Law Firm Defrauded Timeshare Owners To Win Business: Suit

By Joyce Hanson

Law360, New York (June 9, 2017, 8:57 PM EDT) -- A country club and timeshare seller on Thursday sued a Nashville law firm in Florida federal court, alleging that it purports to represent timeshare owners who claim to have been victimized by timeshare fraud but is instead fooling the owners into paying for legal services that it doesn’t deliver. 
Kissimmee, Florida-based Orange Lake Country Club Inc.’s suit against Castle Law Group PC along with its affiliates, lawyers and executives says the defendants masterminded a scheme to solicit timeshare owners using false and misleading advertising with the intent of using their ”timeshare advocate” businesses to interfere with Orange Lake’s contracts and relationships with owners.

The scheme allegedly involves executives William M. Keever and Sean Austin, who under the guise of capital investment firm Castle Venture Group LLC give funds to Castle Marketing Group LLC to fraudulently solicit business for attorney Judson Phillips of Castle Law Group, which is owned by Keever, according to Orange Lake’s complaint. Phillips, a former Shelby County, Tennessee, assistant district attorney, is best known as the founder of the for-profit corporation Tea Party Nation, which organized the first national Tea Party convention in February 2010.

Another company named in the suit, Resort Relief LLC of Conroe, Texas, which is run by executive Kevin Hanson but owned by Austin, induces timeshare owners via fraudulent and deceptive advertising as well as direct phone calls to retain Castle Law’s services, the lawsuit said. Once the owners get in touch with Castle Law, the firm’s nonattorney employees convince them to default on the promissory notes and mortgages they have signed with Orange Lake in order to buy their timeshare interests, the suit said.

Castle’s advertisements claim, “The lawyers and legal support staff will handle your case from start to finish, leaving you to enjoy your life and stop stressing about your timeshare,” according to the complaint. “Timeshare attorneys can negotiate a full and final settlement agreement that completely cancels your timeshare contract and timeshare debt.”

Orange Lake employs 3,000 people to develop, finance and manage timeshare properties at 13 resorts around the United States, totaling about 3,395 individual timeshare units for 100,000 owners, according to the complaint.

In early 2015, Keever, Judson and Austin incorporated Castle Marketing, Castle Venture and Castle Law to solicit timeshare owners using false advertising “with the purpose of tortious interference with Orange Lake’s existing contracts and advantageous business relationships with its owners,” the complaint said.

To entice Orange Lake owners to sign retainers with Castle Law, nonattorney employees tell potential clients the pros and cons of continuing payment to the timeshare company that ends up encouraging the owners to stop making payments under the terms of their purchase agreements, the suit said.

In addition, the Castle defendants are aware that many owners can’t afford to cancel their minimum $40,000 contracts, so they encourage them to make false statements and allegations against Orange Lake to get out of the contracts, according to the suit. At the same time, the defendants convince owners that they are legally representing them for a $7,500 retainer fee even though the defendants know the timeshare contracts have been made in good faith and are unlikely to be canceled, the suit said.

“In many instances, after the one-year or 18-month guaranty time period expired, Castle Law would inform clients that their timeshare contracts have been rescinded and that Castle Law was waiting for paperwork from the developer to finalize the matter,” the suit said. “This was not the case. Castle Law was largely unsuccessful in its efforts to get the developers to cancel the contracts.”

The suit, which cites violations of the Florida Deceptive and Unfair Trade Practices Act, demands a temporary and a permanent injunction against the Castle defendants for false advertising and contacting Orange Lake’s clients along with an award of costs and attorneys’ fees.

Representatives for Orange Lake Country Club and Castle Law did not immediately respond Friday to requests for comment.

Orange Lake Country Club is represented by Jeffrey A. Backman, Richard W. Epstein and Thu Pham of Greenspoon Marder PA.

Legal counsel information for Castle Law was not available.