United States District Court for the Southern District of California

Transcription

1 United States District Court for the Southern District of California If you purchased a hotel-condominium unit at the Hard Rock San Diego in , you could get a payment from a class action settlement. A federal court authorized this notice. This is not a solicitation from a lawyer. A proposed settlement will provide $51,150,000 to purchasers of hotel-condominium units at the Hard Rock Hotel and Condominiums in San Diego, California. The settlement applies to those who agreed to purchase between May 2006 and December 2007 and ultimately closed escrow in either 2007 or The settlement resolves a lawsuit over whether the developers of the Hard Rock (the Defendants) violated the law by not telling purchasers they had a right to cancel their purchase contracts. The two sides disagree about how much money, if any, the Court would have awarded to purchasers if the case had gone to trial. The federal court still has to decide whether to approve this settlement. You have the right to make your views known to the Court. Your rights and options and the deadlines to exercise them are explained in this notice. Your legal rights are affected whether you act or don t act. Read this notice carefully. WHAT ARE YOUR OPTIONS? DO NOTHING EXCLUDE YOURSELF OBJECT OR COMMENT GO TO THE FAIRNESS HEARING If you do nothing and it is determined that you are part of the settlement Class, and the Court approves the proposed settlement, you will be entitled to a share of the settlement. You will not be able to bring your own lawsuit and will be bound by the Release described in the Settlement Agreement. Get no payment. If you exclude yourself from this settlement, or in other words opt out, you will get no payment from the settlement. You may be entitled to file your own case against the Defendants in this case. The deadline to opt out is August 24, If you do not like all or part of this settlement, you can write to the Judge, who will consider your objection before deciding whether to approve this settlement. Or you may submit a comment. The deadline for submitting a written objection or comment is August 24, You are not required to attend or speak at the hearing on this matter, which is called the Fairness Hearing. But you may appear at the hearing and ask the Judge to allow you to share your views of the settlement. The Fairness Hearing is scheduled for September 15, 2017.

2 WHAT THIS NOTICE CONTAINS BASIC INFORMATION ABOUT THIS LAWSUIT... PAGE 3 1. Why did I get this notice package? 2. What is this lawsuit about? 3. Why is this a class action? 4. Why is there a settlement? WHO IS IN THE SETTLEMENT... PAGE 3 5. How do I know if I m in the settlement? 6. Are there exceptions to being included? 7. What if one of my co-purchasers already sued Defendants in the Salameh or Bell case? 8. I m still not sure if I m included. THE SETTLEMENT BENEFITS WHAT YOU GET... PAGE 4 9. What does the settlement provide? 10. How much will my payment be and how will these payments be calculated? 11. Who will be doing the appraisals? 12. Can I try to correct information that I think the Settlement Administrator got wrong? HOW YOU GET PAID... PAGE How do I get paid? 14. When will I get my payment? 15. What am I giving up to get a payment or stay in the Class? THE LAWYERS REPRESENTING YOU... PAGE Do I have a lawyer in this case? 17. How will the lawyers be paid? EXCLUDING YOURSELF FROM THE SETTLEMENT... PAGE What does it mean to be excluded, or opt out? 19. How do I get out of the settlement? 20. Will I get money if I exclude myself? 21. Can I sue Tarsadia and their co-defendants later if I don t exclude myself? 22. If my co-purchasers wish to be excluded, am I excluded? OBJECTING TO THE SETTLEMENT... PAGE What is an objection? 24. How do I object to the settlement? 25. May I be deposed if I object? 26. What s the difference between objecting and excluding? IF YOU DO NOTHING... PAGE What happens if I do nothing? THE COURT S FAIRNESS HEARING... PAGE What is a Fairness Hearing? 29. When and where is the Fairness Hearing? 30. Do I have to attend the hearing? 31. Can I speak at the Fairness Hearing? GETTING MORE INFORMATION... PAGE Are there more details about the settlement? -2-

