Lingard v. Holiday Inn Club Vacations, Inc.

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

ORLANDO DIVISION

ANGELIQUE L. LINGARD and

SUDARIEN D. SMITH,

Plaintiffs,

v. Case No: 6:23-cv-323-JSS-RMN

HOLIDAY INN CLUB VACATIONS,

INC. and WILSON RESORT

FINANCE, LLC,

Defendants.

___________________________________/

ORDER

In this action, Plaintiffs seek to cancel their timeshare plans with Defendants

pursuant to the Military Lending Act (MLA), 10 U.S.C. § 987. (Dkt. 20.) In

preparation for the trial of this matter, each party seeks to exclude opposing experts.

Plaintiffs move to exclude the testimony of Defendants’ expert Paul Habibi. (Dkt. 74.)

Defendants oppose the motion. (Dkt. 80.) Defendants move to exclude the testimony

of Plaintiffs’ rebuttal expert Dr. Christopher Young. (Dkt. 79.) Plaintiffs oppose the

motion. (Dkt. 86.) For the reasons set forth below, Plaintiffs’ motion is denied, and

Defendants’ motion is granted. Plaintiffs also move for class certification. (Dkt. 72.)

Defendants oppose the motion. (Dkt. 77.) Plaintiffs filed a reply in support of the

motion. (Dkt. 85.) For the reasons set forth below, the motion is denied.

BACKGROUND

Plaintiffs bring this proposed consumer class action on behalf of themselves and

other military servicemembers who are similarly situated against Defendants for

alleged violations of the MLA, 10 U.S.C. § 987. (Dkt. 20.) Plaintiffs and the proposed

class members purchased timeshare interests from Defendants. (Id. ¶¶ 88–89.)

Defendants are in the business of selling timeshare plans to consumers throughout the

United States. (Id. ¶¶ 51–56.) These plans give their owners’ points, which allow them

to stay at Holiday Inn Club Vacation Resorts throughout the United States, stay at

out-of-network resorts around the world, and buy airline tickets, cruises, rental cars,

and other vacation services. (Dkt. 77 at 8.) Plaintiffs allege that Defendants’ timeshare

contracts violate the MLA. (Dkt. 20 ¶¶ 57–76.) Specifically, Plaintiffs allege that their

and proposed class members’ contracts contain mandatory arbitration, class action

waiver, and jury trial waiver provisions in violation of the Act. (Dkt. 72 at 11.) For

these alleged violations, Plaintiffs, on behalf of themselves and the class, seek an order

declaring the contracts void from inception and awarding actual damages. (Dkt. 20 at

38–39.)

Pursuant to Federal Rules of Civil Procedure 23(a), 23(b)(2), and 23(b)(3),

Plaintiffs move to certify the following class and subclass:

MLA Class: All persons who have entered into Timeshare

Purchase Agreements to purchase one or more timeshare

interests in the Orange Lake Revocable Trust, in

substantially the same form as Exhibit C, after February 24,

2018[,] and who were identified as an active duty

servicemember or a dependent within a [Department of

Defense (DoD)] Man[p]ower database on the contract date.

Default Subclass: All members of the MLA Class whose

accounts are or were delinquent as evidenced by [Holiday

Inn Club Vacations (HICV)] imposing a “use restriction”

on their timeshare interest for nonpayment.1

(Dkt. 72 at 19) (emphasis and footnote omitted).) Defendants rely on the report of its

expert, Paul Habibi, in its response in opposition to Plaintiffs’ motion for class

certification. (Dkt. 77 at 18–19, 29.) In rebuttal to Defendants’ expert, Plaintiffs

disclosed Dr. Christopher Young and seek to rely upon his report to refute Mr.

Habibi’s report. (Dkt. 86 at 10–11.) The parties seek to exclude each other’s proposed

experts. The court will first consider the parties’ motions to exclude each other’s

experts and then consider Plaintiffs’ motion for class certification.

MOTIONS TO EXCLUDE EXPERT TESTIMONY

In determining the admissibility of expert testimony under Federal Rule of

Evidence 702, “[t]he court serves as a gatekeeper, charged with screening out experts

whose methods are untrustworthy or whose expertise is irrelevant to the issue at

hand.” Corwin v. Walt Disney Co., 475 F.3d 1239, 1250 (11th Cir. 2007); Moore v.

Intuitive Surgical, Inc., 995 F.3d 839, 850 (11th Cir. 2021) (quoting Kilpatrick v. Breg,

Inc., 613 F.3d 1329, 1335 (11th Cir. 2010)). A determination of admissibility requires

findings that “(1) the expert is qualified to testify competently regarding the matters he

intends to address; (2) the methodology by which the expert reaches his conclusions is

sufficiently reliable as determined by the sort of inquiry mandated in Daubert; and (3)

1 Exhibit C was not attached to the motion, but Plaintiffs filed the exhibit on the docket. (See

Dkts. 81-3, 81-4.)

the testimony assists the trier of fact, through the application of scientific, technical, or

specialized expertise, to understand the evidence or to determine a fact in issue.”

United States v. Frazier, 387 F.3d 1244, 1260 (11th Cir. 2004) (en banc) (quoting City of

Tuscaloosa v. Harcros Chems., Inc., 158 F.3d 548, 562 (11th Cir. 1998)); see Daubert v.

Merrell Dow Pharms., Inc., 509 U.S. 579 (1993).

If conflicting expert testimony is presented by both parties at the class

certification stage, a district court should perform a full Daubert analysis at the class

certification stage. Sher v. Raytheon Co., 419 F. App’x 887, 890 (11th Cir. 2011); PB

Prop. Mgmt., Inc. v. Goodman Mfg. Co., No. 3:12-CV-1366-HES-JBT, 2016 WL

7666179, at *9 (M.D. Fla. May 12, 2016). “‘[W]hen an expert’s report or testimony

is critical to class certification, . . . a district court must conclusively rule on any

challenge to the expert’s qualifications or submissions prior to ruling on a class

certification motion.’” Sher, 419 F. App’x at 890 (quoting Am. Honda Motor Co. v. Allen,

600 F.3d 813, 815–16 (7th Cir. 2010)). If there is a challenge to the reliability of the

expert’s information, then the district court must resolve the issue if “‘that information

is relevant to establishing any of the Rule 23 requirements.’” Id. (quoting Am. Honda,

600 F.3d at 816). The district court “must make the necessary factual and legal

inquiries and decide all relevant contested issues prior to certification.” Id. at 891.

ANALYSIS

A. Dr. Christopher Young

A full Daubert analysis is only required at the class certification stage “when an

expert’s report or testimony is critical to class certification.” Local 703, I.B. of T. Grocery

& Food Emps. Welfare Fund v. Regions Fin. Corp., 762 F.3d 1248, 1258 n.7 (11th Cir.

2014) (quoting Am. Honda, 600 F.3d at 815–16); Sher, 419 F. App’x at 890 (same). In

American Honda Motor Co. v. Allen, 600 F.3d 813 (7th Cir. 2010), the court determined

that an expert’s report or testimony was critical to class certification when the plaintiffs

relied “heavily” on it “to demonstrate the predominance of common issues.” Id. at

814; Sher, 419 F. App’x at 888–90 (same) (citing Am. Honda, 600 F.3d at 815–16).

Here, Dr. Young’s report is not critical to the court’s determination of whether

to certify the proposed class because Plaintiffs have not heavily relied upon it for class

certification. Indeed, Plaintiffs only refer to Dr. Young’s report in one sentence related

to the manageability requirement for class certification under Federal Rule of Civil

Procedure (b)(3)(D) (Dkt. 72 at 34–35) (“However, even if, arguendo, the Court were

to determine that HICV is entitled to an offset, . . . offset is calculable, . . . as Plaintiffs’

rebuttal expert makes clear. . . . Thus, there are no manageability issues that would

preclude trial on a classwide basis.”) Even if the court were to determine that multiple

individual lawsuits would be more manageable than a class action, lack of

manageability “will rarely, if ever, be in itself sufficient to prevent certification.” Klay

v. Humana, Inc., 382 F.3d 1241, 1272 (11th Cir. 2004), abrogated in part on other grounds

by Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008). Nonetheless, as Plaintiffs

have not heavily relied upon Dr. Young’s report, “there [is] no need to engage [in] the

Daubert analysis before resolving the class certification motion.” Local 703, 762 F.3d at

1258 n.7.

