The Washington State Attorney General’s case against Reed Hein & Associates grinds on, and Reed Hein remains committed to the same strategy it has used at all points in the life of the company— (1) Hide the truth. (2) Blame timeshare developers.
The State recently filed a motion asking to disclose multiple documents that Reed Hein considers confidential, including information about lawyer Mitchell Reed Sussman’s representation of Reed Hein customers.
The State wants to disclose certain documents. Reed Hein wants to keep them secret. This all seems familiar.
In June 2020, the State wanted to disclose the settlement amount that Reed Hein paid to timeshare developer Orange Lake Country Club. Reed Hein argued that the settlement amount was a trade secret, like the recipe for Coca-Cola. Reed Hein told the judge that knowledge of the settlement amount was top-secret, and unknown to other timeshare developers.
Reed Hein’s argument was utter hogwash: Every timeshare developer knew exactly how much Reed Hein had paid. Reed Hein wanted to keep the settlement amount secret because the truth was embarrassing to Reed Hein.
This is the truth: Two days before jury trial was scheduled to begin, Reed Hein paid $750,000 to a timeshare developer.
To a timeshare developer!!
Two days before trial!!!
It gets worse: Days after backing down to a major timeshare developer by agreeing to pay a tribute of $750,000 to avoid jury trial, Reed Hein issued a press release.
Did Reed Hein founder and chief executive Brandon Reed confess that he was in over his head? Did he announce plans to dissolve the company? Of course not.
Brandon Reed described the settlement as a “major win for consumers,” and Reed Hein took credit for “shining a light” on the abuses of the timeshare industry. Because of course they did.
Round 1 — Mitchell Reed Sussman
Among the documents that Reed Hein wants to keep secret is a summary of the “process” that California lawyer Mitchell Reed Sussman used when he represented Reed Hein.
Mitchell Sussman’s process is hardly a secret.
In 2019, Judge Roy Dalton described in excruciating detail the “timeshare-exit process” used by “the Weasel.”
Yes, that’s a quote. Throughout the order, the judge actually referred to Mitchell Sussman as “the Weasel.”
According to the judge, Mr. Sussman started each client’s representation by sending a letter to the client’s timeshare developer — accusing the developer of fraud and misrepresentation. He sent the letter before speaking with the client or learning anything about the facts of the client’s timeshare sales presentation.
Each letter ended by informing the developer that the client planned intended to stop all future payments and instructing the developer to send all communication intended for the client to the Law Office of Mitchell Reed Sussman.
According to the judge, Mr. Sussman then sent a letter to the developer announcing that the client had “resigned” from timeshare membership. On other occasions, he secretly filed a deed at the county recorder’s office, transferring ownership back to the timeshare developer. And on other occasions, he transferred ownership to an employee of his firm — whom he instructed to default on the payment obligations.
Timeshare developers responded to all his methods by invalidating the transfer and continuing to send bills. The only change was that they sent the bills to Mr. Sussman’s office.
When Mr. Sussman received a bill addressed to a client, his “filing process” was simple and straight-forward: Having decided that all timeshare bills are “trash,” Mr. Sussman “threw them in the garbage can.”
Mr. Sussman considered his “timeshare-exit process” complete on the day that the timeshare developer sent a notice of foreclosure.
“Congratulations,” he wrote to clients. “Your timeshare was taken back as a result of our efforts and your steadfast refusal to pay. This is precisely the result we were hoping for.”
The judge rejected Mr. Sussman’s attempt to claim protections given to lawyers when they engage in the practice of law: “Mr. Sussman’s instructions that clients stop payments — breach their contracts — are not privileged by his status as an attorney.”
The judge explained why not: “Because the context in which he gives the statements makes them fraudulent.”
These are the facts: Reed Hein referred thousands of its customers to Mitchell Reed Sussman, a.k.a., “the Weasel.” The customers received fraudulent advice, and their bills were thrown in the garbage. When they received notices of foreclosure, the Weasel sent them letters of congratulations.
The facts about Mitchell Reed Sussman are embarrassing to Reed Hein.
The facts aren’t secret.
Round 2 – Ramsey Scripts
The Attorney General wants to disclose two “commercial scripts” that Reed Hein prepared for Dave Ramsey. Reed Hein wants to keep the scripts secret.
Whether the scripts are secret or not, they almost certainly contain information that Reed Hein considers to be embarrassing.
Check back for updates.
This blog post isn’t legal advice.
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