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[DonMacGregor]

The injury would come in to play in 2042 when owners who didn't pay for an extension can't use their points at a resort that has not yet expired per the POS document. But, as you said, we see it differently and in 2042, we will know what DVD decides to do and what any original owners decide to do.

I get that you're 100% in on the POS being the only thing that matters, but courts don't operate in vacuums and case law develops new precedent every day. Since this is the first time this has happened, a court will need to hear arguments from both sides and I'm simply saying that "I never expected to be able to use the resort after 2042, and I entered a contract with the understanding that my use and enjoyment will end in 2042, but now that someone else can enjoy it longer, I want to too" argument may not make the cut under tort law.

We shall see.

 

[blizzard]

I see it more like - Disney changed OKW to expire in 2057. They asked the current members to opt in (pay), or opt out (quit claim). They failed to realize that there would be some who did neither. The legal question is whether doing neither is an in or an out. The way Disney did it, there is nothing expiring in 2042 - there are only quit claims on file for those who are opting out in 2042. Without a quit claim, Disney may have to eat it. I certainly hope some people lost their jobs over it.

 

[DonMacGregor]

I see it more like - Disney changed OKW to expire in 2057. They asked the current members to opt in (pay), or opt out (quit claim). They failed to realize that there would be some who did neither. The legal question is whether doing neither is an in or an out. The way Disney did it, there is nothing expiring in 2042 - there are only quit claims on file for those who are opting out in 2042. Without a quit claim, Disney may have to eat it. I certainly hope some people lost their jobs over it.

The problem I have is that the POS refers to the Ground Lease between WDWHRC and DVD. The owners are not party to that agreement and therefore do not have privity. Plus, the POS simply states that on January 31, 2057 the property reverts back to WDWHR and the resort terminates. I still haven't seen the specific language that states that owners have a right to the use of the resort until the termination of the Ground Lease. Obviously, you can't use the resort after that 2057 date if it no longer exists, but I don't see where they have to allow everyone use of the resort until that date.

1. Memorandum of Ground Lease. The Memorandum of Ground Lease is the document that summarizes the provisions of the Ground Lease for the Lake Buena Vista Resort between WALT DISNEY WORLD HOSPITALITY & RECREATION CORPORATION, a Florida corporation, formerly known as Lake Buena Vista Communities, Inc. (“WDWHR”), as lessor, and DISNEY VACATION DEVELOPMENT, INC., a Florida corporation (“DVD”), as lessee (the “Ground Lease”). The Ground Lease, as amended, provides that DVD will lease the property that is declared as part of the Lake Buena Vista Resort from WDWHR until January 31, 2057, at which time the property reverts back to WDWHR and the Lake Buena Vista Resort will terminate. All rent due under the Ground Lease has been pre-paid by DVD to WDWHR.

 

[Sandisw]

The problem I have is that the POS refers to the Ground Lease between WDWHRC and DVD. The owners are not party to that agreement and therefore do not have privity. Plus, the POS simply states that on January 31, 2057 the property reverts back to WDWHR and the resort terminates. I still haven't seen the specific language that states that owners have a right to the use of the resort until the termination of the Ground Lease. Obviously, you can't use the resort after that 2057 date if it no longer exists, but I don't see where they have to allow everyone use of the resort until that date.

This is what is at the beginning regarding one’s ownership interests. No mention of 2042.says it can be extended but no mention that one would have to opt in and pay..my guess is that the original documents said the same thing…which Is why I think it’s not as simple that DVD gave themselves the legal right to keep any owner from using until this date.

 

[DonMacGregor]

This is what is at the beginning regarding one’s ownership interests. No mention of 2042.says it can be extended but no mention that one would have to opt in and pay..my guess is that the original documents said the same thing…which Is why I think it’s not as simple that DVD gave themselves the legal right to keep any owner from using until this date.

View attachment 745789

If (and it's a safe bet) the original document reads "until January 31, 2042, unless otherwise extended in accordance with the Condominium Documents, at which time the Ground Lease will expire...", which would be the governing language under which the original purchase agreement was entered (IE the POS in effect at that time). Interesting that the POS actually defers to the Condominium Documents and the question becomes what those documents say specific to the Ownership Interest and the extension.

