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Chung v. Vistana Vacation Ownership, Inc.

United States District Court, D. Hawaii

March 29, 2019

KEICY CHUNG, Plaintiff,
v.
VISTANA VACATION OWNERSHIP, INC. and STARWOOD HOTELS & RESORTS WORLDWIDE, LLC, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS

          LESLIE E. KOBAYASHI, UNITED STATES DISTRICT JUDGE

         Before the Court is Defendants Vistana Vacation Ownership, Inc. (“Vistana”) and Starwood Hotels & Resorts Worldwide, LLC's (“Starwood, ” collectively “Defendants”) Motion to Dismiss Complaint (“Motion”), filed on December 21, 2018. [Dkt. no. 14.] Pro se Plaintiff Keicy Chung (“Plaintiff”) filed his memorandum in opposition on January 3, 2019, and Defendants filed their reply on February 21, 2019. [Dkt. nos. 20, 50.] The Court finds this matter suitable for disposition without a hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice for the United States District Court for the District of Hawaii (“Local Rules”). Defendants' Motion is hereby granted in part and denied in part for the reasons set forth below.

         BACKGROUND

         Plaintiff filed the instant action on November 29, 2018, based on diversity jurisdiction. [Complaint (dkt. no. 1), at pg. 4.[1] Plaintiff is a resident of the State of California, and alleges Vistana is incorporated in and has its principal place of business in Florida, while Starwood is incorporated in and has its principal place of business in Maryland. [Id. at pgs. 4, 5, 8.]

         I. Complaint

         Plaintiff alleges that, on May 22, 2006, he entered into an agreement with Defendants to purchase a timeshare unit at the “Ocean Resort Villas North” in Ka`anapali, Hawai`i, under contract number 309245 (“2006 Contract”). [Id. at pgs. 9-10.] Plaintiff received an “Owner(s) Copy” of the sales contract for his records, and alleges he achieved “Platinum status” through the Starwood Preferred Guest (“SPG”) Loyalty Program, in exchange for his 2006 timeshare purchase. [Id. at pg. 10.] ¶ 2007, Plaintiff entered into two subsequent timeshare purchases under contract numbers 315182 and 315183 (collectively “2007 Contracts”). [Id. at pg. 12, ¶ 3.]

         At the beginning of 2016, Plaintiff alleges Defendants downgraded him from Platinum to Gold status. In response to Plaintiff's complaints about the downgrade, on June 2, 2016, Defendants produced a copy of Plaintiff's 2006 Contract, and on June 15, 2016, Defendants produced copies of Plaintiff's 2007 Contracts. [Id. at pg. 10] After comparing his version of the 2006 Contract and 2007 Contracts with the copies produced by Defendants, Plaintiff alleges Defendants' records: included additional pages not in Plaintiff's records; were missing certain “term sheets” concerning Plaintiff's Five-Star Elite status that conferred Plaintiff's Platinum status; and were missing disclosures required by law pursuant to Haw. Rev. Stat. Chapter 514E.[2] [Id. at pg. 11.] Plaintiff also alleges Defendants “altered the check lists of the sales contracts, ” without verifying or obtaining Plaintiff's consent, to indicate certain documents were received. [Id. at pg. 12.]

         Plaintiff alleges the following claims against Defendants: violations of Chapter 514E for withholding disclosures regarding the 2006 Contract (“Count I”), and the 2007 Contracts (“Count II”); and a violation of Chapter 514E for engaging in prohibited practices in the sale of timeshare contracts (“Count III”). [Id. at pgs. 11-12.]

         II. California Action

         Prior to filing the instant Complaint, on May 19, 2017, Plaintiff filed a complaint (“California Complaint”) in the Superior Court of California, County of Los Angeles (“California Action”). [Defs.' request for judicial notice in supp. of Motion, filed 12/21/18 (dkt. no. 15) (“Request”), Exh. A (California Complaint).] The defendants named in the California Complaint were Vistana and Starwood Hotels & Resorts Worldwide, Inc. (“California Defendants”). [Id. at pg. 4.[3] Plaintiff's California Complaint is also based on his 2016 SPG status downgrade, and his discovery in 2016 that his 2006 Contract was not complete. [Id. at pgs. 5-6.] Plaintiff also alleged the California Defendants failed to turn over a public report in violation of California law, and failed to disclose the annual assessment fees and taxes for the property. As a result, Plaintiff sought rescission of the 2006 Contract and punitive damages. [Id. at pgs. 6-7.]

