               IN THE COURT OF APPEALS OF TENNESSEE
                          AT KNOXVILLE
                              November 20, 2014 Session

          NATHAN B. OVERTON ET AL. v. WESTGATE RESORTS,
                         LTD., L.P. ET AL.

                  Appeal from the Chancery Court for Sevier County
                 No. 12-6-294  Telford E. Forgety, Jr., Chancellor




             No. E2014-00303-COA-R3-CV-FILED-JANUARY 30, 2015




This case involves the propriety of an award of punitive damages in the amount of
$600,000. The plaintiffs sued the defendant timeshare developer, seeking to rescind a
contract for purchase of a timeshare interest. The plaintiffs alleged, inter alia, that the
defendant was guilty of fraud and misrepresentation, as well as violations of the
Tennessee Time-share Act and the Tennessee Consumer Protection Act. Following the
hearing, the trial court ruled in favor of the plaintiffs and allowed them to rescind the
contract, ordering repayment of their purchase money. The trial court found that the
defendant had violated the respective statutory provisions and was guilty of fraud and
misrepresentation. The trial court thus determined that an award of punitive damages was
proper, and following a second hearing regarding the amount of the punitive damage
award, set such award at $600,000. The defendant has appealed this award. While we
affirm the determination of the trial court that $600,000 represents a reasonable award of
punitive damages considering all applicable factors, we must order remittitur of that
award to $500,000 in accordance with the statutory cap found in Tennessee Code
Annotated § 29-39-104(a)(5).

      Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
                      Affirmed as Modified; Case Remanded

T HOMAS R. F RIERSON, II, J., delivered the opinion of the court, in which D. M ICHAEL
S WINEY and J OHN W. M CC LARTY, JJ., joined.

Gregory C. Logue and Robert L. Vance, Knoxville, Tennessee, for the appellant,
Westgate Resorts, Ltd., L.P.

John O. Belcher and Curtis R. Harrington, Nashville, Tennessee, for the appellees,
Nathan B. Overton and Patricia A. Overton.


                                                 OPINION

                                I. Factual and Procedural Background

      The plaintiffs, Nathan and Patricia Overton, filed the instant action against
Westgate Resorts, Ltd., L.P. (“Westgate”), seeking to rescind a contract for purchase of a
timeshare interest at the Westgate Resort in Gatlinburg.1 The Overtons alleged fraud,
misrepresentation, breach of contract, and violations of the Tennessee Time-share Act,
Tennessee Code Annotated § 66-32-101, et seq., and the Tennessee Consumer Protection
Act, Tennessee Code Annotated § 47-18-101, et seq. The Overtons also sought awards of
compensatory damages, enhanced or punitive damages, and attorney’s fees.

       At trial, the Overtons testified that they traveled to Gatlinburg in July 2011 to
search for a cabin or timeshare to purchase for family vacations. The Overtons desired to
purchase a property or timeshare with sufficient space to accommodate their extended
family for a trip every December to celebrate Christmas and their wedding anniversary.
While walking in downtown Gatlinburg on the morning of July 12, 2011, Ms. Overton
happened upon a Westgate booth. She was told that she and her husband could attend a
ninety-minute presentation regarding the purchase of a timeshare and that they would
receive certain gifts in return.

       Ms. Overton shared this information with her husband, and the Overtons decided
to attend the presentation. They traveled to the Westgate Resort in Gatlinburg, where
they were met by Robert Brian Justice, a Westgate salesperson. Mr. Justice provided
them with information about the resort and accompanied them to tour different timeshare
units. At some point, Raymond Veverka, a Westgate sales manager, joined the Overtons
and Mr. Justice to discuss purchase prices for the units. The Overtons described their
dealings with Mr. Justice and Mr. Veverka as “high pressure,” with the Overtons
spending a total of almost eight hours in discussions with the salespersons on that day.

       During the presentation, the Overtons found a suitable unit that would
accommodate the needs of their extended family. It was described as Unit 458. Satisfied
with their choice, the Overtons decided to purchase a Westgate timeshare interest for a
purchase price of $39,280. According to the Overtons, their decision to purchase was
based on certain assurances from the salespersons that (1) the Overtons would be able to


        1
         Plaintiffs also named W estgate salespersons, Raymond Veverka and Robert Brian Justice, as defendants;
however, Mr. Veverka and Mr. Justice are not parties to this appeal.

                                                        2
request and obtain a reservation for Unit 458 for the same week in December each year;
(2) the Overtons would have the right to book unlimited additional nights at any Westgate
resort for $49 to $69 per night (“Owners’ Nights”); (3) Mr. Justice and Mr. Veverka
would personally refund part of their commissions on the sale to the Overtons, in the
amounts of $1,000 and $500 respectively; and (4) Mr. Justice and Mr. Veverka would
purchase a foosball table that would be kept at the resort for the Overtons’ use during
their stays there.

        The promises regarding the foosball table and the commission refunds were put in
writing and signed by the salespersons. The alleged promises regarding unlimited
Owners’ Nights and the guaranteed use of Unit 458 every December, however, were not
made a part of any written documentation. Rather, the documents signed by the Overtons
at the closing, which took place at approximately 11:00 p.m. that evening, specifically
state that the timeshare interest is for a “floating” week and unit. Following the closing,
the Overtons were presented with a briefcase containing copies of all of their closing
documents as well as three CD-ROM discs.