Plaintiffs seek to rely upon Dr. Young’s report to rebut Defendants’ expert’s

opinion on the issue of class certification. Defendants have moved to exclude Dr.

Young’s report on two grounds. Defendants contend Dr. Young’s report was untimely

disclosed and lacks reliability under Daubert.

“Federal Rule of Civil Procedure 26 prescribes when and how parties must

disclose potential witnesses.” Baxter v. Roberts, 54 F.4th 1241, 1254 (11th Cir. 2022).

Complying with Rule 26 is “‘not merely an aspiration’ as ‘the expert witness discovery

rules are designed to allow both sides in a case to prepare their cases adequately and

to prevent surprise.’” Bray & Gillespie Mgmt. LLC v. Lexington Ins. Co., No. 6:07–cv–

222–Orl–35KRS, 2009 WL 1043974, at *3 (M.D. Fla. Apr. 17, 2009) (quoting Reese v.

Herbert, 527 F.3d 1253, 1266 (11th Cir. 2008)). Rule 26(a) and (e) require the parties

“to disclose all bases of their experts’ opinions” and to timely supplement these expert

disclosures “upon discovery of an omission or as required by court order.” Mitchell v.

Ford Motor Co., 318 F. App’x 821, 824 (11th Cir. 2009). Absent a stipulation or court

order, expert evidence that “is intended solely to contradict or rebut evidence on the

same subject matter identified by another party” must be disclosed “within 30 days

after the other party’s disclosure.” Fed. R. Civ. P. 26(a)(2)(D). Nevertheless, an

expert’s opinion cannot properly be characterized as rebuttal evidence to cure untimely

disclosure. Bell v. Progressive Select Ins. Co., 692 F. Supp. 3d 1121, 1124–26 (M.D. Fla.

2023) (striking an untimely expert report characterized as a rebuttal expert report when

the expert opined on “issues that [the plaintiff] must prove in his case in chief”).

Indeed, a plaintiff cannot characterize an untimely expert report as a rebuttal

expert report when the expert addresses an issue that the plaintiff bears the burden of

proof on at trial. See Travelers Prop. Cas. Co. of Am. v. Ocean Reef Charters LLC, 71 F.4th

894, 904–908 (11th Cir. 2023). In Travelers Prop. Cas. Co. of Am. v. Ocean Reef Charters

LLC, the plaintiff did not disclose an expert to testify in its case-in-chief. Id. at 906–

08. Instead, the plaintiff attempted to rely on their purported rebuttal expert’s report

on an issue they bore the burden of proving at trial. Id. at 908. The Eleventh Circuit

affirmed the district court’s ruling excluding the expert’s report during the summary

judgment stage, explaining that:

The plaintiff argued that [their expert’s] report rebutted [the

defendant’s expert’s] opinions as if it did not have the

burden of proof or did not need an expert to meet that

burden. . . . The plaintiff did not move the court to

redesignate their expert as a case-in-chief expert. And the

district court correctly applied Rule 56 by refusing to

consider rebuttal evidence as evidence that could meet the

plaintiff’s burden of proof.

Id. at 909 (cleaned up).

Here, Plaintiffs untimely disclosed Dr. Young’s report to Defendants. The case

management and scheduling order expressly states that Plaintiffs’ deadline for

disclosing class action expert reports was March 26, 2024. (Dkt. 61 at 1.) According

to Defendants, Plaintiffs did not identify any expert or serve any expert report on that

date. (Dkt. 79 at 9.) Instead, Defendants assert that Plaintiffs disclosed Dr. Young’s

identity and report on May 28, 2024, the day that class discovery closed. (Id.)

Plaintiffs’ argument that Dr. Young’s report was properly disclosed as a rebuttal expert

report pursuant to Federal Rule of Civil Procedure 26(a)(2)(D)(ii) is not well taken.

The crux of Dr. Young’s opinion is that a common methodology can be used

to estimate the offset owed to Holiday Inn from the proposed class members who used

their timeshare points. (Dkt. 79-1 at 14–21.) Although Dr. Young’s opinion

contradicts Mr. Habibi’s report, Plaintiffs bear the burden of proof on this damages

issue. Comcast Corp. v. Behrend, 569 U.S. 27, 35 (2013) (explaining that under Rule

23(b)(3), the plaintiff bears the burden of “establishing that damages are capable of

measurement on a classwide basis”); Klay, 382 F.3d at 1259 (explaining that during

the class certification stage, the plaintiff must “come forward with plausible statistical

or economic methodologies to demonstrate [damage] impact on a class-wide basis”).

Plaintiffs bear the burden of identifying a method to determine the dollar value of the

benefits received by each proposed class member who used timeshare points.2 Once

2 If the class were to be certified and Plaintiffs prevailed on the merits, the court would

declare the contracts void from the inception. In connection with that declaration,

Plaintiffs seek on behalf of themselves and the class “actual damages the greater of all

amounts they paid in connection with or pursuant to the illegal and void timeshare

contracts or $500 per MLA violation . . .” (Dkt. 20 at 39; see also Dkt. 72 at 39

(explaining that Plaintiffs on behalf of themselves and the class seek “actual damages

equal to amounts paid on the void loans”).) The Supreme Court has stated that “when

Congress declare[s] in [a statute] that certain contracts are void, it intend[s] that the

customary legal incidents of voidness w[ill] follow, including the availability of a suit

for rescission or for an injunction against continued operation of the contract, and for

restitution.” Transamerica Mortg. Advisors, Inc. (TAMA) v. Lewis, 444 U.S. 11, 19 (1979).

Rescission of the contracts is the equitable relief that would flow from the contracts

these amounts are determined for each individual, they will be deducted from the

actual damages claimed by each member related to the timeshare contract payments.

382 F.3d at 1259. This damages calculation makes sense because it prevents Plaintiffs

and the proposed class members who used their timeshare points from receiving a

windfall should they prevail on the merits. Additionally, Plaintiffs moving for class

certification also have the burden of showing that determining the value of these

individual benefits does not predominate over the issues subject to generalized proof.

Plaintiffs cannot excuse the untimeliness of Dr. Young’s disclosure by ignoring these

burdens and characterizing Dr. Young’s report as a rebuttal expert report.

Federal Rule of Civil Procedure 37(c)(1) provides that “[i]f a party fails to

provide information or identify a witness as required by Rule 26(a) or (e), the party is

not allowed to use that information or witness to supply evidence on a motion, at a

hearing, or at a trial, unless the failure was substantially justified or is harmless.” Fed.

R. Civ. P. 37(c)(1). To determine whether a nondisclosure was substantially justified

being declared void. See Wilson v. Par Builders II, Inc., 879 F. Supp. 1187, 1190 (M.D.

Fla. 1995) (“The rescission of contract ‘amounts to the unmaking of a contract, or an

undoing of it from the beginning, and not merely a termination . . . .’” (quoting Black’s

Law Dictionary, (5th Ed. 1979)). “The rescission . . . may be effected by mutual

agreement of parties, or by one of the parties declaring rescission of the contract,

without the other if a legally sufficient ground therefor[e] exists, or by applying to

courts for a decree of rescission . . . .’” Id. (quoting same). It is “an action of an

equitable nature.” Id. Under Florida law, one of “[t]he fundamental requirements

necessary to state a cause of action for rescission of contract” is that if “the moving

party has received benefits from the contract, he should . . . allege an offer to restore

these benefits to the party furnishing them, if restoration is possible . . . .” Bland v.

Freightliner LLC, 206 F. Supp. 2d 1202, 1206 (M.D. Fla. 2002).

or harmless, courts consider five factors: “(1) the unfair prejudice or surprise of the

opposing party; (2) the opposing party’s ability to cure the surprise; (3) the likelihood

and extent of disruption to the trial; (4) the importance of the evidence; and (5) the

offering party’s explanation for its failure to timely disclose the evidence.” Northrup v.

