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Legal Update 3-21-17

The following is an update on Legal actions in Deer Creek. As we are able, we have continued to provide you with updates on the status of all of these situations. We ask that you read thru this update in its entirety as we are facing yet another lawsuit. However, while this is not the news we want to give you please keep in mind that the community continues to improve, most major infrastructure items have been attended to, we see demonstrations of community spirit in the events & activities taking place, the amenities are being improved, golf play is at a level that we can’t keep the golf carts available and last but not least we are in the black and have been in the black for several months. This Board will continue to move the community forward and continue to conduct itself in a professional manner.

As we reported in the past we have a malpractice lawsuit against the attorneys and the realtor are based on the legal advice received concerning the purchase transaction.

Should we prevail in the malpractice lawsuit the entire community would benefit from any financial remedies that might be received.

All you need to do is look around in almost any direction in the park and you will clearly see how far we’ve come in a short three years.

We have heard that we should get rid of the lawyers and just sit down and talk. We want to assure you that it has always been the Boards intent to resolve issues thru informal discussions however Board members are not making decisions in a vacuum. This is why we will continue to seek the advice of legal counsel.

Some owners have expressed concerns about legal expenses in the past and we have managed this very closely. However we think you can now see why it is so vitally important to seek legal counsel.

We are however, advising you that we will indeed have new and increased legal expenses.

We will be providing you additional updates and additional information as soon as possible.

Corporation Legal Committee

The Corporation has a Legal Committee which is made up of current & previous Board Members. This Committee was elected by the Board of Directors. The knowledge that this Committee continues to bring to the legal actions being addressed is critical and as such the new Board has voted to keep this committee in place until such time that the Legal issues are resolved or the Board of Directors votes to make changes. This is a huge commitment for everyone, especially for previous Board members who have agreed to serve.This volunteer board, as is the case with previous volunteer boards, has busted their proverbial butts and operated with the highest level of integrity with the single goal in mind of improving the Deer Creek Community for the benefit of EVERYONE. Having said this, this Board does not take these lawsuits, including the recent personal lawsuits, lightly and each individual Board member has the right to exercise their rights to take additional action beyond the defense being provided by our Insurance company attorneys. The newest Lawsuit was filed, by 27 owners in Regal Pointe and 1 owner in Osprey Pointe. The suit includes serious, personal allegations against all current and past Board members. We will vigorously defend the Corporation and its Board members. We have appreciated the support we have received from the majority of the community and we will need your continued support as we work through yet another legal situation. We realize that information is being posted on various Facebook pages but it is important to understand while several of these sites use some portion of the DEER CREEK name in their title these are not pages managed nor endorsed by the DEER CREEK Corporation and the Boards policy will continue to be to not use these sites as a form of communication, nor will we directly respond to Facebook postings.This update will include previously reported items to insure continuity of reporting.

In September 2016, ALL previous volunteer Board members received a letter advising them they too were going to be sued.Over the last several months there have been continual rumors that the suit was going to be filed.We feel it’s important that every resident in the community be aware of this lawsuit and the potential impact it will have on the community financially, the individual Board members , will further divide the community and will have long term impact on all of us. For Individual board members the receipt of this letter has been devastating as it is so personal and so targeted accusing them of very significant wrongs.

We find this extremely offensive especially since the stated goals of the boards have been to move the entire DEER CREEK community forward for the betterment of ALL owners.

We are going to begin our update with Regal Pointe as it represents a new lawsuit.

Regal Pointe

The most recent lawsuit that has been brought forward is by a group of residents in Regal Pointe and it includes personal lawsuits against every past & current board member. PLEASE BE CLEAR the lawsuit has been filed by specific INDIVIDUALS which are outlined in the suit, and NOT THE REGAL POINTE HOA, nor the entire Regal Pointe community.

While we are aware of the suit and that there have seen postings of the suit on various Face Book pages, due to the changing nature of who was on the suit both on the Plaintiff & Defendant side and the changing nature of the scope we delayed advising our owners of the suit until we had an accurate accounting.

The history is as follows:

We received notice from a lawyer representing owners in Regal Pointe in the September time frame. The notice identified them as non-corporate members (no names) the communication advised the intent of to sue each of the individual board members as board members and to sue the corporation.

A consistent tenant of the lawsuits is the area of Assessments and what can be legally charged. The Corporation and as such the Board Members have a responsibility to charge for assessments based on what the governing documents allow us to do in. We are required to ensure that we are covering all existing expenses, projected expenses and building our reserves. All decisions have been & continue to be made with this in mind and with the advice & counsel of our attorneys.

