I've read some more stuff and done some more research since I last posted. I've altered my opinion of things slightly:
Renters:
Do a chargeback if you can. Especially if David's is refusing a refund. Get made whole. In my opinion, these vouchers he's offering are funny money in every sense of the word. Take the cash and use it to rebook your dream vacation on your own terms. Chances are good you're going to see a LOT of really great deals coming up for travel outside of David's. You can negotiate a MUCH better deal with MUCH better terms. The global economy is going to be in recession. Good deals on vacations and travel are going to be plentiful. If you are within your 120-day to 180-day window that your credit card allows a chargeback...do it. I believe your chances of success are high. Even if David's goes out of business/bankrupt you are still very likely to get your money back. (See my previous post in this thread about how charge backs work)
Owners:
I am not a lawyer, and this is a complicated mess. This is not legal advice. In my opinion, David's is probably correct when he says the contract is frustrated. The legal theory originates in English Common Law and it has equivalents in both US and Canadian law. The theory is called The Doctrine of Impossibility:
https://en.wikipedia.org/wiki/Impossibility
Essentially, because David's contracts didn't have a force majeure clause in them, then that usually means the Doctrine of Impossibility applies. Basically, it states that if it later becomes impossible for one or more parties to a contract to fulfill their obligations, then the whole contract becomes void. Canada has a similar legal theory called The Doctrine of Frustration. Reference:
http://www.bclaws.ca/civix/document/id/complete/statreg/96166_01
If this contract were governed under US law, then the Doctrine of Impossibility would void the contract as a whole, and David's could then sue the owner for unjust enrichment for the amount of money that David's paid the owner. It is pretty cut and dried as a matter of US law...There are few exceptions to this, and I don't think any of them would apply in this situation.
But it gets VERY interesting! The contract between
DVC owners and David's covered under Canadian Law! Here is the relevant "Frustrated Contract Act" that applies in Canada:
http://www.bclaws.ca/civix/document/id/complete/statreg/96166_01
It boils down to the same GENERAL principle... if a contract cannot be fulfilled by one or more parties to the contract because of an unforeseeable event, then the whole contract is cancelled. If parts have already been fulfilled, then those parts can stand. Payment under the contract is not considered one of the "obligations" in respect to partial fulfillment of the obligations....so just because David's has paid you, it's not considered to have partially fulfilled the contract. Basically, cash can be undone...you can just pay the other guy back...but goods and services are a lot harder to undo.
BUT...there is a BUT....
I have bolded the section that I think is relevant here...be sure to expand the quote above to see the whole thing
Others on this board have said that David's website has explicitly stated that the owner WILL get paid whether the renter checks in or not. If that's true, then I believe that becomes an implied term of the contract.
Part of it will also depend on what David's did previously in regards to cancellations beyond the control of both the renter and the owner...hurricanes come to mind. What did David's do in those situations where a renter couldn't check in? I know there have been a couple hurricanes that prevent people from checking in while David's has been operating. If he previously ate the loss and paid owners while refunding the renter, then it could create a history of providing insurance and likely makes David's the one on the hook.
Another question is what are other rental brokerage services doing? Are they effecting an insurance against these losses? If so, David's could get swept up in it.
Those are all questions for a judge to decide.
IF the judge decides that there is implied insurance in what David's offered, then David's would likely owe the owner for the full obligation. i.e. the owner did everything on their end...and David's provided an insurance that the owner would be paid. The owner would still get paid. There is a chance that the judge will say that the owner gets to keep the 70% but David's doesn't have to pay the remaining 30% since the contract is frustrated.
IF the judge decides that the whole contract is frustrated, and voids the whole thing...i.e. there is no implied insurance...this would reverse everything...including any payments that anybody has made...including the payment from David's to the owner. However... then we go on to the Restitution portion of the law:
You could claim restitution for your partial performance under the contract. You booked a reservation and did the things you were required to do that you could still do. The restitution must only consist of reasonable expenditures. You cannot take in to account the loss of profits or if you get paid any insurance money. Additionally, the court would take in to account any benefits which remain with the party claiming restitution (i.e. you got your points back...what is the state of those points...etc)
IMO, IF your points are in a reasonably good position...they are bankable, not at risk of expiring, etc...then you likely owe David's all of the money back, and can't claim any damages...you MIGHT be able to claim that the points are now worth less than they were originally because a banked point is not as flexible as a current use-year point...etc...But basically: If DVC made you whole on points, then you don't get to claim restitution on those "expenses" because there weren't any.
If your points are in one of those weird states where you could still deposit them in to RCI but no longer bank them, then you might be able to make some sort of quasi claim...at least you could claim the booking fees for RCI..I'm not sure but you'd be on shaky ground here. You might be better off not depositing them in to RCI and letting them expire so you could claim what I theorize below...
