21-000136 Michael Warren vs. Luxury Vacations In Paradise, Inc., And American Contractors Indemnity Company, As Surety Status: Closed Recommended Order on Friday, April 9, 2021.

Summary: Petitioner failed to establish grounds for a claim against Respondent's performance bond pursuant to section 559.929(3), Florida Statutes.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

M ICHAEL W ARREN ,

Petitioner ,

vs. Case No. 21 - 0136

L UXURY V ACATIONS I N P ARADISE , I NC .,

A ND A MERICAN C ONTRACTORS I NDEMNITY

C OMPANY , A S S URETY ,

Respondents .

/

R ECOMMENDED O RDER

Pursuant to notice, a final hearing was conducted in this case on

March 12, 2021, via Zoom teleconference, before Lawrence P. Stevenson, a

duly - designated Administrative Law Judge (ÑALJÒ) of the D ivision of

Administrative Hearings (ÑDOAHÒ).

A PPEARANCES

For Petitioner: Michael Cole Warren, pro se

2869 Highland View Circle

Clermont, Florida 34711

For Respondent Luxury Vacations in Paradise, Inc. :

Blake Adams, Corporate Representativ e

Luxury Vacations in Paradise, Inc.

5379 Lyons Road, #219

Coconut Creek, Florida 33073

For Respondent American Contractors Indemnity, Co.:

Garen H. Kasparian, Esquire

American Contractors Indemnity Company

801 South Figueroa Street

Los Angeles, California 90017

S TATEMENT OF T HE I SSUE

The issue is whether Petitioner is entitled to his claim against

RespondentÔs security deposit posted with the Department of Agriculture and

Consumer Services.

P RELIMINARY S TATEM ENT

On July 30, 2019, Petitioner , Michael Warren , and his wife, Barbara

Warren, attended a sales presentation and entered into a contract with

Respondent, Luxury Vacations in Paradise, Inc. (ÑLuxury VacationsÒ), a seller

of travel. The Warrens soon regrett ed their purchase and began attempting

to cancel it and obtain the return of their money. Having failed in their

attempts to cancel with the seller, the Warrens , on or about September 25,

2019, filed a claim against the performance bond that Luxury Vacatio ns, as a

seller of travel, was required to file with the Department of Agriculture and

Consumer Services (the ÑDepartment Ò ) pursuant to section 559.929, Florida

Statutes.

Luxury Vacations contested the bond claim and requested a formal

hearing pursuant t o sections 120.569 and 120.57(1), Florida Statutes, via an

Election of Rights form filed with the Department. The form is undated but

no party raised any issue as to the timing of its filing. On January 13, 2021,

the Department forwarded the matter to DOAH for the assignment of an ALJ

and the conduct of a formal hearing. The case was scheduled for hearing on

March 12, 2021, on which date it was convened and completed.

At the hearing, Mr. Warren testified on his own behalf and presented the

testimony of hi s wife, Barbara Warren. PetitionerÔs Composite Exhibit A was

admitted without objection. Luxury Vacations presented the testimony of its

corporate representative, Blake Adams. RespondentÔs Composite Exhibit A

was admitted without objection. Respondent , Ame rican Contractors

Indemnity Company , offered no witnesses or exhibits; however, its corporate

representative, Garen Kapsarian, offered legal argument.

Section 559.929(3) provides that the Department Ñshall act only as a

nominal partyÒ in these proceedings . Thus, the Department did not actively

participate in the final hearing.

No Transcript of the final hearing was ordered. Respondent , American

Contractors Indemnity Company , timely filed its Proposed Recommended

Order on March 22, 2021. Petitioner filed a brief response to that Proposed

Recommended Order on March 22, 2021. Respondent , Luxury Vacations , did

not make any post - hearing filings.

F INDINGS OF F ACT

Based on the evidence adduced at hearing, and the record as a whole, the

following Findings of Fact are made:

1. On July 30, 2019, Michael and Barbara Warren, a retired couple living

in Clermont, attended a ÑVacation SeminarÒ sponsored by Vacations Plus

Travel, a North Carolina based company that operates as an alter ego of

Luxury Vacations, which is ba sed in Florida. The seminar was staged in a

conference room of the Hampton Inn in Clermont.

2. The Warrens were lured by the promise of a free cruise if they listened

to a sales presentation by representatives of Vacations Plus Travel.

