17-000881 Alice Kenyon vs. Wholesale Inventory Network, Llc Status: Closed Recommended Order on Tuesday, August 8, 2017.

Summary: "Seller of travel" did not breach software license agreement or secure contract for travel concierge and discount services through fraudulent misrepresentation. Recommend denial of claim against surety bond.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ALICE KENYON,

Petitioner,

vs. Case No. 17 - 0881

WHOLESALE INVENTORY NETWORK,

LLC,

Respondent.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a formal admi nistrative hearing was

conducted before Administrative Law Judge Mary Li Creasy in Port

St. Lucie, Florida, on April 26 , 2017.

APPEARANCES

For Petitioner: Alice B. Kenyon , pro se

avelers Way

Fort Pierce, Florida 3 4982 - 3989

For Respondent: Kenneth Hamner, Esquire

The Entrepreneur Law Center, P.L.

250 North Orange Avenue , Suite 600

Orlando, Florida 32801

STATEMENT OF THE ISSUE

Whether Respondent, a "seller of tra vel," owes Petitioner

$5,400.00 for failing to provide services to Petitioner pursuant

to a contract between the parties.

PRELIMINARY STATEMENT

On January 23, 2017, Petitioner filed a Hear ing Information

Request to the Florida Department of Agriculture an d Consumer

Services , D ivision of Consumer Services (the Department) , seeking

payment on a surety bond by National Specialty Insurance Company,

on behalf of Respondent, Wholesale Inventory Netw ork, LLC (WIN) ,

naming the Department as oblige e . The Hearing I nformation

Request was forwarded to the Division of Administrative Hearings

(DOAH) on February 10, 2017.

The final hearing was originally scheduled on March 22,

2017 , but was continued until April 26, 2017 , due to a requested

change in location . The heari ng went forward as scheduled.

Petitioner testified on her own behalf and presented the

testimony of one additional witness, Phyllis Grant. Petitioner's

Exhibit , pages 2 through 17 and 21 , and the supplemental

telephone records were admitted.

WIN presente d three witnesses: Jonathan Britt, Vice

President of Sales; Dae Byun, Member Services Agent; and Deborah

Brown, owner of WIN . WIN' s Exhibits 1 through 4 and 6 were

admitted.

The Transcript of the final hearing was filed on

June 5, 2017. Petitioner time ly filed a Proposed Recommended

Order which w as considered in the preparation of th is Recommended

Order . WIN did not file a post - hearing submittal. Unless

otherwise indicated, citations to the Florida Statutes or rules

of the Florida Administrative Code refer to the 2016 versions .

FINDING S OF FACT

1. WIN is a "seller of trave l" as defined by section

559.927(11) , Florida Statu t es.

2. On January 31 , 2016, Petitioner and her sister , Julie

Loftus, atten ded an Italian festival in St. Lucie County where

they both entered a drawing to win a free "getaway" vacation.

3. T he si s ters were contacted within a few days and told

they had won , but to collect their prize, they had to attend a

meeting at a Holiday Inn in Port St. Lucie .

4. On February 13, 2016, t he sist ers attended the

presentation that was put on by WIN. They were provided a

brochure regarding the travel services offered by WIN and were

impressed by th e presentation. WIN offered a " lifetime of worry -

free travel at your fingertips " with travel software to provi de

24/7 access to booking , and significant discounts on travel

services , such as hotel stays, cruises, excursions, dining, car

rentals, and access to a " live personal travel concierge." The

software does not provide on - line booking for airfare, p rivate

homes, yacht, or recreational vehicle rentals .

5. Although neither sister is adept at us ing the I nternet

or computers, they were very interested in having a personal

travel concierge, particularly because they intended to travel to

Rome later in th e year. After the presentation, they jointly

purchased and executed a "Reservation Services Software Licensing

Agreement " (Agreement) for a "lifetime License Fee" of $5,400.00.

The price included a $1 , 000.00 discount in lieu of a certificate

for a free " getaway" that the sisters had won.

6. In pertinent part, the Agreement provides:

This Agreement is made with reference to the

following facts:

A The Licensee desires to license software

from the Licensor to obtain access to

vacation packages, nightly st ays, bonus

weeks, fantasy getaways, activities and

excursions, cruises, car rentals, golf

dis c o unts, hotels and luxury condominium and

villa rentals. The Licensee acknowledges

that the network benefits may be changed from

time to time.