Werner Enter., Inc., No. 8:14-cv-1627-T-27JSS, 2015 WL 4756947, at *2 (M.D. Fla.

Aug. 11, 2015) (citation omitted). The non-disclosing party bears the burden of

showing a failure to disclose was substantially justified or harmless. Mitchell, 318 F.

App’x at 824. “The district court has broad discretion to admit or exclude untimely

submissions under [Rule 37(c)(1)].” Lambert v. Monaco Coach Corp., No. 8:04-cv-608-T-

30-TBM, 2005 WL 5961075, at *1 (M.D. Fla. Feb. 10, 2005) (citing Bearint v. Dorel

Juv. Grp., Inc., 389 F.3d 1339 (11th Cir. 2004)).

Although Plaintiffs recite the substantially justified or harmless standard, they

do not make any argument in support of their position. (See generally Dkt. 86.) Rather,

Plaintiffs explain that Dr. Young’s expert report was timely provided as a rebuttal

expert report. The court has rejected that argument. Plaintiffs have, therefore, failed

to meet their burden of showing that their late disclosure was substantially justified or

harmless. Knight ex rel. Kerr v. Miami-Dade County, 856 F.3d 795, 812 (11th Cir. 2017)

(concluding that a district court did not abuse its discretion by excluding the plaintiffs’

untimely disclosed expert when the plaintiff failed to establish justification for their

tardiness or that the late disclosure was harmless).

Defendants maintain that they were prejudiced because Plaintiffs disclosed Dr.

Young on the day class discovery closed. (Dkt. 79 at 22–23.) Although Defendants

deposed Dr. Young after the court granted an extension to the class discovery deadline

solely for this to occur, Defendants assert there is still unfair prejudice because many

topics could not be fully explored at the deposition. (Id. at 21–22.) For example,

Defendants assert that Dr. Young refused to answer questions about his testimony in

prior cases by invoking confidentiality agreements that had not been disclosed to

Plaintiffs’ counsel for their review. (Dkt. 79 at 21–22.) Defendants also contend that

they are unfairly prejudiced because Dr. Young’s report and deposition testimony are

full of speculation because he reached his conclusions without evaluating any of the

relevant data to estimate the value of the proposed class members’ uses of their points.

(Id. at 9, 21–23.) Given the prejudice caused by the untimely disclosure, the inability

to cure the prejudice at the deposition, and the fact that the trial is only months away,

Dr. Young’s opinion will be excluded.

Second, even if Dr. Young’s report was timely disclosed, which it was not, it is

still due to be excluded because Dr. Young has not reliably applied his “ principles and

methods to the facts of the case.” Fed. R. Evid. 702(d). To determine whether an

expert’s methodology is sufficiently reliable, courts consider the following:

(1) whether the theory or technique can be (and has

been) tested, (2) whether the theory or technique has

been subjected to peer review and publication, (3) in the

case of a particular . . . technique, the known or potential

rate of error, and (4) whether the theory or technique is

generally accepted by the relevant . . . community.

Hendrix ex rel G.P. v. Evenflo, Co., 609 F.3d 1183, 1194 (11th Cir. 2010). Dr. Young’s

report is full of limitations because he has not tested the theories he asks the court to

accept. For example, he opines that the market approach methodology “can be used”

to estimate the offset due to Holiday Inn. (Dkt. 79-1 at 14.) According to Dr. Young,

this approach entails evaluating the following market observations to determine the

value of the Holiday Inn points: (1) the purchase of points by the issuer, (2) the

purchase of points in order to complete a transaction, (3) the sale of points in secondary

markets, and (4) the redemption of points for items such as holiday stays, cruises, and

car rentals, versus the cost of purchasing them. (Id. at 17.) Dr. Young did not analyze

these observations to make any calculations because he was not provided with this

data, and he speculates as to whether Holiday Inn maintains this data. Dr. Young’s

deposition testimony evidences this:

Q: Do you know what that exchange rate is?

A: I don’t know what the exchange rate is because I don’t

have all the data.

Q: Do you know --

A: Once I -- once I get the data, we will perform that

analysis. . .

Q: Can you point to a single document or a piece of paper

that ascribes a dollar value to the use of Holiday Inn Club

Vacation points, outside the Holiday Inn Club Vacations

network?

A: Again, once I get all of the data, we can calculate all of -

- all of -- I can give you thousands of calculations, but once

we get the data -- because Holiday Inn has all of this

information because they have to have this information.

And so once we receive that information and we can look

at all of the various exchanges, when somebody gave up

points on -- one of the plaintiffs gave up points for a rental

car or somebody gave up points for an airline, I can

calculate what the value of those points were at that point

in time. . . .

Q: And you reached that conclusion that you can make

those calculations before receiving the data, correct?

A: I do not have the data yet; that is correct.

(Young Dep., Dkt. 79-2 at 184:22–185:3, 186:2–18, 187:1–6.) In his report, Dr. Young

offers only methods unapplied to this case that might determine the value of potential

class members’ Holiday Inn points. This unapplied and speculative methodology does

not support “that a reliable [class-wide] damages methodology exist[s].” Green-Cooper

v. Brinker Int’l Inc., 73 F.4th 883, 893 (11th Cir. 2023). Therefore, the court will exclude

Dr. Young’s report. See Edwards v. Shanley, 580 F. App’x 816, 823 (11th Cir. 2014)

(“[A] trial court may exclude expert testimony that is ‘imprecise and unspecific,’ or

whose factual basis is not adequately explained.” (quoting Cook, 402 F.3d at 1111));

see also Morgan v. Orlando Health, Inc., No. 6:17-cv-1972-Orl-41GJK, 2019 WL

7423514, at *5 (M.D. Fla. Oct. 23, 2019) (excluding and striking the plaintiff’s class

certification expert’s report when the expert’s report contained no analysis and merely

described a method they would have taken to analyze the data); Brashevitzky v. Reworld

Holding Corp., 348 F.R.D. 107, 120 (S.D. Fla. Nov. 13, 2024) (explaining that when a

party is producing a class certification expert at the close of class discovery, “[i]t is not

sufficient, as a basis to support [the] admission of [the] expert[’s] opinion, . . . to state

what [the expert] will do later on”).

B. Paul Habibi

Defendants heavily rely on Mr. Habibi’s report to oppose Plaintiff’s motion for

class certification. Specifically, they refer to the report to challenge Plaintiffs’ assertion

that the issues in the proposed class action that are subject to generalized proof

predominate over the damages issue subject to individualized proof. (Dkt. 77 at 18–

19, 30–35.) Plaintiffs challenge the admissibility of Mr. Habibi’s report under Daubert.

(Dkt. 74 at 12–26.)

A determination of admissibility under Daubert requires findings that “(1) the

expert is qualified to testify competently regarding the matters he intends to address;

(2) the methodology by which the expert reaches his conclusions is sufficiently reliable

as determined by the sort of inquiry mandated in Daubert; and (3) the testimony assists

the trier of fact, through the application of scientific, technical, or specialized expertise,

to understand the evidence or to determine a fact in issue.” United States v. Frazier, 387

F.3d 1244, 1260 (11th Cir. 2004) (en banc) (quoting City of Tuscaloosa v. Harcros Chems.,

Inc., 158 F.3d 548, 562 (11th Cir. 1998)). The basic Daubert requirements of

“qualification, reliability, and helpfulness . . . [are] distinct concepts[,] and the courts

must take care not to conflate them.” Moore, 995 F.3d at 851 (quoting Frazier, 387

F.3d at 1260). The party offering an expert has the burden of satisfying each of these

elements by a preponderance of the evidence. Id.; Cook ex rel. Est. of Tessier v. Sheriff of

Monroe Cnty., Fla., 402 F.3d 1092, 1107 (11th Cir. 2005).

In formulating his opinion, Mr. Habibi reviewed the operative complaint, the

court’s order granting in part and denying in part Defendants’ motion to dismiss,

Plaintiffs’ deposition transcripts, Plaintiffs’ timeshare loan documents, and timeshare

points use charts for some of the proposed class members who have been identified.

