Case 3:08-cv-00516 Document 1 Filed 12/29/2008 Page 1 of 19

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TENNESSEE
NORTHERN DIVISION
AT KNOXVILLE
)
)
)
)
)
)
)
JAN WATSON and JACK MITCHELL, on
behalf of themselves and all others similarly
situated,
Plaintiffs,
v.
WESTGATE RESORTS, INC., WESTGATE
RESORTS, LTD., WESTGATE RESORTS,
LTD., L.P., WESTGATE SMOKY
MOUNTAIN RESORT AT GATLINBURG,
INC., CFI SALES & MARKETING, LTD.,
CFI SALES & MARKETING, LLC.,
CFI SALES & MARKETING, INC.,
CENTRAL FLORIDA INVESTMENTS, INC.
)
)
)
)
)
)
Civil Action No.
JURY TRIAL DEMANDED
)
)
)
Defendants.
CLASS ACTION COMPLAINT
Plaintiffs Jan Watson and Jack Mitchell, on behalf of themselves and all others similarly
situated ("Plaintiffs'l), by their undersigned attomeys, allege the following against Westgate
ResOlts, Inc., Westgate Resorts, Ltd., Westgate ResOlts, Ltd., L.P., Westgate Smoky Mountain
ResOlt at Gatlinburg, Inc., CFI Sales & Marketing, LLC, and Central Florida Investments, Inc.
(collectively "Westgate" or "Defendants"),
based upon personal knowledge as to themselves,
and as to all other matters, based upon information and belief and upon the investigation of
Plaintiffs' counsel to date. Plaintiffs believe that substantial additional evidentiary support will
exist for the allegations set for herein after a reasonable opportunity for discovery.
INTRODUCTION
1.
Plaintiffs Jan Watson and Jack Mitchell bring this action as a collective action
pursuant to Section 16(b) of the Fair Labor Standards Act ("FLSA'), 29 U.S.C. § 216(b), on
behalf of themselves and a Class consisting of former and current employees of Westgate who
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are owed unpaid wages and overtime compensation under the FLSA, 29 U.S.C. §201 et. seq.
Plaintiffs bring this action to recover the compensation that they and members of the Class are
owed pursuant to the FLSA.
2.
Plaintiffs also bring this action as a class action pursuant to Fed. R. Civ. P. 23 on
behalf of all similarly situated individuals who entered into contracts with Defendants, in order
to recover damages as a result of Defendants' breaches of contract and unlawful conversion of
funds.
JURISDICTION & VENUE
3.
This Court has jurisdiction over this action pursuant to Section 16(b) of the FLSA,
29 U.S.C. § 216(b), which provides: "An action to recover the liability prescribed in either of the
preceding sentences may be maintained against any employer ... in any Federal or State court of
competent jurisdiction by anyone or more employees for and in behalf of himself or themselves
and other employees similarly situated."
This Court also has jurisdiction
over this action
pursuant to 28 V.S.C. §1331 because this action arises under the laws of the United States, 29
U.S.C. §201 et seq., because this action alleges violations of the Fair Labor Standards Act. This
Court has jurisdiction, pursuant to the principles of supplemental jurisdiction and 28 U.S.C.
§1367, over the state law claims alleged herein.
4.
This Court has personal jurisdiction the Defendants because the Defendants: (I)
operate a business within this District; (2) committed acts in violation of the FLSA as alleged
herein within this District; (3) have maintained continuous and systematic contacts with this
District over a period of years; and (4) purposefully availed themselves of the benefits of doing
business within this District.
5.
Venue is proper
III
this Court pursuant to 28.U.S.C.
§1391, because the
Defendants conduct business within this District, have agents within this District and transact
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their affairs in this District, and because a substantial part of the events or omissions giving rise
to the claims occUlTed in this District.
THE PARTIES
6.
Plaintiff Jan Watson is a resident of Cosby, Cocke County, Tennessee.
Plaintiff
Jan Watson resides in this district, and was employed by Westgate as a sales representative at the
Westgate Smoky Mountain Resort in Gatlinburg, Tennessee fl:om July 2006 to November 2008.
7.
Tennessee.
Plaintiff Jack Mitchell is a resident of Strawberry Plains, Jefferson County,
Plaintiff Jack Mitchell resides in this district, and was employed by Westgate as a
sales representative at the Westgate Smoky Mountain Resort in Gatlinburg, Tennessee from May
2005 to March 2008.
