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Travel Services, Inc. v. Vacation Tours USA, Inc.

United States District Court, C.D. Illinois, Springfield Division

October 31, 2016




         Defendants move to dismiss for lack of personal jurisdiction and/or failure to state a claim.


         Case closed.


         A. Background

         The Complaint alleges that Plaintiff Grand Vacation Club is in the business of selling travel memberships to individual consumers in the State of Wisconsin. Grand Vacation Club is owned by Travel Services, Inc. Defendants Vacation Tours USA, Inc. and Millennium Travel and Promotions, Inc. are owned by Defendant Henry J. Armand and his son, Tony Armand. The dispute centers on a marketing agreement entered into by Grand Vacation Club and Vacation Tours USA.

         Plaintiff Grand Vacation Club's (“Plaintiff” or “Grand”) travel memberships were sold to Wisconsin consumers who attended a brief sales presentation by the Plaintiff offering membership in a travel concierge service. In an effort to generate leads for the Plaintiff's sales presentations in Wisconsin, on or about January 22, 2009, the Plaintiff entered into the marketing agreement with Defendants Vacation Tours USA (“Vacation Tours”) and Millennium Travel and Promotions (“Millennium” and collectively, “Defendants”) for marketing services to the Plaintiff. Grand alleges that the marketing agreement required that Defendants legally generate sales leads for the Plaintiffs.

         According to the Complaint, the Plaintiffs believe that Defendants generally employed a methodology to generate sales leads which used postcards and telephone calls to Wisconsin consumers. During the calls, Wisconsin consumers were promised by an employee and agent of the Defendants that the recipient would receive a travel award or gift from the Defendants in exchange for attending a brief sales presentation, in this instance the Plaintiff's sales presentation. Millennium provided and managed the award and gift certificates given to the Wisconsin consumers.

         The marketing agreement provided that Defendants comply with all applicable laws including, without limitation, laws concerning telemarketing, “Do Not Call” lists, solicitation practices, deceptive practices, and other consumer protection laws. The marketing agreement further provided that Defendants would indemnify and hold harmless Grand and its officers, directors, shareholders and agents, among others, from any loss, fine, penalty, award, damage or liability that resulted from the Defendants' acts and omissions in connection with their sales lead generation program and gift certificates.

         The Plaintiffs allege that soon after signing the marketing agreement, Vacation Tours mailed tens of thousands of marketing postcards to Wisconsin residents as part of its sales lead generation program. The Defendants' agent and principal, Armand, represented to Grand's President that the marketing postcards were reviewed, vetted and approved as complying with all laws and statutes applicable to Wisconsin consumers by the Defendants' legal counsel prior to mailing of the postcards. The Plaintiffs believe the Defendants' legal counsel did not review and approve for legal compliance the content of the postcards created by Vacation Tours that were mailed to Wisconsin consumers.

         Millennium provided the travel award and gift certificate given to Wisconsin consumers who attended the Plaintiff's sales presentations. The Plaintiffs paid both Defendants for the services each provided under the marketing agreement and fully complied with all conditions of the marketing agreement.

         B. Wisconsin lawsuits

         On or before January 13, 2002, the State of Wisconsin filed two lawsuits against the Plaintiffs and others: one in Outagamie County, styled Case Nos. 2010-CX-1 through 1D and 1G through 1I, State of Wisconsin v. Going Places Travel Corporation, Perry T. Cruz, Lisa Ann Ruiz, Castaways Vacations, Inc., William Bailey, Christy Spensberger, and Travel Services, Inc., in the Circuit Court, Branch 6, of Outagamie County Wisconsin; and one in Waukesha County, styled Case Nos. 2012-CX-1 through 1C, State of Wisconsin v. Grand Vacation Club, Inc., William Bailey, Christy Spensberger, and Travel Services, Inc., in the Circuit Court, Branch 5, Waukesha County, Wisconsin. The Wisconsin lawsuits alleged violations of Wisconsin consumer protection laws.

         In the Waukesha County Lawsuit, the State complained that Vacation Tour's postcards constituted “prize notices” that violated Wisconsin Statute § 100.171. Specifically, the State alleged:

28. Solicitations were mailed to certain Wisconsin residents on behalf of Grand Vacation Club which represented to those residents that they had been awarded or were being offered two round trip airline tickets to any major international airport anywhere in the continental USA, including a three day/two night getaway that can be used at hundreds of Marriott properties in the continental USA, a $30.00 dinner card for two to be used at named restaurants, and a complimentary $300 grocery voucher or rebate if the resident responded within 72 hours. The mailed cards invited the recipient to call. Certain of the mail solicitations also included, in fine print, “Introducing a great way to save thousands on future vacations. Refundable $50 pp deposit, airline tax, and other appropriate sales tax due upon travel agreement. Retail value of gift is $1, 399.” Said mailed solicitations constitute a “prize notice” as defined by Wis.Stat. § 100.171(1)(b)1 (hereinafter the “mailed prize notices”).
29. Upon information and belief, at least some of the Wisconsin residents who called in response to the mailed prize notices were told that the complimentary offer was being offered by Grand Vacation Club in Waukesha, Wisconsin and that the promotion had nothing to do with timeshare or real estate. Further, at least some of the Wisconsin residents were invited to an open house presentation being held for select residents in the area, were asked certain questions to determine if they were qualified, were informed of some particulars of the promotional items such as a set refundable deposit amount per ticket plus undisclosed amounts of taxes, airline security fees and airport service fees, were informed that a 90-day advance notice was required for booking the airline tickets, that there were blackout dates seven days before or after major holidays (those holidays were not disclosed), were informed regarding certain particulars as to the other promotional items offered, and were informed that the Wisconsin resident and spouse/significant ...

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