IF your points are in a distressed state...i.e. they are expired, can no longer be banked, were banked points that will expire before the resorts open, etc. or are otherwise generally lost..then you can likely make a claim against David's for costs:
this means that you could claim reasonable "losses" of your costs on those points. Probably equal to your cost of purchasing those points for that year from DVC (purchase price of points, divided by number of years in the contract), plus reasonable interest on that money (time value of money), plus the annual dues for those points. You might be able to add some reasonable cost of your time in booking the reservations, managing, etc...All told, i'd guess you'd get about half the TOTAL money that you would've otherwise been paid by David's for any points that would be lost.
Again...it's a jumbled mess, and largely depends on your INDIVIDUAL circumstances as an owner.
At least, that is all my humble opinion as someone who is not really well versed in Canadian Contract Law. In reality, you should probably talk to a lawyer if it DOES come to that. I will say it again: I am not a lawyer and I am not giving legal advice. I am just a law/contract nerd who watches a lot of REALLY boring YouTube.
Now with that very interesting Legal hypothesis out of the way...let's get a bit more practical...Let's talk about the feasability of David's actually going after an owner for the money that was paid by David's to the owner. I am not suggesting that anyone do anything with this information, or take any actions based on my opinion here. You should definitely consult with a lawyer to get real advice. This is just a thought experiment I am working through in my head.
David's ability to actually recover money from an owner he has paid is probably pretty low. It's already been discussed that it's very likely David's has been paying owners through the "send cash to friends/family" function of PayPal. If that's true, then that pretty much means that he will be unable to forcibly reverse the transaction via PayPal. That would've been the "quick and easy" way to get his money back, if it would've been successful. He will likely actually have to file a law suit and collect on that law suit to get his money back.
Let's get a bit realistic about actually filing suit against hundreds, if not thousands, of owners. A lawyer that is advocating for David's is not going to take these cases pro bono. David's would be required to pay any filing fees up front for all of these suits. He would also have to pay his lawyer for their cost of preparing and filing the suit up front. All told, probably a few hundred dollars each...
Once he files the suit, he has to provide process service to the individual's he is suing. The people in Canada are probably relatively easy...just hire a process server and get it done. For the folks in the US, that likely becomes a much more difficult process. International process service is going to cost more. Again these are all expenses that David's pays up front.
Now that process service has happened, the court sets a hearing date...But guess what...the whole world has been shut down for months because of COVID! The courts are going to be very back logged. It will likely be many many months, if not a year or more before a court date rolls around. And that all depends on when courts reopen, and what changes they make to going through cases, and if those changes slow down their ability to handle cases.
Court date rolls around, you as the owner don't show up...so David's gets a default judgement. That would likely equal any money he's paid you plus the court costs and interest on that money. Great...he's now got a piece of paper that says you owe him money. Now he has to collect.
If you're in Canada, it's likely much easier...I don't know the ins/outs of Canadian judgement collections, but he can likely garnish your bank account, garnish your wages, and seize any assets you own.
If you're in the US, it's going to be MUCH harder. He would then have to file ANOTHER case in a US court to get his Canadian judgement recognized in the US. It's relatively straight forward, but he would have to hire a US attorney to do it, and that attorney would have to be local to the owner. Again, additional expense that David's has to pay upfront...likely another few hundred dollars...I think there may be process service as well in this step again...All of this will take time, backlogged courts closed because of COVID, etc...It could take ANOTHER 6-12 months. And at the end of that...he's got a piece of paper from a US court that says his piece of paper from a Canadian court is valid in the US. He now needs to collect on it.
Collecting on a judgement can be a difficult thing. You are generally allowed to garnish wages, bank accounts, file liens on property, etc. But he first has to know where you bank accounts are, where you work, and/or if/where you own property. In theory, he could attach to your DVC membership and file a Lien against that...that would only ever become relevant if you sold your DVC...It wouldn't prevent you from actually using it. But again, in order to find all of this information out, he would need to hire someone to find that information. All at his expense. Now, if he finds money, he can deduct his costs in collecting that money from his proceeds used to pay off your judgement to him...so if he's successful, you ultimately pay for all of these expenses. But if he's not successful in collecting money, then he's out the extra money.
All told, in his worst-case case (US owner, who stonewalls him) it would likely be 2-3 years before he would be able to collect any money by force and it would likely cost him about $2000, up front, to go about it. All of that time/hassle/expense to collect on what is likely about $1500-$3000? I don't believe that the cost/benefit analysis here would add up for that to be a feasible route for David's to go down.
David's can send some scary letters, demand that you pay him, those actions are cheap...but, in my opinion, actually forcing an owner to pay him back is going to be a long and expensive process with a low chance of successfully collecting money.
