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Martinez v. Welk Group, Inc.

United States District Court, S.D. California

October 30, 2012

Hermenegildo (

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Alfredo Torrijos, Arnold C. Wang, Los Angeles, CA, David Boertje, Boertje & Associates, Carlsbad, CA, Mickel Montalban Arias, Los Angeles, CA, for Plaintiff.

Cordon Telfair Baesel, Marie Burke Kenny, Stefanie Warren, McKenna Long & Aldridge, San Diego, CA, for Defendants.



Presently before the Court is Defendants, the Welk Group, Inc., Welk Resort Group, Inc., Welk Music Group, Inc., and Soleil Communications, Inc., (collectively, " Defendants" ), motion for summary judgment, or in the alternative partial summary judgment.[1] [Doc. No. 128.] Plaintiff filed an opposition, [Doc. No. 140.], and Defendants filed a reply, [Doc. No. 143]. On September 25, 2012, the Court issued an order setting a supplemental briefing schedule requesting the parties to address the fraudulent prong and unfair prong with respect to Plaintiff's fifth cause of action alleging violation of California's Unfair Competition Law § 17200 et seq. (" UCL" ). [2] On October 9, 2012 Defendants filed a supplemental brief in support of their motion for summary judgment, [Doc. No. 149], and on October 23, 2012, Plaintiff filed his supplemental reply, [Doc. No. 151]. In accordance with Civil Local Rule 7.1.d.1, the Court finds this motion suitable for determination on the papers and without

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oral argument. For the reasons set forth below, the Court GRANTS Defendants' motion for summary judgment as to all causes of action set forth in Plaintiff's Fourth Amended Complaint (" 4AC" ). [Doc. No. 58.]


This matter is a brought by Plaintiff Hermenegildo " Jay" Martinez (" Plaintiff" ), alleging various causes of action stemming from Defendants failure to abate and disclose the presence of mold at the Welk Resort San Diego (the " Resort" ).[3] As the factual record in this case is well developed, the Court relates only those facts essential to the instant motion. [4] Plaintiff initially purchased 120,000 Platinum Points from Welk Resort Group, Inc. (" Welk" ) in 2007, which provided him with the opportunity to stay at Welk resorts around the world or at any other time-share resort that accepts Platinum Points for vacation stays.[5] Plaintiff then " upgraded" his 2007 Platinum Points interest in April 2009 to 240,000 Platinum Points. [4AC ¶ 23; Ex. A to the 4AC, p. 24; Ex. B to the 4AC, p. 54.]

At some point during the sales process, Plaintiff asked Welk if the Resort was safe for his son (who previously had cancer and needed a clean environment), and the sales agent assured him the Resort was clean, safe, and well maintained. [ See Warren Decl., Ex. 5, pp. 36:20-37:12, 247:25-248:5.] Plaintiff purchased his Platinum Points solely for the purpose of staying at the Welk Resort San Diego, [Martinez Depo., ¶¶ 3-4.], which is located in Escondido, California, and has more than 650 units in three subdivisions: the Lawrence Welk Resort Villas, the Villas on the Green, and the Mountain Villas. [Coogan Decl., ¶ 3.]

During a visit to the Resort in 2009, Plaintiff notified the front desk that his room smelled musty. Welk sent a housekeeper, who cleaned a sink, which apparently fixed the problem. [ See id. at 102:9-105:6, 123:7-22.] Plaintiff later went looking for fishing bait in an outside utility closet (thinking it to be a cool, damp location), where he found something that may have been mold, but he could not be certain.[6] After Plaintiff stayed at the Resort in 2009, his neighbor (a former Welk employee) told him that there was mold at the Resort. This story troubled Plaintiff because he believed that if mold existed in one unit at the Resort, all 650 units in the 500-acre Welk complex would be uninhabitable, even if the mold were removed. [ See Warren Decl., Ex. 5, p. 224:8-14.]