3. Mr. Warren testif ied that they were subjected to intense sales pressure

to buy a software license that they were told would give them access to Ñtrue

wholesale pricesÒ on all their travel needs, from transportation to lodging, for

the rest of their lives. The price of the license was in excess of $7,000 , but the

salesman promised it would more than pay for itself in savings. Mr. Warren

placed the full purchase amount of $7,593.00 on a credit card.

4. The ÑReservation Services License AgreementÒ signed by the Warrens

stated in bold type:

Assuming the Licensee(s) has not accessed any

benefits and has returned all materials delivered to

them at closing, the Licensee(s) has the right to

rescind this transaction within a period of three (3)

days by sending notice of cancellation via certified

mail, return receipt requested.

5. Almost immediately after leaving the seminar, the Warrens regretted

their purchase. They began calling the toll free phone number listed in their

purchase documents to cancel the contract. No one ever answe red the phone.

Ms. Warren testified that she managed to leave a voice message stating that

they wished to cancel the contract but the call was never returned. The

Warrens did not send a notice of cancellation via certified mail.

6. Mr. Warren testified tha t on August 19, 2019, he received an email

from Luxury Vacations with instructions on using its website, including a

password. Mr. Warren testified that he signed onto the website but that it

was not functional. There was a home page , but clicking on any o f the

proffered links returned only a blank page.

7. Mr. Warren stated that he and his wife were away from home for a time

after August 19, 2019, and took no further action either to cancel the contract

or use the website.

8. When they came home, the Warr ens again signed onto the Luxury

Vacations website and this time found it to be functional. Mr. Warren

testified that the website was not at all what was promised at the seminar in

Clermont. The website was essentially a presentation of advertisements for

vacation rentals, minus any information on price comparisons that would

enable the Warrens to determine the savings they might realize by booking

through the Luxury Vacations site. The properties themselves were also not

to the WarrensÔ s liking.

9. Mr. Wa rren testified that he and his wife decided they would never

recoup the cost of the license and again attempted to cancel by phoning the

number provided with their contract materials. Again, they were unable to

speak to anyone or get any kind of response f rom Luxury Vacations.

10. The Warrens sent a letter to Luxury Vacations, via certified mail, on

August 27, 2019, informing the company of their inability to use the website

and requesting cancellation of the contract. They heard nothing from the

company.

11. Having failed to cancel the contract by direct means, the Warrens

contacted their credit card company to dispute the transaction.

12. Blake Adams, the CEO of Luxury Vacations, testified that the

company was ÑblindsidedÒ by the WarrensÔ s dispute of the credit card charges

because up to that point the company had heard nothing from the Warrens.

As adamantly as Mr. Warren testified that he and his wife made repeated

efforts to contact the company, Mr. Adams just as adamantly testified that

the company had no record of any calls from the Warrens and no

correspondence of any kind prior to receiving the notice of dispute from the

credit card provider.

13. Luxury Vacations provided sufficient information to the credit card

provider to uphold the purchase and re ceive the funds for the WarrensÔ s

license purchase.

14. The WarrensÔ s cancellation letter had been misdelivered and did not

reach Luxury Vacations until September 16, 2019. A December 31, 2020,

letter to the Warrens from Stephanie Sorrentino, an employee o f Luxury

Vacations, states that upon receiving the cancellation letter, the company

contacted the Warrens to explain that their account was active and to inform

them of how to use the services they had purchased.

15. The Warrens denied ever being contacted by Ms. Sorrentino or anyone

else from Luxury Vacations. Mr. Warren timely filed the claim for $7,593.00

against the performance bond with the Department on or about

September 25, 2019.

16. Mr. Adams testified that Mr. WarrenÔs testimony about seeing only

advertisements on the Luxury Vacations Ô website showed that Mr. Warren

was never actually logged into the website. Mr. Adams stated that the splash

page of the website includes advertising, but that once the user logs into the

licensed portion of the site there are no advertisements.

17. Mr. Warren testified that he is a retired engineer and circuit designer

and is perfectly capable of signing on to a website.

18. The parties also disputed the events of July 31, 2019, the day after the

Warrens signed the co ntract with Luxury Vacations. Mr. Adams testified that

his company was at the Hampton Inn in Clermont all day on July 31, 2019,

presenting another sales seminar. He stated that the Warrens could have

come to the Hampton Inn and discussed rescission of thei r contract with the

on - site representative of the company.

19. Ms. Warren testified that she in fact went back to the Hampton Inn on

July 31, 2019, and that no one from Luxury Vacations was there.