       Following their departure from the Westgate Resort in Gatlinburg, the Overtons
traveled home to Dickson, Tennessee, expecting a call from Mr. Veverka the next day to
confirm their reservation for Unit 458 for December 2011. The call did not come. When
the Overtons were able to reach Mr. Veverka by telephone a few days later, he reportedly
assured them that their reservation for Unit 458 was complete. According to the
Overtons, when they subsequently tried to confirm their reservation with the individual
whom Mr. Veverka had instructed them to contact, they were informed that there existed
no guarantee of booking Unit 458 and that units were not assigned more than a few days
in advance of arrival.

       The Overtons attempted to contact Westgate customer service, speaking to various
individuals about this purported misrepresentation. Through the course of numerous
phone calls, the Overtons were informed that they did not have unlimited Owners’ Nights
and could not be guaranteed the use of the week or unit they preferred from year to year.
The Overtons in turn contacted counsel, who reviewed the documents and CD-ROMs
provided to the Overtons at closing. During this review, it was discovered that the
Overtons had not been provided with a current and complete copy of Westgate’s public
offering statement (“POS”) as required by Tennessee Code Annotated § 66-32-112 and
-114, relevant sections of the Tennessee Time-share Act. Rather, the Overtons had been
provided with CD-ROMs that, upon further analysis by a computer expert, were
determined to contain only a POS from 2006 and other files with illegible pages. The
CD-ROMs were also nearly impossible to navigate without the required serial number,
which had not been explained to the Overtons. Consequently, pursuant to Tennessee
Code Annotated § 66-32-114, the Overtons sought to rescind the contract. Written notice


                                             3
of their request to rescind was sent to Westgate’s corporate office in Florida on October
25, 2011.

        Counsel for Westgate sent a response on November 28, 2011, denying the
Overtons’ request to rescind the contract. The Overtons subsequently filed the instant
action. Following a trial conducted on June 19 and 20, 2013, the court ruled in favor of
the Overtons. Finding that the Overtons were never provided a correct and current POS
by Westgate, the trial court granted a rescission of the contract, ordering Westgate to
refund the Overtons’ purchase money. The trial court further determined that Westgate
intentionally failed to provide the Overtons with an accurate POS and intentionally
refused to rescind the contract “despite overwhelming evidence” that rescission was
justified.

       Regarding additional claims presented by the Overtons, the court found that the
Overtons were promised gifts of a foosball table and unlimited Owners’ Nights without
proper disclosure in violation of Tennessee Code Annotated § 66-32-133. These
violations of the Tennessee Time-share Act were determined to be willful. The court
further found that Westgate had engaged in deceptive practices in violation of the
Tennessee Consumer Protection Act, specifically Tennessee Code Annotated § 47-18-
104, and that Westgate was guilty of common law fraud and misrepresentation with
regard to the promise of unlimited Owners’ Nights. The court specifically found that
Westgate trained its salespersons to make such a promise and knew that its salespersons
were representing that such a program existed even though the written documents did not
mention it.

        With respect to the relief granted, the trial court ruled that the Overtons were
entitled to punitive damages for common law fraud and/or misrepresentation, as well as
enhanced statutory damages and attorney’s fees pursuant to the Tennessee Consumer
Protection Act. A future hearing date for determination of the amount of punitive
damages, enhanced damages, and attorney’s fees was established. The court concluded
that the Overtons would be allowed to elect between the punitive or enhanced damages
once the amounts had been established.

        The hearing was conducted on October 21, 2013, with the parties presenting
information regarding Westgate’s financial status. Following the hearing, the trial court
issued a memorandum opinion, reiterating that the Overtons had established their
entitlement to punitive damages by clear and convincing evidence. The court explained
that although punitive damages were designed to punish the wrongdoer, they should not
run afoul of constitutional considerations such as reprehensibility of conduct, disparity
between the punitive damage award and the losses incurred by the plaintiffs, and the
difference between the punitive damage award and statutory damages. The trial court


                                            4
carefully reviewed the application of the nine factors discussed in Hodges v. S.C. Toof &
Co., 833 S.W.2d 896, 901-902 (Tenn. 1992).

       Upon consideration of all applicable factors, the trial court established the punitive
damage award at $600,000, finding the most significant factors to be Westgate’s financial
position and the reprehensibility of its conduct. The enhanced statutory damages were set
at $113,340, which represented the amount of compensatory damages trebled. The
Overtons elected to receive the $600,000 punitive damage award. They were also
awarded $117,082 in attorney’s fees and $19,198 in litigation expenses.

      Westgate filed a motion to alter or amend the judgment, which was subsequently
denied by the trial court. The Overtons filed a motion seeking additional attorney’s fees,
which the trial court granted in the amount of $25,429. Westgate timely appealed.

                                         II. Issues

        Westgate presents the following issues for our review, which we have restated
slightly:

       1.     Whether the trial court erred in ruling that the Overtons were entitled
              to punitive damages based on clear and convincing evidence that
              Westgate acted maliciously, intentionally, fraudulently, or recklessly.

