Case update, summer 2018

Published: July 25, 2018

Where does the Lakes Golf Course case stand now?

A superior court judge issued a permanent injunction on May 31 ordering the owners of the Lakes Golf Course to restore the property as a golf course. Judge John R. Hannah Jr. concluded that the golf course owners broke the contract with area homeowners that requires the course owners to operate a golf course on the property. The golf course owners have filed notices to appeal the decision.

What did the homeowners gain when the judge granted the injunction against the developers? 

The injunction requires the golf course owners to share with homeowners their plans for restoring the course , and to do a good job in a timely manner. If the plan is incomplete or progress is slow, the homeowners have the right to return to the judge, who could then spell out a plan and a time schedule. The injunction sticks with the Lakes Golf Course property regardless of course ownership.

Why hasn’t restoration begun? 

The True Life Cos., which proposed Ahwatukee Farms, and Wilson Gee, who sold the course to True Life, have filed notices of appeal with the Arizona Court of Appeals. Their attorneys must file a brief explaining their position by Sept. 11. The restoration will likely be on hold during the appeals process.

How likely are True Life and Gee to prevail in their appeal?

Tim Barnes, attorney for the homeowners, has said he believes that the golf course owners have a weak case.The appeals court will not consider any factual matters, which were argued before the judge last summer and set down in a ruling by the judge. In other words, neither True Life nor Wilson Gee will be able to re-argue whether the golf business has changed or claim that they didn’t violate the CC&Rs.Instead, the appeals court may only consider whether the judge correctly applied the law to the facts. Wilson Gee and True Life are expected to argue that the judge did not have the authority to order the course restoration. They may argue that the judge overreached his power by issuing an injunction.

How long will the appeal take?

It will take at least several months. Wilson Gee and True Life must set out their arguments for appeal in a brief due Sept. 11. The response from Barnes, attorney for homeowners Eileen Breslin and Linda Swain, is due 30 days later. Soon after that, Wilson Gee and True Life will respond to the legal brief filed by Barnes.The appeals court will then decide whether to hear the case or let it stand.

Who owns the property now?

The Lakes Golf Course property is in the process of reverting to Wilson Gee under a trustee’s sale scheduled to occur August 21, 2018. A trustee’s sale is a non-court-involved form of mortgage foreclosure. The trustee’s sale is occurring because True Life owed Wilson Gee a balloon payment of about $8.25 million in June and True Life did not pay it.Because True Life had failed to secure permission to develop the property from the homeowners, True Life chose to not make its final, large payment and will let the property to revert to Wilson Gee via the trustee sale.Wilson Gee and his investor group will likely be the only bidders on the golf course property in the trustee’s sale, and thus, end up owning the property again. Because the debt on the property is so high, it is unlikely that any other bidder would come forward.