3 1. Why did I get this notice package? BASIC INFORMATION ABOUT THIS LAWSUIT You or someone in your family may have entered into an agreement to purchase an interest in a hotel-condominium unit at the Hard Rock Hotel and Condominiums in San Diego, California between May 2006 and December The Court sent you this notice because you have a right to know about a proposed settlement of a class action lawsuit, and about all of your options, before the Court decides whether to approve the settlement. If the Court approves it and after objections and appeals, if any, are resolved, an administrator appointed by the Court will make the payments that the settlement allows. The settlement website ( will include information about the progress of the settlement. This package explains the lawsuit, the settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them. The Court in charge of the case is the United States District Court for the Southern District of California, and the case is known as Beaver, et al. v. Tarsadia Hotels, et. al., Case No. 11-cv GPC-KSC. The people who sued are called Plaintiffs, and the companies and people they sued are called the Defendants. 2. What is this lawsuit about? According to the complaint, purchasers who signed contracts to acquire units at the Hard Rock San Diego in 2006 and 2007 had the right under federal law to rescind or cancel those contracts and get their deposits back. The complaint further alleges that the failure to disclose this right violated federal law and California s Unfair Competition Law. Defendants dispute all of Plaintiffs claims, and deny that purchasers are entitled to compensation. Also, Defendants believe that their former attorneys at a law firm called Greenberg Traurig are responsible for the failure to tell purchasers they had a right to cancel their contracts. Greenberg Traurig denies any wrongdoing and maintains that Defendants and purchasers are not entitled to any compensation from it. 3. Why is this a class action? In a class action, one or more people called Class Representatives (in this case Dean and Laurie Beaver, Kevin and Veronica Kenna, Dinesh Gauba, Steven Adelman, and Abraham Aghachi), sue on behalf of people who have similar claims. All these people are a Class or Class members. One court resolves the issues for all Class members, except for those who exclude themselves from the Class. U.S. District Court Judge Gonzalo Curiel is in charge of this class action. 4. Why is there a settlement? Plaintiffs think they could have won more than $51,150,000 at trial. Defendants think the Plaintiffs would not have been awarded any money at trial. But there was no trial. Instead, the parties agreed to a settlement as a compromise. That way, they all avoid the costs and risks of a trial, and the purchasers will get compensation. The Class Representative and their attorneys think the settlement is best for all Class members. 5. How do I know if I m in the settlement? WHO IS IN THE SETTLEMENT The Court has decided that everyone who fits this description is a Class member and is entitled to a portion of the settlement (with certain exceptions explained below): All individuals and businesses who agreed to purchase hotel-condominium units at the Hard Rock Hotel & Condominiums in San Diego, California at any time between May 2006 and December 2007 and ultimately closed escrow on units in the project. -3-

4 6. Are there exceptions to being included? Yes. The following purchasers are excluded from the Class: The Defendants and their officers, affiliates, directors, employees and the immediate family members of their officers, affiliates, directors and employees. The Defendants have determined this exception excludes only Units 602, 639 and Those named plaintiffs in the action entitled Bell, et al. v. Tarsadia Hotels, et al. (San Diego Superior Court Case No ) who signed the Settlement Agreement And Mutual Release in that case. The named plaintiffs in the action entitled Salameh, et al. v. Tarsadia Hotels, et al. (S.D. Cal. Case No. 09-CV- 2739). Anyone who opts out. 7. What if one of my co-purchasers already sued Defendants in the Salameh or Bell case? If you purchased your unit with one of the named plaintiffs in the Salameh case, or with someone who signed the release in the Bell case, you are still entitled to your portion of the settlement even though your co-purchaser is not. The Settlement Administrator may ask you for documentation related to your ownership of the condominium before it determines whether you are entitled to a portion of the settlement. 8. I m still not sure if I m included. If you are still not sure whether you are included in the settlement, you can ask for free help. You can call or visit for more information. 9. What does the settlement provide? THE SETTLEMENT BENEFITS WHAT YOU GET The Defendants and Greenberg Traurig have agreed to pay $51,150,000 to create a fund to benefit all Class members and pay for attorneys fees and expenses, service awards to Class Representatives and other costs associated with Settlement Administration. Members of the settlement Class will receive a pro rata share of the settlement after deductions for these fees and costs. YOU DO NOT HAVE TO SUBMIT A CLAIM FORM TO PARTICIPATE IN THE SETTLEMENT. But the Settlement Administrator may ask you to provide or confirm certain information. 10. How much will my payment be and how will these payments be calculated? Settlement payments per unit will average approximately $95,000, although the amounts will vary considerably under the formula, with most recoveries being between $50,000 and $120,000 per unit. You may get more or less than this amount, depending on the following factors: If you still own your unit, then the formula used to calculate your share of the settlement considers the difference between what you paid for your unit and the current value of that unit as determined by an appraisal. If you sold your unit, then the formula used to calculate your share of the settlement considers the difference between what you paid for the unit and the resale price. If you lost your unit to foreclosure, then the formula used to calculate your share of the settlement considers the difference between what you paid for the unit and the amount of your loan that was discharged through foreclosure. This is presumed to be the amount of the loan unless additional information is provided. -4-