       2.     Whether the trial court erred in awarding the Overtons $600,000 in
              punitive damages.

       3.     Whether the trial court erred in ruling that Westgate willfully
              violated the Tennessee Time-share Act and the Tennessee Consumer
              Protection Act.

       4.     Whether the trial court erred in failing to enforce the forum selection
              provision contained in the contract.

       The Overtons raise the following additional issue:

       5.     Whether the Overtons should receive an additional award of
              attorney’s fees on appeal pursuant to the Tennessee Time-share Act
              and the Tennessee Consumer Protection Act.




                                              5
                                  III. Standard of Review

       Our standard of review is de novo with a presumption of correctness as to the trial
court’s findings of fact unless the preponderance of the evidence is otherwise. Tenn. R.
App. P. 13(d); McCarty v. McCarty, 863 S.W.2d 716, 719 (Tenn. Ct. App. 1992). No
presumption of correctness attaches to the trial court’s legal conclusions. Union Carbide
Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993).

       As this Court has previously explained, the question of whether the record
demonstrates clear and convincing evidence to support the trial court’s decision to award
punitive damages is a question of law, reviewed on appeal by applying the following
standard:

       Under [the clear and convincing] standard of proof, the appellate court must
       “distinguish between the specific facts found by the trial court and the
       combined weight of those facts.” The facts as found by the trial court are
       reviewed de novo on the record, presuming those findings to be correct
       unless the evidence preponderates otherwise. Findings of fact based on
       witness credibility are given great deference and will not be disturbed
       absent clear evidence to the contrary. Whether the combined weight of the
       facts, either as found by the trial court or supported by a preponderance of
       the evidence, establish clearly and convincingly that [punitive damages are
       warranted] is a question of law, subject to de novo review with no
       presumption of correctness.

White v. Empire Exp., Inc., 395 S.W.3d 696, 721 (Tenn. Ct. App. 2012) (quoting In re
Samaria S., 347 S.W.3d 188, 200 (Tenn. Ct. App. 2011)).

                IV. Westgate’s Liability for Award of Punitive Damages

       Westgate contends that the trial court erred in its determination that an award of
punitive damages was warranted. As Westgate points out, punitive damages are
available in Tennessee if the trial court finds that a defendant has acted (1) intentionally,
(2) fraudulently, (3) maliciously, or (4) recklessly. See Hodges, 833 S.W.2d at 901.
Further, the Tennessee Time-share Act provides that a timeshare developer may be
subjected to a punitive damages award for a willful violation of the Act. See Tenn. Code
Ann. § 66-32-118 (2004).

       In the instant action, the trial court found that Westgate acted both intentionally
and fraudulently. As our Supreme Court has explained:



                                              6
      A person acts intentionally when it is the person’s conscious objective or
      desire to engage in the conduct or cause the result. A person acts
      fraudulently when (1) the person intentionally misrepresents an existing,
      material fact or produces a false impression, in order to mislead another or
      to obtain an undue advantage, and (2) another is injured because of
      reasonable reliance upon that representation.

Hodges, 833 S.W.2d at 901 (internal citations omitted). The trial court also found that
Westgate willfully violated the Tennessee Time-share Act by failing to provide the
Overtons with a current and complete POS.

      In relevant portion, the Tennessee Time-share Act requires:

      A public offering statement must be provided to each purchaser of a
      time-share interval and must contain or fully and accurately disclose:

             (1) The name of the developer and the principal address of the
             developer and the time-share intervals offered in the
             statement;

             (2) A general description of the units including, without
             limitation, the developer’s schedule of commencement and
             completion of all buildings, units, and amenities or if
             completed that they have been completed;

             (3) As to all units offered by the developer in the same
             time-share project:

                    (A) The types and number of units;

                    (B) Identification of units that are subject to
                    time-share intervals; and

                    (C) The estimated number of units that may
                    become subject to time-share intervals;

             (4) A brief description of the project;

             (5) If applicable, any current budget and a projected budget
             for the time-share intervals for one (1) year after the date of
             the first transfer to a purchaser. The budget must include,


                                             7
without limitation:

       (A) A statement of the amount, or a statement
       that there is no amount, included in the budget
       as a reserve for repairs and replacement;

       (B) The projected common expense liability, if
       any, by category of expenditures for the
       time-share intervals;

       (C) The projected common expense liability for
       all time-share intervals; and


       (D) A statement of any services not reflected in
       the budget that the developer provides, or
       expenses that it pays;

(6) Any initial or special fee due from the purchaser at
closing, together with a description of the purpose and method
of calculating the fee;

(7) A description of any liens, defects, or encumbrances on or
affecting the title to the time-share interval;

(8) A description of any financing offered by the developer;

(9) A statement that within ten (10) days from the date of the
signing of the contract made by the purchaser, where the
purchaser shall have made an on-site inspection of the
time-share project prior to the signing of the contract of
purchase, and where the purchaser has not made an on-site
inspection of the time-share project prior to the signing of the
contract of purchase fifteen (15) days from the date of signing
of the contract, the purchaser may cancel any contract for the
purchase of a time-share interval from developer;

(10) A statement of any pending suits material to the
time-share intervals of which a developer has actual
knowledge;



                               8
             (11) Any restraints on alienation of any number of portion of
             any time-share intervals;

             (12) A description of the insurance coverage, or a statement
             that there is no insurance coverage, provided for the benefit of
             time-share interval owners;

             (13) Any current or expected fees or charges to be paid by
             time-share interval owners for the use of any facilities related
             to the property;

             (14) The extent to which financial arrangements have been
             provided for completion of all promised improvements; and

             (15) The extent to which a time-share unit may become
             subject to a tax or other lien arising out of claims against other
             owners of the same unit.

