Multi-Site POS Revision Dated 01/19/19

[ziravan]

HAHAHAHAHAHA

Hey Disney lawyers! You may fool the non-lawyers, but you and I both know that won’t matter in court.

Nice try though!

XOXOXO

Right. The purpose of this rule is to counter the advantage of the more sophisticated legal party over the less sophisticated one. Nothing in this document abrogates that fact so Disney claiming this right to bypass this rule/canon of construction just proves the need for it.

I have seen this language before in contexts where it likely would be enforceable. For example, one of my oil leases has this provision, that the language will be considered to be drafted equally by both parties, in the amendments section, which was the part actually negotiated between parties, and where we actually had a significant say in what was written.

But to claim that right in the preprinted terms of an agreement is contrary to the rule DVC is trying to circumvent; it’s precisely because the less sophisticated party didn’t have a say in drafting this rule that it wouldn’t stand up.

Just to finish that thought, there’s also a canon of construction that handwritten takes priority over typewritten which takes priority over preprinted. This makes sense because preprinted is literally boilerplate, while typewritten is probably added specifically to amend the preprinted form and handwritten is probably added for last minute changes; it likely IS the intent of the parties to modify the preprinted with typewritten and both of those with handwritten changes. The point being that DVC trying to circumvent the canon that a document is construed against the drafter in its preprinted document (where the other party surely had no say in the construction) is at the least ironic.

 

[AdamsMum]

just in case it wasn’t clear before that DVC is reading these threads with great interest, the lawyers have been busy.

Riviera Club Membership Agreement, page 13, 7.16 Interpretation “...No provision of this agreement shall be construed against a Party because the Party provided the drafting of this agreement...”

Not really clear what this means. Does it mean that even though one party drafted the agreement it can't be held up as damaging to the other parties affected?

 

[ziravan]

Not really clear what this means. Does it mean that even though one party drafted the agreement it can't be held up as damaging to the other parties affected?

Typically, if a legal document is ambiguous, it’s construed against the drafter because ‘the party holding the pen’ was presumed to be the more sophisticated party and/or the party trying - and missing - the clarity that would be under review if this rule were being invoked.

DVC is saying that a rule that is designed to protect you doesn’t apply to them because they say so. In effect, the more sophisticated should get a pass because we’re really really more sophisticated. Not likely.

They’re trying to say that if a provision of the agreement is later litigated because it’s unclear, then they can’t be held responsible for the lack of clarity just because they’re the ones that wrote it.

 

[crvetter]

just in case it wasn’t clear before that DVC is reading these threads with great interest, the lawyers have been busy.

Riviera Club Membership Agreement, page 13, 7.16 Interpretation “...No provision of this agreement shall be construed against a Party because the Party provided the drafting of this agreement...”

This language exists in the other resorts’ POS.

 

[DougEMG]

The methodology is maddening. Our POS's (declarations, etc.) all have terms that provide that resale purchasers shall have the same right as Club Members as original purchasers from DVD have. Those documents provide that all such Club Members will be able to reserve any Resorts added to the DVC Resort system. Our associations' agreements with BVTC, which runs the DVC Reservation Component, which applies to trading between the resorts at 7 months out, repeats that the club members, which include resale purchasers can reserve any other DVC Resort (currently at 7 months out). It also provides that BVTC can add new resorts to the DVC club but a requirement for doing so is for the new resort to agree to the same material terms as our agreements.

In other words, the structure of all our documents says DVD cannot do what it is currently trying to do, add a DVC Resort to the DVC Reservation Component, while restricting any resale purchasers from using the DVC Reservation Component to reserve Riviera. In other words Riviera cannot be added to the DVC Resort System with any such restrictions

Though I am still wading through things, basically all that DVD has done is create a POS for Riviera whose declarations look a lot like ours except they reserve a new right for DVD to make restrictions such as for resale purchasers. As you read the declarations, it ultimately just tells you that DVD is reserving such rights and you have to go to the DVC Membership Agreement and DVC Resort Agreement to learn those restrictions. If you go to the DVC Membership Agreement for Riviera, it also does not even state the restrictions but mainly just points out that DVD is reserving those new rights to make restrictions (that have never been reserved in any prior POS or agreements relating to existing resorts) and tells you that you have to go to DVC Resort Agreement to learn any such restrictions. It is the the DVC Resort Agreement that actually lays out the restrictions noted above. Removed from the Riviera agreement is any obligation of BVTC to require other resorts that want to join the system to have the same material terms as the prior DVC Resort Agreements.

