Pelican Sound residents sue WCI

Published June 25, 2004
Article Courtesy of The News Press

Homeowners in the Pelican Sound Golf and River Club in Estero filed a lawsuit Thursday against WCI Communities Inc., claiming among other things accounting irregularities.

The suit claims that the developer, which broke ground on the community off U.S. 41 south of Corkscrew Road in 1998, failed to account for homeowner association funds that should have been turned over when residents took ownership in January 2003.

The 23-count complaint was filed in Lee County Circuit Court by the law firm Becker & Poliakoff.

Homeowners association attorney Herbert Brock did not return a call for comment on Thursday.

Charlie Bishop, president of the homeowners association board, said they found discrepancies when reviewing association documents after the turnover.

However, he said, problems began four years ago, when the turnover committee couldn’t get WCI to provide them with community plan documents.

“The reserves all the members paid into were missing,” Bishop said. “WCI refused to provide the documentation. After the turnover, it’s too late to say, ‘We’re not going to take the property.’ Now, we’re obliged to our members to make the community whole.”

Ken Plonski, WCI’s vice president of public relations, said the developer has not yet been served with court documents. He said he could not speak in detail about a potential lawsuit.

“I can tell you we have been working for many months now with the resident board members at Pelican Sound to address the issues they have raised,” he said. “Our perspective is that there are a few central issues with respect to their complaints.

“We were hopeful we could reach a negotiated agreement on those issues. Unfortunately, it does not appear now that’s going to be the case.”

The community consists of 1,299 single-family, condominium and villa homes ranging in value from $174,000 to $600,000. Bishop said some of the lawsuit claims are monetary — an estimated total of several million dollars.

“Because we haven’t been able to get the documents, we’re not certain of the exact amount,” he said.

Plonski confirmed that the reserve funds are one of the issues being negotiated.

“The number they have arrived at is considerably different than the number we feel is payable,” he said, refusing to state specific amounts.

Bishop said other claims are structural, such as bridge, drainage and irrigation system problems. He said WCI has been working on fixing the roof over the club’s restaurant.

“It’s not uncommon in association turnover for the developer to return to the community to polish it up, in some respects,” Plonski said. “That speaks to our willingness to work with them.”

However, the lawsuit takes a different view. The list of allegations includes:

• The reserve fund collected by WCI and paid into by members for future repairs and maintenance was empty.

• WCI marketing and development expenses were subtracted from accounts funded by homeowners for the operation of the association.

• Payment due to the association from cable television service provider MediaOne was remitted to WCI but never turned over to the homeowners.

• WCI filed incorrect personal property tax returns, incurring taxes, penalties and filing fees the association was required to pay.

• The developer failed to collect assessments from owners of homes it was using as models and from homes owned by WCI employees, creating a monetary shortage.

• WCI built golf course bridges that did not meet Occupational Safety and Health Administration standards, requiring costly upgrades before the club could obtain insurance.

• WCI accepted deposits for events scheduled after turnover but failed to turn the money over to the new association.

Bishop said negotiations are ongoing, and he is hopeful that they will be able to reach a settlement outside of court.