Tenn. Code Ann. § 66-32-112 (2004). The Act further provides:

      “[b]efore transfer of a time-share interval and no later than the date of any
      sales contract, the developer shall provide the intended transferee with a
      copy of the public offering statement and any amendments and supplements
      thereto. The contract is voidable by the purchaser until the purchaser has
      received the public offering statement.”

Tenn. Code Ann. § 66-32-114 (2004).

        We agree with the trial court’s finding that Westgate willfully violated Tennessee
Code Annotated §§ 66-32-112 and -114. Westgate clearly failed to provide the Overtons
with a current and complete copy of the POS. Although the Overtons requested a written
copy of the POS, they were never provided same. Mark Barton, executive director of
contract processing at Westgate’s corporate headquarters in Florida, testified that it was
Westgate’s policy at that time to provide purchasers with the outdated POS on CD-ROM
plus written copies of the amendments. The Overtons, however, never received such
written amendments until after this litigation was commenced, even though Mr. Barton
testified that all such written amendments had been transmitted to the Gatlinburg resort.

        Amanda Green, the executive director of sales at Westgate’s Gatlinburg resort,
testified that at the time of the Overtons’ purchase, the POS was made available on CD-
ROM. She testified that following this incident, she learned Westgate was supposed to


                                             9
provide the amendments in paper form. Further, it is undisputed that the two CD-ROMs
received by the Overtons contained only the outdated versions of the POS as well as other
scanned files. According to testimony presented by a computer expert, the electronic
information was arguably inaccessible and largely illegible. As the trial court found, the
proof demonstrated that by providing only the CD-ROMs, Westgate intentionally
delivered information to the Overtons that was basically unusable.

       In addition, when it was brought to Westgate’s attention in October 2011 that the
Overtons had not received a current and complete POS and desired to rescind the contract
pursuant to Tennessee Code Annotated § 66-32-114, Westgate refused the request.
Although Westgate asserted that the Overtons had received at closing the CD-ROMs
containing the POS, Mr. Barton conceded that it was known within the company that the
CD-ROMs did not contain the post-2006 amendments to the POS and that paper copies of
the amendments had to be provided to the purchaser. This proof demonstrates a willful
violation of the Tennessee Time-share Act.

      The trial court also found that the Overtons were offered gifts of Owners’ Nights
and a foosball table without the proper disclosure in violation of Tennessee Code
Annotated § 66-32-133. This statutory section provides:

       The following unfair acts or practices undertaken by, or omissions of, any
       person in the operation of any prize or gift promotional offer, by any means,
       including, but not limited to, by mail, by telephone, by advertisement or in
       person, for a time-share project are prohibited:

       ***

              (5)    Failing to clearly and conspicuously disclose next to
                     each prize, gift, or thing of value offered or any
                     product offered for sale through the promotional plan
                     the item’s approximate verifiable retail value, . . . .

It is undisputed that, with regard to the promise of a foosball table and unlimited Owners’
Nights, no disclosures were made that listed the respective values of these items.

       Further, the trial court found that the promise regarding unlimited Owners’ Nights
was a fraudulent and intentional misrepresentation by Westgate. Mr. Justice and Mr.
Veverka testified that they had been trained to inform potential buyers of the Owners’
Nights, which they understood to be unlimited additional nights that could be booked by a
timeshare owner at any Westgate resort for $59 per night or more. Mr. Barton testified
that he was generally aware of such a program but that it was beyond his scope of specific


                                            10
knowledge. Ms. Green likewise confirmed that such a program did exist. All parties
conceded, however, that to their knowledge, this program was not addressed in any of the
documentation. Moreover, the letter sent by Westgate’s counsel in November 2011 states
that “these nights must be approved by a manager and are on a per night basis. . . . Mr.
and Mrs. Overton do not have any owner’s nights approved for them.” Thus, as the trial
court found, there is evidence to support the determination that Westgate intentionally
engaged in common law fraud and misrepresentation with regard to the promise of
Owners’ Nights.

       As noted above, a defendant acts intentionally when proceeding with a “conscious
objective or desire to engage in the conduct or cause the result.” Hodges, 833 S.W.2d at
901.    Further, a defendant “acts fraudulently when (1) the person intentionally
misrepresents an existing, material fact or produces a false impression, in order to mislead
another or to obtain an undue advantage, and (2) another is injured because of reasonable
reliance upon that representation.” Id. In this transaction, Westgate allowed its
salespersons to make promises regarding Owners’ Nights that were illusory. Westgate
obviously desired to engage in such conduct in order to sell more timeshares. This
promise was shown to be a misrepresentation of the facts and certainly produced a false
impression, which misled the Overtons into purchasing a timeshare ownership interest.
The Overtons made such purchase while believing they were receiving this additional
illusory benefit, thus acting to their detriment.

