UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
OCALA DIVISION
CS BUSINESS SYSTEMS, INC., a foreign NO. 5: 17-CV-86-OC-40-PRL for-profit corporation, at al.,
Plaintiffs, v. PLAINTIFFS’ AMENDED
MOTION FOR CLASS CERTIFICATION DWIGHT C. SCHAR, et al. AND MEMORANDUM
Defendants. ______________________________/
PLAINTIFFS’ AMENDED MOTION FOR CLASS CERTIFICATION AND SUPPORTING MEMORANDUM
Plaintiffs, CS Business Systems, Inc., James L. Shelton, Virginia Shelton, Brad Heckenberg, and Lana Heckenberg (collectively “Plaintiffs”), by and through the undersigned, pursuant to Fed. R. Civ. P. 23, move for class certification of the instant proceeding, basing their Amended Motion on the facts and authorities set forth in the following memorandum of law, incorporated fully herein.
PLAINTIFFS’ MEMORANDUM OF LAW IN SUPPORT OF CLASS CERTIFICATION
I. INTRODUCTION
Plaintiffs submit this Memorandum of Law in support of their Amended Motion, pursuant to Fed. R. Civ. P. 23, to certify this proceeding as a class action.
The proposed classes are defined as follows:
Class I.
Bella Collina lot owners during the period of June 27, 2012 to the present.
Approximately 350-400 individuals and entities are eligible for this proposed class. Proposed class members are easily ascertainable through county records.
Excluded from this Class are developers Ginn-LA Pine Island, Ltd. LLLP and DCS Real Estate Investments, LLC; all employees, subsidiaries and parent companies of Ginn-LA Pine Island, Ltd. LLLP and DCS Real Estate Investments, LLC; all employees, subsidiaries and parent companies of named preferred builders for homes within the Bella Collina Community; and any other developer lot owners.
Class II.
All current Bella Collina lot owners.
Approximately 95 individuals and entities are eligible for this proposed class. Proposed class members are easily ascertainable through county records.
Excluded from this Class are developers Ginn-LA Pine Island, Ltd. LLLP and DCS Real Estate Investments, LLC; all employees, subsidiaries and parent companies of Ginn-LA Pine Island, Ltd. LLLP and DCS Real Estate Investments, LLC; all employees, subsidiaries and parent companies of named preferred builders for homes within the Bella Collina Community; and any other developer lot owners.
Class Representatives and Counsel
Plaintiffs James L. Shelton, Brad Heckenberg and Michael Choo as managing member of CS Business Systems, Inc., also move to be appointed representatives of the Class. Plaintiffs have standing as they are owners of lots situated within the community and this action is brought against those who have acted as or on behalf of the developer and Property Owners Association.
Plaintiffs also move for the appointment of the following firms as Class Counsel pursuant to Fed. R. Civ. P. 23(g): Widerman Malek, PL, and E. Timothy McCullough Attorney at Law.
Widerman Malek will assume the role of lead counsel in this litigation. Widerman Malek is a national law firm with offices in Melbourne Florida, Orlando Florida, Alexandria, Virginia, and Evansville, Indiana. With 28 attorneys, Widerman Malek brings the bandwidth of attorneys and support staff to properly manage a class action case of this magnitude. Widerman Malek also has the financial capabilities to support this case throughout the litigation. Named partners Scott Widerman and Mark Malek have both been successfully involved with prior class action litigation in California. Many of the firm’s partners and attorneys have tremendous experience in both Federal Court and in complex business litigation courts, including land use and real estate related issues. Further, Widerman Malek currently represents several homeowner associations, and is well versed with the applicable laws governing these organizations. Widerman Malek has the ability to, and will devote whatever resources are required to successfully represent all members of the proposed class in this litigation. Widerman Malek is also able and willing to seek additional of-counsel support if necessary. Widerman Malek will work closely with attorney E. Timothy McCullough in properly managing this case.
