A federal magistrate has ordered several property owners in Lake County's luxury Bella Collina community to pick up their developers' legal tab, which is expected to be hundreds of thousands of dollars.
U.S. District Magistrate Judge Philip Lammens on Tuesday ordered four property owners to pay the legal expenses, saying their complaints that DCS Investment Holdings illegally controlled the property owners association were not supported by facts.
"The complaint lists twelve crimes under Florida law that defendants are alleged to have committed with no explanation of when or how these crimes were committed," he wrote in his order this week.
Most of the original half dozen complainants have dropped off the lawsuit but are still ordered to pay the developers' legal fees, some of which are based on rates of $400 an hour. Property owner Michael Choo, of CS Business Systems Inc., recently wrote an apology letter for participating in the lawsuit, saying he did not know all the facts or the law.
Orlando attorney Tim McCullough represented the property owners and said they are weighing their options. The courts have appeared to side with the developers, he said.
"They are certainly going to declare victory but, at the end of the day, they still have to deal with the public perception of what they've done," he said.
The judge ordered the developers' attorneys to refile attorney fees with more detail, which McCullough estimated to be in the "hundreds and hundreds of thousands of dollars."
The wrangling over Bella Collina legal fees is the latest in years of litigation between property owners and the developer, who prevailed in about 400 lawsuits against property owners who were delinquent paying on association fees.
Many owners purchased lakeview lots, sometimes for $1 million, from original developer Bobby Ginn just before the real-estate downturn of 2007. After the market crashed, DCS bought the golf club and other Bella Collina property for about $10 million in 2012, taking charge of the association and its mounting debt from unpaid association fees.
Some owners accumulated debt of more than $100,000 on vacant home sites.
Last March, McCullough represented the group of owners in the federal complaint charging that developers took over the property owners association illegally. A federal judge earlier this year determined that McCullough should refile his 100-plus-page claim with more specificity about his allegations, which included racketeering.
This week, the attorney said at least one owner continues to wage a legal battle in state court over association fees. He added that it's uncertain whether the federal lawsuit will continue because only one couple — James and Virginia Shelton — remain parties to the litigation. They could not be reached for comment.
"The question is whether to continue on in the case without the financial support of all the parties," McCullough said. "They've been threatened in a lots of ways and watched their dream neighborhood become decimated."
Bella Collina resident Randall Greene, who is part of the development team and charged in the lawsuit, declined to comment. DCS was founded by Washington Redskins co-owner Dwight Schar.
How much of a toll the years of litigation has taken on the gated, rolling-hill golf course development of 1,900 acres is uncertain. Last year, it had more than a dozen sales and about half were for more than $1 million. Five years earlier, it had about half that sales activity, county sales records show.