       Based on all the proof adduced at trial, the Overtons demonstrated by clear and
convincing evidence that Westgate engaged in conduct with regard to this transaction that
was intentional and fraudulent, and that it willfully violated the provisions of the
Tennessee Time-share Act. For these reasons, we determine that the trial court did not err
in ruling that an award of punitive damages was warranted. Further, although the
Tennessee Consumer Protection Act does not provide for the remedy of punitive
damages, in response to Westgate’s third issue, we determine that the trial court correctly
ruled that Westgate willfully violated this Act as well.

       As applicable to the case at bar, the Tennessee Consumer Protection Act provides:

       (a) Unfair or deceptive acts or practices affecting the conduct of any trade
       or commerce constitute unlawful acts or practices and are Class B
       misdemeanors.

       (b) The following unfair or deceptive acts or practices affecting the conduct
       of any trade or commerce are declared to be unlawful and in violation of
       this part:



                                             11
        ***

                 (5) Representing that goods or services have sponsorship,
                 approval, characteristics, ingredients, uses, benefits or
                 quantities that they do not have or that a person has a
                 sponsorship approval, status, affiliation or connection that
                 such person does not have;

                 ***

                 (12) Representing that a consumer transaction confers or
                 involves rights, remedies or obligations that it does not have
                 or involve or which are prohibited by law; . . . .

Tenn. Code Ann. § 47-18-104 (2013).

       The trial court found that Westgate had willfully violated these provisions of the
Tennessee Consumer Protection Act. We agree that Westgate violated Tennessee Code
Annotated § 47-18-104(b)(12).2 Westgate salespersons were trained to promise unlimited
Owners’ Nights as a right that would be received by the purchaser along with the
timeshare interest. It is undisputed, however, that this promise was not documented in
written form. Further, when the Overtons’ counsel inquired about the Owners’ Nights
promised to the Overtons, Westgate’s counsel responded that the Overtons had not been
“approved” for same. It is clear that Westgate represented that the timeshare interest
transaction conferred rights that were not actually involved, thus violating Tennessee
Code Annotated § 47-18-104(b)(12).

       Following a thorough review of the evidence in this matter, we affirm the trial
court’s findings that Westgate engaged in intentional and fraudulent conduct and that
Westgate willfully violated both the Tennessee Time-share Act and the Tennessee
Consumer Protection Act. We find no error in the trial court’s determination that an
award of punitive damages was warranted.

                              V. Amount of Award of Punitive Damages

      Alternatively, Westgate asserts that the amount of the punitive damage award was
improper and excessive. As our Supreme Court has explained, once a defendant has been


        2
           W estgate did not violate Tennessee Code Annotated § 47-18-104(b)(5) because a timeshare interest is an
estate in real property, see Tennessee Code Annotated § 66-32-103, and is not a good or service as defined in
Tennessee Code Annotated §§ 47-18-103(7) and (18).

                                                         12
found liable for punitive damages, the amount of such damages shall be determined in a
separate proceeding. See Hodges, 833 S.W.2d at 901. When determining the proper
amount of a punitive damage award, the trial court shall consider the following factors
where relevant:

      (1) The defendant’s financial affairs, financial condition, and net worth;

      (2) The nature and reprehensibility of defendant’s wrongdoing, for example

             (A) The impact of defendant’s conduct on the plaintiff, or

             (B) The relationship of defendant to plaintiff;

      (3) The defendant’s awareness of the amount of harm being caused and
      defendant’s motivation in causing the harm;

      (4) The duration of defendant’s misconduct and whether defendant
      attempted to conceal the conduct;

      (5) The expense plaintiff has borne in the attempt to recover the losses;

      (6) Whether defendant profited from the activity, and if defendant did
      profit, whether the punitive award should be in excess of the profit in order
      to deter similar future behavior;

      (7) Whether, and the extent to which, defendant has been subjected to
      previous punitive damage awards based upon the same wrongful act;

      (8) Whether, once the misconduct became known to defendant, defendant
      took remedial action or attempted to make amends by offering a prompt and
      fair settlement for actual harm caused; and

      (9) Any other circumstances shown by the evidence that bear on
      determining the proper amount of the punitive award.

Hodges, 833 S.W.2d at 901-02; see also Tenn. Code Ann. § 29-39-104. The primary
purpose of a punitive damage award is to deter misconduct. Id. at 902.

     In addition, as this Court recognized in Wilson v. Americare Sys., Inc., No.
M2013-00690-COA-RM-CV, 2014 WL 791936 at *2-3 (Tenn. Ct. App. Feb. 25, 2014):



                                            13
After Hodges, another layer of analysis was added due to the United States
Supreme Court case of BMW of North America, Inc. v. Gore, 517 U.S. 559,
116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). As explained in Flax v.
DaimlerChrysler Corp., 272 S.W.3d 521 (Tenn. 2008):

