Would you join a lawsuit against DVC to stop/revert the 2020 reallocation?

Discussion in 'DVC Member Services' started by zavandor, Dec 28, 2018.

  1. zavandor

    zavandor DIS Veteran

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    DVC have published the new point charts for 2020 and many members have been negatively impacted. This caused many of us to go and (re)read the POS and possibly discover that the reallocation done may not be legal in its current form.
    The most contentious points are:

    1) Reallocations should leave the total points needed to book one unit/vacation home unchanged

    Reallocations are described in the POS document for each resort in "Exhibit G - Disney Vacation Membership Agreement for XXX RESORT"
    For SSR (and as far as I know, every resort, please point out any resort with different wording), the reallocations are authorised as follows:

    In order to meet the Club Members’ needs and expectations as evidenced by fluctuations in Use Day demand at the Condominium experienced by DVCMC during a given calendar year, DVCMC may, in its sole discretion, increase or decrease the Home resort Vacation Point requirements of a given Use Day within a given Vacation Home during the given calendar year by any amount not to exceed twenty percent (20%) of the Home Resort Vacation Points required to reserve a Use Day during the previous calendar year; provided, however, that the total number of Home Resort Vacation points existing within a given Unit at any time may not be increased or decreased because of such reallocation. The twenty percent (20%) reallocation limitation shall not apply to increases or decreases of Home Resort Vacation Point reservation requirements relating to designated periods of high demand which do not occur on the same Use Day each year. Any increase or decrease in the Home Resort Vacation point reservation requirement for a given Use Day pursuant to DVCMC’s right to make this Home resort Vacation Point adjustment must be offset by a corresponding increase or decrease for another Use Day or Use Days.”

    For a long time we have thought that Disney could do whatever they wanted with the point charts as long as the total points needed to book the whole resort for the whole year remained unchanged. Reading the POS is seems this is not the case.
    • The first highlighted sentence seems to restrict reallocations only to balance demand during the year, not across different vacation home sizes. If bungalows seat empty and studios fly off the shelves at 11 months, a reallocation cannot be used to balance demand
    • The second sentence says points can be shifted only "within a given Vacation Home". A Vacation Home is defined as "portion of a unit designed and intended for separate use and occupancy". This allows to move points only within the same room type. They can lower points for a studio for weekends and increase week days, they cannot increase studios and 1BR and lower 2BR
    • The third sentence says the total points allocated to a Unit cannot change. It seems the reallocation they did for the SSR treehouses is not legal, as all the treehouses are declared in their own units. Poly Bungalows are in different units from the studios, so the 2020 reallocation is not legal. Also, usually a unit includes different room types and different units within the same resort can have different compositions. If a unit includes 2 dedicated studios and 2 lockoffs, another might include only dedicated 2BR. Balancing units with different compositions might prove impossible if points are moved across different vacation home types.
    In the first years of DVC, when a balancing act was needed to balance demand within the same room types, DVC created different booking categories with the same price point. This applied to BW view (same points as garden), and OKW HH (same points as the rest of the rooms). Those separate booking categories are a good advantage for owners, because they can book the better rooms before the 7 months window without paying a premium in points. Later DVC started moving points around balancing the points across the new booking categories. It might have been in good faith (at the beginning), but it doesn't seem to be allowed by the POS and it opened the way for strategic point allocations like the Poly bungalows: the high point cost for the bungalows allowed DVC to sell a lot of points while showing the points required by studios to potential owners.


    2) The lockoff premium
    The point needed to book a studio + a 1BR are greater than the points needed to book a 2BR. This has always been the case since DVC opening. It is called "lockoff premium" (and can be justified by the fact that managing two reservations can be more onerous).
    For example, in 2019, in Adventure season:
    - studio standard: 11 points
    - 1BR standard: 22 points
    - 2BR standard: 30 points (and not 11+22)
    The lockoff premium is 3 points.
    In 2020 the lockoff premium has increased, as both studios and 1BR have increased while the 2BR has decreased:
    - studio standard: 12 points
    - 1BR standard: 24 points
    - 2BR standard: 28 points
    The lockoff premium will be 8 points, nearly trebled.

    VGF is the only resort there there is explicit mention of the lockoff with the wording authorising DVC to modify it at will. For other resorts there is no mention of it.
    It is not clear if the lockoff premium is even legal in the first place, but it has always been there so it probably is. However it doesn't seem right that DVC can increase it at will. This would violate the reallocation rule written above (each Vacation Home/Unit must keep the same number of points constant over the whole year).
    Increase the lockoff premium seems to benefit only Disney. The extra availability generated by the lockoff premium goes into the breakage inventory which is then booked by Disney for cash which is paid back into the resorts budget to lower the dues. However there is a cap to how much is paid back (2,5% of the total budget) and that cap has been already reached every year in the past. So an increase of the lockoff premium will cause more cash income that will be kept by Disney.