5 You will not receive the full difference in values described above. Rather, these calculations are the baseline for calculating your percentage of the settlement. For a complete explanation, see the Distribution Plan at Note that Class members who only owned a partial interest in a unit (for example 50%) will only receive a partial share of the settlement amount determined for that unit. But if a unit was purchased by an entity such as a Limited Liability Company, then the settlement payment will be made to that entity even if the entity has more than one member or owner. Also, in most cases, for units purchased jointly by a married couple, a single settlement check will be made out to both spouses. The Settlement Administrator will have the discretion to make an initial partial payment of each Class member s settlement amount and then make a final payment later. For more detailed information, go to Who will be doing the appraisals? Lance W. Doré, MAI, FRICS of the Doré Group will do the appraisals which will be posted on the settlement website at Mr. Doré s C.V. is also posted on the same website. Appraisal values cannot be challenged. 12. Can I try to correct information that I think the Settlement Administrator got wrong? Yes. Before sending out settlement checks the Settlement Administrator will send you a letter explaining the inputs that will be used to calculate your settlement amount. You can send information to the Settlement Administrator if you believe the Settlement Administrator has used the wrong values to determine your share of recovery from the settlement. You will also have an opportunity to challenge determinations made by the Settlement Administrator to a so-called Special Master, who acts like an appellate judge or referee within the settlement administration process. 13. How do I get paid? HOW YOU GET PAID To qualify for payment, you do not need to do anything unless the letter you receive from the Settlement Administrator instructs you to provide further information or correct information provided by the Settlement Administrator. If you are instructed to provide information, please do so within the time limits stated, as you otherwise may not receive payment. 14. When will I get my payment? The Court is currently scheduled to hold a Fairness Hearing on September 15, 2017, to decide whether to approve the settlement. This date may change. If Judge Curiel approves the settlement, there may be appeals. The entire process could take a year or longer, and the appellate court could overturn the settlement. Please be patient. Updates on the status of the settlement are available at What am I giving up to get a payment or stay in the Class? Unless you exclude yourself, you are staying in the settlement Class, and that means that you can t sue, continue to sue, or be part of any other lawsuit against Tarsadia Hotels and their co-defendants about the legal issues in this case. It also means that all of the Court s orders will apply to you and legally bind you. -5-

6 16. Do I have a lawyer in this case? THE LAWYERS REPRESENTING YOU The Court has asked five law firms Reiser Law, P.C., Gibbs Law Group LLP, The Meade Firm p.c., Talisman Law P.C., and the Fostvedt Legal Group, LLC to represent you and other Class members. These lawyers are called Class Counsel. You will not be billed for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense. 17. How will the lawyers be paid? Class Counsel will ask the Court to approve a payment of attorneys fees of up to 33 and 1/3 of the Settlement Fund, which is $17,050,000, plus reimbursement of their litigation expenses, which will not exceed $223, The fees would pay Class Counsel for investigating the facts, litigating the case, and negotiating and managing the settlement. They will also ask the Court to award up to $50,000 to (a) Mr. and Mrs. Beaver; (b) Mr. and Mrs. Kenna; (c) Mr. Gauba; and (d) Messrs. Adelman and Aghachi, for a total of up to $200,000 for their services as Class Representatives. The Court may award less than these amounts. These amounts will be paid out of the Settlement Fund and reduce the amounts available for Class members. Defendants and Greenberg Traurig have agreed not to oppose these requests for fees and expenses. 18. What does it mean to be excluded, or opt out? EXCLUDING YOURSELF FROM THE SETTLEMENT If you don t want a payment from this settlement, but you want to keep the right to sue Tarsadia Hotels and other defendants named in this lawsuit on your own about the legal issues in this case, then you must take steps to get out. This is called excluding yourself, or opting out of the settlement Class. If you opt out you will not get any settlement benefits and you cannot object to the settlement. 19. How do I get out of the settlement? To exclude yourself from the settlement, you must send a letter by mail entitled Request for Exclusion. You must clearly say I want to be excluded from the settlement Beaver, et al. v. Tarsadia Hotels, et al. (S.D. Cal. Case No. 11- cv gpc-ksc). You must also include: (1) your full name, address and telephone number; (2) the number of your unit(s); (3) whether you purchased your unit with another purchaser; and (4) personally sign your request to be excluded. If known, please also include each co-purchasers percentage ownership in the unit. If a married couple purchased the unit, both spouses must personally sign the Request for Exclusion and request exclusion. You must mail your exclusion request postmarked no later than August 24, 2017, to: Beaver v. Tarsadia c/o GCG PO Box 9349 Dublin, OH Failure to comply with these requirements and to timely submit the Request for Exclusion will result in the Class member being bound by the terms of the settlement. 20. Will I get settlement money if I exclude myself? If you ask to be excluded, you will not get any settlement payment, and you cannot object to the settlement. You will not be legally bound by anything that happens in this lawsuit. You may be able to sue Tarsadia Hotels and their co-defendants in the future. -6-