The problems I see with the methodology include the following. Those Riviera agreements. both the DVC Membership Agreement and the DVC Resort Agreement, cannot validly create any new DVD rights to restrict resort owners of other DVC Resorts from reserving any new DVC Resort. The Riviera DVC membership Agreement and DVC Resort Agreement are signed by BVTC, DVD and the association for Riviera. The associations of all the other resorts are not parties. BVTC, DVD and the Riviera Association have no power to take away in the Riviera DVC Resort Agreement any rights of the members of the existing 14 resorts to use the DVC Reservation Component to reserve any resort that is part of the club or added to the club. Only the existing members or possibly the existing associations could do that if the members agreed. In essence, the methodology used is like three strangers to all the existing owners and resorts getting together and signing an agreement that modifies rights of those owners, Unless someone who can actually waive those rights is a valid party, the agreement should have no legal effect in doing what it is designed to do.

Moreover, BVTC has just ignored its obligations under the other DVC Resort Agreements to require any new DVC Resort to accept the same material terms as the other DVC Resort Agreements. So its signing of this new DVC Resort Agreement is a breach by BVTC of the other DVC Resort Agreements, and a probable breach of its fiduciary obligations to the members of the other resorts.

I am not necessarily saying it was impossible for DVD to come up with a way to restrict resale purchasers from reserving Riviera, e.g., perhaps it could have chosen some new exchange program while creating a DVC 2 for Riviera. In other words, it might have been possible for DVD to do what it intended to do with restrictions, but the methodolgy chosen is both a miss and a mess.

Makes you wonder why they didn't just start up a DVC2....probably cause the marketing of the Riviera being in a new DVC2 would clearly indicate to purchasers that there was something different going on.

 

[mustinjourney]

Typically, if a legal document is ambiguous, it’s construed against the drafter because ‘the party holding the pen’ was presumed to be the more sophisticated party and/or the party trying - and missing - the clarity that would be under review if this rule were being invoked.

DVC is saying that a rule that is designed to protect you doesn’t apply to them because they say so. In effect, the more sophisticated should get a pass because we’re really really more sophisticated. Not likely.

They’re trying to say that if a provision of the agreement is later litigated because it’s unclear, then they can’t be held responsible for the lack of clarity just because they’re the ones that wrote it.

As ziravan stated in another post, these clauses are typically only effective when both parties are on equal footing and are both represented by attorneys.

I’ve never heard of this clause being enforceable in a situation such as this when one party controls everything and it is take it or leave it for the other party.

 

[sndral]

Mentioned above is section 5.3, Of the DVC Resort Agreement which provides:

DVD, DVCM, and the Association acknowledge and understand that different Home Resort Priority Periods may exist at each DVC resort; provided, however, that in no event shall BVTC associate a resort as a DVC resort if such a resort has a Home Resort Priority Period of less than one (1) month.

Be aware that is not new and exists in every prior DVC Resort Agreement and in different ways in the other parts of the POS. It is mainly just an acknowledgment that each home resort could have a different home resort advantage time. Currently that is four months for each resort and it can be changed to as low as one. However, it cannot really be changed at any one particular resort to allow purchasers from DVD to reserve before resale purchasers.That is because all owners of a resort are supposed to have the same first come first served rights to make reservations.

Thus, each Home resort could have a different length of home resort priority e.g., one could have 11 months to 7 and another 9 months to 7 but all owners of the particular resort need to have the same starting time for their home resort.