    3) Unbalanced rebalance
    Members have strong evidence that the least popular room size is the 1BR. Studios are the first to go, then 2BR and finally after a lot of time, 1BR. Also, the most common last minute availability is for 1BR.
    So it seems that a reallocation increasing both studios and 1BR in favor of 2BR doesn't make sense.
    The only possible explanation is that Disney want to push members to book larger vacation homes for the benefit of selling add-ons and larger contracts. At the expense of people who bought to stay in studios.


    What is the plan?
    In this phase we are still gathering feedback and information. I have recently enquired Disney about the legality of reallocations across different vacation homes/units and I have yet to receive a reply.
    Previously I questioned the legality of the increase of the lockoff premium and received a call back by a CM who just seemed to read from a script not addressing the problem: she told me the reallocation happened to balance demand cross seasons, but she seemed unaware about what the lockoff premium was and what the actual policy was about it.

    We now have to gather potential support for a possible lawsuit.
    The best outcome would be that given the weight of many members willing to pursue a lawsuit, DVCMC management would be willing to reconsider their decision and revert the changes. If not, I'll find a way for all people to communicate easily and decide what the best way to move forward will be.
    If you want to join this group, please reply below. It would be important to have as much public support as we can get, but if you prefer to stay anonymous, please PM me.

    Please note: as members we will pay with our dues for the legal expenses for DVCMC to fight us.

    What will we ask
    1/25/2019 will be the first day the new points charts will became effective, as it's the first day it'll be possible to book in 2020. As a matter of urgency, we ask DVC to suspend the application of the new points charts and use the same 2019 charts, only adjusted for floating holidays. However this could be achieved only if we find an agreement with DVCMC management. A Lawsuit will require a lot more time.

    Currently, my intention is to ask:
    - cancel any reallocation done (even in the past) that modified the number of points needed to book every vacation home
    - remove the lockoff premium from the point charts
    - create new booking categories for the rooms that have been reallocated in the past.
    However, those points are open for discussions, if you would like to modify them or add other points, please post below.

    How can you help?
    Members reading the DISboards and informed about what's happening are a very small minority of the membership base. I am ready to bet that most people don't even know that the 2020 charts have been published, let alone that a reallocation happened.
    So it is important to raise awareness in any way. Please post on Twitter, Facebook and other social media a link to this page. If you belong to any other forum or Facebook group, please post a recap of this post. Send a letter to the press. I have had a journalist interested in the topic and he's going to contact DVCMC management for an official position.
     
    Last edited: Dec 28, 2018
  2. zavandor

    zavandor DIS Veteran

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    This is take two of this thread. The previous version was deemed to violate the DISboards terms, I apologize with the moderators but it was in good faith. I hope that in the current form it complies. It might be for the better: I immediately regretted using a poll, as I couldn't see who voted. This also means that if you want to join, please reply again.
     
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  4. glamdring269

    glamdring269 DIS Veteran

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    I’m in if there are no other options. Don’t have nearly as much skin in the game as many others here but would still support seeing that we don’t get collectively pushed over.
     
  5. freediverdude

    freediverdude Was very touched by the Tapestry of Dreams parade

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    Well I do think that this will end up with either someone at DVC reading the terms in the contract and going oops and re-issuing the points charts, or if they dig their heels in, a lawsuit over it. I don't see how it can end any other way unless everyone just rolls over and lets it happen, which given what many DVC members are like, I don't see happening lol.
     
  6. Wakey

    Wakey DIS Veteran

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    I think Zavendor is doing an excellent job here. No one is against balancing demand and supply. I'm convinced if DVCMC had increased studios, and decreased 1 beds in a direct point to point set off, no one would have been able to say that was done in bad faith.
    What people on Facebook etc seem unable to grasp (eyes filled with pixie dust) is what Zavandor seems to be highlighting.
    I think DVCMC need to come out and explain, with data, their exact thinking on the points allocation, and also answer the issue raised above.
    I'd also like to know why none of this was addressed at the members' meeting the week before. That MUST have been a conscious decision, which is totally unacceptable.
    The new head of DVC needs to now address this, and failing that, Jeff Vahle needs to be contacted.
    If we still get nowhere, the lawsuits may be next.
    I'm pretty sure if there is a good case, a lawyer would take a class action on a contingency basis. I would suggest maybe contacting one and asking if they'll be interested.
    Unfortunately the whole system is not ideal. When you effectively have the management co making its money based on a percentage of dues, and effectively controlled by DVD, who are still selling timeshare, conflicts can arise. I'm not saying they have, but they obviously can.
    What I want initially is the clarification, then I can consider if I was wrong all along and what I see as a counter productive points allocation was actually done for the members' benefit.
     
