A lawyer for the Boca Raton, Fla. property urged a Florida federal court to take action against a proposed class of residents and their lawyers in their contract dispute against the club, saying the claims of mismanagement that led to improper and excess fees and dues, and decreased property values, are “baseless.”
A lawyer for Boca West Country Club in Boca Raton, Fla., country club urged a Florida federal court on July 14 to impose sanctions on a proposed class of residents and their lawyers in their contract dispute against the club, Law360 reported, saying the suit is “frivolous” and its claims are baseless.
C&RB reported in May on the lawsuit filed by residents that alleged mismanagement which resulted in members paying “improper and excess fees/dues and having their property values dramatically decreased,” with total losses amounting to $17 million (http://clubandresortbusiness.com/2017/05/class-action-lawsuit-filed-boca-west-fla-cc/).
Larry Corman, a shareholder in the law firm of Greenspoon Marder PA, said counsel for defendants Boca West Country Club Inc. and its Board members Jerold Glassman and Philip Kupperman, as well as for Corman himself, had warned counsel for lead plaintiff Frank Calmes that the suit was without legal merit when the initial complaint was filed, Law360 reported.
The amended complaint was no better, merely doubling down on claims that were made without reasonable inquiry into their factual and legal bases “or for improper purposes” to harass the club, its Board members and its lawyer, according to Corman’s attorneys, Richard W. Epstein and Roy Taub of Greenspoon Marder, in the motion for sanctions, Law360 reported.
“Plaintiff’s claims against Corman are without any legal merit and are plainly deficient,” Epstein and Taub said. “Any reasonable attorney would have known that and, rather than twice file these claims against Corman, conclude that they are frivolous and decline to do so.”
Corman’s attorneys requested an oral argument on the motion and asked the court to impose sanctions against Calmes and his attorneys in the amount of Corman’s attorneys’ fees, Law360 reported.
Also on July 14, Calmes opposed a June 23 joint motion by the defendants to require him to post bond pending the outcome of the litigation and in anticipation of his failure to win the suit, Law360 reported. The club and Board argued that Florida’s Deceptive and Unfair Trade Practices Act provides that a nonprevailing party must be responsible for attorneys’ fees and costs of the prevailing party.
In his response to that motion, Calmes argued that for a bond to be required under Florida statute, a plaintiff’s case must be “frivolous, without legal or factual merit or brought for the purpose of harassment,” and his case does not meet that standard, Law360 reported.
According to the plaintiffs’ suit, when Boca West sold a parcel of vacant land to Akoya Associates LLC, it failed to include a standard “time of the essence” provision in its sales contract, resulting in a five-year building delay. Ultimately, the Akoya units were not timely built, and the club lost $9 million in yearly dues and $8.4 million in initiation fees, the suit claimed.
Leading up to the sale, Glassman and Kupperman supported the deal, allegedly breaching their fiduciary duties to residents at the club, the plaintiffs’ suit said. The suit also noted that Kupperman, who is a tax consultant, is a former managing partner at the accounting firm Arthur Andersen LLP. Meanwhile, Glassman is senior counsel at Fox Rothschild LLP with more than 40 years of experience and was the founder and CEO of Grotta Glassman & Hoffman PC, the suit said.
Given their “vast experience and expertise,” the residents trusted Glassman and Kupperman’s opinion on the sale, the suit said.
To cover up losses from the Akoya deal, the club increased membership dues, decreased refunds and increased fees, the suit alleged. Previously, residents weren’t required to buy a membership, but they could purchase one for $20,000 and receive a $15,000 refund when they sold their property, according to the suit.
But after the Akoya sale, the club required residents to purchase a $70,000 membership, and only $200 of that membership fee is reimbursable if the property is sold, according to the suit. The club also imposed new restrictions limiting unit rentals, the suit said.
As a result of the club’s actions, the suit alleged property values have been decimated and some less-expensive units are now valueless. On average, properties have decreased by $120,000 per unit, and due to the membership fee, some units can’t be sold even for $1, the suit said.