20. Mr. Adams testified that the Warrens have an active con tract with

Luxury Vacations and the company remains ready to assist the couple in

achieving the savings promised at the sales seminar.

21. In summary, the Warrens present a sympathetic case. They were

subjected to a high - pressure sales pitch and succumbed. Once away from the

pressurized sales environment, they regretted their purchase and took some

steps to rescind it. They repeatedly phoned the number provided by Luxury

Vacations. However, the one thing they did not do was take the action

specifically set forth in the contract they had just signed: send notice of

cancellation within a period of three days via certified mail, return receipt

requested. They waited until August 27, 2019, to send a written notice of

cancellation to Luxury Vacations.

22. Section 559.929(2) provides that the performance bond at issue in this

proceeding must be in favor of the Department and is for Ñthe use and benefit

of a consumer who is injured by the fraud, misrepresentation, breach of

contract, or financial failure, or any oth er violation of this part by the seller of

travel.Ò There is no evidence that Luxury Vacations committed fraud,

misrepresentation, or that it breached its contract with the Warrens. Luxury

Vacations did not fail financially. Therefore, the Warrens may only succeed in

claiming against the bond by showing that Luxury Vacations violated part XI

of chapter 559.

23. At the hearing, the undersigned raised the possibility that section

559.932, titled ÑVacation Certificate Disclosure,Ò might apply in this case.

Res pondents argued that this statute did not apply because Luxury

Vacations does not sell Ñvacation certificates,Ò which are defined in section

559.927(14) as:

any arrangement, plan, program, vacation package,

or advance travel purchase that promotes,

discuss es, or discloses a destination or itinerary or

type of travel, whereby a purchaser is entitled to

the use of travel, accommodations, or facilities for

any number of days, whether certain or uncertain,

during the period in which the certificate can be

exerc ised, and no specific date or dates for its use

are designated. A vacation certificate does not

include prearranged travel or tourist - related

services when a seller of travel remits full payment

for the cost of such services to the provider or

supplier wit hin 10 business days of the purchaserÔs

initial payment to the seller of travel. The term

does not include travel if exact travel dates are

selected, guaranteed, and paid for at the time of the

purchase.

24. Respondents were correct that the software lice nse at the heart of the

contract between the Warrens and Luxury Vacations did not meet the

definition of a Ñvacation certificate.Ò However, the undersigned raised the

possibility that the statutory language of section 559.932 reaches more than

vacation cer tificates, in spite of its title:

(1) A seller of travel must provide each person

solicited with a contract that includes the following

information, which shall be in 12 - point type, unless

otherwise specifiedÈ.

25. The quoted language does not appear con fined to sales of vacation

certificates but applicable to any solicitation by a Ñseller of travelÒ such as

Luxury Vacations. Part of the information that must be included in the

contract is the following:

(h) In immediate proximity to the space reserved

in the contract for the date and the name, address,

and signature of the purchaser, the following

statement in boldfaced type of a size of 10 points:

ÑYOU MAY CANCEL THIS CONTRACT

WITHOUT ANY PENALTY OR OBLIGATION

WITHIN 30 DAYS FROM THE DATE OF

PURCHASE OR RECEIPT OF THE VACATION

CERTIFICATE, WHICHEVER OCCURS LATER.Ò

ÑYOU MAY ALSO CANCEL THIS CONTRACT IF

ACCOMMODATIONS OR FACILITIES ARE NOT

AVAILABLE PURSUANT TO A REQUEST FOR

USE AS PROVIDED IN THE CONTRACT.Ò

ÑTO CANCEL THIS AGREEMENT, A SIGNED

AND DATED COPY OF A STATEMENT THAT

YOU ARE CANCELING THE AGREEMENT

SHOULD BE MAILED AND POSTMARKED, OR

DELIVERED TO (NAME) AT (ADDRESS) NO

LATER THAN MIDNIGHT OF (DATE) .Ò

26. Respondents conceded that if this provision were applicable in the

instant ca se, and Luxury Vacations had been required to give the Warrens

30 days in which to cancel their contract, then the WarrensÔ s August 27,

2019, cancellation letter was timely. However, Respondents continued to

argue that section 559.932, taken as a whole, is plainly intended to apply

only to contracts for vacation certificates.