Subsequent to his 2009 stay at the Resort, Plaintiff decided he would never use his points again— either at Welk or any other timeshare resort. Additionally,

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Plaintiff has not attempted, nor is he willing to attempt, to sell his Platinum Points to another individual, as he does not believe it would be ethical given his knowledge of the extensive mold issues at the Resort. [Martinez Decl., ¶ 8.] Consequently, Plaintiff claims his Platinum Points have diminished in value. [ See id. at 139:7-16, 208:23-209:5; Exh. 4, p. 3:24-26; Exh. 1, p. 12:3-27; Exh. 3, p. 8:12-9:24.] Plaintiff sued Defendants for breach of contract, breach of fiduciary duty, negligence, nuisance, breach of the implied warranty of habitability, and for violations of California's Unfair Competition Law (" UCL" ). Defendants now seeks summary judgment on all claims, or in the alternative for partial summary judgment.


Summary judgment is properly granted when there is no genuine issue as to any material fact such that the moving party is entitled to judgment as matter of law. Fed.R.Civ.P. 56(c). Entry of summary judgment is appropriate " against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The court shall consider all admissible affidavits and supplemental documents submitted on a motion for summary judgment. See Connick v. Teachers Ins. and Annuity Ass'n, 784 F.2d 1018, 1020 (9th Cir.1986).

The moving party has the initial burden of demonstrating that summary judgment is proper. Adickes v. S.H. Kress & Co., 398 U.S. 144, 152, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). To avoid summary judgment, the nonmovant cannot rest solely on conclusory allegations. Berg v. Kincheloe, 794 F.2d 457, 459 (9th Cir.1986). Rather, he must present " specific facts showing there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). " Finally, if the factual context makes the nonmoving party's claims implausible, that party must come forward with more persuasive evidence than would otherwise be necessary to show that there is a genuine issue for trial." California Architectural Bldg. Prods. v. Franciscan Ceramics, 818 F.2d 1466, 1468 (9th Cir.1987), cert. denied, 484 U.S. 1006, 108 S.Ct. 698, 98 L.Ed.2d 650 (1988).

The court may not weigh evidence or make credibility determinations on a motion for summary judgment. Quite the opposite, the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505; United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). The nonmovant's evidence need only be such that a " fair minded jury could return a verdict for [him] on the evidence presented." Anderson, 477 U.S. at 255, 106 S.Ct. 2505. However, in determining whether the nonmovant has met his burden, the court must consider the evidentiary burden imposed upon him by the applicable substantive law. Id. If the nonmovant's evidence is " merely colorable, or is not significantly probative," summary judgment may be granted. Id.


Plaintiff's 4AC alleges five causes of action: (1) breach of contract; (2) breach of fiduciary duty; (3) negligence; (4) private nuisance; (5) unfair competition in violation of California Business and Professions Code § 17200 et seq. ; and (6) breach of the implied warranty of habitability. [Doc. No. 128.] Defendants contend they are entitled to summary judgment on all claims because Plaintiff cannot prove he was injured as a result of Defendants' conduct. Specifically, Defendants argue

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Plaintiff has failed to produce any witnesses, any documents, or any evidence to support that his Platinum Points have " lost value." [Doc. No. 128, 8:8-13; Martinez Depo., pp. 176-77.]

I. Breach of Contract

Plaintiff's first cause of action alleges damages stemming from Defendants' alleged breach of the Purchase and Sale Agreement. Plaintiff contends that because he has satisfied all contractual obligations to Welk, by paying for time-share ownership points and all associated fees, and Defendants breached such contract, by failing to abate and disclose the presence of mold, Defendants are liable for " damages consisting of the cost of repairs and replacement, diminutions in value of the time share ownership points, and other associated costs." [FAC ¶ 34.] Defendants move for summary judgment alleging that Plaintiff has failed to identify a specific provision of the Purchase and Sale Agreement that has been breached, has not— directly or indirectly— paid for repair or replacement costs at the Resort since 2009, as he has not paid his annual maintenance fees and is currently $1,480.48 in ...

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