That language relating to different home resort periods really has little to do with the DVC Reservation Component and reserving at 7 months out. That seven month provision could be shortened or lengthened but all members of all resorts need to have the same first come first serve right as the members of other DVC Resorts in using the DVC Reservation Component. Also, there is allowance for varying from a required home resort period when the new resort first becomes available, but even then it needs to be the same for all, e.g, with past resort openings they often allowed new purchasers of the new resort a very short period, such as a month, to do reservations before owners of other resorts. That is just a usual accommodation related to when a new resort first is sold and when it opens.

In other words, I do not think we should be overly concerned about section 5.3

If this requirement of BVTC is true in the current contracts, that may be a much more serious legal issue than the missing comma in the POS about resales. They are trying to create new trading restrictions without creating a new club system for new resorts, which would be the proper way to do so given all the current contracts. And they may not back down from this as easily as they did the point charts.

This is the issue that’s been bothering me, coupled with the language that membership in the club is an appurtenance which runs w/ the real property interest. As such it’s an easement and are they diminishing a resale buyers use of that easement by restricting their membership in the club? This is just off the cuff brainstorming, but it ‘feels’ like they are.

 

[Wakey]

Again I totally agree with Drusba, I cannot see how they are legally doing what they are trying to do. I am amazed they didn’t go the DVC 2 route.

 

[LAX]

Again I totally agree with Drusba, I cannot see how they are legally doing what they are trying to do. I am amazed they didn’t go the DVC 2 route.

Does anyone think this "mess" is going to end up blowing up in some DVD execs' face?

LAX

 

[zavandor]

The interesting part is that the new resale restrictions and the inclusion of Riviera in the Club but with modified rules have been done in collaboration between DVD, DVCMC and BVTC. DVD is going to sell DVC contract with an advantage illegally obtaind thanks to the new resale restrictions. This means a lawsuit could target DVD directly and have them pay directly if found in violation of the law by a judge (the lawsuit against the 2020 reallocation would have targeted DVCMC, meaning memebrs would have paid for legal fees).
I'm thinking about sending a cease and desist letter to ask to either stop sales of Riviera or cancel the resale restrictions immediately.

 

[TexasChick123]

The interesting part is that the new resale restrictions and the inclusion of Riviera in the Club but with modified rules have been done in collaboration between DVD, DVCMC and BVTC. DVD is going to sell DVC contract with an advantage illegally obtaind thanks to the new resale restrictions. This means a lawsuit could target DVD directly and have them pay directly if found in violation of the law by a judge (the lawsuit against the 2020 reallocation would have targeted DVCMC, meaning memebrs would have paid for legal fees).
I'm thinking about sending a cease and desist letter to ask to either stop sales of Riviera or cancel the resale restrictions immediately.

Did you decide to send the letter?

 

[disneymagicRN]

I've been lurking on this thread...I am not a lawyer, so a lot of this is fascinating. We currently have a post 1-19-19 resale contract in ROFR. Following along to see if anything would actually change for us.

 

[crvetter]

Based on the fact they changed the language in the Riviera POS I fully expect that the multi-site POS has been modified.

 

[Spartan86]

Based on the fact they changed the language in the Riviera POS I fully expect that the multi-site POS has been modified.

Not that what is posted on the DVC website under notifications carries the weight of a POS, but, the day the Riviera POS came out and the unambiguous language of 1/19/2019 was pointed out in the POS - by you @crvetter as I recall - I went to the DVC website to compare the language. Oddly enough, our dashboards and notifications were unavailable. But, when they came back the notification message regarding 1/19/2019 was back and in line with the new POS. Was that a change?

 

[crvetter]

Not that what is posted on the DVC website under notifications carries the weight of a POS, but, the day the Riviera POS came out and the unambiguous language of 1/19/2019 was pointed out in the POS - by you @crvetter as I recall - I went to the DVC website to compare the language. Oddly enough, our dashboards and notifications were unavailable. But, when they came back the notification message regarding 1/19/2019 was back and in line with the new POS. Was that a change?

I did notice the message disappearing for a night and coming back. Not sure if the language changed though. But for sure the Riviera POS changed.

 

[ziravan]

That’s a simple matter of requesting the 12/18/18 document from Florida dept of timeshares.