(Dkt. 77-2 at 31–38.) After reviewing these materials, Mr. Habibi provided three

opinions based on his training and experience: (1) Plaintiffs and proposed class

members acquired unique and variable timeshare interests in different structures with

different use rights, financing terms, and financing disclosures before and during the

Proposed Class Period; (2) any negative impact on Plaintiffs’ and proposed class

members’ credit scores, ability to obtain financing, and professional careers in the

military cannot be reliably assessed using a common approach across the entire class;

and (3) the remedies sought by Plaintiffs would require an individualized analysis of

each proposed class member’s respective purchase, interest, and use history. (Dkt. 83-

1 at 15–24.) Plaintiffs seek to exclude Mr. Habibi’s report, arguing that he is not

qualified, all of his conclusions are irrelevant, and that his third conclusion is not based

on reliable facts and is not helpful to the trier of fact. (Dkt. 74 at 11–27.)

1. Qualifications

Plaintiffs assert that Mr. Habibi is not qualified to render an opinion in this

matter because his curriculum vitae does not refer to expertise in timeshares or

economics or valuing non-traditional property interests such as timeshare vacation

points. (Id. at 9.) Defendants maintain that Mr. Habibi is qualified to give his opinion

here because his area of competence matches the subject matter of his testimony. (Dkt.

80 at 21.)

“Determining whether a witness is qualified to testify as an expert requires the

trial court to examine the credentials of the proposed expert in light of the subject

matter of the proposed testimony.” Feliciano v. City of Miami Beach, 844 F. Supp. 2d

1258, 1262 (S.D. Fla. 2012) (quotation omitted). This inquiry is not stringent, and “so

long as the expert is minimally qualified, objections to the level of the expert’s expertise

[go] to credibility and weight, not admissibility.” Vision I Homeowners Ass’n, v. Aspen

Specialty Ins. Co., 674 F. Supp. 2d 1321, 1325 (S.D. Fla. 2009) (quotation omitted).

Mr. Habibi is the owner of a real estate expert services firm. (Dkt. 83-1 at 4.)

He is also a senior continuing lecturer at the University of California Los Angeles

Schools of Management and Law, where he teaches in the areas of real estate, finance,

and accounting. (Id.) He holds a Master of Business Administration and is a licensed

realtor, broker, and certified public accountant. (Id. at 29–30.) Mr. Habibi teaches a

course on timeshares for the MBA program at UCLA. (Dkt. 83-3 at 7.) He also

teaches a course on business skills for lawyers, which covers business valuations and

economic damages. (Id. at 7–8.) Mr. Habibi’s extensive educational background and

experience qualify him to provide expert testimony in this matter.

2. Relevance and Helpfulness

Plaintiffs maintain that Mr. Habibi’s first opinion is irrelevant and unhelpful

because Plaintiffs’ proposed class definition is now limited to servicemembers who

purchased one type of timeshare interest, an interest in the Orange Lake Revocable

Trust. (Dkt. 74 at 12.) Initially, in the operative complaint, Plaintiffs’ proposed class

definition was not limited to one type of timeshare interest and sought to include “[a]ll

covered borrowers who financed a timeshare from Holiday Inn.” (Dkt. 20 ¶ 77.)

Defendants assert that Mr. Habibi’s opinion is still relevant despite Plaintiffs

narrowing the proposed class definition because Plaintiffs seek to void the contracts.

(Dkt. 80 at. 11.) Specifically, Defendants argue that if the court were to declare the

contracts void, Plaintiffs would seek to rescind those contracts. (Id. at 5–6.) Therefore,

Plaintiffs have the burden of showing that rescission is feasible and equitable on a class-

wide basis based on the facts of the case. (Id. at 11–13); see also Cox v. Cmty. Loans of

Am. Inc., 625 F. App’x 453, 457 (11th Cir. 2015) (acknowledging that the MLA allows

covered servicemembers and their dependents to rescind and seek restitution on a

contract rendered void under the statute’s criteria). In this regard, Mr. Habibi opines:

[Plaintiffs] have offered no way to determine, on a class-

wide basis, the type of timeshare interest purchased by each

proposed class member, the use rights of each proposed

class member[], the value of those use rights in the HICV

network or any comparative value within the Proposed

Class Period, the value of any of those interests in securing

accompanying financing, or whether HICV accurately

disclosed the terms of financing.

(Dkt. 83-1 ¶ 50.) “An expert’s testimony is helpful if it ‘assists the trier of fact, through

the application of scientific, technical, or specialized expertise, [(1)] to understand the

evidence or [(2)] to determine a fact in issue.’” Rivera v. Ring, 810 F. App’x 859, 863

(11th Cir. 2020) (quoting Frazier, 387 F.3d at 1260). Since Plaintiffs seek to declare

the timeshare contracts void and seek actual damages, Mr. Habibi’s opinion is relevant

and helpful “to understand the evidence or to determine a fact in issue . . . .” Fed. R.

Evid. 702(a). Specifically, Mr. Habibi’s first opinion is relevant to the predominance

class certification analysis because the parties dispute whether actual damages can be

easily calculated for all class members. (Compare Dkt. 72 at 37–40, with Dkt. 77 at 30–

35.)

Next, Plaintiffs contend that Mr. Habibi’s second opinion is also irrelevant and

unhelpful because Plaintiffs do not seek damages for the harms described in the

opinion. (Dkt. 74 at 13.) Defendants maintain that the opinion is relevant and helpful

to the court’s class certification predominance analysis. (Dkt. 80 at 9–10.)

Specifically, Defendants assert this opinion helps the court evaluate the proposed class

members’ Article III standing. (Id.) District courts should consider “whether the

individualized issue of standing will predominate over the common issues in the case

when it appears that a large portion of the class does not have standing, . . . and making

that determination for these members of the class will require individualized

inquiries.” Cordoba v. DIRECTV, LLC, 942 F.3d 1259, 1277 (11th Cir. 2019). Mr.

Habibi’s second opinion is relevant to the predominance class certification analysis

because Defendants challenge whether determining standing for each proposed class

member will predominate over issues subject to generalized proof. (Compare Dkt. 72

at 32–35, with Dkt. 77 at 29–30.)

As for Mr. Habibi’s third opinion, Plaintiffs maintain that it is irrelevant and

unhelpful because Defendants failed to plead set-off as an affirmative defense. (Dkt.

74 at 14–18.) The court finds this argument unpersuasive because Mr. Habibi opines

concerning Plaintiffs’ ability to establish a class-wide damages methodology, which

they bear the burden of proving during the class certification stage and at trial. Klay,

382 F.3d at 1259. Mr. Habibi’s third opinion is relevant to the court’s predominance

class certification analysis since the parties dispute whether actual damages can be

easily calculated for all class members.

3. Reliability

Plaintiffs maintain that Mr. Habibi’s third opinion is unreliable because he did

not consider relevant information in the possession of Holiday Inn before reaching his

conclusion. (Dkt. 74 at 22–23.) Specifically, Plaintiffs argue that Mr. Habibi should

have reviewed the third-party contracts that Holiday Inn had with other companies.

(Dkt. 80 at 18–19.) According to Plaintiffs, such a review would help determine a

dollar value of points redeemed by class members for services provided by these third

parties, which would help calculate the potential setoff for class members. (Id.)

Defendants respond that this exceeds the scope of Mr. Habibi’s assignment here as he

was not retained “to calculate damages but rather to evaluate the approach one could

take to do so on a common class-wide basis.” (Id. at 19 (citing Habibi Dep., Dkt. 83-

3 at 88:4–6.)) According to Defendants, the fact that some of their contracts with their

third-party vendors may provide some mechanism for reimbursement in dollars does

not render unreliable Mr. Habibi’s opinion that there is no common approach that can

be used to value the redeemed points of the proposed class members. The court agrees.

For example, Defendants’ corporate representative, Michael Gould, testified that

Holiday Inn does not have information on how points used at RCI, an external

exchange company where members could redeem their points, could be valued

because Holiday Inn lacks access to this information. (Gould Dep., Dkt. 77-1 at

104:9–108:5.) Mr. Habibi analyzed the timeshare points usage history data of 300

proposed class members. (Dkt. 83-1 ¶ 70.) Based on his analysis, Mr. Habibi

determined the following: (1) 39% of the proposed class members redeemed all of their

timeshare points to stay at another Holiday Inn resort, and (2) for the proposed class

members who redeemed their points for external stays or outside services, the average

class member used 26.9% of their total timeshare points towards outside services. (Id.)