8.
Defendant Westgate Resorts, Inc., is a Florida corporation that is registered to do
business in Tennessee, whose principal office is located at 5601 Windhover Drive, Orlando,
Florida 32819.
9.
Defendant
Westgate ResOlts, Ltd., is a Florida Limited Partnership
that is
registered to do business in Tennessee, whose principal office is located at 5601 Windhover
Drive, Orlando, Florida 32819.
10.
Defendant Westgate ResOlts, Ltd., L.P., is a Florida Limited Pal1nership that is
registered to do business in Tennessee, whose principal office is located at 5601 Windhover
Drive, Orlando, Florida 32819.
11.
Defendant Westgate Smoky Mountain ResOlt At Gatlinburg, Inc., is a Tennessee
Corporation with its principal place of business at 915 Garden Road, Gatlinburg, Tennessee
37738.
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12.
Defendant CFI Sales & Marketing, Ltd., is a Florida Limited Liability Company
that is registered to do business in Tennessee, whose principal office is located at 5601
Windhover Drive, Orlando, Florida 32819.
13.
Defendant CFI Sales & Marketing, LLC, is a Florida Limited Liability Company
that is registered to do business in Tennessee, whose principal office is located at 5601
Windhover Drive, Orlando, Florida 32819.
14.
Defendant CFr Sales & Marketing, Inc., is a Florida Corporation whose principal
office is located at 5601 Windhover Drive, Orlando, Florida 32819.
Upon infol1nation and
belief, Defendant CFr Sales & Marketing, Inc. conducts business in Tennessee through its
wholly-owned
or related entities Westgate Resorts, Inc., Westgate Resorts, Ltd., Westgate
Resorts, Ltd., L.P., Westgate Smoky Mountain Resort At Gatlinburg, Inc., andJor CFI Sales &
Marketing, Ltd. And CFI Sales & Marketing, LLC.
15.
Defendant Central Florida Investments, Inc., is a Florida Corporation whose
principal office is located at 5601 Windhover Drive, Orlando, Florida 32819. Upon information
and belief, Defendant Central Florida Investments, Inc. conducts business in TelUlessee through
its wholly-owned or related entities Westgate Resorts, Inc., Westgate ResOlts, Ltd., Westgate
Resolts, Ltd., L.P., Westgate Smoky Mountain Resort At Gatlinburg, Inc., andJor CFI Sales &
Marketing, Ltd., CFI Sales & Marketing, LLC, and CFr Sales & Marketing, Inc.
16.
Defendants are hereby collectively referred to as "Westgate" or "Defendants."
All Defendants are, for the purposes of the FLSA and the other claims alleged herein, a common
or joint enterprise or pmtnership that is collectively, jointly and severally liable to Plaintiffs and
members of the Class as described herein.
17.
Defendants are in the business of developing and selling fi:actional or interval real
estate ownership, or "time-share,"
properties throughout the throughout
the United States,
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including Tennessee, Arizona, Florida, Missow'i, Mississippi, Nevada, South Carolina, Utah and
Virginia.
Upon information and belief, Westgate is the largest privately~owned time-share
company in the world.
Westgate operates a real estate time-share business in the State of
Tennessee through Defendant Westgate Smoky Mountain Resort At Gatlinburg, Inc.
18,
Plaintiffs and members of the Class were employed as sales representatives in
Westgate's Gatlinburg time-share sales business during the three years immediately preceding
the filing ofthis suit. Westgate paid Plaintiffs and members ofthe Class on a commission-only
basis.
19.
Upon information and belief, Defendants employed hundreds of similarly situated
inside sales representatives within the United States on a commission~only basis within the last
three years.
SUBSTANTIVE ALLEGATIONS
20.
Westgate employs sales representatives like Plaintiffs and members of the Class
to sell fractional real estate units, or "time-share"
throughout the United States.
units, at its various resOlt destinations
These sales representatives
premises, giving tours of time~share units to prospective
work in Westgate's
offices and
customers, participating in sales
presentations of time-share units, and ultimately selling time-share units.
21.
All sales representatives, including Plaintiffs and members of the Class, are paid
solely on a commission-only basis and have the same job duties and responsibilities.
A.
Employment Conditions
22.
