as to whether, or for how much, I can sell my membership or rent my vacation period.

b.         Neither the seller nor the Association, nor any related companies, has any duty at all to provide any form of rental or resale program or to repurchase my membership in the future.

ROA 167, Orben Decl., Ex. 1, SHELL-GL-0000035, emphasis added. See also, ROA 167, Orben Decl., Ex. 1, SHELL-GL-000046 [Defendants have not made “any representations or guarantees as to the potential resale value or marketability of your existing vacation ownership(s)”].

The DRE Report also explains that that the time-share is not ownership in real property: “This Program is a ‘multi-site time-share plan’ as defined in Business and Professions Code, Section 11212(z)(2)(B), and the memberships are time-share uses as defined in Business and Professions Code, Section 11212(x)(2). This distinction means you will receive a periodic right of occupancy in real property that will not be coupled with an interest in real property”. ROA 167, Orben Decl., Ex. 4, SHELL-GL-0000105, emphasis added. See also ROA 167, Ex. 4, SHELL-GL-0000106, ¶A [“You have no ownership interest in the Vacation Property.”]

The DRE Report also cautions that selling the timeshare may be difficult: “SHOULD YOU PURCHASE A MEMBERSHIP, YOU MAY FIND IT DIFFICULT TO RESELL YOUR MEMBERSHIP WITHOUT THE USE OF AN EXTENSIVE PROMOTIONAL AND ADVERTISING CAMPAIGN OR USE OF A SALES ORGANIZATION.” ROA 167, Orben Decl., Ex. 4, SHELL-GL-0000102, ¶2.

Moreover, the integration clause in the TPA and the Buyer’s Certification advise that terms not contained in writing in the Contract Documents are not part of the agreement even if verbal representations are made otherwise. ROA 167, Orben Decl., Ex. 1, ¶22.D, pp. 15 [“This agreement, the escrow agreement, the home documents and the club documents contain the whole agreement between you, the seller and the association. Things not written in those documents are not part of our agreement, even if someone tells you otherwise.”]; ROA 167, Orben Decl., Ex. 1, SHELL-GL-0000035 [“I understand that the seller and its employees do not make oral agreements, promises or representations related to buying my membership and will not honor any verbal representations made to me other than those documented in my membership or the governing documents. I agree that I am not relying on any oral agreements, promises or representations and all items related to my purchase must be in writing in my membership agreement or in the governing documents. If anything in this Buyer Certification is inconsistent with my understanding, I will not acknowledge it.”]

Plaintiffs contend the verbal representations from Ingrebretson conflict with the written terms of the Contract Documents. Thus, Plaintiffs were at least on inquiry notice regarding the alleged misrepresentations in November 2013. (See Kline v. Turner, supra, 87 Cal.App.4th at 1374 [plaintiff’s claims barred by statute of limitations because he was on inquiry notice that an associate took $50,000 owed to him on a music contract because defendants told plaintiff they made out the check to the associate at the associate’s direction but plaintiff did not act until 3 years passed].)

In Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, for example, the plaintiff allegedly was induced to leave his former employment by the representation that the defendant employer followed a nondiscrimination policy. The court held that the crucial event for accrual purposes was the date on which the plaintiff first learned that the employer actually followed a discriminatory policy; i.e., the date the plaintiff learned that the representation was false. (Id. at 484) In Snow v. A.H. Robins Co. (1985) 165 Cal.App.3d 120, 135, similarly, the court ruled that a cause of action for misrepresentations about a defective intrauterine contraceptive device accrued not when the plaintiff became pregnant, but when she learned that the manufacturer had misrepresented the effectiveness of the device. Likewise, in Brandon G. v. Gray (2003) 11 Cal.App.4th 29, 35, for purposes of plaintiffs' claims of misrepresentation, the relevant date was July 16, 1993, when the parents learned that the County had falsely represented that it had received no complaints about KidStop.

Given Plaintiffs’ admissions that they had constructive notice of the terms in the TPAs and other Contract Documents in 2013 (ROA 214, UMF Nos. 58-59), the statute of limitations on Plaintiffs’ fraud claim began to accrue in 2013 and is now barred by the statute of limitations.

Additionally, this same evidence demonstrates that there is no justifiable reliance.

An “alleged reliance on [] oral promises [] is simply not justifiable because representations contradict the parties’ integrated [] agreement.” (Slivinsky v. Watkins-Johnson Co. (1990) 221 Cal. App. 3d 799, 807 (affirming summary judgment and dismissing fraudulent concealment claim). Where “allegations [are] conclusory . . . [Plaintiffs] could not have reasonably relied on any implied promise [] which contradicted the express provisions of the written stock option agreement which [they] signed.” (Shapiro v. Wells Fargo Realty Advisors (1984) 152 Cal. App. 3d 467, 482.)

Although Mr. Glover claimed that the ability to sell the timeshare was important (ROA 216, Ex. A, 89:23-90:2), he also testified that it was sufficient to receive confirmation that the timeshare could be sold, transferred or rented. Mr. Glover also admitted that he wanted to keep the timeshare long-term so he “didn’t delve into all the possible secondary markets they had for properties like that.” ROA 216, Ex. A, p. 97:25-98:7. Mr. Glover also admitted that that “No one told us it would be [sold] easily.” ROA 216, Benjamin Decl., Ex. A, p. 27:22-23. Thus, contrary to Plaintiffs’ current claims, Mr. Glover’s testimony shows the ease with which to sell or transfer the timeshare was not relevant; it was sufficient that Plaintiffs had the right to sell, and it is undisputed that they did. ROA 214, UMF No. 31. Moreover, Mr. Glover admits he did “find a marketplace or somebody or somehow where people sell those things”. ROA 216, Ex. A, p. 113:14-15.