27. After careful review of the statute and the Proposed Recommended

Order of American Contractors Indemnity Company, the undersigned is

persuaded that Respondents have read section 559.932 correctly. The statute

provides ten discrete provisions that a contract must contain, most of which

are clearly directed to the terms and conditions for stays at specific

destinations. Nearly all of these provisions would be inapplicable to the

sof tware licensing contract but would nonetheless be mandatory if section

559.932 applied to this contract.

28. Further indication that the 30 - day notice requirement is applicable

only to vacation certificates is section 559.933, titled Ñ Vacation certifica te

cancellation and refund provisions,Ò subsection (1)(a) of which provides:

(1) A seller of travel or an assignee must honor a

purchaserÔs request to cancel a vacation certificate

if such request is made:

(a) Within 30 days after the date of purchase or

receipt of the vacation certificate, whichever occurs

laterÈ.

29. Section 559.933 is replete with references to the 30 - day cancellation

requirement and is clearly limited to vacation certificates.

30. Aside f rom the 30 - day cancellation period for vacation certificates,

part XI of chapter 559 appears to mandate no specific time period for

cancellations of contracts.

31. Looking farther afield, the Federal Trade CommissionÔs ÑCooling OffÒ

rule, 16 C . F . R . § 429, gives a consumer in the WarrensÔ s position three days

to cancel a sale. Sections 501.021 - .055, Florida Statutes, provide

substantially the same right to cancel a Ñhome solicitation sale,Ò which by

definition includes the transaction at issue in this proce eding. See

§ 501.021(1), Fla. Stat.

32. Luxury VacationsÔ notice of cancellation rights did not comply fully

with the letter of section 501.031, which provides:

Every home solicitation sale shall be evidenced by a

writing as provided in this section.

(1) In a home solicitation sale, the seller must

present to and obtain from the buyer his or her

signature to a written agreement or offer to

purchase which designates, as the date of the

transaction, the date on which the buyer actually

signs and which contai ns a statement of the buyerÔs

rights, which statement complies with subsection

(2).

(2) The statement must:

(a) Appear under the conspicuous caption,

ÑBUYERÔS RIGHT TO CANCELÒ;

(b) Read as follows: ÑThis is a home solicitation

sale, and if you do not want the goods or services,

you may cancel this agreement by providing

written notice to t he seller in person, by telegram,

or by mail. This notice must indicate that you do

not want the goods or services and must be

delivered or postmarked before midnight of the

third business day after you sign this agreement. If

you cancel this agreement, th e seller may not keep

all or part of any cash down payment.Ò

33. The Luxury Vacations Ô contract provision was not consistent with

section 501.031. It did not include a Ñconspicuous captionÒ of ÑBUYERÔS

RIGHT TO CANCELÒ in all capital letters. It did not i nclude the statutory

language verbatim. The cancellation language in the Luxury Vacations Ô

contract was printed in bold type but no larger than the other language and

was not on the page signed by the Warrens. The Luxury Vacations Ô

cancellation clause limi ted the exercise of the cancellation right to written

notice via certified mail; the statute provides that the buyer may cancel in

person, by telegram, or by mail.

34. The relevant statutes provide that any person making home

solicitation sales must first obtain a permit from the clerk of the court of the

county in which the sales are to take place. § 501.022(2), Fla. Stat. The clerk

of the court may revoke, suspend, or deny issuance of a home solicitation

sales permit for failure to comply with any provisi on of sections 501.021 - .055.

§ 501.022(4), Fla. Stat. The Attorney General or a state attorney may initiate

proceedings to enjoin any person found to be violating the provisions of

sections 501.021 - .055. § 501.052, Fla. Stat. There are criminal penalties t hat

attach to violations of the cited sections. See § 501.055, Fla. Stat.

35. However, the home solicitation sales statutes are silent as to any

direct remedy that a consumer may pursue for the failure of a home

solicitation seller to abide by the notice p rovision of section 501.031. Also, the

terms of the performance bond statute limit consumer claims to violations of

part XI of chapter 559. The undersigned was unable to find a provision of

part XI that would encompass the home solicitation sellerÔs cancel lation

notice requirements. 1

C ONCLUSIONS OF L AW

36. DOAH has jurisdiction of the subject matter of and the parties to this

proceeding. §§ 120.569 and 120.57(1), Fla. Stat.

