Business Monday: Aspen condo association wants out of Ritz-Carlton litigation
October 28, 2018
The Aspen Highlands Condominium Association is making a push to be removed from a class-action lawsuit brought on nearly three years ago by timeshare owners at the Ritz-Carlton Club.
The condo association's motion for summary judgment is the latest legal maneuver in a dispute over an affiliation the Ritz-Carlton Club established with Marriott Vacation Club Destinations in April 2014. The 36-page motion was originally filed Oct. 12, but a judge denied it because of its length. A shorter, 26-page version was submitted with the court Oct. 22.
The lawsuit accuses the condo association, Marriott Vacations Worldwide Corp. and four other defendants of covertly agreeing to affiliate with Marriottt Vacation Club without allowing a say from the timeshare owners.
More than 200 owners of the 1/12 timeshares at the Ritz-Carlton Club, which is located at the base of the Aspen Highlands ski area, claim the values of the fractional-ownership interests have decreased by as much as 80 percent because of the Marriott affiliation. Some of the timeshares were acquired for more than $400,000.
For its part, the Aspen Highlands Condominium Association claims that the timeshare owners have failed to demonstrate it conspired with the other defendants. In fact, the condo association's motion contends that some timeshare owners wanted to affiliate with Marriott because "they wanted more exchange opportunities."
The motion also says that while timeshare owners did not vote on the affiliation, a survey Marriott gave them in December 2013 showed 74 of the 141 respondents were in favor of an exchange program with Marriott. In April 2014, Marriott and the Ritz-Carlton Club at Aspen Highlands reached a memorandum of understanding over a trade-a-week program that would take effect later that year, the motion says.
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The condo association also negotiated a $150,000 reduction in Marriott's annual management fee, the motion says.
So far, the judge presiding over the case has not been convinced that the condo association was acting in good faith.
In April, U.S. District Judge Philip A. Brimmer ruled that the condo association "acted arbitrarily by declining to hold a vote before agreeing to the (Marriott Vacation Club) affiliation. Plaintiffs allege that the Association promised such a vote and told its members that such a vote was legally required, before acting contrary to these statements without disclosure or explanation."
The condo association's motion, however, claims that the plaintiffs "have no evidence that any vote was required or discussed."
Aspen attorney Matthew Ferguson is one of the lawyers representing the timeshare owners.
"Marriott obviously is a major player in the wrongdoing, but the condo association, clearly as we have said in our papers, has breached its fiduciary duties to the owners," he said last week.
The lawsuit was initially filed in January 2016 in Pitkin County District Court. There were two plaintiffs at the time; the case was transferred in May 2016 to Denver federal court.
The pending claims against the defendants include breach of fiduciary, aiding and abetting, conspiracy and constructive fraud, which is a legal term for deception without intent.
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