Mr. Habibi reached the following conclusion in his report after analyzing the data:

[A]ny rescissory damages must be offset by the actual

benefits received by putative class members each of whom

had a different usage history of his or her timeshare

interests. . . . [T]he timing and form of product which each

owner redeems his or her interest is associated with

significant variation [of] the value of such interest. If an

owner redeems his or her interests to redeem outside

services or book reservations on external exchanges, the

cash equivalent value of HICV Club Points for outside

services and exchanges may vary over time. In these cases,

owners can convert their Club Points to credits for outside

services or points on external exchanges, but the number of

points required to book a particular service (such as airfare

or a rental car) or a hotel or timeshare stay on an external

exchange is highly dynamic. . . . Because the value of points

for outside services and on external exchanges can change

on a daily basis, estimating the value received by proposed

class members for the redemption of their Club Points

necessitates an individualized analysis of each owner.

(Id. ¶¶ 66, 69–71 (footnote omitted).) Mr. Habibi’s analysis supports his conclusion

that proposed class members have redeemed their points in various ways at different

times such that there is no common value ascribed to points universally that could be

used as a basis to ascribe a specific dollar value to the points on a class-wide basis.

(Habibi Dep., Dkt. 83-3 at 89:14–90:6.) Further, as mentioned above, Plaintiffs bear

the burden of establishing that calculating damages on a class-wide basis predominates

over issues subject to individualized proof. Defendants only offer Mr. Habibi’s

testimony to rebut Plaintiffs’ assertion they have met their burden on this issue. Mr.

Habibi’s nonscientific opinion about whether there is a common methodology that can

be used to determine the value of the points redeemed by the proposed class members

is reliable based on his training and experience, and the court has already found this

testimony to be relevant and helpful to the court’s predominance class certification

analysis. Am. Gen. Life Ins. Co. v. Schoenthal Fam., LLC, 555 F.3d 1331, 1338 (11th Cir.

2009) (“A district court may decide that nonscientific expert testimony is reliable based

upon personal knowledge or experience.” (quotation omitted)).

PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

Plaintiffs move to certify a class, (Dkt. 72), and Defendants oppose class

certification, (Dkt. 77). “The class action is ‘an exception to the usual rule that

litigation is conducted by and on behalf of the individual named parties only.’” Wal-

Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011) (quoting Califano v. Yamasaki, 442

U.S. 682, 700–01 (1979)). The burden of establishing the propriety of class

certification “rests with the advocate of the class.” Valley Drug Co. v. Geneva Pharms.,

Inc., 350 F.3d 1181, 1187 (11th Cir. 2003). A “district court has broad discretion in

determining whether to certify a class.” Washington v. Brown & Williamson Tobacco

Corp., 959 F.2d 1566, 1569 (11th Cir. 1992); accord Griffin v. Carlin, 755 F.2d 1516, 1531

(11th Cir. 1985) (“Questions concerning class certification are left to the sound

discretion of the district court.”).

Federal Rule of Civil Procedure 23(a) requires the movant to demonstrate the

following when moving for class certification:

(1) the class is so numerous that joinder of all members is

impracticable; (2) there are questions of law or fact common

to the class; (3) the claims or defenses of the representative

parties are typical of the claims or defenses of the class; and

(4) the representative parties will fairly and adequately

protect the interests of the class.

Fed. R. Civ. P. 23(a). These prerequisites are commonly called the “numerosity,

commonality, typicality, and adequacy of representation” requirements. Williams v.

Reckitt Benckiser, LLC, 65 F.4th 1243, 1260 (11th Cir. 2023)). After meeting the

requirements of Rule 23(a), the party seeking class certification must establish at least

one of the alternative requirements of Rule 23(b). Valley Drug, 350 F.3d at 1188.

A Rule 23(b)(2) class is permitted when “the party opposing the class has acted

or refused to act on grounds that apply generally to the class, so that final injunctive

relief or corresponding declaratory relief is appropriate respecting the class as a whole

. . . .” Fed. R. Civ. P. 23(b)(2). A Rule 23(b)(3) class is permitted if “the court finds

that the questions of law or fact common to class members predominate over any

questions affecting only individual members, and that a class action is superior to other

available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ.

P. 23(b)(3). Also, the class representative must have standing to sue, and the proposed

class must be adequately defined and clearly ascertainable. See Prado–Steiman, 221

F.3d at 1279; Carriuolo v. Gen. Motors Co., 823 F.3d 977, 984 (11th Cir. 2016).

ANALYSIS

A. Standing

Plaintiffs must demonstrate Article III standing to pursue each of the claims

asserted in the complaint. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992). This

requires Plaintiffs to establish that they “(1) suffered an injury in fact, (2) that is fairly

traceable to the challenged conduct of the defendant, and (3) that is likely to be

redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338

(2016). Further, “[t]o have standing to represent a class, a party must not only satisfy

the individual standing prerequisites, but . . . also be part of the class and possess the

same interest and suffer the same injury as the class members.” Mills v. Foremost Ins.

Co., 511 F.3d 1300, 1307 (11th Cir. 2008) (quotation omitted). Therefore, the court

must determine that at least one named class representative has Article III standing to

raise each class claim or subclaim. Prado–Steiman, 221 F.3d at 1279.

The court has already addressed Defendants’ standing arguments as to the

named Plaintiffs on the merits in its orders granting in part and denying in part

Defendants’ Motion to Dismiss (Dkt. 36) and denying Defendants’ Motion for

Reconsideration (Dkt. 92). Therefore, for the reasons previously explained by the

court, Plaintiffs have sufficient standing to pursue the class claims.

B. Adequacy of Class Definition and Ascertainability

“Before a district court may grant a motion for class certification, a plaintiff

seeking to represent a proposed class must establish that the proposed class is

adequately defined and clearly ascertainable.” Little v. T-Mobile USA, Inc., 691 F.3d

1302, 1304 (11th Cir. 2012) (quotation omitted). “A class is ascertainable if

membership is based on objective criteria.” Mount v. Pulte Home Co., LLC, No. 6:20-cv-

2314-RBD-LRH, 2022 WL 3446217, at *2 (M.D. Fla. Aug. 17, 2022) (citing Karhu v.

Vital Pharms., 621 F. App’x 945, 946 (11th Cir. 2015)). “[A] vague class definition

portends significant manageability problems for the court.” Rink v. Cheminova, Inc.,

203 F.R.D. 648, 660 (M.D. Fla. 2001).

Defendants argue that the proposed class period is overbroad by three years and

should be limited to applicable class members who purchased their timeshare after

February 24, 2021.3 (Dkt. 77 at 37.) The MLA states:

An action for civil liability . . . may be brought . . . not later

than the earlier of--

(i) two years after the date of discovery by the plaintiff

of the violation that is the basis for such liability; or

(ii) five years after the date on which the violation

that is the basis for such liability occurs.

10 U.S.C. § 987(f)(5)(E). Plaintiffs maintain that the five-year class period applies

because Defendants claim the MLA does not apply to its timeshare loans. (Dkt. 85 at

11.) The Supreme Court has interpreted similar “two-sentence” statutes of limitations

like the MLA by viewing the shorter period as a statute of limitations and the longer

period as a statute of repose. Cal. Pub. Emps.’ Ret. Svs. v. ANZ Sec., Inc., 582 U.S. 497,

3 Defendants argue that February 27, 2021, is the applicable date. (Dkt. 77 at 37.) However,

it appears that Defendants made a typographical error in their calculations. Although this

case was assigned on February 27, 2023, a review of the docket shows that it was filed on

February 24, 2023. (Dkt. 1.) Thus, the court concludes that Defendants intended to use

February 24, 2021, as the relevant date for their statute of limitations argument.

