White Bluff Owners Sue Developer Over Use of Property Owner Fees, Says Rose Walker, L.L.P

Lawsuit says development is nothing more than a means to pocket fees

Aug 22, 2011, 12:42 ET from Rose Walker, L.L.P

DALLAS, Aug. 22, 2011 /PRNewswire/ -- More than 450 property owners at the White Bluff Resort on Lake Whitney, Texas, have filed lawsuits against development owner Double Diamond-Delaware Inc. based on claims that the company collected millions in fraudulent property owners association fees.

The lawsuits filed in state district courts in both Dallas and Hidalgo counties target Dallas-based Double Diamond, its CEO and president R. Michael Ward of Highland Park, Texas, who owns over 90 percent of the company, and multiple additional defendants in the Dallas area.

The Hidalgo County plaintiffs say Double Diamond targeted them with mailers and promised gifts that included free golf clubs and stays at the resort's inn in exchange for "tours" of the property located 70 miles south of Fort Worth.  In reality, the plaintiffs say customers were treated to high-pressure sales pitches where Double Diamond employees confined them in a "closing room" for hours in order to monitor their conversations and adjust the sales pitches accordingly.  According to the lawsuits, Double Diamond's salespeople were instructed that potential buyers had to refuse their pitches 10 separate times before they would be allowed to leave the room.

After purchasing lots at White Bluff, buyers are automatic members of the White Bluff Property Owners Association. Customers were told the association was controlled by property owners, but the group was and continues to be controlled by Double Diamond and Mr. Ward.  Association members were subject to a host of fees, including a yearly maintenance fee of almost $1,000, a golf assessment and an annual $250 "use-it-or-lose-it" food and beverage charge.

According to the lawsuits, the fees are nothing but revenue-generators for Double Diamond, which charges the association $1.6 million each year to maintain the resort's golf course, which Double Diamond and Ward own.  Plaintiffs say Mr. Ward's control of the association has included rigged elections and alterations in association by-laws that have kept him in power.

Those attempting to sell White Bluff lots have found little or no market for the properties despite Double Diamond's promises that no customers would lose their investments.  Some lot owners who have attempted to simply walk away have seen Double Diamond foreclose on the property and use its United Equitable Mortgage financing arm to create huge credit problems for customers.

"This is nothing short of a nightmare for the people who've been duped into buying these lots and it's just wrong, plain and simple," says attorney Martin Rose of Rose Walker in Dallas, who represents the property owners.  "We are determined to continue pursuing this case until we get a jury to fix this."

In addition to the property owners' lawsuits, Double Diamond and Mr. Ward are being investigated by the Office of the Attorney General for the state of Kentucky related to a development similar to White Bluff named The Falls.  

Rose Walker, L.L.P., is a premier trial law firm, focusing on complex civil litigation.  The firm represents businesses and individuals, and its many major courtroom victories have helped Rose Walker earn a national reputation for excellence.

To learn more about the firm, please visit http://www.rosewalker.com.

For more information on the lawsuits involving White Bluff Resort, please contact Mark Annick at 800-559-4534 or mark@androvett.com.

SOURCE Rose Walker, L.L.P