White Bluff Owners Sue Developer Over Use of Property Owner Fees, Says Rose Walker, L.L.P

DALLAS, Aug. 22, 2011 /PRNewswire/ -- More than 450 property owners at the White Bluff Resort on Lake Whitney, Texas, have filed lawsuits against development owner Double Diamond-Delaware Inc. based on claims that the company collected millions in fraudulent property owners association fees.

The lawsuits filed in state district courts in both Dallas and Hidalgo counties target Dallas-based Double Diamond, its CEO and president R. Michael Ward of Highland Park, Texas, who owns over 90 percent of the company, and multiple additional defendants in the Dallas area.

The Hidalgo County plaintiffs say Double Diamond targeted them with mailers and promised gifts that included free golf clubs and stays at the resort's inn in exchange for "tours" of the property located 70 miles south of Fort Worth. In reality, the plaintiffs say customers were treated to high-pressure sales pitches where Double Diamond employees confined them in a "closing room" for hours in order to monitor their conversations and adjust the sales pitches accordingly. According to the lawsuits, Double Diamond's salespeople were instructed that potential buyers had to refuse their pitches 10 separate times before they would be allowed to leave the room.

After purchasing lots at White Bluff, buyers are automatic members of the White Bluff Property Owners Association. Customers were told the association was controlled by property owners, but the group was and continues to be controlled by Double Diamond and Mr. Ward. Association members were subject to a host of fees, including a yearly maintenance fee of almost $1,000, a golf assessment and an annual $250 "use-it-or-lose-it" food and beverage charge.