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Lawsuit ruling could save club millions

A panel of appeals judges overturns a ruling that granted class status to members' case.

By JOHN FRANK
Published October 1, 2006

The 5th District Court of Appeal has rejected a class-action lawsuit filed in 2003 by seven Black Diamond Club members, potentially sparing the exclusive golf community from owing millions of dollars in damages.

The appellate ruling does not prevent individual club members from filing suit, but it still represents a major victory for Black Diamond Properties and its developer-owner, Stan Olsen.

In an opinion issued Friday, a three-judge panel from the court reversed Circuit Judge Patricia Thomas' determination in April 2005 that the group of seven plaintiffs represented the interests of all 500 club members.

If Black Diamond lost, it could have faced about $17-million in damages, the product of 500 members asking for a refund of their golf and country club memberships, which cost an average $35,000.

"Class-action status makes the case involve a whole lot more money," said Edward Marod, the lead attorney for Black Diamond. "Higher costs and higher risk."

John Crabtree, the attorney who represented the club members, said he plans to seek clarification of the ruling and will petition the Florida Supreme Court to take the case. He said the opinion conflicts with previous decisions made by the state's appellate courts.

"They Black Diamond officials should be very happy," he said. "I was certainly disappointed. ... I respectfully disagree with the court."

The case stems from a suit filed Oct. 30, 2003, that claimed the management company for the Black Diamond Ranch in Lecanto "deceived and tricked" residents with misleading advertisements about their ability to own a stake in the club.

They argued that they bought nothing more than an "illusory option" and will never actually own a portion because of the way Black Diamond Properties structured the memberships.

In making its ruling, the appellate panel said that a class-action suit is reserved for a group with common issues. The judges decided that this case requires proof from each member of the lawsuit, making it unmanageable as a class-action complaint.

"At the very core of the plaintiffs' complaint is the allegation that oral and written misrepresentations took place in 500 separate oral contract transactions spanning many years and involving numerous sales personnel," Judge Vincent G. Torpy wrote for the panel. "Finally, given the varied circumstances and span of time over which the transactions occurred, defenses applicable to some plaintiffs will not be applicable to others."

Concurring were Judge William D. Palmer and Chief Judge Robert J. Pleus, who also wrote a brief concurring note.

"While I am sympathetic to the trial court's desire to dispose of these numerous claims, the conclusion reached by the majority is a correct one under current law governing class certification," Pleus wrote.

Steve Haines, a Black Diamond resident, led the charge for club members, along with Richard Conboy and Tom Howell. Reached Friday, Haines said the appellate court's ruling doesn't mean the end of the dispute.

"We absolutely will press forward," he said. "We are not deterred at all."

John Frank can be reached at jfrank@sptimes.com or 860-7312.

[Last modified September 30, 2006, 21:11:54]