      The Court [in Gore] concluded that due process requires that
      “a person receive fair notice not only of the conduct that will
      subject him to punishment, but also of the severity of the
      penalty that a State may impose.” Accordingly, the Court
      adopted three guideposts for determining whether a defendant
      has adequate notice of the magnitude of the sanction that may
      be imposed. The first and most important guidepost is the
      reprehensibility of the defendant’s conduct. The Court
      indicated that the presence of violence, deceit, reckless
      disregard for the safety of others, or repeated misconduct may
      be aggravating factors that increase the reprehensibility of the
      defendant’s conduct. The second guidepost is the ratio
      between the punitive damage award and the actual harm
      suffered by the plaintiff. Although the Court declined to
      adopt any strict mathematical formula, it repeated the
      suggestion from a previous case that “a punitive damages
      award of ‘more than 4 times the amount of compensatory
      damages’ might be ‘close to the line’” of constitutional
      impropriety. The final guidepost requires courts to compare
      the punitive damage award to civil or criminal penalties that
      could be imposed for similar conduct. “[A] reviewing court
      engaged in determining whether an award of punitive
      damages is excessive should ‘accord “substantial deference”
      to legislative judgments concerning appropriate sanctions for
      the conduct at issue.’” These legislative judgments are
      relevant because they provide defendants with notice of the
      severity of the penalty that may be imposed upon them.

Id. at 537 (internal citations omitted). “When deciding whether a punitive
damages award is excessive to the point that it transgresses constitutional
due process standards, our review is de novo to ensure that the award is
based on an application of the law rather than the jury’s caprice.” Goff v.
Elmo Greer & Sons Constr. Co., 297 S.W.3d 175, 190 (Tenn. 2009) (citing
State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct.
1513, 155 L.Ed.2d 585 (2003)).



                                     14
Wilson, 2014 WL 791936 at *2-3.

        Upon a thorough review of the trial court’s memorandum opinion, we determine
that the trial court properly considered and applied the above-listed factors. With regard
to the nine factors set forth in Hodges, 833 S.W.2d at 901-02, the trial court examined
each factor in turn in accordance with the facts developed at trial. The court engaged in
substantial analysis of the first two factors regarding Westgate’s financial position and the
reprehensibility of the conduct, finding these factors to be the most significant. The trial
court opined that, with Westgate’s appreciable assets and income, it would “take[] a lot of
money to make them feel it.” The court noted that in 2011, Westgate generated income
of $545,568,329 while owning total assets of $1,389,788,000. In support of the punitive
damage award, the trial court observed, “How are you going to deter somebody with that
kind of income? It takes more than a slap on the wrist. What is a lot of money to you and
me is very little money to Westgate.” The court also determined that the conduct of
Westgate had a severe negative impact on the Overtons, that Westgate had engaged in
“high-pressure tactics,” and that Westgate made intentional misrepresentations regarding
the transaction.

       The court next addressed factors three and four, determining that Westgate’s
motivation for its conduct was to sell timeshare interests. Furthermore, Westgate’s
misconduct continued long after the sale as Westgate refused to rescind the contract,
causing the Overtons to incur a greater loss of time and money. In applying factors five
and six, the court found that the Overtons had expended over $136,000 in attorney’s fees
and that Westgate profited from its conduct by making a sale. With regard to factor
seven, the trial court noted that there was no evidence that Westgate had been subjected to
a punitive damage award before. Finally, with reference to factor eight, the court found
that Westgate did not take remedial action or attempt to make amends once the
misconduct became known to it.

       In further support of the award, the trial court discussed the factors elucidated by
the U.S. Supreme Court in BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575 (1996).
Those considerations are (1) reprehensibility of the conduct, (2) the ratio between the
punitive damage award and the actual harm suffered by the plaintiff, and (3) a
comparison of the punitive damage award to civil penalties imposed in comparable cases.
Id. The High Court explained that “trickery and deceit” were examples of conduct
considered to be reprehensible. Id. at 576. As stated above, the trial court herein found
Westgate’s conduct to be exceedingly reprehensible, due to the fact that Westgate made
intentional misrepresentations to the Overtons, willfully violated the Tennessee Time-
share Act, and refused to rescind the contract despite statutory provisions supporting such
rescission.



                                             15
      Westgate contends that the punitive damage award is unconstitutionally
disproportional inasmuch as it is approximately sixteen times the amount of the
compensatory damage award. As explained by the U.S. Supreme Court, however:

      we have consistently rejected the notion that the constitutional line is
      marked by a simple mathematical formula, even one that compares actual
      and potential damages to the punitive award. Indeed, low awards of
      compensatory damages may properly support a higher ratio than high
      compensatory awards, if, for example, a particularly egregious act has
      resulted in only a small amount of economic damages. A higher ratio may
      also be justified in cases in which the injury is hard to detect or the
      monetary value of noneconomic harm might have been difficult to
      determine. It is appropriate, therefore, to reiterate our rejection of a
      categorical approach. Once again, “we return to what we said ... in Haslip:
      ‘We need not, and indeed we cannot, draw a mathematical bright line
      between the constitutionally acceptable and the constitutionally
      unacceptable that would fit every case. We can say, however, that [a]
      general concer[n] of reasonableness . . . properly enter[s] into the
      constitutional calculus.’” In most cases, the ratio will be within a
      constitutionally acceptable range, and remittitur will not be justified on this
      basis. When the ratio is a breathtaking 500 to 1, however, the award must
      surely “raise a suspicious judicial eyebrow.”