In order to be employed by Westgate, all sales representatives, including Plaintiffs
and members of the Class, were required to declare that they were not presently to or bound by
any contracts with any other resorts.
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23.
All sales representatives,
including Plaintiffs and members of the Class, were
required to enter into a confidentiality and non-competition agreement with Westgate.
24.
All employees, including Plaintiffs and members of the Class, were also required
to enter into agreement acknowledging that "Employees are not pelmitted to smoke on company
propeliy. "
25.
Prior to stm1ing as a sales representative
at Westgate, Plaintiffs and Class
Members received an extensive training course for several weeks, given by Westgate. Westgate
compensated Plaintiffs and Class Members for their time spent during this course.
26.
Prior to commencing their training with Westgate, Plaintiffs and members of the
Class were required to sign and agree to a "Pre~Employment Disclosure" that outlined certain
conditions of employment with Westgate. The provisions that Plaintiffs and the Class agreed to
include:
•
"I understand that I have to memorize, word for word most of the sales
presentation. I will have to write it out from memory."
•
"My 2 days off will be assigned during the training period according to the
needs of the company. However, I understand that during peak seasons I
may be required to work 6 days per week."
•
"I understand that the Westgate Resods has a strictly enforced dress and
grooming code which I have to abide by beginning on the first day of
training. A training manual on company selling procedures will be
provided to me during training."
•
"Westgate Resolis strongly discourages any Sales Representative from
working a second job while working on the sales line. This is to prevent a
conflict of interest. A second job is pelmittable as long as it is not a
conflict with Westgate job responsibilities and attendance,"
•
"I must provide my own reliable mode of transportation to and from
work."
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27.
Upon being hired, Defendants entered into contracts with all sales representatives,
including Plaintiffs and members of the Class. Upon information and belief, all employment
contracts entered into between Defendants and the Class are identical in all material aspects.
28.
While employed as a sales representative as Westgate, Westgate dictated the sales
methods that could be employed by Plaintiffs and Class Members, and made all the decisions as
to adveliising, equipment, and other office supplies. All office fumishings and equipment was
paid for by Westgate, and all office stationary had the Westgate logo on it.
Westgate also
provided all sales and marketing materials for use in selling the time-share units.
29.
All employees, including Plaintiffs and members of the Class, were required to
sign the Central Florida Investments Employee Conduct Policy, which regulated their conduct
while employed at Westgate and provided a list of prohibited conduct, such as "disrespectful
conduct, coercion, intimidation or threatening supervisors, other employees, visitors or clients,"
and "abusing, misusing or destroying company propeliy or the property of other employees."
The Central Florida Investments Employee Conduct Policy also included a list of conduct that
would be considered just cause for disciplinary action, such as: "frequent or unexcused
absenteeism or lateness;" "failure to follow established procedure;"
"violation of company
policy;" "making personal phone calls on business phones;" receiving unauthorized visitors
(friends / family members) while on duty;" "failure to clock in/out;" "failure to complete normal
work assignments
in a timely manner;"
"minor rudeness or discourtesy;"
"unauthorized
distribution ofliterature materials on company property;" "unauthorized solicitation on company
property;" "failure to call in when unable to work;" "loitering while on duty;" "failure to perform
assignments as directed by your supervisor;" "arguing with employees;" "violation of company
dress, grooming or personal hygiene standards;" "behavior that is detrimental to the well being
of others, employee morale or the reputation of the company;" "unauthorized absence from
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assigned work areas;" "working overtime without a manager's authorization;" "engaging in or
failure to report activities which could be considered to discredit the company;" and "eating or
taking meal breaks at times other than assigned meal periods or in areas other than those
designated."
30.
All sales leads for Westgate's
sales representatives,
including Plaintiffs and
members of the Class, would come through Westgate. If a sales representative were to complete
a self-generated sale (Le. a sale that arose independently fi'om a lead independently procured by a
sales representative) that sale could not proceed unless first approved by Westgate's Director of
Sales.
31.
Westgate set the hours of employment
for all of its sales representatives,
including Plaintiffs and the Class.
32.
During their employment with Westgate, Plaintiffs and members of the Class
were required to repOlt at Westgate's Smoky Mountain Resort time-share sales office for work at
a celtain time every morning in order to check-in and receive a pager. Thereafter, Plaintiffs and
members of the Class patticipated in a moming meeting, after which they statted actively
bringing in potential clients, giving tours and transacting sales oftime-share units.
