BRADENTON – The civil lawsuits StayTerra Vacations filed against Kiri Stewart and Jennifer Warren-Kaleta were dismissed on June 18 by 12th Judicial Circuit Judge Charles Sniffen, but the door remains open for StayTerra to amend its original lawsuit complaints.
The original lawsuit complaints filed with the 12th Judicial Circuit Court in Bradenton named StayTerra Vacations, Prime Vacations and GSP Prime Holdings as the plaintiffs. One lawsuit named Stewart and several rental property-related LLCs she is or was associated with as the defendants. One lawsuit named Warren-Kaleta and several rental property-related LLCs she is or was associated with as the defendants.
It has been noted in court documents and stated during court hearings that Kiri Stewart is the current partner of Shawn Kaleta and Jennifer Warren-Kaleta is Shawn Kaleta’s former wife.
Shawn Kaleta is not named as a defendant in either lawsuit, but his actions and involvement are frequently referenced in the complaints.
According to the lawsuit complaints, on or around Sept. 18, 2024, GSP, through StayTerra, closed on a transaction with the founders, owners and certain other seller entities to acquire a majority stake in Prime Business. The lawsuit complaints identify Shawn Kaleta and Roman Eckert as the Prime Business owners and founders. The complaints allege a breach of contract for the $105 million consideration StayTerra paid Prime Business in exchange for the exclusive right to collect management fees for the properties for a minimum of seven years.
According to the lawsuit complaints, the Prime Business owners/founders also agreed to five-year no-compete provisions. The lawsuits allege those no-compete provisions were violated.
JUDGE’S ORDER
In his written order that granted the defendants’ motion to dismiss, Sniffen stated, “The motion is hereby granted, and the complaint is hereby dismissed without prejudice. Plaintiffs shall have 20 days to amend their complaint in conformity with this order.”
Regarding the legal term “without prejudice,” the Cornell Law School website states, “When a court dismisses a claim but leaves the plaintiff free to bring a subsequent suit based on the same grounds as the dismissed claim.”
StayTerra representative Elizabeth Chaconas told The Sun on July 1 that StayTerra declined to comment about any possible future legal action.
In his dismissal order, Sniffen cited multiple issues with the original lawsuit.
“(It) does not specifically allege whether Kaleta and/or Eckert were signing the agreement as ‘Founders of the Prime Business,’ as authorized signatories on behalf of the individual LLCs that are alleged to own each of the properties, or some combination of both. These allegations shall be clarified in any amendment,” Sniffen’s order states.
“The court rejects the defendants’ argument that the allegations of the complaint, even if accepted as true, fail to state a cause of action for breach of contract based upon an alleged violation of one or more terms of the agreement. The defendants suggest that the allegations of the complaint are insufficient to establish that StayTerra and/or GSP have standing to prosecute breach of contract claims for violation of the agreement in their own names,” the order states.
The order notes that the plaintiff must prove that the defendants’ conduct “misled guests and distorted the vacation rental market” and “plaintiffs had to mitigate the harm to guests and the public by preventing double-booking and disruption to reservations.”
The order states, “These short plain statements of ultimate fact do not appear in the complaint and cannot be adequately gleaned from the cited paragraphs.”
In his order, Sniffen stated the 97-page complaint, which included 418 numbered paragraphs, is replete with evidentiary facts and impertinent allegations.
“The court may strike redundant, immaterial, impertinent or scandalous matter from any pleading at any time. It is hereby ordered that any amended pleading filed in this action shall include only a short, plain statement of the ultimate facts showing that the plaintiffs are entitled to relief and shall avoid the inclusion of unnecessary background details,” Sniffen stated in his order.
LAWSUITS AND DISMISSALS
The defendants’ motions to dismiss the lawsuits were the subject of a June 4 Zoom hearing conducted by Sniffen.
Attorney Megan Michalski represented Stewart and Warren-Kaleta at the hearing. Michalski claimed that since Stewart and Warren-Kaleta did not sign the contract with StayTerra, and were not parties to the contract, they cannot be bound by the contract. Michalski also stated the contract does not bar the transfer of rental properties and the self-management of those properties.
Anthony Paduano, of the New York City-based Paduano and Weintraub law firm, represented the plaintiffs (GSP/StayTerra) during the June 4 hearing.
“The plaintiffs allege that, in short, they have been swindled,” Paduano said. “Mr. Kaleta is the signatory on the agreement as the agent for the LLCs that are being named as defendants.”
Sniffen later issued his order in favor of Michalski’s legal arguments.
