A Lee County Circuit Judge has dismissed part of the Florida Attorney General’s case against Bonita Bay Group.
The case involves the Bonita Springs-based developer’s handling of more than $215 million in deposits it collected from members of its golf and other recreational clubs.
The Attorney General’s lawsuit alleges Bonita Bay Group and its top executives, David and Brian Lucas, engaged in deceptive and unfair practices when the company refused to immediately refund deposits to its resigning members. The developer abruptly dropped its refund policy in November 2008 after seeing a rash of resignations and a run on deposits.
Judge Michael T. McHugh dismissed the claims of deception, but not the claims of unfairness.
“We are pleased that the court dismissed the deception claim, and we remain confident that we will ultimately prevail.” Brian Lucas, president and CEO of Bonita Bay Group, said in a written statement.
A spokesman for the Attorney General’s office was not immediately available for comment about the order.
In his order, McHugh said prosecutors failed to prove deception. However, he left room for the Attorney General’s office to amend that part of the complaint within 10 days of his order, if it wants to move forward with those claims.
Attorney Robert Housel, a former member of Bonita Bay Group’s club at Mediterra who has filed his own lawsuit against the developer, said McHugh’s ruling wasn’t all that surprising. He expects the Attorney General’s case to move forward.
“It can still be a violation of Florida’s unfair sales practices act,” he said.
Though Housel got his $180,000 deposit back after a long wait, he’s still suing for fraud and punitive damages.
In May, attorneys for Bonita Bay Group put on their best defense at a court hearing in Fort Myers.
In court, Bonita Bay Group’s legal team argued there was no deception, just a change in the refund policy because there was no other choice. They said the developer paid the refunds until it could do so no more because of economic hardship, following a nationwide financial crisis.
In his order, McHugh indicated that it was proper to keep David and Brian Lucas as defendants in the case. Because of their positions they can be held personally liable under Florida’s Deceptive and Unfair Trade Practices Act, he wrote.
He denied motions for summary judgment in the case, filed byboth sides. To grant those, he wrote, “the evidence must be so crystallized that nothing remains but questions of law.”
Without a settlement, the case now appears to be headed for a trial. That might not happen until next year.
McHugh is the same judge that entirely dismissed the Attorney General’s first case against Bonita Bay Group, saying it wasn’t detailed enough to support its claims. He gave the Attorney General the right to file a beefed-up complaint, which it did in November.
Since changing its refund policy, Bonita Bay Group has sold most of its clubs to their members. Those who agreed to join the new member-owned clubs signed releases that they would not seek their deposits back with the transfer of ownership.
Others, who didn’t join the new member-owned clubs, have received their deposits back through a lottery program.
In court, the state’s attorneys argued there is no rule that allowed the developer to stop living up to its promise of a refund. They said it’s up to the developer to show it has done no wrong.
Michael Lissack, a former member of the club at Mediterra and one of Bonita Bay Group’s most vocal critics, said he sees the judge’s order as positive.
“He basically signaled to the Bonita Bay people they are going to lose on the unfair practices part, that his judgment is that they’ve lost,” he said.
He said everyone would likely agree that the developer didn’t start out to be deceptive in offering an instant refund policy for its members. The case, he pointed, out does not have to be proved “beyond a reasonable doubt.”
“The AG’s office has not charged them with a crime,” he said. “The standard of proof is a preponderance of evidence. This is a civil case.”
Connect with Laura Layden at www.naplesnews.com/staff/laura_layden.