33.
Plaintiffs and members of the Class were required to work throughout the day,
until at least 3:00 p.m., without any breaks.
34.
Although Plaintiffs and members of the Class were required to be on the Westgate
premises until 3:00 p.m. everyday in order to perform tours of time-shat'e units and/or transact
sales of such units, Plaintiffs and Class Members were frequently required to stay past 3:00 p.m.
Specifically, if a prospective buyer walked in at 3:00 p.m. wanting a tour, Plaintiffs and members
of the Class were required to work until the tour or sales transaction was complete. This resulted
in Plaintiffs and the Class working late hours on many days.
Accordingly,
Plaintiffs and
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members of the Class, as Westgate sales representatives, regularly worked in excess of forty
hours per week.
35.
Westgate also regulated which vacation days Plaintiffs and the Class were
pelmitted to take throughout the year. To this end, Westgate provided all sales representatives,
including Plaintiffs and members of the Class, with a yearly calendar illustrating celiain blacked
out dates during which Plaintiffs and the Class were not permitted to take vacation time.
B.
Compensation
36.
Westgate pays all of its sales representatives, including Plaintiffs and members of
the Class, on a commission-only basis. As such, Plaintiffs and Class Members were not paid by
the hour (and therefore did not receive a minimum wage), nor did they receive a guaranteed
salary. The amount of Plaintiffs' and the Class's compensation did not depend upon the numbers
of hours worked in a given workweek, but rather upon the number of time-share sales they made.
Thus, Plaintiffs and Class Members waited until they completed a sale before receiving any
compensation for their hard work.
The pay Plaintiffs and Class Members received was from
Westgate Resorts and CFI; CFI Sales & Marketing, Ltd.; and Central Florida Investments, Inc.
37.
All
commissions
(and
hence
all
compensation)
for
Westgate's
sales
representatives, including Plaintiffs and members of the Class, were solely based upon sales of
time-share units. The commissions ranged from 6% to 13%, based upon the amount of down
payment that was put down by the purchaser of the time-share unit.
38.
When Plaintiffs and Class Members made a sale, Westgate would first receive the
check for the sale from the purchaser.
Only then would Westgate pay Plaintiffs and Class
Members their commission.
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C.
The Reserve Account
39.
As a condition of their employment for Westgate, Plaintiffs and members of the
Class were required to maintain a "reserve'l account in the amount of$3,500.
40.
The funds for this reserve account were accumulated fi'om the commissions owed
to Plaintiffs and the Class. Specifically, ten percent of commission due on each sale was retained
by Westgate in order to establish and maintain the reserve fund.
41.
The funds in the reserve accounts were maintained by the Defendants as security
for "charge backs." These charge backs would only arise at a time when sales representatives,
such as Plaintiffs and members of the Class, are no longer employed by Westgate.
Specifically,
after a sales representative is no longer employed by Westgate, he or she may be charged back
for all sales upon which commissions have been made in the event that the purchaser of the timeshare units has not made six timely and consecutive monthly payments, as well as the ten percent
minimum down payment.
Thus, the reserve accounts were intended to cover any loss to the
Defendants in the event that the Defendants paid Plaintiffs and the Class commissions that
Defendants were later entitled to reclaim pursuant to the terms of the employment contract
between Defendants and the Class.
42.
Unless a charge back occurred, the funds in the reserve accounts were fully the
property of Plaintiffs and the Class.
43.
Westgate agreed to reimburse the sales representative for the funds remaining the
reserve account at such time that the sales representative is no longer employed by Westgate
under the tenns of the contract.
44.
Although Plaintiffs are no longer employed by Westgate, they still have not
received the remaining funds in their reserve accounts.
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Upon information and belief, there are
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thousands of other Class Members who are no longer employed by Westgate and who have yet
to receive the funds in their reserve accounts.
CLASS AND COLLECTIVE ACTION ALLEGATIONS
45.
As to Plaintiffs' FLSA claims, Plaintiffs bring this action as a collective action
pursuant to Section 16(b) of the FLSA, 29 V.S.C. § 216(b), also commonly refelTed to as an
"opt-in" class, on behalf of themselves and all current and former sales representatives
of
Westgate who have not been paid a minimum wage or overtime compensation pursuant to the
FLSA.
46.
