Adams v. Raintree Vacation Exchange

702 F.3d 436 (2012)

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Adams v. Raintree Vacation Exchange

United States Court of Appeals for the Seventh Circuit
702 F.3d 436 (2012)

RW

Facts

Several hundred individuals (buyers) (plaintiffs) paid Desarrollos Turisticos Regina, S. de R.L. de C.V. (DTR) for timeshare interests in Mexican vacation villas that DTR had yet to build. Each buyer signed a purchase contract that contained a forum-selection clause requiring any dispute to be litigated in Mexico. DTR subsequently sold out to a corporate subsidiary of Raintree Vacation Exchange, LLC (Raintree) (defendant). The villas were never built. The buyers accused Raintree of conspiring with Starwood Vacation Ownership, Inc. (Starwood) (defendant) to defraud the buyers by taking the buyers’ money and using it to repay Raintree’s debt to Starwood. The buyers sued Raintree and Starwood in a United States federal district court. Raintree and Starwood invoked the DTR contracts’ forum clauses and argued that any such suit must be filed in a Mexican court. The district court granted the companies’ motion to dismiss the case. The buyers’ appeal to the Seventh Circuit centered on the fact that neither Raintree nor Starwood was signatory to the DTR contract.

Rule of Law

Issue

Holding and Reasoning (Posner, J.)

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