Foster and Janet Watkins walked into Coral Resorts’ office searching for a slice of paradise.
The retired couple wanted a pool-side timeshare they could visit each Thanksgiving on Hilton Head Island, a five-hour drive from their home north of Atlanta and near their daughter who worked at Armstrong State University in Savannah.
After hearing a sales pitch, they bought a two-bedroom villa in 2012 at Coral Sands Resort, Coral Resorts’ Venetian-style complex on Pope Avenue. The longtime timeshare owners said they thought they’d paid for a spot to spend their remaining vacations.
“We’ve been doing timeshares since the late 1980s, so we walked in there knowing what we wanted to buy and walked out of there thinking that’s what we had bought,” said Foster Watkins, 77, a former education administrator. “But the finesse and lack of truth in the sales pitch was something we didn’t pay enough attention to.”
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The Watkinses are among 57 Coral Resorts timeshare owners who have filed more than 30 lawsuits against the company, alleging fraud, misrepresentation and unfair trade practices, according to Beaufort County court records. Along with Coral Sands, the company runs Port O’Call at Shipyard Plantation, Island Links and Coral Reef resorts on Hilton Head.
The unhappy owners allege they were misled by salespeople and signed contracts that did not reflect what they were told.
Their lawsuits have been thrust into the public eye because of extensive efforts by Coral Resorts to keep a tight lid on information that could be crucial to the owners’ claims. That information includes a transcript of the company’s public hearing before a state board that could prove the contracts the owners signed were invalid. The once-public transcript has been sealed by two courts and a state regulatory official.
Last month, The Island Packet and The Beaufort Gazette received the transcript from an unknown, anonymous source and published it, believing it to be a public document the public has a right to see.
The success of the owners’ lawsuits could rely on using the sealed transcript as evidence, according to their attorneys, Zach Naert and Joe DuBois of Hilton Head.
The lawsuits say various promises — such as annual visits during holiday weeks, waived maintenance fees, reimbursement for their current timeshare and other perks — turned out to be false.
Some owners say that after complaining to the company they paid more money to get what they were originally promised, but the perks never came.
One owner has paid as much as $50,000, according to attorneys.
Coral Resorts has denied the claims.
Nekki Shutt, an attorney representing the company, declined to discuss individual cases, citing pending litigation.
In a statement, she said there are thousands of customers pleased with their Coral Resorts experience. She added that owners can ask for a refund within five days of signing the contract.
“These property owners visit Hilton Head frequently and contribute meaningfully to the area’s economy,” she said in an email. “Every property owner receives what he or she contracts to receive. The usage terms are clearly stated on the first page of each contract in bold print. All purchasers of property also have a five-day ‘right of rescission’ after their purchase during which they can cancel their purchase for any reason — or no reason at all — and receive a full refund.”
‘THIS DIDN’T HAPPEN BY ACCIDENT’
Groceries in hand, Jim and Audre Pile were called over to a kiosk in 2012 outside Walmart on Hilton Head.
The kiosk attendant said he had a great deal: Attend a 90-minute timeshare presentation and get $100 worth of gift certificates to island restaurants.
Having owned a timeshare at Seacrest on Hilton Head for 14 years, “we weren’t babes in the woods when it came to presentations,” Jim Pile, 68, said.
But this one impressed the couple from Newport News, Va.
The salesman was “extremely personable,” Pile said.
He promised an annual timeshare at Coral Sands. He also said Coral Resorts would buy Pile’s Seacrest timeshare and use that money toward his Coral Sands purchase, according to a lawsuit.
Moreover, the salesman said the company would rent out the Piles’ new timeshare when they didn’t want to visit. The couple could use that money to pay off the unit, their suit says.
Shutt, the Coral Resorts attorney, said the company does not resell or rent other timeshare properties for owners.
“You couldn’t believe he was misleading you,” Pile said. “Of course we questioned him, but he was so earnest.”
After reading the contract overnight, the Piles signed the next day. They didn’t see the clause that said the villa was a triannual rental, once every three years.
“That was buried on the fourth page and obscured by the way the packet was stapled,” Jim Pile said. “When the salesman steadied the page to read it to us, he put his finger over the world ‘triannual.’”
Pile recognized his mistake a few weeks later.
“I couldn’t get in touch with a salesperson for weeks despite the card that said ‘call anytime,’” he said.
After spending more than $10,000, the couple have yet to visit their unit on Pope Avenue.
Their lawsuit is headed to arbitration, according to court records.
“It’s just our word against theirs,” Jim Pile said. “This didn’t happen by accident. It was methodical and well thought out.”
The Watkinses, the Atlanta couple, paid more to the company when they realized their contract wasn’t what they thought.
A saleswoman promised to give them what they were originally promised for an additional $6,000, according to court records. Foster Watkins never heard back from her, he said.
“My wife has nearly killed me for paying,” he said.
The couple filed a motion for a class-action lawsuit against the company. That motion is pending.
Coral Resorts representatives argue that there are plenty of satisfied timeshare owners.
Paul Vico, a retired teacher from New Jersey, has owned property at Port O’Call for 20 years. He has visited three or four times a year, including last month with more than 20 friends and relatives.
“You can’t beat the quality at Port O’Call. I’ve never had a bad experience,” Vico said. “When we signed 20 years ago, salesmen were still trying to make their commission, but you read people and know what you’re getting into.”
SEALED FILES COULD LIMIT OWNERS’ CASES
Coral Resorts has worked to suppress evidence likely to play a key role in the owners’ lawsuits.
The evidence includes a transcript of a hearing the company had before the S.C. Real Estate Commission.
The transcript shows Coral Resorts did not pay annual fees required by the state Department of Labor, Licensing and Regulation. The lapsed payments led to questions about whether registrations of the company’s four timeshares remained intact during the years fees weren’t paid, according to records.
If registrations did lapse because the fees weren’t paid, the owners could argue that the contracts they signed during the lapses are invalid because an unregistered company can’t legally sell timeshares. Two documents included with the transcript use the term “registration lapsed” to describe the status of the registrations. For example: “Island Links Resort — Registration lapsed 9-11-2005.”
Coral Resorts lawyers insisted at the Jan. 23, 2013, Real Estate Commission hearing that the unpaid renewal fees had no bearing on whether the company could legally sell timeshares, according to the transcript. The company “categorically denies any lapse” of registration to sell timeshares, Shutt has said.
The lawyers for the dissatisfied timeshare owners disagree. They say the transcript provides “absolute, direct evidence” supporting the owners’ lawsuits.
However, it is unclear if the owners can use the sealed transcript in court.
In July, the S.C. Court of Appeals dismissed an appeal of 14th Circuit Court Judge Carmen Mullen’s decision to seal the documents.
Chief Judge John C. Few ruled that the owners’ attorneys did not file their paperwork in time. He also said some of the procedures the lawyers questioned cannot be appealed.
The attorneys plan to ask a Circuit Court judge to rule whether the transcript is admissible, they said last week.
Pile, the unhappy timeshare owner, said he has told his attorneys to keep fighting.
“Why am I spending triple the money to get my money back?” he asked. “There comes a time when you need to take a stand and say these things shouldn’t go unnoticed.”