As to Plaintiffs'
state law claims, Plaintiffs bring this action as a class action
pursuant to Federal Rule of Civil Procedure 23 on behalf of themselves and the following
Tennessee Class:
All persons who were formerly or are currently employed as sales
representatives for Westgate and who were paid on a commission
only basis.
w
47.
Excluded from the Class are Defendants, their officers, directors, agents, trustees,
parents, children, corporations, uusts, representatives, employees, principals, servants, partners,
joint venturers, or entities controlled by Defendants, and their heirs, successors, assigns, or other
persons or entities related to or affiliated with Defendants and/or their officers and/or directors,
or any of them; the Judge assigned to this action, any member ofthe Judge's immediate family;
and counsel for Plaintiffs.
48.
Certification of the Class is appropriate pursuant to Fed. R. Civ. P. 23, in that: (a)
the Class is so numerous that joinder of all members is impracticable; (b) there are questions of
law or fact common to each Class member; (c) the claims or defenses of each Class member is
typical of the claims or defenses of all Class members; (d) the representative party will fairly and
adequately protect the interests of the Class.
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49.
Numerosity, Plaintiffs are informed and believe, and on that basis allege, that the
proposed Class contains thousands of similarly situated persons who are either cU11'entlyor
fOlmerly employed by Westgate as sales representatives seIling Westgate time-share units, and
who were paid on a commissionwonly basis. The precise number of Class Members is currently
unknown to Plaintiffs,
The hue number of Class Members is known by Defendants, however,
and thus, may be notified of the pendency of this action by first class mail, electronic mail, and
by published notice.
The members of the Class are so numerous that joinder of all members
would be impracticable.
50.
Existence
and Predominance
of Common
Questions
of Law and Fact.
Common questions of law and fact exist as to all members of the Class and predominate over
any questions affecting only individual Class Members,
These common legal and factual
questions include, but are not limited to, the following:
a.
Whether the Defendants breached its contracts with the Class;
b.
Whether the Defendants improperly withheld funds from Class Members'
reserve accounts;
c.
Whether the Defendants engaged in the unlawful practices alleged herein;
d.
Whether the Defendants are liable to Plaintiffs and members of the Class
for damages for conduct actionable under Tennessee law; and
e.
Whether Plaintiffs and members of the Class have sustained damages as a
result of Defendants' conduct, and, if so, what is the appropriate measure
of damages,
51.
Tvpicality.
Plaintiffs' claims are typical of the claims of the Class Members in
that Plaintiffs and each member of the Class have been injured by the same wrongful conduct of
the Defendants. Plaintiffs' claims arise from the same practices and course of conduct that gave
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rise to the Class Members' claims and are based on the same legal theories.
Plaintiffs, like all
Class Members, have not been fully compensated Westgate pursuant to the terms of their
employment contracts, and thus Plaintiffs, like all Class Members, have been damaged by
Defendants' unlawful conduct.
52.
Adeauacy of Representation.
Plaintiffs will fairly and adequately protect the
interests of the members of the Class. Plaintiffs have retained counsel experienced in complex
class action litigation, and Plaintiffs intend to prosecute this action vigorously. Plaintiffs have no
adverse or antagonistic interests to those of the Class.
53.
Superiority.
A class action is superior to all other available means for the fair
and efficient adjudication of this controversy. The damages or other financial detriment suffered
by individual members of the Class is relatively small compared to the burden and expense that
would be entailed by individual litigation of their claims against the Defendants.
It would thus
be virtually impossible for the members of the Class, on an individual basis, to obtain effective
redress for the wrongs done to them. Fmihermore, even if members of the Class could afford
such individualized litigation, the cOUli system could not.
Individualized claims brought by
members of the Class would create the danger of inconsistent or contradictory judgments arising
from the same set offacts.
Individualized litigation would also increase the delay and expense to
all patiies and the cOUlisystem from the issues raised by this action. By contrast, the class action
device provides the benefits of adjudication of these issues in a single proceeding, economies of
scale, and comprehensive supervision by a single court, and presents no unusual management
difficulties under the circumstances here.
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COUNT I
FAIR LABOR STANDARDS ACT
54.
Plaintiffs repeat and reallege the allegations set fOlih above as if fully contained
55.
Defendants
herein.
condominiums
are
in
the
business
of
developing
and resorts, and employ inside sales representatives
and
selling
time-share
such as Plaintiffs and
members of the Class to market and sell time-share units in their condominiums and resorts.
