Local judges, ex-judge sue
Florida condo developer
By Chip Drago
Mobile Bay Times
Two Mobile judges and a former judge here last week won a temporary restraining order barring developers from collecting on letters of credit totaling $225,000 on pre-construction units in a Panama City Beach, Fla. condominium project.
Circuit Judge Thomas Baxter of Chatom ruled that neither Regions Bank nor Banktrust should honor calls made on three letters of credit for $75,000 each provided by presiding Mobile County Circuit Judge Charles Graddick, District Judge George N. Hardesty and former District Judge Judson Wells.
Also last week, an attorney for the judges filed a lawsuit in Panama City against Ocean Reef Developers II contending that the Bay County, Fla. company had violated the Interstate Land Sales Full Disclosure Act. ORD's failure to comply with provisions of the act allowed the judges' to rescind their contracts, according to the complaint.
Baxter set a hearing here at 1:30 p.m. Friday on the judges' motion for a preliminary injunction.
In granting the temporary restraining order, Baxter noted that the banks were merely in the middle in the dispute between the judges and the true beneficiaries of the letters of credit -- ORD, Bay County Land and Abstract and C.B. Harbour, IV. Lawyers for those parties are expected to attend the hearing Friday.
Baxter entered his order after a teleconference with attorneys Dan McCleave representing the judges and Chuck Holtz for Regions and David Quittmeyer for Banktrust.
Baxter found that "it clearly appears from the specific facts shown by the verified complaint that immediate and irreparable injury, loss or damage will result" if the letters of credit were allowed to be called.
In asking for the TRO, the judges included a summary final judgment reached earlier this year in a similar dispute brought against ORD by John J. Herber and Matthew L. Westerman.
"The facts before the court are quite simple," Bay County Circuit Judge Michael Overstreet declared. "The plaintiffs entered into a contract with the defendant for the purchase of a pre-construction condominium unit to be constructed on Panama City Beach in Bay County, Florida."
The judge noted that ORD failed to provide necessary paperwork to the plaintiffs as required under the Interstate Land Sales Full Disclosure Act which applies to developments of more than 100 units.
The judge also acknowledged questions over the statute of limitations which he resolved in favor of the plaintiffs.
The plaintiffs' cause of action against ORD is "well taken and the contract between the plaintiffs and the defendant should be rescinded and the the defendant shall return to the plaintiffs all of plaintiffs' deposit and direct the escrow agent to release the plaintiff's letter of credit."
Overstreet also directed ORD to pay $1,555 in attorney fees and court costs.
McCleave said the complaint really spoke for itself. Holtz declined comment. A message was left with Quittmeyer's office at Hand Arendall early Monday afternoon and the call was not immediately returned.
Brian Hess, the judges' and Wells' attorney in Bay County, Fla., as well as the prevailing attorney in the previous suit against ORD, was not immediately available to comment.
Initial efforts to reach attorneys for Harbour, ORD and Bay County Land and Abstract were not successful.
Wells said he would do as he instructs his clients to do: refer questions to your attorney; in his case, either McCleave or Hess. Both Hardesty and Graddick indicated they had nothing to add beyond the assertions in the complaint.