BMW, 517 U.S. at 582-83 (internal citations omitted). Further, in Wilson, this Court
affirmed a punitive damage award that was approximately seventeen times greater than
the compensatory damage award. 2014 WL 791936 at *7. This Court also pointed out
that in Goff v. Elmo Greer & Sons Constr. Co., 297 S.W.3d 175, 195 (Tenn. 2009), there
were noted “a number of decisions with higher ratios.” Wilson, 2014 WL 791936 at *7.
Based upon this precedent, we do not find the ratio of punitive damages to compensatory
damages in this case to run afoul of due process concerns.

       Finally, BMW instructs that we must consider the difference between the punitive
damage award and the penalties imposed in comparable cases. 517 U.S. at 583. As
explained by the High Court:

       Comparing the punitive damages award and the civil or criminal penalties
      that could be imposed for comparable misconduct provides a third indicium
      of excessiveness. As Justice O’CONNOR has correctly observed, a
      reviewing court engaged in determining whether an award of punitive
      damages is excessive should “accord ‘substantial deference’ to legislative
      judgments concerning appropriate sanctions for the conduct at issue.”


                                            16
       Browning-Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S., at
       301, 109 S.Ct., at 2934 (opinion concurring in part and dissenting in part).
       In Haslip, 499 U.S., at 23, 111 S.Ct., at 1046, the Court noted that although
       the exemplary award was “much in excess of the fine that could be
       imposed,” imprisonment was also authorized in the criminal context.

BMW, 517 U.S. at 583.

       In the case at bar, the Tennessee Time-share Act authorizes a civil right of action
against a developer who violates the Act. See Tenn. Code Ann. § 66-32-118. It also
provides for the imposition of criminal penalties. See id. The Tennessee Consumer
Protection Act likewise authorizes a civil right of action, criminal penalties, and in certain
cases, treble damages. See Tenn. Code Ann. § 47-18-101, et seq. The trial court herein
found that the treble damage award would have been $113,340. We do not find the
punitive damage award of $600,000 to be excessive based on the civil penalties that could
have been awarded pursuant to the statutes, especially when coupled with the prospect of
criminal penalties as well. In any event, the initial two factors identified in BMW are
often afforded greater weight than the third. See Wilson, 2014 WL 791936 at *7. Upon
careful review, we therefore determine that the punitive damage award of $600,000 was
reasonable, based on applicable factors, and supported by a ratio within a constitutionally
acceptable range.

               VI. Applicability of Tennessee Code Annotated § 29-39-104

        Determining that the punitive damage award was reasonable based on the
applicable factors and constitutional considerations, however, does not end our inquiry.
As Westgate points out, the Tennessee Legislature enacted a statutory cap on punitive
damages in 2011, which is contained in Tennessee Code Annotated § 29-39-104. This
statute provides, in pertinent part:

       (a) In a civil action in which punitive damages are sought:

       ***

       (5) Punitive or exemplary damages shall not exceed an amount equal to the
       greater of:

              (A) Two (2) times the total amount of compensatory damages
              awarded; or

              (B) Five hundred thousand dollars ($500,000);


                                              17
       (6) The limitation on the amount of punitive damages imposed by
       subdivision (a)(5) shall not be disclosed to the jury, but shall be applied by
       the court to any punitive damages verdict;

       ***

       (b) Nothing in this section shall be construed as creating a right to an award
       of punitive damages or to limit the duty of the court, or the appellate courts,
       to scrutinize all punitive damage awards, ensure that all punitive damage
       awards comply with applicable procedural, evidentiary and constitutional
       requirements, and to order remittitur when appropriate.

Tenn. Code Ann. § 29-39-104 (2011).

       Tennessee Code Annotated § 29-39-104 was enacted by Chapter 510 of the Public
Acts of 2011, which states: “This act shall take effect October 1, 2011, the public welfare
requiring it and shall apply to all liability actions for injuries, deaths and losses covered
by this act which accrue on or after such date.” Therefore, Tennessee Code Annotated §
29-39-104 will only apply to the case at bar if the Overtons’ injury or loss accrued on or
after October 1, 2011.

       It is undisputed that the Overtons purchased the timeshare interest at issue on July
12, 2011. This was the date of the initial transaction and the date upon which the various
promises were made to the Overtons. It is also undisputed, however, that the Overtons
did not seek to rescind the contract until October 25, 2011, and their request to rescind
was denied by Westgate via letter dated November 28, 2011.

       In a recent case involving a claim of fraud, this Court explained that: “Under the
discovery rule, a cause of action accrues ‘when a plaintiff discovers, or in the exercise of
reasonable care and diligence, should have discovered, his injury and the cause thereof.’”
See Berry v. Mort. Elec. Registration Sys., No. W2013-00474-COA-R3-CV, 2013 WL
5634472 at *6 (Tenn. Ct. App. Oct. 15, 2013) (quoting Russell v. Household Mort. Servs.,
No. M2008-01703-COA-R3-CV, 2012 WL 2054388 at *5 (Tenn. Ct. App. June 7, 2012).
Therefore, the Overtons’ injury based on Westgate’s fraud did not accrue until it was
discovered by the Overtons. Based on the fact that Westgate’s refusal of the Overtons’
request for rescission did not occur until November 28, 2011, we determine that their
injury did not fully accrue until after October 1, 2011, thus rendering Tennessee Code
Annotated § 29-39-104 applicable to this action.