  7. zavandor

    zavandor DIS Veteran

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    As members we do not have an interest in settling this with a huge payment for damage, because we would pay it with our dues. The only option would be if we could prove that DVCMC actions have been dictated by explicit requests of DVD for their interests. I could see it as really difficult to win. So a lawyer may not be interested in a contingency fee, unless they'd do it for the publicity that they would get for taking down Disney.
     
    Last edited: Dec 28, 2018
  8. MommaBerd

    MommaBerd DIS Veteran

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    Though I hope that all non-litigious routes will first be explored, I am willing to support this effort.
     
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  9. T-Daddy

    T-Daddy The Colonel

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    I'm in. I don't see how raising 1BR requirements helped in any way.
     
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  10. tjkraz

    tjkraz <img src="http://www.wdwinfo.com/images/silver.jpg

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    DVC could render this moot with a single sentence. This could be just the first year of a 2-year adjustment, necessitated by the 20% cap. In 2021 there could be a shifting of points from One Bedrooms to Studios. Or they could claim that they have actual usage data to back up the moves made. All we can tell from booking data presented online is whether a resort/room type is 100% sold out. The underlying trends regarding how quickly rooms fill across the seasons may tell a different story.

    They could claim that the 1BR changes gave more weight to other measurable booking trends rather than comparing to Studios and Two Bedrooms (Adventure & Choice vs Dream & Magic, Standard Views vs Preferred/Lake, Weekdays vs Weekends.) Sometimes you have to eat the elephant one bite at a time.

    If a legal professional is truly interested in this cause, the first thing they'll want to know is what dialogue has taken place with DVC. Disney may not make it easy, but an avenue exists to discuss the matter one-on-one. Flying to Florida for the day--even from the UK--is going to cost less than the legal fees necessary to read POS, research case law and send a written inquiry.

    If someone wants to go meet with DVC, I'll buy them lunch. But that's about the extent of my interest level. Gathering support for a lawsuit should be about Step 8 in this process. With all due respect, people are being asked to support a random crowd-funded legal battle when other avenues (steps) are being completely ignored.
     
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  11. zavandor

    zavandor DIS Veteran

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    I'm happy to take onboard feedback and I can see that possibly this is premature. I can see that possibly this should have been titled differently.
    This is my situation: I will have to use 12 more points per visit due to this reallocation. It's a $150 damage per year. If I have to book a flight, hotel, transport to go and visit the DVC HQ it would take me probably 15 years to recoup the expenses.
    Possibly many people are in my same situation. The damage is not big enough for a single person to take action, above all someone who books studios or 1BR. People who own a lot of points probably book larger rooms, so they're not impacted. The chances of a single person to be affected so much to take legal action are non existent.
    So DVC could get away with it.
    As I said, I'd be very happy if someone else want to coordinate a team to challenge this reallocation and want to take different steps in a different order. What I wouldn't be happy is if this ends up doing nothing because for a single person it's too expensive.
     
  12. tjkraz

    tjkraz <img src="http://www.wdwinfo.com/images/silver.jpg

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    I would ask you to consider the worst possible outcome--that you get a lot of owners to commit a lot of money and get absolutely nowhere. Every person who every contacted an attorney and/or filed a lawsuit thought they had a legitimate case. Many of them were wrong.

    Hiring a legal team to pour over the Public Offering Statements and prepare a lawsuit against The Walt Disney Company doesn't seem like the best way to spend those people's money. Not when there are cheaper alternatives available...ones which should yield SOME useful information in a non-combative setting.
     
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  13. DVC92

    DVC92 Mouseketeer

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    First you need to send the details you started the thread with to DVCMC and get a response. Then, I would file a complaint with the Florida Timeshare Bureau before taking legal action. Points or financial remuneration can always be done in the future.
     
  14. zavandor

    zavandor DIS Veteran

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    Taking onboard your feedback I've changed the title of this thread to slow down a little. I'm not going to hire a lawyer for a very long time. However in the thread I tried to make clear the current stage is gather interest from a number of people who are upset by the changes to form a team of people who might be seen by DVC as a real interlocutor to which give real answers. As a single member I haven't had any yet.

    I've done it, I haven't received a reply yet. I've received an answer to another email, so that one is not in the queue anymore. It is either being ignored or passed to someone else to formulate an answer.
    If anyone else want to try their luck, they can take the text and send it to DVC too.
     
  15. WebmasterDoc

    WebmasterDoc Administrator Administrator

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    I have reviewed and scanned the DVC POS documents I have but they are pretty ancient dating back to 05/93 and 08/98. I will share those here and add my personal comments. Others are welcome to offer legal interpretations as I am neither an attorney nor do I play one on TV.

