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Bluhm v. Wyndham Destinations Inc.

United States District Court, W.D. Washington, Tacoma

November 21, 2019

BRANDON BLUHM, Plaintiff,
v.
WYNDHAM DESTINATIONS INC., et al., Defendants.

          ORDER DENYING DEFENDANTS' MOTION TO DISMISS SECOND AMENDED COMPLAINT AND GRANTING DEFENDANTS' MOTION TO TRANSFER VENUE

          BENJAMIN H. SETTLE, UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on Defendants Wyndham Destinations, Inc. (“WDI”) (formerly Wyndham Worldwide Corporation (“WWC”)), Wyndham Vacation Ownership, Inc. (“WVO”), and Wyndham Vacation Resorts, Inc.'s (“WVR”) (collectively, “Defendants”) motion to dismiss second amended complaint and/or for summary judgment and/or to transfer venue. Dkt. 37. The Court has considered the pleadings filed in support of and in opposition to the motion and the remainder of the file and hereby grants the motion to transfer venue and denies the remainder of the motion for the reasons stated herein.

         I. PROCEDURAL HISTORY

         Plaintiff Brandon Bluhm (“Bluhm”) filed suit in this Court on October 8, 2018. Dkt. 1. On January 24, 2019, Defendants moved for transfer of venue, or in the alternative for dismissal pursuant to Fed.R.Civ.P. 12(b)(6), 12(b)(7), or summary judgment pursuant to Fed.R.Civ.P. 56. Dkt. 11. On April 9, 2019, the Court granted Defendants' motion to dismiss without prejudice on the basis of Bluhm's failure to establish jurisdiction and granted Bluhm leave to amend his complaint. Dkt. 18.

         On April 19, 2019, Bluhm filed his First Amended Complaint. Dkt. 19. On May 3, 2019, Defendants filed a second motion to dismiss, or in the alternative for summary judgment, or in the alternative to transfer venue. Dkt. 20. On May 13, 2019, the Court entered the parties' stipulated order to permit substitution of counsel for Bluhm. Dkt. 22. On July 12, 2019, the Court again granted Defendants' motion to dismiss for lack of jurisdiction and granted leave to amend but advised Bluhm that the Court may be skeptical of further requests for leave to amend. Dkt. 30.

         On July 26, Bluhm filed his Second Amended Complaint. Dkt. 31. In addition to the named Defendants set out above, Bluhm also named Wyndham Does 1-50. Id. On August 9, 2019, Defendants filed a third motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2), 12(b)(6), and/or for summary judgment, and/or to transfer venue. Dkt. 37. On September 3, 2019, Bluhm responded. Dkt. 40. On September 11, 2019, Defendants replied. Dkt. 43.

         II. FACTUAL BACKGROUND

         While the Court has set out the facts of this case in previous Orders, the Court here sets out the more detailed factual allegations of the Second Amended Complaint. Dkt. 31. Bluhm generally alleges that because WDI has hundreds of subsidiaries, "it is unclear which entity (or entities) originally solicited Plaintiffs business; which entity designed, owns, and manages the reservations system at issue, which entity manages and/or employs the individuals Plaintiff spoke to about the problems that began in mid-2017, which entity (or entities) held title to Plaintiffs timeshare contracts at the time he was forced to reconvey them; or which entity makes strategic decisions concerning [Defendants'] timeshare business." Id. ¶¶ 14-15. In much of his complaint, Bluhm refers to Defendants collectively as Wyndham. Id. ¶ 7.

         In 1996, Defendants mailed Bluhm an advertisement to his home in Washington State. Id. ¶ 24. Responding to the advertisement, Bluhm went on vacation at a resort in Pompano Beach, Florida owned by Defendants. Id. ¶¶ 24-25. While in Florida, Bluhm purchased a timeshare for between $27, 000 and $30, 000, in addition to ongoing monthly fees, from an entity called Fairfield Resorts. Id. ¶¶ 24 & n.10, 25. Fairfield Resorts was acquired by WVR in 2006. Id. ¶ 24. n. 10. Bluhm continued to buy timeshare deeds and points, and by 2000, he owned 1, 000, 000 points, sufficient to pay for three months of travel per year. Id. ¶¶ 27-28. Between 2000 and 2012, Bluhm acquired additional timeshare points and deeds, more than doubling his holdings. Id. ¶ 29. In 2012, Bluhm learned Defendants offered a system called Extra Holidays where people who owned Defendants' timeshares could offer those timeshares for rent to the public. Id. ¶ 30. Bluhm alleges that WVR managed this system, possibly along with WVO and WDI, and that Defendants' timeshares could not be listed for rent through other vacation-rental services. Id. ¶¶ 12, 30. When Bluhm sold a booking through Extra Holidays, Defendants would keep 40% of the sale, and Bluhm would receive 60%, paid by "Wyndham Vacation Ownership, Extra Holidays department." Id.31.

         Bluhm continued to acquire additional timeshare interests, including indirectly from disgruntled owners, and sell bookings strategically, such that by 2013 selling bookings through Extra Holidays was his primary source of income. Id. ¶¶ 32-33. In 2016, Bluhm earned $262, 000 in gross income through Extra Holidays. Id. ¶37. In May of 2017, Bluhm owned approximately 18, 000, 000 points and "68 associated fractional contracts." Id. ¶35.

         Bluhm alleges that in April or May 2017, "a systemwide message informed [Bluhm] that the reservation website would be down for the weekend while [Defendants] launched a new system." Id.¶39. Bluhm alleges that he did not regain access to the system after the weekend and was extremely concerned because he needed to prepare for lucrative summer bookings during this period. Id. ¶¶ 41-42. Bluhm also alleges that "other customers and partners, at least those with fewer points and deeds" regained access to their accounts. Id. ¶42. Bluhm repeatedly called and emailed Defendants but was told to "give it time." Id. ¶ 43. In July 2017, Bluhm spoke to Andres Mosquera ("Mosquera") on the phone. Id. ¶44. Mosquera "described himself as part of [Defendants'] management team and had higher level access." Id. Mosquera told Bluhm his access could be restored if 64 contracts were removed from his portfolio. Id. Bluhm alleges that Defendants "[were] legally and contractually obligated to allow [Bluhm] to use his properties as intended" but "refused to help, stated that [they] would not honor [their] commitments, and told [Bluhm] that he had no choice but to convey the contracts back to them." Id. ¶ 45. Bluhm alleges that Defendants told him he could only regain access to the system if he sold back 64 contracts, the equivalent of 14, 000, 000 of his 18, 000, 000 points. Id. ¶ 46.

         Between July 2017 and the end of August 2017, Defendants emailed Bluhm 64 "contracts and/or deeds" which he signed, notarized, and mailed back, in exchange for Defendants' paying off a $199, 043.07 loan Bluhm owed to an unspecified party and Defendants' promise that he would regain access to the system. Id. ¶ 49. As part of these transactions Bluhm also entered the "Purported 8/17/17 Agreement" (the "August 17, 2017 Agreement") with WVO. Id.[1]

         Bluhm alleges that he was first able to access the system on October 18, 2017 and lost five months of rental income in the intervening period. Id. ¶ 50. He alleges that he experiences ongoing website errors which cause him to lose income. Id. ¶¶51-52.

         Finally, Bluhm alleges that in discovery, he "intends to find out whether the new system's inability to handle his accounts was a design feature maliciously implemented by Wyndham, rather than a bug as was represented." Id. ¶ 59.

         Against all Defendants, Bluhm alleges breach of contract, violation of the Washington Timeshare Act, RCW Chapter 64.36, violation of the Washington Consumer Protection Act, RCW Chapter 19.86, violation of Florida's Deceptive and Unfair Trade Practices Act, negligence, gross negligence, tortious interference with business expectancy, and unjust enrichment. Against WVR and WVO, Bluhm also alleges fraud and fraud in the inducement. Bluhm seeks injunctive relief and other relief including damages and rescission or reformation of contracts.

         III. DISCUSSION

         Defendants' motion asks the Court to dismiss Bluhm's claims for lack of personal jurisdiction or for failure to state a claim, or in the alternative, transfer the action to the Middle District of Florida. Dkt. 37 at 2. Defendants' reply argues that Bluhm failed to respond to the motion to transfer venue, so the Court should grant it. Dkt. 43 at 2. As before, the Court finds it prudent to assess jurisdiction over the parties before considering a motion to dismiss or to transfer venue.

         A. Motion to Dismiss Under ...


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