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Timeshare company dismissed from Wyndham lawsuit

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A defendant this month was dismissed from a federal lawsuit involving nearly two dozen southwest Missouri timeshare businesses and individuals.

The judge dismissed timeshare company Catalyst Consulting Firm LLC on the grounds of improper grouping of defendants and lack of specification of claims, according to documents in the U.S. District Court, Southern District of Florida.

In an omnibus order filed Nov. 6, the defendant stated its arguments for dismissal as impossible to reasonably defend against broad allegations from the plaintiffs, led by Wyndham Vacation Ownership Inc., who lumped 22 timeshare entities together as one, the court motion said.

The decision comes two months after Orlando-based Wyndham and other plaintiffs sued Catalyst and others in the timeshare industry seeking $15 million on seven counts for damages and injunctive relief. Among the claims are federal trademark infringement, violations of the Florida Deceptive and Unfair Trades Practices Act and civil conspiracy.

The 11th Circuit Court of Appeals in Florida agreed with Catalyst, stating Wyndham cannot make multiple claims against the defendants without specifying which acts are improper.

“The complaint repeatedly lumps the defendants together, rendering it unclear and confusing as to which defendant is being charged with which conduct and on what grounds,” the court documents state.

The Wyndham companies, also including plaintiffs Wyndham Resort Development Corp., Wyndham Vacation Resorts Inc. and Shell Vacations LLC, have until Dec. 10 to file an amended complaint to support its claims against Catalyst. Court documents state the plaintiffs failed to allege how Catalyst infringed on Wyndham trademarks and interfered in its business relationships or contracts.

The lawsuit also makes the claim that Mary Clapp, owner of Clapp Business Law LLC in Springfield, is the sole organizer of Catalyst. Clapp has told Springfield Business Journal the Chavez family owns Catalyst and her firm only served as the registered agent for Catalyst to list the business with the Missouri secretary of state.

The lawsuit also claims Catalyst is an alter-ego of all the rest of the defendants.

“We’re the youngest company out of all of them,” said Jeffrey Chavez, chief operations officer for Catalyst, disputing the claim.

The company was created on Jan. 19, according to Missouri secretary of state records.

Chavez said Catalyst is a resolution company to help timeshare customers navigate the sales process, and upgrade, sell or rent properties. Chavez said the reason his company was included in the lawsuit was due to past business with Principal Transfer Group LLC and owner Jason Levi Hemingway, and its use of Clapp as a registered agent. Hemingway and his CLS Inc. business also are named in the suit.

Lumped in
While one overarching lawsuit is front and center, there has been past infighting between defendants.

Among the other businesses in the suit, Josh Ungaro is listed as the registered agent of six: JJ&C Marketing LLC, Allied Solutions LLC, The Mid-West Transfer LLC, Transfer For You LLC, Midwest Transfers LLC and JJ Midwest Marketing LLC, according to Missouri secretary of state filings. He also was individually named in the suit.

Ungaro said Wyndham also is trying to sue 30 timeshare companies in Florida in an attempt to lump them together to run those companies out of the marketplace.

“Wyndham has been doing everything they can, trying to run everyone out of this industry,” he said. “It is absolutely ridiculous.”

Ungaro said Wyndham sued every business he owned except his tuition-free nonprofit school Perspectives Preparatory Academy in south Springfield, where half of the students have special needs.

“They didn’t want publicity suing the school,” he said.

SBJ’s attempt to reach Wyndham’s media department via email went unanswered.

Ungaro said he booked timeshare tours for a few months for Brian Scroggs but claimed the two stopped working together after Ungaro disagreed with Scroggs’ business practices. Scroggs is individually named in the lawsuit along with his two companies, Vacation Consulting Services LLC and The Transfer Group LLC.

Ungaro claimed his association with Scroggs and his businesses led to his inclusion in the lawsuit.

Ungaro said Hemingway ran a print shop for him, until he was fired and went to work for Scroggs. Ungaro said he filed a lawsuit two years ago against Hemingway claiming he broke nondisclosure and noncompete agreements by working for Scroggs, along with an alleged theft of a lawnmower.

The lawsuit against Hemingway was dismissed without prejudice, according to Missouri court records.

“I don’t associate with those people,” Ungaro said of Hemingway and Scroggs.

BBB weighs in
Separate from the Wyndham lawsuit, an alert is listed on the Better Business Bureau website stating a pattern of consumer complaints against Scroggs’ Vacation Consulting Services and The Transfer Group. Consumers allege misleading advertising, unsuccessful extrication of timeshare contracts, failure to issue refunds, failure to cancel a contract with the company and overall poor customer service.

BBB officials say when they see a flurry of activity in complaints against a company, they investigate the cause and reason.

“Our focus was on those businesses because of the complaint activity,” said Don O’Brien, a BBB investigator in St. Louis. “We had been looking at both of these firms for a while. We found it to be in the best public interest to let consumers know.”

Vacation Consulting Services had 19 complaints closed, which have been addressed and handled by the company, in 2018, O’Brien said, with The Transfer Group closing 17 complaints during the year.

Vacation Consulting Services still has three unanswered and seven unresolved complaints, with The Transfer Group having three unanswered and five unresolved complaints, O’Brien said. Both businesses are currently rated F by the BBB.

Scroggs told SBJ last month he was in the process of closing both companies and opening a new business, Real Travel LLC. He was critical of the BBB’s methods in a provided statement:

“According to the BBB webpage, we have seven unresolved customer complaints, and we have had only 34 complaints out of 2,500 clients over four and a half years,” he said. “Vacation Consulting Services had an A- to a B+ rating from 2014 through the beginning of 2017. It is interesting to see the fluctuation in the BBB’s grading system.”

Wyndham Vacation Ownership also is not accredited on the BBB website. The firm holds a C+ rating and a 1-star review out of five from 166 customers. There are 2,160 complaints filed against Wyndham.

O’Brien said the BBB ratings algorithm assesses how quickly businesses respond to and resolve complaints, and it takes into account the size and scope of the business and its operations.

Geoff Pickle contributed.

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