* * *

6 Annual Software Renewal Fee .

I n addition to the purchase price, the

Licensee does hereby agree to pay an A nnual

S oftware R enewal F ee of $199 to S ave O n

R esorts, LLC (whose phone number is 858 - 649 -

1481), with the first payment to be paid

twelve (12) months from the purchase date of

this L icensing A greement. . . .

a. Freeze Option .

T he Licensee acknowledges that they have the

option to freeze their license. By doing so,

they understand that although their L icense

is L ifetime, during the freeze period , the y

will not have access to the website or

R eservations H otline. The Licensee may

freeze their license without penalty by

contacting S ave On R esorts at least 7 days

prior to their A nnual Renewal F ee due date.

* * *

8 Discount Variation .

A ll benef its and discounts conferred through

this Agreement vary greatly based on the

characteristics of the vacation unit or type,

the time of year, space availability, and / or

the rates charged by those parties listing

the accommodations for rent. The Licensee

ac knowledges that he/she has been advised

that while some discounts may be significant,

these same accommodations may not enjoy deep

discounts at other times and that deep

discounts are not available for some vacation

units or types at any time. The License e

acknowledges that the value in this License

is expected to be realized over time and that

the License Fee is not guaranteed to be

recovered on a single vacation, the first

year, if the Licensee does not take

vacations, or if the vacation choices are not

tailored to deep discount offerings, but

rather are contingent on the frequency of the

use of the software.

9 Assistance of P ersonal L ive T ravel

C oncierge and Website A ccess .

The Licensee shall be provided 24 hour access

to the i nternet website www.plan with WIN .com

and may book travel arrangements through this

website 24 hours a day, 7 days a week, with

the exception of those travel arrangements

which require the coordination of booking

assistance with travel vendors, such as

cruise lines. The Licensee s hall also be

provided access to a Personal Live T ravel

C oncierge A gent at 1 - 858 - 649 - 1481 during the

hours of 9 am through 9 pm EST , Mondays through

Fridays, and 10 am through 4 pm EST , Saturdays,

at no additional charge. The hours of

availability for the Live T ravel C oncierge

A gent are subject to change without notice.

* * *

11 Live Online Software Demonstration and

Tutorial .

T he Licensee acknowledges that he/she has had

direct access to, including a live

demonstration online, and a complete tutori al

covering usage of the software program

operation prior to the execution of this

Agreement and was able to review the benefits

with a sales agent of the Licensor . The

Licensee acknowledges that they are

comfortable with the operation of online

software program. The Licensee acknowledges

that the licensor has informed him/her that

at any time during normal business hours, the

Licensee may also call SaveOn Resorts at

(858)649 - 1481 to schedule an additional

tutorial for assistance with the operation of

the software at no additional cost.

7. On February 18, 2016, Petitioner and her sister spoke by

telephone to Dae Byun , WIN's Member Services Agent, who walked

them through the online software tutorial. By the end of the

call with Mr. Byun , the sisters were familiar with the software

capabilities and how to use it.

8. Mr. Byun asked the sisters if they knew where their

first trip would be . They explained that they intended to travel

to Rome in August or September 2016 to attend a ceremony at the

Vatican for a friend who was celebrating his 50 th anniversary as

a priest . Mr. Byun told the sisters that when they call to make

travel arrangements, they should dial his direct line in Orlando

because he had been a travel agent for over 30 years, was very

famili ar with Italy , and c ould easily assist them. Mr. Byun told

the sisters that when they called, they should speak exclusively

with him and that he worked Monday through Friday, and was not

available on weekends. Because both sisters are retired, these

arra ngements were fine with them.

9. During this same call, the sisters asked Mr. Byun to

begin working on their flight from Philadelphia to Rome on

August 31, 2016 . They advise d that they did not need hotels in

Rome because a friend had made arrangements fo r them to stay in a

convent bed - and - breakfast. However, they sought hotels in Venice

and Florence on September 9 and September 18 through 22, 2016,

respectively. Mr. Byun spoke knowledgeably about hotels and

travel in Italy , and the sisters were pleased.