56.
At all relevant times, Defendants constituted an enterprise engaged in commerce
as defined by Sections 3(1')and 3(s) of the FLSA, 29 D.S.C. §§ 203(r) and 203(s).
57.
At all relevant times, Plaintiffs and the Class were considered "employees
engaged in commerce"
under Section 6(a) of the FLSA, 29 V.S.C. § 206(a), as well as
"employees engaged in interstate commerce" under Section 7(a) of the FLSA, 29 D.S.C. §
207(a), as defined by Sections 3(b) and 3(e)(1) ofthe FLSA, 29 US.C. §§ 203(b) and 203(e)(1).
58.
Section 6 of the FLSA, 29 USCS § 206, provides for a statutory minimum wage
for all employees "employed in an enterprise engaged in commerce:'
59.
Defendants violated Section 6 of the FLSA, 29 U.S.C. § 206, by failing to pay a
minimum wage to Plaintiffs and the Class.
60.
Section 7(a)(1) of the FLSA, 29 D.S.C. § 207(a)(1) provides:
Except as otherwise provided in this section, no employer shall
employ any of his employees who in any workweek is engaged in
commerce or in the production of goods for commerce, or is
employed in an enterprise engaged in commerce or in the
production of goods for commerce, for a workweek longer than
forty hours unless such employee receives compensation for his
employment in excess of the hours above specified at a rate not
less than one and one"half times the regular rate at which he is
employed.
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61.
Defendants violated Section 7(a)(1) of the FLSA, 29 V.S.C. § 207(a)(1), by
failing to pay Plaintiffs and members of the Class time and one-half their regular hourly rate for
hours worked in excess of forty hours during a workweek.
62.
At all relevant times, Defendants were aware that, as employees of Westgate,
Plaintiffs and members of the Class were owed compensation pursuant to the FLSA.
63.
Defendants' violations of 29 V.S.C. §§ 206 and 207(a)(1) were repeated, willful
and intentional.
64.
As a result of Defendants' wrongful conduct, Plaintiffs and the Class have been
deprived of wages and oveliime compensation, and have suffered damages.
65.
Plaintiffs, on behalf of themselves and all FLSA class members who opt to join in
this collective action, demand judgment against Defendants for the unpaid wages and unpaid
balance of overtime compensation, plus an equal amount as liquidated damages, as well as
reasonable attomeys' fees and reimbursement of all costs for the prosecution of this action, and
such other and further relief as may be just and proper.
FLSA EXEMPTIONS INAPPLICABLE
66.
The FLSA
provides
an exemption
salespeople employed by a retail establishment
for overtime
compensation
for inside
who are paid on a commission-only
basis.
Specifically, 29 U.S.C. § 207(i) provides, in peliinent pali:
No employer shall be deemed to have violated subsection (a) by
employing any employee at a retail or service establishment for a
workweek in excess of the applicable workweek specified therein,
if (1) the regular rate of pay of such employee is in excess of one
and one-half times the minimum hourly rate applicable to him
under section 6 [29 USCS § 206], and (2) more than half his
compensation for a representative period (not less than one month)
represents commissions on goods or services.
67.
The Code of Federal Regulations, 29 CFR 779.312, defines a "retail or service
establishment" as "an establishment 75 per centum of whose annual dollar volume of sales of
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goods or services (or of both) is not for resale and is recognized as retail sales or services in the
pmticular industry."
68.
The Code of Federal Regulations,
29 CFR 779.317, provides
a list of
establishments to which the "retail concept does not apply," and this list includes "real estate
companies."
69.
Since Westgate is engaged in the business of selling real estate, it is not engaged
in an industry having a "retail concept" as that term is defined by the United States Department
of Labor in Subpmt D ofPmt 779 of Title 29 ofthe Code of Federal Regulations.
70.
Accordingly, "real estate companies" such as Defendants do not have a "retail
concept" and the salespeople they employ are therefore not exempt from the overtime provisions
of the FLSA pursuant to 29 D.S.C. § 207(i).
COUNT II
BREACH OF CONTRACT
71.
Plaintiffs repeat and reallege the allegations set forth above as if fully contained
72.
Defendants entered into a written contract with Plaintiffs and the Class whereby
herein.
Defendants promised to pay Plaintiffs and members of the Class commissions in exchange for
their work as sales representatives.
73.
