United States District Court, D. Nevada
ILONA HARDING, an individual; LESTER THOMAS HARDING, an individual, all on behalf of themselves and all similarly-situated individuals, Plaintiffs,
DIAMOND RESORTS HOLDINGS, LLC, a Nevada limited liability company; DIAMOND RESORTS INTERNATIONAL, INC., a Delaware corporation; DIAMOND RESORTS U.S. COLLECTION, L.L.C., a Delaware limited liability company; DIAMOND RESORTS INTERNATIONAL MARKETING, INC., a California corporation; DIAMOND RESORTS INTERNATIONAL CLUB, INC., a Florida corporation; DIAMOND RESORTS MANAGEMENT, INC., an Arizona corporation; DIAMOND RESORTS U.S. COLLECTION MEMBERS ASSOCIATION, a Delaware corporation; DIAMOND RESORTS DEVELOPER & SALES HOLDING COMPANY, a Delaware company; DIAMOND RESORTS FINANCIAL SERVICES, INC., a California corporation; and DOES 1 THROUGH 100, INCLUSIVE, Defendants.
DEFENDANTS' MOTION TO COMPEL, PLAINTIFFS'
MOTION TO STRIKE, AND PLAINTIFFS' MOTION FOR LEAVE TO
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE
the Court is Defendants Diamond Resorts Holdings, LLC;
Diamond Resorts International, Inc.; Diamond Resorts U.S.
Collection, L.L.C.; Diamond Resorts International Marketing,
Inc.; Diamond Resorts International Club, Inc.; Diamond
Resorts Management, Inc.; Diamond Resorts U.S. Collection
Members Association; Diamond Resorts Developer & Sales
Holding Company; Diamond Resorts Financial Services, Inc., a
California corporation; and Does 1 through 100, Inclusive
(collectively, “Diamond”)'s Motion to Compel
Arbitration and to Stay or Dismiss this Action (ECF No. 18),
Plaintiffs Ilona Harding and Lester Harding (collectively,
“Plaintiffs”)' Motion to Strike Reply (ECF
No. 27), and Plaintiffs' Motion for Leave to File
Supplemental Exhibit (ECF No. 34). For the reasons stated
below, Defendants' Motion to Compel is granted, and
Plaintiffs' Motion to Strike and Motion for Leave to File
January 29, 2017, Plaintiffs filed a Class Action Complaint
with Jury Demand against Defendants. (ECF No.
Judge Cam Ferenbach granted the parties' Stipulation to
extend time on Defendants' response on February 27, 2017.
(ECF No. 17). On April 3, 2017, the day Defendants'
response was due, Defendants filed the instant Motion to
Compel. (ECF No. 18). The same day, Defendants also filed a
Motion to Stay, pending the Court's decision on the
Motion to Compel. (ECF No. 19).
filed Responses to the Motion to Compel and Motions to Stay
on April 17, 2017. (ECF Nos. 22, 23). Defendants Replied on
April 24, 2017. (ECF Nos. 24, 25).
1, 2017, Plaintiffs filed a Motion to Strike the  Reply.
(ECF No. 27).
September 14, 2017, Plaintiffs filed a First Motion for Leave
to File a Supplemental Exhibit in support of their opposition
to the Motion to Compel. (ECF No. 34). Defendants Responded
on September 28, 2017 (ECF No. 35) and Plaintiffs Replied on
October 9, 2017 (ECF No. 36).
Court finds the following facts to have been properly alleged
Plaintiffs' Relationship with Defendants
December 31, 2012, Plaintiffs have been timeshare owners with
Diamond. In the intervening years, Plaintiffs have entered
several different timeshare purchase and security agreements
(“PSAs”) with Diamond. Plaintiffs allege that
Diamond uses sales tactics that take advantage of elderly
most recent PSA Plaintiffs entered, and the PSA that is the
main subject of this Motion, was entered on December 12,
2015. Plaintiffs contend that on October 1, 2016, they
formulated the intent to opt-out of the arbitration provision
as well as other provisions of the PSA. On October 11, 2016,
Plaintiffs, through counsel, sent a letter to Diamond giving
notice of their wish to opt-out of the December 12, 2015 PSA
as well as all previous PSAs.
Arbitration Provision The first lines of text that
appear in the December 12, 2015 PSA state in bold text:
“This is a binding contract by which you agree
to purchase an interest in a time-share project. You should
examine this statement of your right to revoke this contract
within 5 days which is contained elsewhere in this
contract.” (ECF No 18-1 at 8) Section 18 is
titled “ARBITRATION PROVISION”
and states in relevant part:
• (a) Opt-Out Right IF PURCHASER DOES
NOT WANT THIS ARBITRATION PROVISION TO APPLY, WITHIN 30 DAYS
PURCHASER MUST SEND A SIGNED LETTER TO SELLER STATING THAT
THE ARBITRATION PROVISION DOES NOT APPLY[.] OPTING OUT OF
ARBITRATION WILL NOT AFFECT ANY OTHER PROVISION OF THIS
AGREEMENT[.] (ECF No 18-1 at 14).
• (b) Arbitration Terms Defined in this
Arbitration Provision, the term “Company
Party” means Seller and/or the Association,
their affiliates and the agents, representatives, members,
employees, officers and/or directors of such entities, if and
to the extent that any Claim is asserted by or against such
entity or person[.] “Bound
Parties” means each Company Party and
Purchaser[.] “Claim” means any
legal claim, dispute or controversy between any Company Party
and Purchaser, including statutory, contract and tort
disputes of all kinds and disputes involving requests for
declaratory relief, injunctions or other equitable relief[.]
However, “Claim” does not include any individual
action brought by a Purchaser in small claims court or an
equivalent court, unless such action is transferred, removed,
or appealed to a different court, and does not include any
dispute concerning the validity and effect of Section 18(h)
below, the ban on class actions and certain other proceedings
(the “Class Action Ban”)[.]
“Administrator” means the
American Arbitration Association (“AAA”), 1633
Broadway, 10th Floor, New York, NY 10019, http ...