7 21. Can I sue Tarsadia and their co-defendants later if I don t exclude myself? No. If you do not exclude yourself from the settlement, you will not be permitted to sue Tarsadia Hotels and their codefendants at a later date for alleged wrongdoing that was the subject matter of this lawsuit. 22. If my co-purchasers wish to be excluded, am I excluded? With the exception of married couples, each individual co-purchaser must separately mail in a Request for Exclusion if they wish to be excluded from the settlement. That means if you purchased a unit with a co-purchaser who is not your spouse and you exclude yourself, the co-purchaser would need to send in a separate Request for Exclusion if he or she wishes to be excluded from the settlement. Otherwise your co-purchaser will be included in the settlement and you will not. If a married couple purchased the unit, both spouses must sign the Request for Exclusion in order for the exclusion to be valid. OBJECTING TO THE SETTLEMENT You can tell the Court that you don t agree with the settlement or some part of it, or simply comment on the settlement. 23. What is an objection? If you re a Class member, you can object to the settlement if you don t like any part of it. You can give reasons why you think the Court should not approve it. The Court will consider your views. You may also submit a comment to the Court on any aspect of the settlement. 24. How do I object to or comment on the settlement? To object to or comment on any part of the settlement, you must mail a written objection or comment to each of the following four different addresses postmarked no later than August 24, Your objection or comment will be deemed waived if not timely filed. COURT CLASS COUNSEL DEFENSE COUNSEL COUNSEL FOR GREENBERG TRAURIG Clerk of the Court, United States District Court, Southern District of California, Office of the Clerk, 333 West Broadway, Suite 420, San Diego, CA Michael Schrag Gibbs Law Group LLP th St, Suite 1110, Oakland CA, Frederick H. Kranz Cox Castle & Nicholson LLP, 3121 Michelson Drive, Suite 200, Irvine, CA Michael P. McNamara, Jenner & Block LLP 633 West 5 th Street, Suite 3600, Los Angeles, CA You must include a statement that you are objecting to or commenting on the settlement in Beaver, et al. v. Tarsadia Hotels, et al. (S.D. Cal. Case No. 11-cv GPC-KSC). You also must state in your objection or comment: (1) your full name, address and telephone number(s); (2) the number of your unit(s); (3) whether you purchased your unit with another purchaser, and if so what your percentage ownership of the unit is; (4) the reasons for your objection, including the factual and legal grounds, or the nature of your comment; (5) whether you wish to speak at the Fairness Hearing, either on your own behalf or through counsel; (6) what other class actions you or your attorney have objected to in the last five years, if any; and (7) personally sign your objection or comment. All objections must attach any documents supporting the objection. For a complete list of requirements, see the Preliminary Approval Order at May I be deposed if I object? If you object, the parties to the settlement may ask for your deposition, or seek documents or other information from you relevant to your objection. -7-

8 26. What s the difference between objecting and excluding? Objecting is simply telling the Court that you don t like something about the settlement. You can object only if you stay in the Class. Excluding yourself is telling the Court that you don t want to be part of the Class. If you exclude yourself, you have no basis to object because the case no longer affects you. 27. What happens if I do nothing? IF YOU DO NOTHING If you do nothing and the Settlement Administrator determines that you are part of the settlement Class, you will be sent a check for your share of the settlement, and you will not be able to bring your own lawsuit. However, it is possible that the settlement Administrator will need information from you before it can issue a settlement check. 28. What is a Fairness Hearing? THE COURT S FAIRNESS HEARING The Court will hold a Fairness Hearing (also called a Final Approval Hearing) to decide whether to approve the settlement. At this hearing, the Court will consider whether the settlement is fair, reasonable, and adequate. If there are objections, the Court will consider them. The Court may also decide how much to pay Class Counsel and the Class Representatives. After the hearing, the Court will decide whether to approve the settlement. 29. When and where is the Fairness Hearing? The Fairness Hearing will take place on September 15, 2017 at 1:30 p.m., in Courtroom 2D of the United States District Court for the Southern District of California, 221 West Broadway, San Diego, California Do I have to attend the hearing? You may attend, but do not have to. If you send in a written objection or comment, the Court will consider that objection or comment and you don t have to attend the hearing or speak about it. Class Counsel will answer any questions from the Court about the settlement. 31. Can I speak at the Fairness Hearing? If you wish to speak, you must comply with the objection/comment requirements set forth in Question 24 above namely, you must file an objection or comment, and state your intention to speak at the Fairness Hearing therein. For a complete list of requirements, see the Preliminary Approval Order at Are there more details about the settlement? GETTING MORE INFORMATION This notice summarizes the proposed settlement. More details are in the settlement Agreement. You can get a copy of the settlement Agreement by writing to the address listed below or by visiting You can also get more information or answers to any questions about the settlement from this same website, by calling toll free, or writing to: Beaver v. Tarsadia c/o GCG PO Box 9349 Dublin, OH