10. Petitioner used WIN's personal travel concierge to book

a one - night hotel room stay at a Microtel in Leesburg , Florida ,

for $65.00 during the week of February 27, 2016.

11. During the months of March and April 2016, the sisters

made multiple calls t o WIN's Orlando office in an attempt to

speak with Mr. Byun to schedule their Rome trip. Most time s they

called, they were told he was out of the office or training new

customers on the software. Because of Mr. Byun's initial

instruction to speak only to Mr. Byun regarding the trip to Rome,

they did not want to speak with another member services agent for

this trip .

12. On or about March 23 , 2016, Petitioner also called to

arrange a rental cabin in the North Carol ina Mountains for a

girlfriend s ' gatherin g . Petitioner was told that W IN did not

have access to discounts and reservations for private cabins , but

she was provided information on a condominium and hotel room

options in the area. Because Petitioner found the choices

provided by WIN unsuitable fo r her group , she chose to make her

own arrangements.

13. During M arch and April 2016, the sisters spoke to

Mr. Byun regarding the Italy trip once or twice. WIN sent four

e - mails to the sisters on April 15 with a tentative flight

schedule, hotel options, and train information for Italy .

14. The sisters were not pleased with the initial flight

itinerary because it called for a layover on the way from

Philadelphia to Italy. They were concerned that their luggage

was more likely to be lost with a layover an d asked for a direct

flight.

15. According to Petitioner, her sister had a follow - up

conversation with Mr. Byun during which she selected a direct

flight , provided credit card information , and asked him to book

the flight.

16. Mr. Byun testified that he was told at that time that

they were not sure of their travel dates. This was a preliminary

search only. He has no notes reflecting credit card or any

additional information he would have needed to book the flight ,

such as dates of birth, passport number s, frequent flyer account

numbers, an d seat preferences. Mr. Byun credibly testified that

if he booked airline tickets, that would be done in one phone

call with the client on the line because airfares change within

minutes. Mr. Byun would not quote an a irfare with the intention

of booking a flight at a later time, even on the same date.

Mr. Byun had no further conversation with the sisters regarding

the Italy trip.

17. According to Petiti oner, on May 24 , 2016, her sister

received her credit card statem ent and realized there was no

charge for airline tickets. The sisters were panicked because

they had learned Mother T eresa was being canonized a saint in

Rome at the same time as their trip and flights and hotels were

filling up quickly. The sisters atte mpted to reach Mr. B yun by

telephone to demand an explanation. Although they did not reach

Mr. Byun, another WIN employee explained that there was no record

of reservations of the proposed trip to Italy. Within a few

days, the sisters opted to use the se rvices of AAA to book the

trip to Italy.

18. The sisters sent a letter by e - mail on May 31, 2016,

expressing their extreme disappointment and asked "What are we

paying you for?" They received no response. They subsequently

used the services of the Glanz law firm to send WIN a demand

letter seeking a refund of the $5,400.00 . They also filed a

complaint with the Better Business Bureau and the Department.

Petitioner and her sister traveled to Italy and Greece from

August 31 through September 23 , 2016, wit hout the assistance of

WIN.

19. Beginning in February 2017, Petitioner's sister began

rec e iving correspondence and frequent automated calls from WIN

that their annual maintenance fee of $199.00 is due. Although

Petitioner and her sister have made their i ntention clear that

they do not wish to use the services of WIN going forward, they

have not asked to "freeze" their account as is provided for in

the Agreement.

CONCLUSIONS OF LAW

20 . DOAH has jurisdiction over the parties and the subject

matter of this proceeding pursuant to sections 120.569 and

1 20.57(1), Florida Statutes.

21. Section 559.926, et . seq . , is the "Florida Sellers of

Travel Act." A "se ller of travel" is defined in section

559.927(11) as:

[ a ] ny resident or nonresident person, firm,

corpora tion, or business entity that offers,

directly or indirectly, prearranged travel or

tourist - related services for individuals or

groups, including, but not limited to,

vacation packages, or vacation certificates

in exchange for a fee, commission, or other

v aluable consideration. The term includes

such person, firm, corporation, or business

entity who sells a vacation certificate to

third - party merchants for a fee, or in

exchange for a commission, or who offers such

certificates to consumers in exchange for

attendance at sales presentations. The term

also includes any business entity offering

membership in a travel club or travel

services for an advance fee or payment, even

if no travel contracts or certificates or

vacation or tour packages are sold by the

b usiness entity.