Defendants breached the contracts by failing to pay Plaintiffs and the Class
certain commissions that were owed.
74.
Upon information and belief, all contracts entered into between Defendants and
the Class are identical in all material aspects and are all subject to the same governing law.
75.
As a result of Defendants' breach, Plaintiffs and the Class have suffered damages.
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76.
Plaintiffs, on behalf of themselves and the Tennessee Class, seek a judgment
against Defendants for all monies due to them under their contracts with Defendants as a result
of Defendants' breach, along with interest, costs and attorneys' fees.
COUNT III
CONVERSION
77.
Plaintiffs repeat and reallege the allegations set forth above as if fully contained
78.
As a condition of their employment for Westgate, Plaintiffs and members of the
herein.
Class were required to maintain a "reserve" account in the amount of$3,500.
79.
The funds for this reserve account were accumulated fromthe commissions owed
to Plaintiffs and the Class. Specifically, ten percent of commission due on each sale was retained
by Westgate in order to establish and maintain the reserve fund.
80.
Unless a charge back OCCUlTed,as described herein, the funds in the reserve
accounts were fully the property of Plaintiffs and the Class.
81.
Upon the tetmination
of Plaintiffs
and Class Members'
employment
with
Westgate, and the passing of a specific period of time within which Defendants were entitled to
their charge back against the reserve funds, Westgate was required under the contract to release
the remaining funds in the reserve accounts to Plaintiffs and the Class. At that time, the funds
held in the reserve accounts were the vested property of Plaintiffs and the Class.
82.
Defendants had no legal right to any of the funds held in the reserve accounts
except for the limited circumstance in which a charge back arose.
83.
Once Plaintiffs
and Class were no longer employed by Westgate,
and all
conditions under the contract have been met, Defendants were under a duty to deliver the
remaining funds in Plaintiffs' and the Class's reserve accounts to Plaintiffs and the Class.
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84.
Despite this duty, Defendants have failed to deliver such funds.
85.
Defendants have intentionally exercised dominion over the remaining funds in the
Plaintiffs' and the Class's reserve accounts at a time when those funds were to be rightfully
delivered to Plaintiffs and the Class, and have appropriated the property of Plaintiffs and the
Class for their own use and benefit in defiance of the rights of Plaintiffs and the Class.
86.
As a result of Defendants'
wrongful conduct, Plaintiffs and the Class have
suffered damages.
87.
Plaintiffs, on behalf of themselves and the Tennessee Class, seek a judgment
against Defendants for all monies that have been wrongfully withheld by the Defendants, along
with punitive damages, interest, costs and attomeys' fees.
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs, on behalf of themselves and all others similarly situated, pray
for judgment against Defendants as follows:
A.
Determining that the action is a propel' collective action pursuant to 29 U.S.C. §
216(b) as to the FLSA claims alleged herein; certifying an opt-in class; and directing Defendants
to provide a list of all persons employed by Westgate as a time-share sales representative during
the past three years, including the last known address and telephone numbers of each person;
B.
Determining that this action is a propel' class action maintainable under Fed. R.
Civ. P. 23 as to the state law claims alleged herein; certifying Plaintiffs as class representatives;
and appointing Plaintiffs' counsel as counsel for the Class;
C.
Determining that the conduct alleged herein be unlawful under the FLSA and
Tennessee law;
D.
Awarding Plaintiffs and the Class monetary damages in such amount as may be
determined at trial, and in excess of $75,000.00;
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E.
Enjoining the Defendants from continuing the unlawful practices alleged herein;
F.
Awarding Plaintiffs and the Class reasonable attorneys' fees and reimbursement
of all costs for the prosecution of this action; and
G.
Awarding Plaintiffs and the Class such other and further relief as may be just and
proper.
JURY DEMAND
Plaintiffs demand a trial by jury.
COLEMAN & EDWARDS, P.C.
Greg2f
. oleman
4800· ld ngston Pike, Suite 120
Knoxville, TN 37919
Telephone: (865) 247-0080
Facsimile: (865) 247-0081
Kenneth A. Wexler
Edward A. Wallace
S. Melisa Twomey
WEXLER WALLACE LLP
55 W. Momoe Street, Suite 3300
Chicago, IL 60603
Telephone: (312) 346-2222
Facsimile: (312) 346-0022
Atto1'1leysfol' Plaintiffs and the Class
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