Mobile home owners lose appellate ruling and 18-year battle to buy Naples Estates land

Article Courtesy of The Naples Daily News

By Greg Stanley    

Published December 5, 2016


"We're pleased it's over, and we're pleased with the result," Bobo said. "We look forward to making this a good community for the residents."

The case began after residents, who own their homes but rent the lots beneath them, learned their park for residents 55 and older was sold for $11.6 million to another buyer. The homeowners association had right of first refusal to buy the park off Rattlesnake Hammock Road.

The homeowners sued the companies that bought the park, Ell-Cap/75 and Manufactured Home Communities, which are owned by Norton Karno, a California lawyer who represented the Church of Scientology for years.

The homeowners originally won in court. More than a decade after the suit was filed, Circuit Court Judge Hugh Hayes ruled the homeowners had the right to buy the park for $14.4 million. The appeals court upheld the ruling in May 2015.

But the sale never happened.

The homeowners were unable to close on the property by an October 2015 deadline. They argued they couldn’t meet the deadline because Karno’s companies took out a mortgage on the property and stopped paying the debt in the early 2000s. That debt ballooned to more than $20 million over the years as the case wound through court.

Stanton argued the homeowners couldn’t be expected to close on the land, and that a bank couldn’t be expected to loan money, if they didn’t know whether the homeowners association would be responsible for paying down that ever-increasing unpaid mortgage on top of the purchase price.

Naples Estates residents circulate through their community clubhouse during an election on Tuesday, Oct. 7, 2014, in East Naples.

“Nobody ever accused (Karno) of being stupid, that is for sure,” Hayes said.

He dismissed the case when the deadline passed, saying homeowners had missed their chance. The appellate court now has upheld that ruling.

Resident Brian Pignetti called the ruling “a sin.”

“It’s a shame,” Pignetti said. “A community is destroyed and the future is uncertain.

"This shows you that someone can violate a contract but then create all these loopholes if he has the money to go on a 19-year defense," Pignetti said. “Then after 19 years, the high courts make a ruling like this without explanation. He got away with it.”

The lawsuit spawned a tangled slew of others, including a dispute over a 69 percent rent increase that homeowners said was retribution and numerous evictions and home demolitions. Those lawsuits will continue.

The court also still has to decide who will be responsible for paying 18 years’ worth of attorneys' fees, a tab that hasn’t yet been calculated.

Although the homeowners association didn’t end up with the property, it did win in court on the central question of the case – that it had right of first refusal to buy the park, Stanton said.

“My client won the case,” Stanton said. “Both parties got knocked down, but it was the homeowners association that prevailed.”

The case bitterly divided many of the residents who live in Naples Estates, between those who wanted the suit dropped and those who wanted to fight.

Pat Fogell, who has lived in the park for more than 15 years, said she is relieved it’s over.

“I’m very glad,” Fogell said. “Now the owner can start making improvements they haven’t been able to make because of this.

"There’s going to be a new pool, new homes. It does look promising.”