22. It is undisputed that WIN is a "seller of travel."

Sellers of travel are required to be registered with the

Department in order to transact business in Florida. As part of

the registration process, sellers of travel must provid e a

performance bond in an amount set by the Department. See

§ 559.929 (1) , Fla. Stat.

23. A c onsumer who is injured by a seller of travel may

bring an action to recover against the bond to be conducted

pursuant to chapter 120 . § 559.929( 3) , (4) , Fl a. Stat . In this

case, Petitioner timely filed her claim against the bond seeking

damages for alleged breach of contract and fraudulent

misrepresentation.

Breach of Contract

24. To prevail on a breach of contract claim, a claimant

must prove: (1) a valid contract existed; (2) a material breach

of the contract; and (3) damages. Deauville Hotel Mgmt., LLC v.

Ward , 2017 Fla. App . LEXIS 7810 (Fla. 3 d DCA 2017); Burlington &

Rockenbach, P.A. v. Law Offices of E. Clay Parker , 160 So. 3d

955 , 960 (Fla. 5t h DCA 2017).

25 . Petitioner and her sister entered into a valid

contract, the Agreement, with WIN for a software licensing

agreement on February 13, 2016. Shortly thereafter, they

received the on - line tutorial regarding the use of the software,

and a tol l - free number to use for personal concierge travel

assistance.

26. As described by Petit i oner , " We signed a contrac t and

paid $5400 and Wholesale I nventory Network, WIN, offered, what

the contract said, that their duty was t o provide acce ss to a

website, 24 - hour access to a website and also access to a

personal live travel concierge who would listen to what our

requests were and produce a plan. "

27 . Petitioner alleges a "material breach" of the contract

because her travel arrang e ments were not "worry free . " Nor was

Mr. B yun, her software trainer and Member S ervices A gent, readily

available to p lan her trip to Italy.

28 . To establish a material breach, the party alleged to

have breached the contract must have failed to perform a duty

that goes to the esse nce of the contract and is of such

significance that it relieves the injured party from further

performance of its contractual duties. Burlington , id. ( citing

Covelli Family, L.P. v. ABG5, L.L.C. , 977 So. 2d 749, 752 (Fla.

4th DCA 2008) ) ; Sublime, Inc. v. Boardman's Inc. , 849 So. 2d 470,

471 (Fla . 4th DCA 2003). T rivial noncompliance and minor

failings do not constitute material breaches. Covelli Family ,

977 So. 2d at 752.

29 . Notably absent from the Agreement is a designation of a

particular individual as a personal travel concierge. Rather,

customers are directed to use the toll - free number for

assistance. The sisters did not know Mr. Byun at the time of

signing the Agreement. Although Mr. Byun represented he would be

the best person to assist them with their Italy trip, the sisters

unreasonably refused to plan the travel with anyone else at WIN

despite Mr. Byun's limited avai l ab i lity.

30 . WIN fulfilled the essence of the contract. Its

software was available 24/7 for Petitioner's use. Petitioner

u sed the services of WIN's travel concierge service to book a

hotel night and to explore accommodations in North Carolina.

31 . Although the sisters purchased the Agreement with the

intention of first using it for booking their flights and

accommodations t o Italy, the fact that the trip ultimately was

not booked through WIN does not evidence a material breach. WIN

provided a proposed flight itinerary and possible hotel

accommodations at a discount. It was the responsibility of

P etitioner and her sister, n ot WIN, to take the necessary steps

to finalize their plans by providing credit card information and

all other relevant booking information.

32 . Notably absent from the hearing was the testimony of

Petiti oner's sister, Ms. Loftus, who Petitioner contends is the

person who gave Mr. Byun the authorization and credit card to

book the air travel to Italy. In Ms. Loftus' absence,

Petitioner's testimony , that Mr. Byun had the information

necessary to book the travel, is uncorroborated hearsay.

33 . Petitioner a lso suggests that the Agreement was

breached because she did not receive a discount of what she

believes was the standard room rate for the Leesburg hotel stay.

However, the Agreement , paragraph 8 , is very clear that discounts

are variable depending on mu ltiple factors and the customer will

enjoy more saving s the more frequently they use the services

provided by the software.