506 (2017) (explaining that “[t]he pairing of a shorter statute of limitations and a longer

statute of repose is a common feature of statutory time limits”). Specifically, “[t]he

two periods work together: The discovery rule gives leeway to a plaintiff who has not

yet learned of a violation, while the rule of repose protects the defendant from an

interminable threat of liability.” Id. (interpreting the one-year discovery provision and

the three-year statute of repose in 15 U.S.C. § 77m). Because other grounds support

the decision not to certify the class, and this issue was not adequately briefed—it was

only mentioned in three sentences before the conclusion of Defendants’ opposition

(Dkt. 77 at 37) and in a short paragraph in Plaintiffs’ reply (Dkt. 85 at 11)—the court

declines to define the appropriate limitations period at this time.

Defendants do not otherwise challenge whether the proposed class is adequately

defined and clearly ascertainable. (See Dkt. 77.) Based on the evidence submitted,

Plaintiffs establish that the parties can identify the proposed class members that

purchased one or more timeshare interests in the Orange Lake Revocable Trust from

Defendants through Defendants’ business records and can determine their military

status through a query of the Department of Defense Manpower Data Center

database. Plaintiffs also point to an Orange Lake Revocable Trust timeshare contract

form that contains the mandatory arbitration, class action waiver, and jury trial waiver

provision that Plaintiffs allege violates the MLA and is substantially similar to the

contracts signed by the proposed class members. (Dkts. 81-3, 81-4.) Defendants also

stipulated that all of its timeshare loan contracts contain substantially similar

mandatory arbitration, class action waiver, and jury trial waiver provisions. (Brandow

Dep., Dkt. 81-5 at 121:11–122:6.) Plaintiffs further established that the parties could

identify the proposed subclass members by reviewing Defendants’ business records.

Plaintiffs produced evidence that supports Holiday Inn sends monthly billing

statements reflecting loans that are in default and places a “use restriction” on

timeshare interests that are in default. (Dkt. 72-5 ¶ 27; Dkt. 72-6 ¶ 27.) Therefore, the

court concludes that the proposed class is adequately defined and clearly ascertainable.

C. Rule 23(a) Factors

1. Numerosity

A class action is appropriate “only if . . . the class is so numerous that joinder

of all members is impracticable . . . .” Fed. R. Civ. P. 23(a)(1). “As a general rule, . .

. more than forty class members will be adequate to meet the numerosity requirement,

while fewer than twenty-one class members will be inadequate . . . .” Mills, 269 F.R.D.

at 670 (citing Cox v. Am Cast Iron Pipe Co., 784 F.2d 1546, 1553 (11th Cir. 1986)).

Plaintiffs contend that while the precise number of potential class members is

unknown, they have identified over three hundred potential class members. (Dkt. 72

at 24–25). This demonstrates an adequate number of members in the proposed class

as joinder of a class this size is impracticable. “[A] plaintiff need not show [a] precise

number of members in the class.” Evans v. U.S. Pipe & Foundry Co., 696 F.2d 925, 930

(11th Cir. 1983). Moreover, Defendants do not dispute numerosity. (See Dkt. 77.)

Therefore, the court finds that the numerosity requirement is satisfied.

2. Commonality

Commonality requires “questions of law or fact common to the class . . . .” Fed.

R. Civ. P. 23(a)(2). To satisfy this element, the class members’ “claims must depend

upon a common contention,” and that common contention “must be of such a nature

that it is capable of classwide resolution.” Sliwa v. Bright House Networks, LLC, 333

F.R.D. 255, 273–74 (M.D. Fla. 2019) (quoting Dukes, 564 U.S. at 350). “[F]or

purposes of Rule 23(a)(2) even a single common question will do.” Carriuolo, 823 F.3d

at 984 (quoting Dukes, 564 U.S. at 359); accord Williams v. Mohawk Indus., Inc., 568 F.3d

1350, 1355 (11th Cir. 2009) (“Commonality requires that there be at least one issue

whose resolution will affect all or a significant number of the putative class

members.”).

Plaintiffs maintain that two issues are common to the class: (1) whether the

MLA applies to the timeshare loans and (2) whether the contracts are void from

inception for containing mandatory arbitration, class action waiver, and jury trial

waiver provisions in violation of the Act. (Dkt. 72 at 25–27.) The determination of

whether the MLA applies to the loans and whether Defendants violated the Act,

making the contracts void from inception, “will resolve an issue that is central to the

validity of each one of the [class members’] claims in one stroke.” See Dukes, 564 U.S.

at 350. Therefore, the commonality requirement is satisfied.

3. Typicality

Typicality requires that “the claims or defenses of the representative parties [be]

typical of the claims or defenses of the class . . . .” Fed. R. Civ. P. 23(a)(3). The class

representative’s claims need not be identical to those of the individual class members;

rather, “there need only exist a sufficient nexus between the legal claims of the named

class representatives and those of individual class members to warrant class

certification.” Ault v. Walt Disney World Co., 692 F.3d 1212, 1216 (11th Cir.

2012) (cleaned up). “This nexus exists ‘if the claims or defenses of the class and the

class representative arise from the same event or pattern or practice and are based on

the same legal theory.’” Id. (quoting Kornberg v. Carnival Cruise Lines, Inc., 741 F.2d

1332, 1337 (11th Cir. 1984)). Furthermore, “[a] class representative must possess the

same interest and suffer the same injury as the class members in order to be typical

under Rule 23(a)(3).” Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1275 (11th Cir. 2009)

(quoting Busby v. JRHBW Realty, Inc., 513 F.3d 1314, 1322 (11th Cir. 2008)). Lastly,

the presence of substantial factual differences does not negate a finding that the

typicality requirement has been met so long as “there is a strong similarity of legal

theories.” Local 703, 762 F.3d at 1259 (quoting Williams, 568 F.3d at 1357).

Plaintiffs contend that their individual and the proposed class claims arise from

being “covered borrowers” as defined by the MLA and purchasing a timeshare interest

in the Orange Lake Revocable Trust. (Dkt. 72 at 28.) Plaintiffs further maintain that

Plaintiffs’ and the proposed class’s legal theories are the same and that Defendants’

inclusion of the provisions prohibited by the MLA makes the contracts void from

inception. (Id.)

Plaintiffs bring individual common law fraud claims against Defendants under

Florida law. According to Plaintiffs, these claims arise from a Holiday Inn sales agent

allegedly falsely informing Plaintiffs that since they are members of the military,

Holiday Inn “would buy back their timeshare points” at any time upon Plaintiffs’

request. (Dkt. 20 ¶¶ 127–139.) The facts that give rise to Plaintiffs’ individual fraud

claims do not arise from Defendants’ alleged MLA violations. Ault, 692 F.3d at 1216.

The proof required to prove Plaintiffs’ individual claims differs from the proof required

to establish that Defendants violated the MLA. Plaintiffs do not provide the court

with legal authority supporting their ability to represent the class, maintain their

individual claims, and satisfy the typicality requirement. Therefore, the court finds

that Plaintiffs have not met their burden of showing that “the claims or defenses of the

representative parties are typical of the claims or defenses of the class.” Fed. R. Civ.

P. 23(a)(3).

4. Adequacy of Class Representation

The final Rule 23(a) element requires that “the representative parties will fairly

and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). Adequacy

refers to both the named plaintiffs and the lawyers who intend to serve as class counsel.

London v. Wal-Mart Stores, Inc., 340 F.3d 1246, 1253 (11th Cir. 2003). The adequacy

of representation requirement “encompasses two separate inquiries: ‘(1) whether any

substantial conflicts of interest exist between the representatives and the class[] and (2)

whether the representatives will adequately prosecute the action.’” Valley Drug, 350

F.3d at 1189 (quoting In re HealthSouth Corp. Sec. Litigation, 213 F.R.D. 447, 460–461

(N.D. Ala. 2003)). The adequacy requirement also concerns whether the plaintiff’s

counsel is “qualified, experienced, and generally able to conduct the proposed

litigation.” Griffin, 755 F.2d at 1533. Plaintiffs maintain that they are adequate

representatives because no conflicts exist, and they have actively participated in this

litigation by conferring with counsel numerous times, responding to written discovery,

producing documents, and appearing for depositions. (Dkt. 72 at 29.) Plaintiffs’

attorneys also maintain that they have extensive experience prosecuting complex class

actions. Defendants do not challenge Plaintiffs’ attorneys’ qualifications or their ability

to prosecute this action. (See Dkt. 77.) After reviewing the record, the court is satisfied

that Plaintiffs’ attorneys are qualified, experienced, and can adequately prosecute this

action.