        Similarly, a claim under the Tennessee Consumer Protection Act accrues when a
plaintiff discovers the unlawful act or practice. See Tenn. Code Ann. § 47-18-110; see


                                             18
also Fortune v. Unum Life Ins. Co. of Am., 360 S.W.3d 390, 402 (Tenn. Ct. App. 2010).
In the case at bar, the Overtons’ claim did not accrue until they discovered that Westgate
was guilty of unlawful acts, and this was not made clear until receipt of the above-
referenced letter from Westgate’s counsel in November 2011, denying that the Overtons
were entitled to Owners’ Nights. Again, Tennessee Code Annotated § 29-39-104 should
have been applied by the trial court to the punitive damage award herein as the injury or
loss did not accrue until after October 1, 2011.

       Pursuant to the language of Tennessee Code Annotated § 29-39-104 (a)(6), the
statutory cap on punitive damages “shall not be disclosed to the jury, but shall be applied
by the court to any punitive damages verdict.” In this case, where the punitive damage
award was set by the trial court after proper consideration of all factors, the court should
have then applied the statutory cap and reduced the punitive damage award to $500,000
in accordance with Tennessee Code Annotated § 29-39-104(a)(5). As stated in Tennessee
Code Annotated § 29-39-104(b), this Court must still scrutinize the punitive damage
award and ensure that it complies with all applicable requirements, as we have done.
Thus, while we find that the trial court properly awarded a reasonable amount of punitive
damages based on all applicable considerations, we must order remittitur of that award to
$500,000 in order to comply with the statutory cap. We therefore determine that the
punitive damage award should be reduced to $500,000 in accordance with Tennessee
Code Annotated § 29-39-104(a)(5).

                               VII. Forum Selection Clause

      Westgate posits that the trial court erred in failing to enforce the forum selection
clause contained in the parties’ contract, which provided that any litigation arising
between the parties would take place in Orange County, Florida. The Overtons assert,
however, that an action brought pursuant to the Tennessee Consumer Protection Act is to
be brought “in the county where the alleged unfair or deceptive act took place.” Tenn.
Code Ann. § 47-18-109(a)(2) (2013).

       The Tennessee Consumer Protection Act further provides:

       (b) Any provision in any agreement or stipulation, verbal or written,
       restricting jurisdiction or venue to a forum outside this state or requiring the
       application of the laws of another state with respect to any claim arising
       under or relating to the Tennessee Consumer Protection Act of 1977 and
       related acts set forth in this title is void as a matter of public policy.

Tenn. Code Ann. § 47-18-113 (2013). Pursuant to this statutory provision, a contractual
forum selection clause “cannot defeat the ability of a Tennessee consumer to bring an


                                              19
action under the [Tennessee Consumer Protection Act] within the appropriate forum in
this state.” See Walker v. Frontier Leasing Corp., No. E2009-01445-COA-R3-CV, 2010
WL 1221413 at *5 (Tenn. Ct. App. Mar. 30, 2010).

       Further, as Westgate concedes in its brief, the Overtons alleged in their complaint
that they were fraudulently induced into entering into the contract, and the trial court
found fraud in the transaction.3 As we have previously stated, “fraud in the underlying
transaction renders a contract clause, such as the forum selection clause at issue here,
unenforceable.” Lamb v. MegaFlight, Inc., 26 S.W.3d 627, 631 (Tenn. Ct. App. 2000).
For these reasons, the trial court properly refused to enforce the forum selection clause
contained in this contract.

                                           VIII. Attorney’s Fees

       Finally, the Overtons request an additional award of attorney’s fees and expenses
on appeal. The Overtons assert that a plaintiff may be awarded reasonable attorney’s fees
incurred during an appeal on a claim brought under the Tennessee Consumer Protection
Act where one or more of the Tennessee Consumer Protection Act’s provisions has been
violated. See Killingsworth v. Ted Russell Ford, Inc., 205 S.W.3d 406, 410 (Tenn. 2006).
Given the sufficiency of the punitive damage award in this case, however, we do not find
it appropriate to grant an additional award of attorney’s fees on appeal.

                                               IX. Conclusion

       For the reasons stated above, we affirm the judgment of the trial court as modified,
reducing the punitive damage award to $500,000. We deny the Overtons’ request for an
award of attorney’s fees on appeal. Costs on appeal are taxed to the appellant, Westgate
Resorts, Ltd., L.P. This case is remanded to the trial court, pursuant to applicable law, for
collection of costs assessed below.




                                                              _________________________________
                                                              THOMAS R. FRIERSON, II, JUDGE


        3
          W estgate argues that the Overtons were required to show that they were fraudulently induced into
accepting the forum selection clause itself, rather than the contract as a whole, in order to invalidate the forum
selection clause, citing Chaffin v. Norwegian Cruise Line, Ltd., No. 02A01-9803-CH-00080, 1999 W L 188295 at
*13-14 (Tenn. Ct. App. Sept. 13, 1999). W e find Chaffin to be inapplicable, however, because its holding was based
on federal maritime law.

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