 

[AstroBlasters]

I have no horse in this race, but I do find it fascinating. If I was a juror I would side with Disney on this one.

 

[tom1944]

I was in tax administration for over 40 years and used to have these types of discussions with tax attorneys and CPAs.

Interpretation of a statute or contract language is never simple when there is disagreement. I used to tell the tax professionals this is our interpretation of the statute and while you disagree it will be the position we take until someone beyond you or I determines what the statute says.

That someone is the court and unless you go to court that remains the meaning.

Hardly anyone goes to court and we won significantly more times than we lost.

I would be interested if Disney would take the same stance.

 

[Genie+]

What strikes me about this:

1) DVD changed the POS in a clumsy and not kosher way to first/foremost benefit themselves. This was not done specifically in the interest of owners, as it should be.

2) When things were not going as intended, DVD acted egregiously using their size/muscle against owners not comfortable with situation, didn’t want to give a free pass and/or didn’t want to allow bad precedent to impact future ownership.

3) DVD bullied and harassed some owners until they complied. Holding back their room was one of a few strategies.

4) DVD also created a future can of worms regarding dues during the 15 year extension. Owners didn’t want to get left holding the bag with increased maintenance costs to keep the whole resort functioning with a significant fraction of the ownership gone. It took a lawsuit to have DVD clarify.

Years passing since doesn’t change what, how, and why this happened.

There are frivolous suits and not. Personally I’m glad owners stepped up when DVD lacks integrity or competence, like they also did with the 1BR lockoff premium and shady surplussing of base year points.

 

[Drew729]

I agree with this statement.

I could see an argument being made by 2042 owners that by extending the contract out to 2057 the value of their 2042 contract was diminished and they deserve compensation for the loss of value. I still have trouble seeing how that compensation should be 15 years of additional use.

Proving loss of value would be the key.

I could see that argument as well in regards to diminishing value of 2042 contracts which may just have have some legs.

Proving loss of value at this moment may be tough but maybe there is a scenario where let's say in 10 years the 2042 contracts are reselling for much less that either a 2057 resale contract or a 2057 direct contract. The data may show that extending the ground lease agreement between DVD and WDWHR gave an advantage for sellers of 2057 contracts, of which Disney would be included.

The original purchase agreement was signed saying the agreement ends in 2042. Which is also why I don't think they just allow 2042 owners to pay yearly fees and let them use it until 2057.

 

[DonMacGregor]

What strikes me about this:

1) DVD changed the POS in a clumsy and not kosher way to first/foremost benefit themselves. This was not done specifically in the interest of owners, as it should be.

2) When things were not going as intended, DVD acted egregiously using their size/muscle against owners not comfortable with situation, didn’t want to give a free pass and/or didn’t want to allow bad precedent to impact future ownership.

3) DVD bullied and harassed some owners until they complied. Holding back their room was one of a few strategies.

4) DVD also created a future can of worms regarding dues during the 15 year extension. Owners didn’t want to get left holding the bag with increased maintenance costs to keep the whole resort functioning with a significant fraction of the ownership gone. It took a lawsuit to have DVD clarify.

I don't disagree with any of this. I'm just not convinced a court would punish Disney for being jerks.

 

[DonMacGregor]

I could see that argument as well in regards to diminishing value of 2042 contracts which may just have have some legs.

Proving loss of value at this moment may be tough but maybe there is a scenario where let's say in 10 years the 2042 contracts are reselling for much less that either a 2057 resale contract or a 2057 direct contract. The data may show that extending the ground lease agreement between DVD and WDWHR gave an advantage for sellers of 2057 contracts, of which Disney would be included.

The original purchase agreement was signed saying the agreement ends in 2042. Which is also why I don't think they just allow 2042 owners to pay yearly fees and let them use it until 2057.

I agree. I think that proving up an injury would be the toughest element of proving up a tort claim.

 

[tjkraz]

I don't know whether it was kosher or not but the OKW extension was a black mark on DVC's record, IMO.

My default belief is that corporations tend treat customers well more often than not. Not always because that philosophy is rooted deep in their culture or because they "care" more. But if nothing else, they wish to foster good will, keep selling products and remain in business.