- Timothy McCullough has practiced law for 35 years and is currently licensed to practice in Florida, Pennsylvania and Massachusetts. Mr. McCullough has extensive experience in both Federal Court and complex business litigation courts. Mr. McCullough has also been involved with prior class action litigation in the US District Court in South Carolina, involving breach of contract and ERISA claims. Mr. McCullough is also well versed in Florida homeowner’s association law and has also represented numerous homeowner’s associations. Mr. McCullough will work closely with Widerman Malek in managing this case.
Both proposed counsel are sufficiently qualified to properly prosecute, manage and fund this case as a class action.
A. Factual Background
Plaintiffs commenced this action against the above-captioned Defendants in March 2017. Plaintiffs aver that on June 27, 2012, DCS Real Estate Investments, LLC (“DCS”) purchased the distressed in-development community of Bella Collina, a luxury community located in Montverde, Florida, from Ginn-LA Pine Island LTD, LLLP, the original developer.
The purchase included all of the land within the confines of the community, the Bella Collina Club, LLC and Ginn Bella Collina Golf, LLC, the community golf course. Once the land conveyance was complete, Defendants conspired to create a monopoly in the sale and development of real estate within the Bella Collina community.
Defendant developer DCS illegally usurped control of the Property Owners Association (“POA”), despite the statutory percentage of community conveyances for turnover to lot owners having been reached on August 29, 2005. Usurping control of the POA allowed for the passage of various self-serving special assessments subsequent to the passage of amendments to the Covenants, Conditions and Restrictions (“CC&R”) of the community. These amendments and assessments were improper ab initio, as a proper vote by its members was never held and no member authorization was obtained. The most egregious amendment allowed for the POA and DCS to enter into an “Assignment and Assumption Agreement” which allowed for the POA to act as a debt collector on behalf of the Bella Collina Club.
Acting in this capacity, the POA filed approximately 400 lawsuits against lot and home owners to coerce surrender of the individual lots and homes. The surrendered lots and homes were then subjected to various conveyances in which the title encumbrances were cleared through the usage of tax deeds and POA write-offs, with DCS finally obtaining an unencumbered title. DCS has obtained approximately 700 lots, for little or no payment, and has been advertising the sale of the lots and homes with numerous incentives individual lot owners cannot offer. Further, DCS has placed numerous obstacles in the path of potential sales from individual lot owners, including the requirement that lot and home owners obtain permission from DCS to sell their individual properties.
In their Complaint, Plaintiffs have pled the elements of a class action pursuant Fed. R. Civ. P. 23 (Doc. 1, ¶ ¶ 196 – 211) and now submit this Memorandum in support of the instant Motion for Class Certification pursuant to the same.
B. Statement of Issues Before the Court
Whether the proposed classes satisfy the requirements of Rule 23(a) and (b) of the Federal Rules of Civil Procedure.
C. Summary of Argument
The proposed class definition meets the requirements of Fed. R. Civ. P. 23(a) and (b) and class certification is proper. The prospective classes are easily definable. The named Representatives have standing to bring forth these claims, and the claims of the class are live.
The proposed class satisfied the four requirements of Rule 23(a): (1) the proposed classes, the first totaling approximately 350-400 individuals and entities and the second totaling approximately 95 individuals and entities, is so numerous that joinder is impractical; (2) there are questions of law or fact common to the proposed class of lot and home owners, including whether DCS illegally usurped control of the POA through the usage of illegal amendments to the CC&R and implementation of special assessments with an ultimate goal of recovering lots to monopolize resale within the community; (3) the claims of the named Plaintiffs are typical of the class claims; and (4) the named Plaintiffs will fairly and adequately protect the interests of the class because they are aggrieved lot and home owners who have been subjected to the same amendments and special assessments illegally set forth by DCS and the POA, and have suffered the same damages as the proposed class members.
The proposed class also meets the requirements of Rule 23(b) because Rule 23(a) is satisfied and: (1) prosecuting separate actions by individual class members will create a risk of inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; (2) the party opposing the class has both acted and refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; and (3) the questions of law and fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.