Defendants argue that Plaintiffs are inadequate representatives for the proposed

class based on four grounds. First, Defendants maintain without citing any supporting

legal authority that Plaintiffs’ interpretation of the Uniform Code of Military Justice

could harm class members. (Dkt. 77 at 24–25.) This argument is unpersuasive because

it is based on speculation. See Gamache v. Hogue, 338 F.R.D. 275, 290 (M.D. Ga. 2021)

(“Adequacy is not defeated by mere speculative or hypothetical conflicts.”). Second,

Defendants challenge the credibility of Plaintiffs, arguing that statements contained in

Plaintiffs’ June 26, 2024, declarations contradict their prior deposition testimony.

(Dkt. 77 at 26–28.) The court deems it inappropriate to assess Plaintiffs’ credibility at

this stage of litigation. Powers v. GEICO, 192 F.R.D. 313, 317 n.6 (S.D. Fla. 1998)

(“[A]ny inquiry concerning [a plaintiff’s] credibility [at the class certification stage] is

an impermissible examination of the merits of the case.”) (citing Eisen v. Carlisle &

Jacquelin, 417 U.S. at 177–78 (1974)). Any credibility concerns may be appropriately

raised and addressed at a later phase of litigation or trial upon consideration of the

merits of Plaintiffs’ claims. Third, Defendants maintain that Plaintiffs have created a

conflict of interest between themselves and the proposed class members because

Plaintiffs improperly abandoned claims based on Defendants’ purported failure to

include the statement of the Military Annual Percentage Rate (MAPR) in Plaintiffs’

and the proposed class members’ timeshare contracts. (Dkt. 77 at 25–26.) The MLA

states in pertinent part:

With respect to any extension of consumer credit (including

any consumer credit originated or extended through the

internet) to a covered member or a dependent of a covered

member, a creditor shall provide to the member or

dependent . . . orally and in writing before the issuance of

the credit . . . [a] statement of the annual percentage rate of

interest applicable to the extension of credit.

10 U.S.C. § 987(c)(1). According to Defendants, this kind of “claim-splitting” is not

permitted because Eleventh Circuit precedent requires a plaintiff to assert all of its

causes of action arising from a common set of facts in one lawsuit. (Dkt. 77 at 25

(citing Kennedy v. Floridian Hotel, 998 F.3d 1221, 1236 (11th Cir. 2021); Kelescseny v.

Chevron, 262 F.R.D. 660, 672–73 (S.D. Fla. 2009)).)

Under Kennedy v. Floridian Hotel, “[t]he claim-splitting doctrine . . . applies

where a second suit has been filed before the first suit has reached a final judgment.”

998 F.3d at 1236. This case is distinguishable because only one lawsuit has been filed

by Plaintiffs against Defendants. In Kelescseny v. Chevron, the court determined that the

plaintiff was not an adequate representative because

[p]otential class members who . . . suffered damages . . .

would be precluded from obtaining relief for the withdrawn

damages claims under Florida law.

Id. at 673. The court explained that the plaintiff, in seeking a limited remedy, “not

only foreclose[d] his own right to relief for other damage done to his boat but

foreclose[d] the rights of all other class members.” Id. This case is distinguishable

because Plaintiffs’ abandonment of the MAPR claim does not leave potential class

members without relief, as in Kelesceny. This is because Plaintiffs contend that all the

potential class members’ loan contracts contain mandatory arbitration, class action

waiver, and jury trial waiver provisions that also violate the MLA and make their

contracts void from inception.

Plaintiffs reply that the missing MAPR disclosure language pertains to loan

interest rates exceeding 36%. (Dkt. 85 at 9 (citing 32 C.F.R. § 232.6(c)(3)).) Because

the interest rates on the applicable timeshare loans are well below 36%, they contend

that the absence of the MAPR disclosure is a mere procedural violation that did not

cause any actual harm. (Id. (citing Muransky v. Godiva Chocolatier, Inc., 979 F.3d 917,

924 (11th Cir. 2020).) Courts have found that a class representative is adequate,

despite abandoning certain claims or theories and thereby subjecting absent class

members to preclusive effects, when the court determined that the abandoned claim

was not suitable for class treatment and that the remaining claims adequately protect

the class members’ interests. See In re Universal Serv. Fund Tel. Billing Practices Litig.,

219 F.R.D. 661, 670 (D. Kan. 2004) (finding class representative adequate where

plaintiff abandoned uncertifiable fraud claim, which “advance[d] the named plaintiffs’

interests as well as the interests of the absent class members”); Stanich v. Travelers

Indem. Co., 259 F.R.D. 294, 308 (N.D. Ohio 2009) (“Here, the only thing that has been

abandoned is one theory for satisfying the duty element of the fraudulent concealment

claim. Thus, the potential conflict in this case is less significant than the abandonment

of an independent fraud claim . . . .”) Defendants have not shown Plaintiffs to be

inadequate class representatives based on Plaintiffs’ failure to assert the MAPR

violation claim since that claim is unsuitable for class treatment under the

circumstances here. The remaining claims for the allegedly violative mandatory

arbitration, class action waiver, and jury trial waiver provisions violations adequately

protect the class members’ interests.

Next, Defendants maintain that a fundamental conflict of interest exists because

Plaintiffs and some of the proposed class members used their timeshares. (Dkt. 77 at

17–18 & 23–24.) In Valley Drug, the Eleventh Circuit explained:

A fundamental conflict exists where some party members

claim to have been harmed by the same conduct that

benefitted other members of the class. In such a situation,

the named representatives cannot vigorously prosecute the

interests of the class through qualified counsel because their

interests are actually or potentially antagonistic to, or in

conflict with, the interests and objectives of other class

members.

Valley Drug, 350 F.3d at 1189 (quotation omitted). Defendants assert that out of the

322 identified proposed class members, over 60% have used their timeshare points to

stay at a Holiday Inn Club Vacations resort or used their points for external services

such as airfare, car rental companies, and resort exchanges. (Dkt. 77 at 23–24.)

Plaintiffs do not dispute this assertion. Instead, Plaintiffs note that Defendants have

provided no evidence supporting the contention that the proposed class members

prefer to retain their timeshare interests and the related financial burden. (Dkt. 85 at

8.) Plaintiffs also respond that if they were to prevail on the merits, no evidence

supports that voiding the contracts and awarding the proposed class actual damages

would be financially detrimental to class members because they can always purchase

another timeshare if they desire. (Id.)

Plaintiffs’ arguments are not well-taken. As the “party seeking class

certification,” Plaintiffs “must affirmatively demonstrate” their compliance with Rule

23. Dukes, 564 U.S. at 350. Plaintiffs have not done so here, as they do not dispute

that more than half of the identified proposed class members used their timeshare

points in various ways. As a result, Plaintiffs’ interests in seeking to void the timeshare

contracts are “actually or potentially antagonistic to, or in conflict with, the interests

and objectives of other class members.” Valley Drug, 350 F.3d at 1189; accord Warren

v. City of Tampa, 693 F. Supp. 1051, 1061 (M.D. Fla. 1988) (“Conflicts pertaining to

the specific issues being litigated will bar class certification.”). This conflict is further

evidenced by Plaintiffs’ position that potential class members who wish to keep using

their timeshare points can buy another timeshare if Plaintiffs were to prevail on the

merits and obtain a declaration voiding the class members’ timeshare contracts. See In

re Photochromic Lens Antitrust Litig., No. 8:10-md-2173, 2014 WL 1338605, at *10

(M.D. Fla. Apr. 3, 2014) (“It follows that a class cannot be certified when some

members of the class benefitted from the alleged wrongful conduct, such that the

proposed class consists of winners and losers.” (citing Pickett v. Iowa Beef Processors, 209

F.3d 1276, 1280 (11th Cir. 2000)). Based on this conflict, Plaintiffs have not met their

burden of showing that “the representative parties will fairly and adequately protect

the interests of the class.” Fed. R. Civ. P. 23(a)(4). As a result, the proposed class will

not be certified because Plaintiffs have failed to demonstrate typicality and adequacy.