But every so often most stray off course. Whether out of sloppiness or malice, nobody bats 1.000. In DVC's case, the OKW extension and the point chart reallocations stand out as things they should have handled better.

I still wonder if DVC had internal meetings where they walked through the entire process and considered the reaction from a customer perspective. Or if someone merely said: "we want to sell extensions do just do whatever it takes."

I think Disney deals with most customer-facing issues as good as, if not better than, most companies. The phrase "you can't always get what you want" still applies, but (IMO) it's pretty rare that Disney / DVC will truly leave guests on an island. Their handling of COVID was above-and-beyond, between the late cancellations, point extensions and dues refunds, they went pretty far guide members through a tough time.

 

[Nursemanit]

1. I think WDW has lost lots of pull in Florida and the courts are all political appointees.

2. My deeds ( poly / RR / BWV) all are contingent on the membership agreement. Surprised that OKW does not have this clause. The deed is just tracking the chain of ownership of the usage rights nothing more.

3. With the way MF are at OKW they may make owing past 2042 less desirable.

 

[zavandor]

Would you have the same opinion if DVD decided to add resale restrictions to the contracts for all the resorts? Do you think owners should be okay with that since the contract says don't buy with the intention of getting any value out of it?

They already did it.
Every contract now has a form of resale restrictions, because if sold, they cannot be used for Riviera and probably newer resorts.

It's probably illegal, but no one had a great motivation to sue about it. This has been discussed at length here:
https://www.disboards.com/threads/w...t-to-revert-dvcs-resale-restrictions.3747861/

 

[tom1944]

They already did it.
Every contract now has a form of resale restrictions, because if sold, they cannot be used for Riviera and probably newer resorts.

It's probably illegal, but no one had a great motivation to sue about it. This has been discussed at length here:
https://www.disboards.com/threads/w...t-to-revert-dvcs-resale-restrictions.3747861/

I actually find that a more compelling case than the OKW case.

 

[AnnaKristoff2013]

The third and (arguably) most important element in establishing a tort claim.

This wouldn’t be a tort claim, it would be a breach of contract claim. The POS says what it says, everyone agreed to it, Disney unilaterally modified the POS knowing what effect it would have, to benefit Disney, and Disney now needs to live with that. All of these comments about “what a jury will do” are meaningless. This likely doesn’t get past summary judgment if it ever goes to court. I agree with others who have posted that the most likely outcome here is that Disney quietly lets the few remaining 2042 owners in 2042 keep using their contract and paying their dues until 2057.

may not make the cut under tort law.

We shall see.

This is not a tort case. It is a breach of contract case. What the contract says matters. When the plain meaning of the contract is clear (and it is here), court’s aren’t going to look at extraneous factors.

I have no horse in this race, but I do find it fascinating. If I was a juror I would side with Disney on this one.

This never gets to a jury imo. There are no real contested factual issues, it’s a purely legal question.

 

[zavandor]

I actually find that a more compelling case than the OKW case.

It is, and in the future, with more resale purchasers, a class action might actually start. DVC is sitting on a ticking bomb.

 

[Sandisw]

They already did it.
Every contract now has a form of resale restrictions, because if sold, they cannot be used for Riviera and probably newer resorts.

It's probably illegal, but no one had a great motivation to sue about it. This has been discussed at length here:
https://www.disboards.com/threads/w...t-to-revert-dvcs-resale-restrictions.3747861/

They changed it moving forward so no one who bought with initial language is impacted.

At least the new contract language for the DVC resort agreement regarding that change says what the new rules are..

OKW is murkier..I certainly don’t know what a court of law would decide but I just think there is enough there that owners who did neither have a potential case that there ownership rights were extended automatically with the change…

And because of the issue of MFs, I think there is a chance we see DVD let it go if they are not 100% confident they would win.

But. I was responding that any changes to the POS are changes to the POS and owners who feel the contract was extended by default certainly have the right to fight it…just like those who think the other issue should not have happened could fight it.

 

[tom1944]

Absolutely have the right to fight it.

My issue with the restrictions are that they diminished the value of what the person owned if they sold it after a certain date.

 

[Jlo85]

Interesting to me if OKW 2042s that may be auto-extended to 2057 are a better SAP than SSR.