Florida attorney general ends legal battle with Bonita Bay Group

David Lucas, chairman of Bonita Bay Group:

David Lucas, chairman of Bonita Bay Group:

Brian Lucas, president/CEO and vice chairman of Bonita Bay Group.

Photo by Bonita Bay Group

Brian Lucas, president/CEO and vice chairman of Bonita Bay Group.

— The Florida Attorney General’s case against the Bonita Bay Group is over.

A Lee circuit judge on Friday approved a compromise that will halt a more than two-year legal battle over the Bonita Springs-based developer’s handling of more than $249 million in deposits it collected from members of its golf and other recreational clubs.

The Attorney General’s Office has resolved the case against the company and dismissed all claims against its top executives.

The lawsuit alleged the company and its executives engaged in deceptive and unfair practices when they refused to immediately refund deposits to its resigning members. The developer abruptly dropped the refund policy in November 2008 after seeing a rash of resignations and a run on deposits.

David Lucas, chairman of Bonita Bay Group, and Brian Lucas, the company’s vice chairman, were dismissed from the case this week, with all claims against them dropped.

The lawsuit ended in a compromise, with no admission of wrongdoing. Bonita Bay Group has in turn agreed to a handful of conditions.

The developer is required to disclose in writing its procedures for changing the rules and regulations of club memberships in the future. The company has agreed not to offer refundable club deposits based on the sale of future memberships without revealing how members would get repaid.

“We stopped offering refundable memberships ... So that’s not an issue for us. That’s not something we plan to offer in the future,” Brian Lucas said by phone Friday.

The company will contribute $150,000 toward the cost of the Attorney General’s investigation. Neither the company nor its officers will have to pay any fines or other penalties to the Attorney General’s Office or club members.

A spokeswoman for the Attorney General couldn’t immediately be reached for comment Friday.

Brian Lucas described the lawsuit as overblown.

“We’re thrilled with putting this behind us. And we are very pleased with the outcome,” he said.

Continuing with the lawsuit would have been “an unnecessary waste of time and resources” after the claims were dropped against him and his father, he said.

The Attorney General first filed a lawsuit in Lee Circuit Court in March 2010. Circuit Judge Michael McHugh dismissed it a few months later, saying it wasn’t detailed enough to support its claims. But he gave the Attorney General’s Office the right to file a new complaint, which it did.

In July of last year, McHugh dismissed the claims of deception brought in the new case, saying the Attorney General failed to prove it.

In court, Bonita Bay’s legal team argued the developer had no other choice than to change the refund policy. The company lawyers told the judge Bonita Bay paid the refunds until it could do so no more because of economic hardship, following a nationwide financial crisis.

In June 2009, the Attorney General’s Economic Crimes Division started getting complaints from members who reported the developer had stopped giving back deposits in seven of its communities in Lee and Collier counties. Since then, Bonita Bay Group has sold most of those clubs to its members. Those who agreed to join the new member-owned clubs signed releases that they wouldn’t seek their deposits back with the transfer of ownership.

Most members who didn’t join the new clubs have received their deposits back.

At one time, Bonita Bay Group had 2,847 of its members on resign lists, awaiting refunds. Now, there are 53 and most belong to the club at Verandah in Fort Myers, which the developer still owns. For that club, the average wait time to resign is 18 months since a new policy was adopted that allows one member out for every three that join.

In a statement, David Lucas said the sale of its clubs and an injection of more than $100 million into the company by its shareholders enabled it to refund deposits while continuing operations.

“We’ve worked very hard these last several years, through extremely difficult conditions in the real estate market and at considerable cost to my family, to accomplish these results,” he said.

Some disgruntled members filed their own civil lawsuits against Bonita Bay Group seeking their deposits back after the developer changed its refund policy. One of them is Michael Lissack, a former member at the club in Mediterra who has been one of Bonita Bay Group’s most vocal critics.

“I still have not been paid my refund,” he said. “It’s stupid.”

He’s moving ahead with his lawsuit in Collier Circuit Court, seeking damages on top of his refund.

“I don’t actually give a hoot,” he said about the end of the Attorney General’s case. “It doesn’t affect me one way or the other.”

* * * * * Posted earlier * * * * *

The Florida Attorney General's case against the Bonita Bay Group is over.

On Friday, a Lee circuit judge signed off on an agreement that will end a more than two-year legal battle over the Bonita Springs-based developer's handling of more than $249 million in deposits it collected from members of its golf and other recreational clubs.

The case against the company has been terminated. In turn, Bonita Bay Group has agreed to disclose its procedures for changing the rules and regulations for club membership and has agreed not to offer refundable club deposits based on future memberships without revealing the rules under which members would get repaid.

David Lucas, chairman of Bonita Bay Group, and Brian Lucas, the vice chairman, were dismissed from the lawsuit on June 19. All claims against them were dropped.

The company will contribute $150,000 toward the cost of the Attorney General's investigation. Neither the company nor its officers will have to pay any fines or other penalties to the Attorney General or club members.

Return to naplesnews.com later today for more on this developing story

__ Connect with Laura Layden at www.naplesnews.com/staff/laura_layden

© 2012 Naples Daily News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Comments » 3

HowAboutThat writes:

The way to reduce government spending is to get rid of Attorney General's Office. What a waste - - spending so much time and money on the illegal activities of Bonita Bay Group and then walking away from the lawsuit so they can waste their time and money on something else. Same thing at the federal level - - wasting time and money to prosecute Roger Clemens. Who really cares about that case other than the lawyers trying ot make a name for themselves? Just shut down the legal system since it doesn't work.

jaq writes:

Correction: Bonita Bay Club members who did not join the new club did not receive their deposits back; they received only 30% of their "fully refundable" deposits.

SunshineBoy writes:

No matter how you color it they promised refunds and then broke that promise. They never set aside a fund to handle refunds and co mingled the member deposits with their corporate money. They should pay a penalty far greater than $150K which is less than 1 membership in one of their clubs.

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