Plaintiffs also did not rely on any misrepresentation that that the timeshare was a financial investment and real property asset. Mr. Glover testified he did not remember anyone telling him the timeshare was a financial investment: “If I had been told, I probably wouldn’t remember or care because I didn’t intend it to be an investment. So I would say I don’t remember anytime they said that in particular.” ROA 216, Ex. A, p. 98:22-25. See also, ROA 216, Ex. A, p. 71:8-20 [“this was not something I considered like an investment income, … This was, you know, for other purposes.”]

Although Plaintiffs state they believed they owned real properties, Plaintiffs could not remember if those exact words were used by Defendants. ROA 214, UMF No. 35.

This is similar to Hinesley v. Oakshade Town Ctr. (2005) 135 Cal. App. 4th 289, 300–03. In Hinesley, plaintiff alleged he relied on verbal representations about who his cotenants would be but he did not take any action to confirm that the proposed cotenants actually signed their leases, discuss the benefits of the having the cotentants or made any representations he was signing the lease because of the cotenants. The Court found Hinesley’s reliance on the representations to be unjustified and that his actions also contradicted the inference of reliance. (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal. App. 4th 289, 300–03.)

Here, the Contract Documents clearly advise that the timeshare is not real property, that it is not an investment, and that the timeshare could be sold but Defendants will not assist in doing so and make no representations on the market and as discussed, Plaintiffs’ testimony contradicts the inference of reliance.

Plaintiffs attempt to create disputed facts by arguing about immaterial issues. But Plaintiffs cannot escape their own testimony which clearly demonstrates that the saleability of the timeshare only became an issue because of Plaintiffs’ potential bankruptcy and financial hardship.  

The Court is also not persuaded by the injunction against Trendwest and its successors. As argued by Defendants, there is insufficient evidence that they are bound by the injunction. But even if Defendants were bound by the injunction, Plaintiffs have not shown that they have standing to enforce it against Defendants, and more importantly, Plaintiffs were still aware of what the Contract Documents said and the disclosures in them.

The motion for summary adjudication is GRANTED on the First Cause of Action for Fraud.

2^nd COA for Intentional Concealment. The elements of an action for intentional concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage. (Mktg. W., Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal. App. 4th 603, 612–14.)

This cause of action fails because the undisputed facts show Defendants have not concealed any material facts.

In support of this cause of action, Plaintiffs allege concealment of the nature, extent and amount of the annual maintenance and association dues or separated billed taxes and Defendants’ intent to hinder, limit and restrict the sale and transfer of Plaintiffs’ time-share to a third party. FAC, ¶¶54-65.

However, the undisputed material facts show that the maintenance and association dues or separated billed taxes were disclosed. ROA 214, UMF Nos. 5, 8, 43, 44, 52. See also, ROA 167, Orben Decl., Ex. 1, pp. 5-6, 8, 11, SHELL-GL-00000013, 16, 26, Ex. 2, pp. 64, 87, Ex. 3, pp. 112, 131.

And Defendants have demonstrated that there is no evidence that Defendants intended to hinder, limit, or restrict the sale and transfer of Plaintiffs’ time-share to a third party. The Contract Documents expressly and repeatedly advised Plaintiffs that Defendants would not assist in the selling the time-share or make any representation as to whether, or for how much, the timeshare could sell. ROA 214, UMF Nos. 26, 30; ROA 216, Benjamin Decl., Ex. A, p. 70:6-10; ROA 167, Orben Decl., Ex. 1, pp. 5-6, SHELL-GL-0000035, SHELL-GL-000046. In January 2018, when Plaintiffs asked Defendants about selling their timeshare, Defendants acted consistently with the Contract Documents by stating “I don’t know how you could do that”. ROA 216, Benjamin Decl., Ex. A, p. 30:8; ROA 214, Pltf’s AMF Nos. 44, 45. Defendants’ refusal to provide assistance, when Defendants repeatedly stated that they would not provide assistance in selling the timeshare, fails to support Plaintiffs’ argument that Defendants concealed an intent to hinder, limit or restrict the sale of the timeshare, or that Defendants even had an intent to hinder, limit or restrict the sale of the timeshare.

In their Opposition, Plaintiffs argue that Ingrebretson only gave a partial truth by stating “they could freely sell their timeshare”, and therefore, Defendants were under a duty to disclose the full-truth, “primarily their intent to hinder Plaintiffs’ sale of the time-share interest to a third party.” ROA 218, Opp., pp. 11-12. However, it is undisputed that the Contract Documents do permit the sale of the time-share. ROA 214, UMF Nos. 28, 31. This is consistent with what Ingrebretson told Plaintiffs. Mr. Glover testified that Ingrebretson confirmed that the timeshare could be sold, transferred and rented. ROA 216, Benjamin Decl., Ex. A, pp. 28:4-29:6. Therefore, there is insufficient evidence that Ingrebretson made any false statement.

Further, as discussed above, Plaintiffs have not shown they were unaware of any material fact. Plaintiffs admit that they read the TPAs and other Contract Documents prior to execution and prior to expiration of the seven-day statutory rescission period. ROA 214, UMF Nos. 8, 13, 59. Thus, Plaintiffs were aware of all material facts regarding the alleged misrepresentations and nondisclosures.

The Motion for summary adjudication is GRANTED on the Second Cause of Action for Intentional Concealment.

Defendants are ordered to give notice.