    These are from the May, 1993 revised POS. This is one from Exhibit "I" to the Declaration of Condominium, Section VI. Miscellaneous Provisions, Subsection 6.3 Amendment of this Agreement and Subsection 6.4 Governing Law; Waiver of Jury Trial; Venue.

    It describes that DVC has discretion to change the terms and conditions of this agreement and the Rules and Regulations along with the law governing law for legal challenges against the agreement, interpretation, vaidity, performance, enforcement, etc of the agreement.

    Others are also from the same revised POS and exhibit "I", Section II - Operation of the Club, Subsection 2.3 Vacation Point Reservation values which goes on to describe how a reallocation of points may be accomplished. In this early version there is no mention of a 'Unit' regarding reallocation - only that Vacation Points must represent the total points owned at a given Resort and is some use days are increased others must be reduced to keep the system in balance. It goes on to describe a Maximum Reallocation where all days of the year for each type of villa would have the same point requirement. There would be no seasons or weekend differential. It also provides a chart based on ownership of 230 points at OKW (which was the original minimum purchase at the 'Disney Vacation Club Resort', now known as Old Key West).

    Also included in this section, are comments about the ability of DVC to have a 'Minimum Stay Requirement' for all reservations (ie - a 3 night minimum stay) and also to reduce the Home Resort Reservation Advantage to as little as one month instead of the 7 month advantage which has always been in place.
     

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  16. Madame

    Madame DIS Veteran

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    So this seems to imply that we’ve waived our rights to challenge DVC legally & that they have the right to make decisions which do not benefit the collective membership @drusba
     
  17. zavandor

    zavandor DIS Veteran

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    Thanks for posting this. I find somehow fascinating how the text has evolved during the years. At some point between the original documents and the SSR ones, they've added the wording about vacation homes. At VGF they've added the lockoff premium but they've later removed it.
    It's anyone guess why. It's like trying to resolve a sudoku with only a couple of numbers in the grid.

    However there is a mention to a unit:
    … provided however that the total number of vacation points existing within a given unit and at that DVC resort at any time may not be increased or decreased because of any such reallocation

    That's quite clear and similar to the SSR one.. At some point at the beginning of that paragraph they've added also thhe text saying points can only be moved within a Vacation Home. However, given the different composition of units the effect may be the same as it could be impossible to guarantee all units keep the same amount of points if they're shifted between room sizes.

    Everything might be trumped by their right to change whatever they want. But then don't understand why they would re-add similar wording in each section but adding constraints on why and what they can change.
     
  18. OKW Lover

    OKW Lover Retired and living 2 miles from The Castle. DIS Lifetime Sponsor

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    That's pretty much the case. We ceeded our rights to DVD to manage the resorts.
     
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  19. WebmasterDoc

    WebmasterDoc Administrator Administrator

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    Here is a copy from the August, 1998 Hilton Head POS. It is Exhibit "H" to the Master Deed, Section III, subsection 3.3 Home Resort Vacation Point Reservation Values. It describes reallocation of vacation points for given Vacation Homes and may be accomplished by increasing or decreasing points required for specific Use Days. Again, it describes that the total Vacation Points must be kept in balance, but does use the 'Unit' term in balancing the points. It also states "The total number of Home Resort Vacation Points required to reserve all Vacation Homes during all Use Days in the Condominium must always equal, and be symbolic of, the total number of Ownership interests owned by Club Members in the Condominium."

    DVCMC has reallocated points three times previously. The first involved only OKW in 1996, The next two were 2010/2011 when points were reallocated over a two year period (there is a 20% maximum allowed per year).

    Discussions like this have been introduced with each reallocation but, to my recollection, there has been no active attempt to gain audience or information from DVC regarding specific information about the reallocation. If you search for 'reallocation' you may be able to find ghostly old threads with many of the same sentiments echoed.

    Replacing DVCMC as the operating management for the DVC Resorts requires a 60% vote of the membership with the same requirement to modify a reallocation of more than 20% in one year over the last year.

    Amendments may be submitted and ratified by a vote of 75% of the owners.
     

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  20. supersnoop

    supersnoop What time is the three o'clock parade?

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    We’d have to file a case claiming that they are no longer operating in the best interest of the members and have violated their fiduciary responsibility. The whole concept of employees acting as the board members of each and every subsidiary organization is based on them acting in good faith. I think that would be much scarier to The Disney companies; that a court could mandate the replacement of those boards with members.
     
  21. 10CJ

    10CJ DIS Veteran

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    So are the terms vacation home and unit defined in the document? I see the definition for vacation home in the first post but not unit.
     

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