The points being raised include our rights to allow for the discount to corporate members, to charge for the Golf Course, Legal Expenses and our right to maintain and to repairs to the Common elements of the community without a vote of the community and serious claims against the Board members including conspiracy, breach of fiduciary responsibilities!!!!

Regal Ridge

– The Corporation Board has been trying to resolve issues as it relates to assessments we feel are due from Regal Ridge since 2015 with a goal to resolve without extensive legal involvement/expenses. Several meetings have been held this year and we have still been unable to resolve or move the needle on some of the major issues. We are now at the point where members of the Board are being deposed by the Plaintiffs council.

– Following is some of the background:

– On 2/8/16 we sent supporting documentation to our Regal Ridge Corporate members
outlining all of the meetings we had trying to resolve our differences. There is a copy available for review in the office. If you would like to review you can make an appointment with the Office Manager. Since the time this summary was created we have had additional meetings with a goal of trying to come to resolution.-  We developed, proposed and entered into a partial payment agreement in hopes that we could resolve our issues and at the same time reserve our rights to the balance of what we feel is owed. We did not come to this decision without the guidance of our Legal team

–  We met with the Regal Ridge Board on multiple occasions and could not come to an agreement

–  We continued with the partial payment agreement, including an extension of same , again with an eye on trying to resolve our differences

–  When we had made no progress, we cancelled the partial payment agreement at the end of 2015.

–  We met again in April of 2016 and while we cannot discuss the terms of the discussions per strict legal guidance, we were prepared to try to resolve to come to some agreement

–  A key point which we have been unable to resolve is that of the number of lots which Regal Ridge feels we should be using as the divisor to calculate what is owed.

–  That number has changed frequently and they claim it is based on the total number of lots in the Deer Creek Golf And Tennis RV Resort, Master Plan, including Phase 1 and all future phases or units as planned in the public records of Polk County, Florida.

–  This includes communities that were never built. The actual construction of their divisor is unknown since they never produced the documents that they obtained their information from.

–  We have a responsibility for assessing at a rate to cover all projected expense, actual
expenses and to build a reserve to cover future expenses. To agree to this higher number would impact the entire community. Again we did not come to this position without legal counsel and significant reviews of the governing documents throughout the community.-  Based on this, although suing at any level was never an action we wanted to take, we counter sued the Regal Ridge Corporation.

–  We continue to hope that we can resolve this without going to court and will keep you up to date as we get new information which we can share.

– Costs related to this defense are largely covered by our Insurance however there will be ongoing legal costs as our attorneys work with the Insurance company attorneys to understand our position. Both are working to minimize this expense.-

– Thru out this process we have continued to include Regal Ridge in all initiatives such as the PUD Modification , HOA Board President meetings, Committees, Music Licensing, have continued to try to work to come to an agreement. We have been advised that the representative for the Communication Committee has resigned and the Regal Ridge Board choice not to participate in the purchase of the Music Licensing.

-We have continued to be sensitive to our Corporate Members in Regal Ridge and while we have recently announced that access to Common Area Recreational amenities will be restricted to members in good standing we have put measures in place to allow members to get their discount and to become members in good standing.

Malpractice

As previously communicated, the Corporation filed a lawsuit against Lifestyle Choice Reality, William D. Gorman , William Robert Korp and Scott Edward Gordon, Esquire individually and Lutz Bobo & Telfair, P.A. For those owners who were not here during the acquisition phase, this was the team we worked with and sought counsel from before we purchased the community.

Shortly after purchasing we began to uncover things that we felt we should have been advised on prior to purchase. After careful review & evaluation we determined that we
should seek new counsel. In Dec of 2014 we met with Saxon & Gilmore (attorneys) and reviewed the history of the purchase. When they stepped in they needed to do a complete review of what we had purchased, what our rights were as to who we could charge for what and evaluate what information we should have been provided vs what we received and issues that we were facing. After an extensive review we reached out to a Malpractice firm who reviewed the situation and agreed to take this case on a contingency basis. During this entire process it took time and legal spending. We were precluded from discussing any of this before the complaint was filed.

At this point we continue to work thru discovery phase where information is being requested and provided. This is a normal part of the process; however there have been delays due to multiple attorney changes and difficultly in scheduling. We have continued to try to resolve this outside of the Courts.

If you would like to view both the status and the cases:

-To view go to: https://pro.polkcountyclerk.net/PRO/

-Click on public access

– Verify that you are not a robot

– Click on Public Access

– Select Civil as Court type

– Regal Ridge enter case # 2016CA000858000000

– Malpractice enter case # 2016CA002832000000

– Regal Pointe enter case# 53 2017 CA000614

Download this update in PDF: Legal Update 3-21-17