It doesn’t matter what they put on their website, or what they hand out for that matter.

The official language is the filed and approved language. If there were a legal issue regarding it, the Court is going to defer to the language approved by the state.

If they want to change it, they have to file the change with the state.

 

[LAX]

The interesting part is that the new resale restrictions and the inclusion of Riviera in the Club but with modified rules have been done in collaboration between DVD, DVCMC and BVTC. DVD is going to sell DVC contract with an advantage illegally obtaind thanks to the new resale restrictions. This means a lawsuit could target DVD directly and have them pay directly if found in violation of the law by a judge (the lawsuit against the 2020 reallocation would have targeted DVCMC, meaning memebrs would have paid for legal fees).
I'm thinking about sending a cease and desist letter to ask to either stop sales of Riviera or cancel the resale restrictions immediately.

This is getting interesting. However, I can't imagine how Disney/DVD's army of lawyers hadn't thought about this potential issue before deciding not to establish DVC2.

LAX

 

[ziravan]

This is getting interesting. However, I can't imagine how Disney/DVD's army of lawyers hadn't thought about this potential issue before deciding not to establish DVC2.

LAX

The bottom line is that for the L14, membership in the club is an appurtenance of ownership (can’t be stripped from resale), and each home resort has the obligation, to the extent that they do participate, to participate on an equal basis with other resorts in the club.

BCV for example, has a reciprocal right to participation and some of BCV’s owners are resale owners with deeded rights of membership in the club.

This is why DVC can’t restrict resale L14 members from exchanging within the L14; its a deeded right.

But this is also why they can’t restrict L14 resale members from participating in Riviera. The L14 resale members and direct Riviera owners are on equal footing in DVC1 (BVTC); that BCV’s resale deed demands it; members of Riviera can only participate in an exchange with BCV on a reciprocal basis, and resale owners at BCV are deeded members for that purpose.

DVC can make whatever restrictions they like with their new resort. But the restriction forbidding them from adding Riviera to the club at a mismatch to BCV resale club members (members by right of deed) is a pre-existing prohibition.

They’ll have a heck of a time defending this.

 

[LAX]

The bottom line is that for the L14, membership in the club is an appurtenance of ownership (can’t be stripped from resale), and each home resort has the obligation to participate on an equal basis with other resorts in the club.

BCV for example, has a reciprocal right to participation and some of BCV’s owners are resale owners with deeded rights of membership in the club.

This is why DVC can’t restrict resale L14 members from exchanging within the L14; its a deeded right.

But this is also why they can’t restrict L14 resale members from participating in Riviera. The L14 resale members and direct Riviera owners are on equal footing in DVC1; that BCV’s resale deed demands it; members of Riviera can only participate in an exchange with BCV on a reciprocal basis, and resale owners at BCV are deeded members for that purpose.

DVC can make whatever restrictions they like with their new resort. But the restriction forbidding them from adding Riviera to the club at a mismatch to BCV resale club members (members by right of deed) is a pre-existing prohibition.

They’ll have a heck of a time defending this.

I am not arguing with you. In fact, I will be more than delighted to see DVD retract the most recent restriction as I am a resale purchaser myself. This would be quite a blunder if it ever ends up in court and DVD windup losing.

LAX

 

[ziravan]

I am not arguing with you. In fact, I will be more than delighted to see DVD retract the most recent restriction as I am a resale purchaser myself. This would be quite a blunder if it ever ends up in court and DVD windup losing.

LAX

This is why so many people here thought they’d make Riviera the first leg of a “DVC2”, with some undefined mechanism for trading between the two. It’s a hard slog to do what they want to do within the rules laid down for reciprocity in BVTC between resorts.

I would argue that the board of each of the L14 resorts, controlled by DVC or not, has both a best interest and fiduciary responsibility to withdraw from BVTC if a new resort is allowed to affiliate at a disadvantage to current home resort owners.

This is where cheapening the value of resales comes directly into play. Those boards cannot allow that devaluing to come at the expense of the deeded interests of the members. They’d likely have a Court enforceable obligation to withdraw.