         After the case was removed to the United States District Court for the Central District of California, the district court granted the California Defendants' motion to dismiss the California Complaint. [Request, Exh. B (10/19/17 order dismissing the California Complaint (“10/19/17 California Order”)).[4] The district court explained that Plaintiff's claims failed because: 1) the choice-of-law provision stated the laws of Hawai`i governed disputes arising under the 2006 Contract, therefore Plaintiff's claims based on California law must be dismissed;[5] 2) Plaintiff's exhibits attached to the California Complaint negated his fraud claims; and 3) Plaintiff's punitive damages claims were remedies, not claims. 10/19/17 California Order, 2017 WL 6886721 at *3-7. On November 2, 2017, the district court entered a judgement against Plaintiff and in favor of the California Defendants, and awarded them their costs (“California Judgment”). [Request, Exh. C (California Judgment).] Plaintiff appealed the California Judgment to the Ninth Circuit Court of Appeals, and on April 17, 2018, the Ninth Circuit issued its memorandum disposition affirming the California Judgment. [Request, Exh. D (4/11/18 mem. dispo.).[6]

         III. Motion

         In the instant Motion, Defendants assert all claims should be dismissed because: 1) the doctrine of res judicata precludes Plaintiff from asserting the same claims, or claims that could have been brought in the California Complaint; 2) the six-year statute of limitations under Haw. Rev. Stat. § 657-1(4) bars Plaintiff's claims; 3) Plaintiff's exhibits to the Complaint contradict his allegations that he did not receive the timeshare disclosures; and 4) Plaintiff's allegations fail to state a claim upon which relief can be granted.

         DISCUSSION

         I. Consideration of Materials Beyond the Pleadings

         First, the Court will address Defendants' request for the Court to take judicial notice of Defendants' Exhibits A through H. As a general rule, this Court's scope of review in considering a Fed.R.Civ.P. 12(b)(6) motion to dismiss is limited to the allegations in the complaint. See Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 998 (9th Cir. 2018), cert. petition docketed, No. 18-1010 (Feb. 4, 2019). If the district court considers materials beyond the pleadings, “the 12(b)(6) motion converts into a motion for summary judgment under [Fed. R. Civ. P.] 56, ” and “both parties must have the opportunity ‘to present all the material that is pertinent to the motion.'” Id. (quoting Fed.R.Civ.P. 12(d)). However, a district court can consider materials beyond the pleadings without converting the motion to dismiss into a motion for summary judgment if either the incorporation by reference doctrine or Fed.R.Evid. 201 judicial notice applies. Id.

         Defendants' Request is made pursuant to the latter doctrine, which permits a court to take notice of an adjudicative fact if it is “not subject to reasonable dispute.” Fed.R.Evid. 201(b). A fact that is “generally known” or “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned” is not subject to reasonable dispute. Id. Matters of public record are not subject to reasonable dispute. See United States v. Raygoza-Garcia, 902 F.3d 994, 1001 (9th Cir. 2018) (“A court may take judicial notice of undisputed matters of public record, which may include court records available through PACER.” (citations omitted)). However, “a court cannot take judicial notice of disputed facts contained in such public records.” Khoja, 899 F.3d at 999 (citation omitted).

         Because Defendants' Exhibits A through H are court records filed in the California Action, and Plaintiff has not objected to Defendants' Request, this Court will take judicial notice of Defendants' Exhibits A through H, but only as to the facts within those records that are not disputed in the California Action.

         II. Plaintiff's Claims

         A. Whether Plaintiff's Claims are Time-Barred and the ...


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