Property Owners Sue White Bluff Resort and Developer for Fraud

Landowners forced to pay for improvements to developer's private property

Sep 24, 2009, 13:46 ET from Rose Walker, L.L.P.

DALLAS, Sept. 24 /PRNewswire/ -- Two landowners at the White Bluff Resort on Lake Whitney, Texas, have filed a federal RICO class-action lawsuit against the resort and its developer based on claims that the defendants are pocketing payments intended to benefit White Bluff property owners.

Lake Whitney is located approximately 90 miles southwest of Dallas. The suit was filed in the U.S. District Court for the Northern District of Texas in Dallas.

Plaintiffs Betty Bridgewater of Arlington, Texas, and Jerry P. Williams of Azle, Texas, are among approximately 6,000 lot owners who have purchased property at White Bluff Resort, lured by lake views, two 18-hole golf courses, a restaurant and other amenities. Though the development dates back to 1990, only about 10 percent of the lots have homes.

White Bluff Resort is owned by Dallas-based Double Diamond-Delaware Inc., and the company is led by its president and majority shareholder, R. Mike Ward. Instead of further developing the resort, the lawsuit says that Ward and Double Diamond are gaining revenue by assessing annual fees from the landowners that must be made payable to the White Bluff Property Owners Association (WBPOA), a tax-exempt non-profit group that Ward and Double Diamond control.

Each year, these mandatory fees for food and beverages, golf course maintenance, and other expenses bring in more than $4 million. The lawsuit says those association fees are then fraudulently transferred to White Bluff Club Corp, another Double Diamond company.

"This is a case of a real estate developer who has abused his power by assessing ridiculous yearly fees to line his own pockets rather than continue to develop the real estate," says attorney Martin Rose of Rose Walker, L.L.P. in Dallas, who, along with attorney Barbara T. Hale of Blanscet Sutherland Hooper & Hale in Addison, Texas, represents the plaintiffs. "The people buying the lots are just everyday folks with dreams of retiring on the lake, and this company is stealing their dreams."

Since 2004, the WBPOA also has assessed each White Bluff landowner an annual food and beverage fee (currently $200) and issued credits redeemable only at White Bluff golf courses, restaurants and other White Bluff facilities. But, the lawsuit states, Double Diamond retains the money when property owners don't use the credit in a given year, something that happens regularly since many lot owners live out of state. In fact, about 90 percent of property owners are non-residents.

According to the filing, property owners who raised questions about the assessments or tried to change the makeup of the association board have been sued by Double Diamond for defamation. In June, a Dallas County state court jury found in favor of one landowner and the court later entered a judgment that the food and beverage assessments violated the association's bylaws and state law. Even so, Double Diamond continues to send bills for the assessments, including a mailing in July.

Property owners who fail to pay assessments have found that another Double Diamond company, United Equitable Mortgage, had reported to credit agencies that the property owners' accounts were delinquent, even though no such delinquencies existed, according to the lawsuit.

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For more information on the class action lawsuit involving White Bluff Resort, please contact Mark Annick at 800-559-4534 or

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SOURCE Rose Walker, L.L.P.