34. Petitioner complains that the one - night booking in

Leesburg was not worth $5 , 400.00. However, Petitioner tes tified

that, "we p aid WIN $5,400 for them to plan our trips for the rest

of our lives." If Petitioner and her sister are damage d , it is

through their unilateral refusal to use WIN's services . If the

sisters pay the $199.00 annual fee, it is certainly possible for

them to recoup the value paid by future discounts on travel, as

is contemplated by the Agreement.

Fraudulent Misrepresentation

35. To prevail on a claim for fraudulent misrepresentation,

Petitioner must prove the following elements: (1) a false

statement c oncerning a material fact; (2) the representor's

knowledge that the representation is false; (3) an intention

that the representation induces another to act on it; and

(4) consequent injury by the party acting on reliance on the

representation. Johnson v. Davis , 480 So. 2d 625 (Fla. 1985).

36. Petit i oner asserts that the fraudulent

misrepresentation was the sa les pitch, "a lifetime of worry - free

travel " and the availability of a personal travel concierge.

37. If Petitioner and her sister use th e services provided

for by the software licensing agreement, it is possible they can

enjoy "worry - free travel" for life. Unfortunately, they

unilaterally attempted to cancel the contract when they did not

get satisfactory assistance from Mr. Byun in final izing their

plans for the Italy trip. The fact that the sisters were worried

about their travel arrangements was not due to any material

misrepresentation that induced them to enter into the A greement.

As discussed above, there was no statement at the ti me of the

purchase that Mr. Byun, or any other specific individual, would

serve as the only point of c ontact for travel assistance.

38. It is indeterminable from the evidence in this case

whether travel arranging with WIN is "worry - free" because

Peti tioner and her sister failed to avail themselves of the

services as offered and agreed upon . While it is understandable

that someone who is not computer savvy would rely heavily on the

concierge services offered by WIN, it is not understandable why

Petiti oner and her sister waited more than a month after they

claim they had flights arranged with Mr. Byun to look for

confirmation of those details. Nor does it make sense that they

would insist only on speaking to Mr. Byun when they were having

difficulty re aching him. It simply is not credible and does not

amount to any fraudulent inducement in the sale of the Agreement.

39. Even assuming arguendo , that Petitioner was sold the

Agreement through fraudulent misrepresentation, Petitioner failed

to show a ny damages. The $5,400.00 paid was not for any specific

trip but rather the software and concierge services that were at

all times available. Petitioner and her sister ultimately made

alternative arrangements for their trip. No evidence was

presented th at they paid a premium to arrange travel outside of

WIN. Further, Petitioner and her sister did not utilize the

price match guarantee available through WIN that would have

compensated them for any difference.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that Petitioner Alice Kenyon's claim

against WIN and the surety bond be DENIED .

DONE AND ENTERED this 8th day of August , 2017 , in

Tallahassee, Leon County, Florida.

S

MAR Y LI CREASY

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Admi nistrative Hearings

this 8th day of August , 2017 .

COPIES FURNISHED:

W. Alan Parkinson, Bureau Chief

Bureau of Mediation and Enforcement

Department of Agriculture and

Consumer Services

Rhodes Building, R - 3

2005 Apalachee Parkway

Tallahassee, Florida 3 2399 - 6500

(eServed)

Tina Robinson

Bureau of Mediation and Enforcement

Department of Agriculture and

Consumer Services

Rhodes Building, R - 3

2005 Apalachee Parkway

Tallahassee, Florida 32399 - 6500

(eServed)

Alice B. Kenyon

avelers Way

Fort Pierce, Florida 34982 - 3989

(eServed)

Kenneth Hamner, Esquire

The Entrepreneur Law Center, P.L.

250 North Orange Avenue , Suite 600

Orlando, Florida 32801

(eServed)

Tom A. Steckler, Director

Division of Consumer Services

Department of Agriculture and

Consume r Services

Mayo Building, Room 520

407 South Calhoun Street

Tallahassee, Florida 32399 - 0800

Stephen Donelan, Agency Clerk

Division of Administration

Department of Agriculture and

Consumer Services

Mayo Building, Room 509

407 South Calhoun Street

Tallah assee, Florida 32399 - 0800

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.