Lakes Course case heading for yet another showdown

Posted: January 16, 2020 / Source: Ahwatukee Foothills News


The stage has now been set for yet another showdown in two homeowners’ 6-year-old fight to have the Ahwatukee Lakes Golf Course restored after their attorney asked the Arizona Supreme Court to the appeal filed by owner Wilson Gee and former owner The True Life Companies.

Attorney Tim Barnes last week urged the high court to turn down their request for a review of an Arizona Court of Appeals decision, calling the owners’ arguments “hollow.”

Barnes directed his 14-page argument top two points made by attorneys for Gee and True Life. They have argued that forcing the restoration of the course violated the U.S. Constitutional prohibition of slavery and that the appellate court misconstrued the meaning of Conditions, Covenants and Restrictions governing the 101-acre site.


True Life and Gee assert that the CC&Rs permit the owner to “abandon, demolish, cease the use of” any golf-related activities there.

The high court is under no time constraints in rendering a decision on whether it will accept the case for review. Its review staff will examine the Gee-True Life petition and Barnes’ response and make a recommendation to the Supreme Court at some point in the next several months.

If the Supreme Court grants the request, it would set a schedule for the two sides to submit briefs. Those briefs can be longer than the 3,500-word limit lawyers for both sides have been working under in this appeal stage. 

If the high court rejects the request to review the lower court ruling, the legal action will shift back to Superior Court, where Barnes is expected to revive his request that Gee and True Life be held in contempt for ignoring the original January 2018 order that the course be restored.

That in turn could prompt Gee to follow through with his threat to simply walk away from the course by filing for bankruptcy – an action that in itself can take months to resolve.

Gee closed the course in 2013, claiming he was losing money and that a golf course cannot be profitably operated there.

Homeowners Linda Swain and Eileen Breslin filed suit a year later and in the meantime, Gee sold the course in 2015 to True Life. The company gave Gee a $750,000 down payment on the purchase price of $9 million.

True Life had proposed an agrihood called Ahwatukee Farns with plans to build about 165 single-family houses and townhomes along with a five-acre farm, a new campus for Desert Garden Montessori, a café and other amenities.

But to implement that plan, True Life needed just over half the Lakes’ approximate 5,400 homeowners to agree to changing the CC&Rs. Despite a nearly two-year campaign to win those votes, True Life fell far short and Gee eventually foreclosed on the $9 million note, retaking possession of the course.

 

In his response to the request for review, Barnes ripped the positions of both Gee and True Life, stating that Gee had been planning to sell the course to a home developer since at least 2008 – two years after he paid $5.6 million for Ahwatukee Lakes and the Ahwatukee Country Club and that True Life knew what it was getting into when it agreed to buy the site nine years later.

“The trial court found that ‘[t]here was no evidence that the golf course could not  have been operated profitably in 2008,’” Barnes wrote, noting that Superior Court Judge John Hannah also found that the “evidence did not show that Bixby could not have operated the golf course profitably with adequate maintenance, at any point in time before Bixby closed the course and stripped it.”

As for True Life, Barnes said, the company “had no intention of reconstructing the golf course to put it back in the condition it was in as of May of 2013” and that it “purchased the golf course for $9 million with the intention of developing the Golf Course for residential or commercial use.”

He cited the testimony of two True Life executives, one of whom said “there was ‘no chance’ TTLC would build a stand-alone golf course” and the other who testified that the company bought it “with eyes wide open” on the campaign it would have to wage to win enough homeowners to its side.

As for True Life’s argument that it would be forced into “involuntary servitude” if it was ordered to restore and run a golf course, Barnes told the high court, “TTLC made the business decision to purchase the golf course which would, upon purchase, bind TTLC to comply with the 1992 CC&Rs.”

“By itself, that voluntary decision made with full knowledge of the risks totally undermines (True Life’s) ‘involuntary servitude’ argument,” he added, arguing:

“In the face of these facts, an ‘involuntary servitude’ argument is, at best, hollow. The involuntary servitude argument cannot be taken seriously given TTLC’s admitted gamble that it could shed the restrictive 1992 CC&Rs by investing substantial sums of money in, first, a community effort to vote for its plan to change the Golf Course and, failing that effort, seeking a trial court order approving a change to the 1992 CC&Rs.”

https://www.ahwatukee.com/news/article_3ce4280a-37c5-11ea-80ef-03bf90e3582f.html

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