Lawyers sued Boca West Country Club and three of the club’s leaders in a $500 million federal class action lawsuit last week on behalf of Frank Calmes who owns a unit in the Hammocks at Boca West condominiums. The class action indicates it represents over 3000 people who purchased property at Boca West Country Club.
One critical element of the claim appears to be alleged mismanagement of the new Akoya development going on within the club. The lawsuit says that the defendants mishandled that agreement by not insisting on a “time is of the essence” clause, that this delayed the project by five years, and that the lost revenue caused shortfalls leading to large increases in membership costs, which then made the properties harder to sell and reduced property values by $500 million. Property value depreciation is an inevitability (this article by property valuers details the ways it can occur and how to mitigate it) but this sheer level of depreciation is alleged to have been avoidable if the clause had been included in the project.
There are condos for sale now in Boca West for as little as $500, with 13 currently active for $10,000 or less.
The lawsuit includes other grievances charges for locker rentals with no refunds after the lockers were demolished.
We see some odd details in the lawsuit. There’s a concept in federal lawsuits called “diversity jurisdiction” and, as we read it, it fails to properly allege diversity (it doesn’t indicate any parties are out of state). That should be minor as it is likely there are property owners in Boca West who are residents of other states.
Also the claim about Akoya seems odd. If they had never reached a deal on Akoya the club still would have not received the revenue from the project. That “lost” revenue amounts to only $17 million. For both reasons we don’t see how that connects to $500 million in reduced property value.
There’s more to the story and we will likely write a follow-up in the next few days, and/or update this article. We reached out to the local attorney who filed the lawsuit, Ron Kaniuk, but he declined comment. Kaniuk is working on the case with an attorney from New York. We also reached out to defendant Larry Corman, who is an attorney, but we haven’t heard back yet.
The full complaint filed in federal court is below: