$3.9 million verdict when Wyndham Vacation Resorts breaches contract, commits fraud against travel wholesaler. Los Angeles County.

Summary

Plaintiff, a wholesale travel sales company, sold certificates to defendant Wyndham Vacation Ownership's timeshares for many years. When the recession hit, defendant broke oral and written contracts, costing plaintiff a majority of its business as it had worked almost exclusively for defendant.

The Case

  • Case Name: Casablanca Express, Inc. vs. Wyndham Vacation Ownership, et al
  • Court and Case Number: Los Angeles County Superior/ BC 436168
  • Date of Verdict or Judgment: Sunday, October 21, 2012
  • Date Action was Filed: Wednesday, March 31, 2010
  • Type of Action: Fraud
  • Judge or Arbitrator(s): Hon. Victor E. Chavez
  • Plaintiffs:
    Casablanca Express, Inc.
  • Defendants:
    Wyndham Vacation Ownership
    Wyndham Resort Development Corporation
    Wyndham Vacation Resorts
  • Type of Result: Jury Verdict

The Result

  • Gross Verdict or Award: $3,907,000. Settled confidentially before punitive damages phase.
  • Economic Damages:

    $3,907,000: $3,192,000 for fraud; $715,000 for contract damages.

    The jury found that Wyndham breached the right of first refusal provision of the agreement by secretly using other travel certificate companies without offering Casablanca the right of first refusal. The jury found that Wyndham acted with “fraud, oppression, or malice” sufficient to justify punitive damages.

    The case proceeded to a punitive damage phase which included the evidence of Wyndham’s net worth. After the punitive phase of the trial, and while the jury was deliberating on punitive damages, the case settled for a confidential amount.

  • Punitive Damages:

    Case settled for a confidential sum while jury was deliberating on punitive damages.

  • Trial or Arbitration Time: 20 days
  • Jury Deliberation Time: 5 days
  • Jury Polls: 12-0
  • Post Trial Motions & Post-Verdict Settlements: Case settled for a confidential sum while jury was deliberating on punitive damages.

The Attorneys

  • Attorney for the Plaintiff:
    Engstrom, Lipscomb & Lack by Paul Traina, Scott A. Marks, and Richard P. Kinnan, Los Angeles.
  • Attorney for the Defendant:
    Terra Law, LLP by David Draper and Martin Dioli, San Jose.

The Experts

  • Plaintiff's Technical Experts:
    Chris Hamilton, forensic accounting and fraud examination, Simi Valley.
  • Defendant's Technical Experts:
    Edward Westerman, forensic accounting and fraud examination, San Francisco.

Facts and Background

  • Facts and Background:

    Over a 19 year period (1989 - 2008), Casablanca Express and Wyndham built a business relationship whereby Casablanca helped Wyndham market and sell its timeshare products. Casablanca sold Wyndham Travel Certificates for use in its marketing and sale of timeshares. Casablanca agreed to and did serve as the travel agency for the Wyndham Travel Certificates, and Casablanca serviced the travel certificates by arranging for and fulfilling all the proper accommodations and travel called for by the travel certificates.

    At Wyndham’s request, Casablanca worked almost exclusively for Wyndham. As part of the contract between the parties, Wyndham agreed to give Casablanca a “wind-down” severance agreement, whereby Wyndham would pay Casablanca for three years after terminating its relationship with Casablanca so as to allow Casablanca time to rebuild its business with other clients. Wyndham also promised to give Casablanca the right of first refusal to sell all travel certificates used by Wyndham.

    In October 2008, claiming it needed help during the recession, Wyndham requested that Casablanca waive the wind-down clause in exchange for promises of a long-term, growing and exclusive business relationship going forward. Shortly after Casablanca agreed to delete the wind-down provision of the agreement (and give up other financial entitlements) in exchange for the promise of a long-term, growing and exclusive business relationship going forward, Wyndham abruptly ceased doing business with Casablanca.

     

  • Plaintiff's Contentions:

    That defendant breached numerous oral and written contracts and acted with fraud. 

    Plaintiff claimed that during the parties’ business relationship, Casablanca maintained a 100% successful service rate for all the travel certificates sold to Wyndham. 

    That Wyndham had intentionally misrepresented facts to Casablanca about the long-term, growing and exclusive business relationship going forward, and, that Wyndham fraudulently concealed its secret intent to terminate the business relationship at the time it got Casablanca to waive the wind-down clause (and its other financial entitlements).

     

  • Defendant's Contentions:

    Defendant contended that they did not breach any oral or written contracts and did not commit fraud in their dealings with plaintiff.

Disclaimer

This is not an official court document. While the publisher believes the information to be accurate, the publisher does not guarantee it and the reader is advised not to rely upon it without consulting the official court documents or the attorneys of record in this matter who are listed above.

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