D. Rule 23(b)(2) Certification

Plaintiffs seek hybrid class certification under Federal Rule of Civil Procedure

23(b)(2) and (b)(3). (Dkt. 72 at 29.) Plaintiffs contend that the class should be certified

under Rule 23(b)(2) because “[a]ny meaningful redress for Plaintiffs and the [c]lass

requires a declaration voiding the loans from inception.” (Dkt. 72 at 30.) Plaintiffs

also seek rescission of the contracts and actual damages. (Dkt. 20 at 38–39.)

Generally, claims for monetary relief may not be certified under Federal Rule

of Civil Procedure 23(b)(2). Dukes, 564 U.S. at 360–61. (“Rule 23(b)(2) applies only

when a single injunction or declaratory judgment would provide relief to each member

of the class. . . . [I]t does not authorize class certification when each class member

would be entitled to an individualized award of monetary damages.”) The damages

Plaintiffs seek on behalf of the class would flow from a declaration that the contracts

they signed are void from the inception. However, the damages sought here are not

merely incidental to declaratory relief of an indivisible injunction that benefits all class

members. Rather, the damages sought are individualized claims for money, which

“belong in Rule 23(b)(3)” not Rule 23(b)(2). Id. at 362. Each class member would be

entitled to a different amount of damages, depending on the amount of interest paid

and the amount of the loan. For these reasons, even if Plaintiffs satisfied the Rule

23(a) factors, which they have not, the class still cannot be certified pursuant to Rule

23(b)(2).

E. Rule 23(b)(3) Certification

1. Predominance

Plaintiffs also seek class certification under Rule 23(b)(3). The requirement that

common questions of law or fact predominate means “the issues in the class action

that are subject to generalized proof and thus applicable to the class as a whole[] must

predominate over those issues that are subject only to individualized proof.” Kerr v.

City of West Palm Beach, 875 F.2d 1546, 1558 (11th Cir. 1989) (quotation omitted).

Common issues do not predominate if “as a practical matter, the resolution of [an]

overarching common issue breaks down into an unmanageable variety of individual

legal and factual issues.” Babineau v. Fed. Express. Corp., 576 F.3d 1183, 1191 (11th Cir.

2009) (quotation omitted). Plaintiffs maintain there is one predominating common

question here: whether “the Trust Product Timeshare loans [are] void from inception

because they contain provisions that are prohibited by [section] 987(e) of the MLA.”

(Dkt. 72 at 33.) Defendants contend that individual issues predominate for several

reasons. (Dkt. 77 at 28–35.)

First, Defendants argue that Plaintiffs’ burden to prove standing for each

proposed class member predominates over whether the loans are void from inception.

“In some cases, whether absent class members can establish standing may be

exceedingly relevant to the class certification analysis required by [Rule 23].” Cordoba,

942 F.3d at 1273. “[A]t some time in the course of the litigation[,] the district court

will have to determine whether each of the absent class members has standing before

they [can] be granted any relief.” Id. at 1275. Of course, “[t]hat is an individualized

issue,” and a district court must consider it in the predominance inquiry under Rule

23(b)(3). Id. Here, it is undisputed that some of the proposed class members use their

timeshares despite the alleged MLA violations. Reviewing thousands of claims to

determine which class members suffered an injury in fact due to the alleged MLA

violations would likely require individualized legal and factual analyses that ordinarily

prevent a finding of predominance under Rule 23(b)(3). See Green-Cooper, 73 F.4th at

893 n.13.

Second, Defendants contend that if the class were certified and Plaintiffs were

to prevail on the merits, individual analysis would be needed to unwind and rescind

the proposed class members’ contracts. (Dkt. 77 at 30–31.) Defendants maintain that

the “mortgages and deeds associated with each transaction would have to be taken

back through either a deed-in-lieu of foreclosure or foreclosure and re-deeded.” (Dkt.

77–14 ¶ 4.) For proposed class members such as Plaintiffs who utilized equity from a

previous timeshare interest to buy a timeshare interest in the Orange Lake Revocable

Trust, Defendants argue that re-deeding may be impossible. (Id. ¶¶ 3, 5.) According

to Defendants, the type of former timeshare interest Plaintiffs owned might no longer

exist, or a third party may now own it. (Id.; Dkt. 77 at 31.) Defendants also argue

that predominance is defeated because Plaintiffs have not identified a method to

determine the value of the timeshare points used by Plaintiffs and proposed class

members. (Dkt. 77 at 31, 33.)

“[T]he presence of individualized damages issues does not prevent a finding

that the common issues in the case predominate,” as long as Plaintiffs “come forward

with plausible statistical or economic methodologies to demonstrate [damage] impact

on a class-wide basis.” Klay, 382 F.3d at 1259 (quotation omitted). “Particularly

where damages can be computed according to some formula, statistical analysis, or

other easy or essentially mechanical methods, the fact that damages must be calculated

on an individual basis is no impediment to class certification.” Id. at 1259–60 (footnote

omitted).

Plaintiffs have not “come forward with plausible statistical or economic

methodologies” to demonstrate how damages can be calculated class-wide. See id at

1259. Plaintiffs do not rely on an expert to argue that a class-wide damage

methodology exists. According to Plaintiffs, damages can be calculated class-wide by

looking at Defendants’ business records to determine all payments made by each class

member on each void loan. (Dkt. 72 at 38.) This may be true for potential class

members who have paid on their timeshares and are not delinquent in making

payments but have not redeemed any points or who have paid on their timeshares and

are delinquent in making payments but did not redeem any points before delinquency.

However, this calculation does not account for the potential class members who have

paid on their timeshares, are not delinquent in those payments, and have redeemed

some of their points or who have paid on their timeshares and are delinquent in making

payments but redeemed some of their points predelinquency. For the potential class

members who used their timeshare points, the value of the benefit received must be

quantified individually and subtracted from their potential recovery. Klay, 382 F.3d

at 1259. Although the exact figures deduced from these calculations are not required

at the class certification stage, Plaintiffs are required to identify a plausible

methodology at this stage. They have failed to do so. Therefore, even if Plaintiffs

would have met their burden under Rule 23(a), which they have not, they have not

met their burden of establishing predominance under Rule 23(b)(3).

2. Superiority and Manageability

The Rule 23(b)(3) superiority provision requires the court to determine “that the

class action device is superior to other available methods for the fair and efficient

adjudication” of the controversy. In re Terazosin Hydrochloride Antitrust Litig., 220

F.R.D. 672, 700 (S.D. Fla. 2004). The four factors district courts consider in making

this determination are (1) the interest of members of the class in individually

controlling the prosecution or defense of separate actions, (2) the extent and nature of

any litigation concerning the controversy already commenced by or against members

of the class, (3) the desirability or undesirability of concentrating the litigation of the

claims in the particular forum, and (4) the difficulties likely to be encountered in the

management of the class action. Fed. R. Civ. P. 23(b)(3)(A)–(D).

Plaintiffs assert that they are unaware of any other litigation brought by absent

class members against Defendants. (Dkt. 72 at 37.) However, as discussed previously,

the record suggests that some potential class members use their timeshare points

despite the purported MLA violations. Therefore, a class action is not a superior

method for the fair and efficient adjudication of this controversy because military

servicemembers like Plaintiffs who seek to void their timeshare contracts may bring

individual actions.

CONCLUSION

Accordingly:

1. Plaintiffs’ Motion in Limine to Exclude the Expert Report and

Testimony of Paul Habibi (Dkt. 74) is DENIED.

2. Defendants’ Motion to Exclude the Opinions of Plaintiffs’ Proposed

Expert Christopher Young (Dkt. 79) is GRANTED.

3. Plaintiffs’ Motion to Certify Class (Dkt. 72) is DENIED. On or before

March 14, 2025, Plaintiffs shall file a third amended complaint which

omits class action allegations.

ORDERED in Orlando, Florida, on February 14, 2025.

( fa _ a

JUVIE S. SNEED

UNITED STATES DISTRICT JUDGE

Copies furnished to:

Counsel of Record

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