CONWAY — A state judge on Thursday approved a settlement agreement that will give Westgate Resorts sales agents half of what they are owed for timeshare sales they generated at the companys oceanfront Myrtle Beach resort, bringing an end to a six-year legal battle over unpaid wages and commissions.
Judge Michael Baxley approved the settlement, although some sales agents in the class-action lawsuit said they wanted to continue fighting the Orlando, Fla.-based timeshare group, headed by self-proclaimed timeshare king David Siegel, a billionaire who is building what he calls the largest home in America.
Nearly a dozen sales agents attended Thursdays hearing and most of them said they opposed the settlement.
Baxley, however, said a vast silent majority of the 356 individuals in the lawsuit wanted to take the money rather than take their chances in future court hearings.
It seems very simple and its something weve heard since childhood that a bird in the hand is worth two in the bush, Baxley said. I believe it is in the best interest of the class that this settlement is approved.
Baxley told the sales agents they would be looking at several more years of court hearings and the possibility of coming away with nothing in a trial if they did not accept the settlement agreement first proposed a month ago by Westgate.
Win, lose or draw, if theres a trial its only going to be round one, Baxley said, adding that whoever loses likely would appeal the decision, and that could take another three years. The lawsuit over unpaid wages was filed in 2007 and had bounced between state and federal courts before Thursdays resolution.
Under the settlement, CFI Sales & Marketing Ltd. the company that markets Siegels timeshares will pay $500,000 within three days to lawyers Gene Connell and David Canty, who represented the sales agents. That money will be split among the sales agents, giving each of them 50 percent of what they were owed. The sales agents will be paid by March 19.
Judith Parker, the lead plaintiff in the case, said she was disappointed in the settlement amount but added that its about the best she could expect from Westgate.
What can you do when you have a company that will not do the right thing? she said. Theres not a good solution. I guess this is the best of all the bad solutions.
The need for a resolution was urgent for some sales agents, who said some members of the class were facing illnesses and financial hardships. News of one sales agents death from a heart attack on Feb. 4 the same day he had planned to attend a previous court hearing on the settlement spread among the group as they waited for Thursdays hearing to begin.
He never got to enjoy any of the money he earned, plaintiff Cynthia Reilly told Baxley. This has played out for so long I find it appalling.
Timothy Walsh told Baxley he was ready to accept the settlement until Westgate lawyer Richard Epstein asked during the Feb. 4 hearing that a non-disparagement clause be added to the agreement to keep the sales agents from saying negative things about Siegel or his companies.
He [Epstein] said he wants us to act like ethical business people, Walsh said. How can they have the audacity to say that when [Siegel] is building the largest house in America on the backs of people he didnt pay?
Baxley said he would not impose a non-disparagement clause in the settlement agreement, saying it is not enforceable and not in keeping with our Constitution.
This is the second time a settlement has been reached in the case. The sales agents agreed in January 2010 to accept $650,000 in payments from CFI, but Siegels company defaulted on the agreement after making just two payments totaling $50,000. CFIs lawyers said during a court hearing later that year that the company had only agreed to have a judgment entered against it, but hadnt promised to make all of the payments. Baxley then ruled that if CFI wasnt willing to pay the debt, the sales agents could pursue payment from Siegel, other company executives and Siegels other businesses.
Baxley required CFI to deposit its latest settlement amount into a trust fund before accepting the agreement.
The case dragged along for years after the initial settlement offer, but efforts to bring Siegel to trial picked up steam last year after Siegel appeared on national television shows boasting about his wealth.
Connell told The Sun News in October that Siegels statements including a vow to complete his 90,000-square-foot home nicknamed Versailles, dubbed the most opulent home in America indicate the Westgate founder has plenty of money to pay his workers. In an ABC News appearance in July, for example, Siegel said that while the nations economic collapse forced his family to cut back on their number of servants it did not impact his wifes caviar purchases or her taste for Gucci, Valentino and Versace.
CFI lawyer John Wilkerson III said at the time that Siegels personal fortune has nothing to do with debts his companies might owe.
Siegel was supposed to appear in court last year to detail his finances but the hearing was canceled at the last minute after his lawyers told Baxley that the corporate jet was broke and they could not make the trip from Florida.
This is all just a big game to them, Reilly said during her testimony Thursday.
The local sales agents were paid an hourly wage but not the commissions CFI had promised for generating sales at the Westgate resort at 415 S. Ocean Boulevard. Westgate, which was founded by Siegel in 1982, operates 27 resorts in destinations including Las Vegas, Miami, Orlando, Fla., Branson, Mo., and Gatlinburg, Tenn.
Contact DAVID WREN at 626-0281.