Court rules that Ritz-Carlton Aspen Highlands owners can seek punitive damages
A magistrate judge is allowing owners at the Ritz-Carlton Aspen Highlands to seek punitive damages in addition to monetary awards for claims that their fractional ownerships tanked in value because of an affiliation with Marriott Vacations Worldwide Corp.
The Aspen attorney on the fractional owners’ class-action suit, Matthew Ferguson, hailed U.S. Magistrate Judge Gordon P. Gallagher’s order, delivered last month, as an “important step” because of the difficulty in seeking punitive damages — which are awards in excess of actual damages as a form of punishment to a defendant — in Colorado.
“Trying to get punitive damages in Colorado is fairly difficult,” Ferguson said this week.
The Colorado Supreme Court has said as much, reasoning that a plaintiff must produce “sufficient evidence of willful and wanton conduct” to sue for punitive or exemplary damages. Gallagher’s ruling, stating it was based on evidence in the “light most favorable to the plaintiff,” found that to be the case with the 240-plus members’ motion to amend their suit by adding a claim for punitive damages, which the defendants opposed.
The defendants also argued that should the Ritz-Carlton fractional owners prevail in their case, the obvious harm from awarding exemplary damages would make the case more expensive. They asked that the judge not allow a claim for exemplary damages at this juncture of the litigation.
“The court is not persuaded,” Gallagher wrote. “The court fails to see how … allowing a claim for exemplary damages would change the arguments, briefing or analysis.”
The ruling by Gallagher comes after U.S. District Judge Philip A. Brimmer’s April denial of a motion to dismiss the lawsuit against Condominium Association and Marriott Vacations Worldwide Corp., as well as four other defendants.
The Aspen Highlands Ritz-Carlton’s class-action suit originated in Pitkin County District Court in January 2016, before being transferred to Denver federal court that May.
The suit contends the fractional ownerships plummeted by more than 89 percent after the Ritz-Carlton Club at Aspen Highlands forged an affiliation with Marriott Vacation Club Destinations in April 2014.
Once the Marriott affiliation became formalized, the 1/12 fractional ownership interests — which originally were bought for between $200,000 and $400,000, lost their cachet of exclusivity and became less marketable, the suit contends.
The Aspen Highlands Ritz-Carlton owners say they must pay condo association fees ranging from $12,000 to $16,000 a year, while Marriott point-holders do not. They also contend they had no influence on the affiliation with Marriott, though they were informed nearly two years before the affiliation was made official that it was being negotiated.
Since the suit was filed, Marriott has been sanctioned twice for concealing integral evidence in the case, the website LAW360.com originally reported in May.
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