EAST NAPLES — More than two dozen senior citizens from Naples Estates mobile home park filled a Collier County courtroom last week, hoping for a Christmas gift: An end to their 14-year legal battle.
They eagerly listened as Collier Circuit Judge Hugh Hayes heard arguments from their attorney, A.J. Stanton, and the park's lawyer, J. Allen Bobo, over their motion to allow them to take title to their East Naples mobile home park.
Their hopes were dashed again when the judge agreed with Bobo that a ruling would be premature because he only had days to prepare to argue such a large issue. However, Hayes said Tuesday's hearing allowed him to see their current positions and they could file the motion again within the next 30 days.
"Well, it's good food for thought … and gives me an idea where the parties are coming from," Hayes said as the seniors sat listening, many on cushions they'd brought to soften the courtroom's hard benches.
Afterward, they were upset there still is no end in sight.
"I feel we made progress, but it's not quite fast enough to satisfy me because, simply, it's been a long time," said 84-year-old Barb Brown, a 25-year homeowner and the association's president.
Susie Setser, 66, who has lived there 12 years with her husband, Jack, said it always appears they're moving forward, but they don't.
"It just gets delayed constantly," Setser said. "You get tired of it."
Ralph Mazzella, 72, a five-year homeowner who pays higher rent on the lot than the earlier homeowners — $685.35 monthly compared with about $500 — hoped he and his wife, Stella, would see the dispute end.
"I don't want to wait 15 or 20 years and then I'll be dead," Mazzella said.
The 484-home park for residents 55 and older, located at County Barn and Rattlesnake roads, was part of a bundled package of 39 mobile home parks owner Jerry Ellenburg wanted to sell for roughly $390 million in the late 1990s. It was valued at $11.6 million — a price cited in a 1997 agreement outlining the homeowners' right of first refusal to buy it from Ell-Cap/75, Ellenburg's company.
Residents weren't aware of the pending sale to Manufactured Home Communities, a company owned by Norton S. Karno, until a homeowner discovered it in the Collier County records. They sued Ell-Cap/75 in 1998, arguing they had the right of first refusal to buy the park and the right to purchase and operate it themselves.
Over the years, as the lawsuit dragged on, their monthly rents increased, including a hefty $281 jump in 2007, an 83 percent rise that surpassed the maximum of 6 percent in their prospectus. That prompted a second lawsuit that's also pending.
In March 2009, Collier Circuit Judge Hugh Hayes ruled the purchase price would be based on the park's value on Feb. 24, 1998, when residents sued the mobile home park's then-owner Ell-Cap/75 to state their intent to purchase the park and exercise their right of first refusal if it were to be sold.
In 2008, Hayes ruled they had the right to buy the park. Their lead attorney, Lee Collins, lined up willing lenders. The next year, the judge ruled the purchase price would be based on the value on Feb. 24, 1998, when they sued. Last year, after days of testimony from appraisers, the judge set the price at $14.4 million, well over the $11.8 million residents hoped for.
Residents' attorney Stanton has argued that Karno has manipulated numbers to benefit himself, including increasing the park's income to $2.4 million to garner a higher purchase price and then lowering it, after the judge set the price, to claim there are no rents or profits that would be payable to residents after a purchase. Karno provided documents showing losses every year except 2007. One expense that caused losses is interest on a $6 million mortgage he stopped paying, prompting a default and interest to accrue.
Stanton has questioned whether that loan really exists, noting Karno's company reported no outstanding mortgage when he tried to collect money from Collier County government during an eminent domain procedure.
By law, residents must pay him interest on the purchase price and Karno must turn over rents and profits generated from park operations since they sued. But the growing interest increases what the homeowners must pay, in addition to lowering — or possibly eliminating — rents and profits Karno must give them.
Stanton has argued Karno stopped making mortgage payments so interest would grow at the 18 percent default rate. He contends Karno knew if the loan debt, now roughly $20 million, wasn't paid the sale wouldn't move forward because the mortgage couldn't be satisfied. However, Stanton said that tactic backfired because the loan maturity date was 2004 and under Florida law, the mortgage terminated five years later.
Residents hope that means they could acquire the park for nothing, except paying their 14 years of attorney fees and expenses.
"If we can't pay it, that's the 800-pound gorilla in the room," Stanton said of the purchase price, telling the judge it could be transferred subject to the existing loan. " … It's obvious the note's not being paid for some reason. … The reason is to throw a poison pill to frustrate this order."
An angry Bobo shot back: "Your honor, we believe the motion is nonsensical."
He contended the homeowners had opportunities to appeal, but didn't even contest the purchase price.
"The court made a ruling the homeowners would have to be ready, willing and able to buy," he said. "As we stand here today, there is no evidence before the court that they even took a vote to buy, much less have the funds."
The seniors nudged each other, angry, knowing they had voted and the judge ruled they didn't yet have to show they are ready, willing and able to purchase because the owner never provided an amount or terms of an agreement.