37. Section 559.927(11) defines Ñseller of travelÒ to mean:

any resident or nonres ident person, firm,

corporation, 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

1 Section 559.934, titled ÑDeceptive and unfair trade practice,Ò provides that Ñ[a]cts, conduct,

practices, omissions, failings, misrepresentations, or nondisclosures which c onstitute a

violation of this part also constitute a deceptive and unfair trade practice for the purpose of

s. 501.201 and administrative rules promulgated thereunder. Ò However, the statute does not

provide for the reverse, i.e., that a violation of chapte r 501 also constitutes a violation of part

XI of chapter 559. Thus, Luxury VacationsÔ failure to comply fully with section 501.031 doe s

not establish a ground to claim against the performance bond under section 559.929(2).

other valuable 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 p ackages are sold by the business entity. The

term does not include third parties who may offer

prearranged travel or tourist - related services, but

do not participate in travel fulfillment or vacation

certificate redemption.

38. It is undisputed that Luxur y Vacations meets the definition of Ñseller

of travel.Ò

39. Section 559.929 requires sellers of travel to submit a performance

bond with the Department. Section 559.929 provides, in relevant part:

(2) The bond must be filed with the department

on a form adopted by department rule and must be

in favor of the department for the use and benefit of

a consumer who is injured by the fraud,

misrepresentation, breach of contract, or financial

failure, or any o ther violation of this part by the

seller of travel . Such liability may be enforced by

proceeding in an administrative action as specified

in subsection (3) or by filing a civil action. The bond

must be open to successive claims, but the

aggregate amount a warded may not exceed the

amount of the bondÈ.

(3) A consumer may file a claim against the bond.

Such claim, which must be submitted in writing on

an affidavit form adopted by department rule, must

be submitted to the department within 120 days

after an alleged injury has occurred or is discovered

to have occurred or a judgment has been entered.

The proceedings shall be conducted pursuant to

chapter 120. For proceedings conducted pursuant to

ss. 120.569 and 120.57, the agency shall act only as

a nominal party.

40. It is undisputed that Mr. WarrenÔs claim against the performance

bond was timely filed.

41. As explained in the Findings of Fact above, Mr. Warren failed to

establish that he and his wife were Ñinjured by the fraud, misrepresentation,

breach of contract, or financial failure, or any other violati on of this partÒ by

Luxury Vacations. The Warrens allowed themselves to fall victim to a high -

pressure sales pitch and then failed to cancel the contract according to the

express terms provided by Luxury Vacations. They failed to establish that

they suffer ed an injury contemplated by section 559.929(2).

42. This Recommended Order should not be read as a vindication or

approval of Luxury VacationsÔ sales practices as described at the hearing. In

their submissions, the Warrens included scores of Better Busine ss Bureau

complaints filed against Luxury Vacations that made allegations similar to

those made by the Warrens in this case. These complaints were pure hearsay

and were not considered as evidence in the writing of this Recommended

Order. However, they shou ld be read as fair warning to prospective

customers of such businesses to perform their due diligence before paying

thousands of dollars for a software license.

R ECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

R ECOMME NDED that the Department of Agriculture and Consumer Services

issue a final order denying Michael WarrenÔs claim of $7,593.00 against the

performance bond of Luxury Vacations in Paradise, Inc.

D ONE A ND E NTERED this 9th day of April , 2021 , in Tallahassee, Leon

County, Florida.

S

L AWRENCE P. S TEVENSON

Administrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 9th day of April , 2021 .

C OPIES F URNISHED :

Blake Adams W. Alan Parkinson, Bureau Chief

Luxury Vacations in Paradise, Inc. Bureau of Mediation and Enforcement

#219 Department of Agriculture and

5379 Lyons Road Consumer Services

Coconut Creek, Florida 33073 Rhodes Building, R - 3

2005 A palachee Parkway

Michael Cole Warren Tallahassee, Florida 32399 - 6500

2869 Highland View Circle

Clermont, Florida 34711 Garen H. Kasparian, Esquire

American Contractors Indemnity Company

Honorable Nicole ÑNikkiÒ Fried 801 South Figueroa Street

Commissioner of Agriculture Los Angeles, California 90017

Department of Agriculture and

Consumer Services Steven Hall, General Counsel

The Capitol, Plaza Level 10 Department of Agriculture and

Tallahassee, Florida 32399 - 0810 Consumer Services

4 07 South Calhoun Street, Suite 520

Tallahassee, Florida 32399 - 0800

N OTICE OF R IGHT T O S UBMIT E XCEPTIONS

All parties have the right to submit written exceptions within 15 days from

the date of this Recommended Order. Any exceptions to this Recommended

Or der should be filed with the agency that will issue the Final Order in this

case.