By: Rob Harris
With over 95 per cent of civil lawsuits never being tried to conclusion, litigation primarily is an effort at generating bargaining chips to be opportunely played by a party as it pursued an optimal settlement.
A great example of this is presented by the dispute between the owner of California’s Ridgemark Golf & Country Club and the Board of Directors of the homeowners’ association where the club is situated.
Last year, the course owner closed 18 of the facility’s 36 holes, indicating plans to turn the real estate into housing. That precipitated a lawsuit by the homeowner’s association, who alleged that the club owner’s easement over the roadways would not extend to such a real estate development. The course owner counterclaimed.
The resulting litigation, according to a published report, imperils the course owner’s contract to sell the remaining 18 holes to a third party purchaser. If the sale were to fall through, the owner has hinted it will close the remaining eighteen holes as early as this summer.
Entering the fray are the home owners themselves, many of whom are members of the golf club, and who also are concerned about their property values should the course close.
As the constituents of the homeowners association Board of Directors, a number of the home owners are upset that the Board commenced the litigation without taking a vote of the members. Thus, the Board finds itself in the uncomfortable position of either losing the litigation or ostensibly driving off the contract purchaser of the golf course, and then having to rationalize the result to the home owners. Thus, the Board has announced that, before it will settle the litigation, it will seek the approval of the home owners.
Meanwhile, the contract purchaser holds the legal right to abandon the project if the litigation is not settled by May 15, with this right providing the purchaser with leverage to negotiate better terms, if it chooses to do so.
The presence of so many diverse, yet intertwined, interests is fertile territory for settlement and the parties are saying the right things. According to the attorney for the homeowners’ association, “there have been some meetings and potential settlement discussions between the parties in the last couple of months.Unfortunately, as of this point in time, we have not been able to resolve the case. However, [the association] remains optimistic that a mutually beneficial resolution to this matter that ensures the long term health of the Ridgemark Estates community can be reached.”
The golf course owner echoed these sentiments in referring to the settlement negotiations: ”It’s ongoing. Knowing that a buyer is trying to step in and wanting to move forward, there seems to be an effort to work something out.”
In all likelihood, there will be a settlement within days. If not, and if the buyer walks, the litigation will be long, messy and expensive.