Champion Forest homeowners brought suit against Cypress Forest Public Utility District (PUD) last month, April 2010, challenging the PUD’s “bait and switch” maneuver of using promises to induce voters to approve a park bond to purchase Raveneaux Country Club property, and then reneging on the promises when it came time to close on the deal with JP Raveneaux (the developer).

On Friday, May 14, 2010, 295th District Court Judge Caroline Baker held a hearing. The PUD argued to Judge Baker that she could not decide immediately (she doesn’t have “jurisdiction”) whether to issue an injunction against the PUD using taxpayer bond money because the PUD hasn’t yet decided 100% to use the bond money (the PUD argued they could use some other source of money, like a loan, etc.)

Judge Baker’s Decision

• The case was dismissed without prejudice based on a determination that the claims were not “ripe” until the PUD commits to use the park bond money.

• The homeowners can re-file the suit against the PUD as soon as the PUD decides to use park bond money.

• If the case is re-filed, Judge Baker will give us an immediate hearing on a temporary injunction to prevent the PUD from use park bond money to close on a deal that changes the original acreage and land-use restriction terms.

The PUD’s Next Steps

• The PUD can agree to any deal with the developer that does not use park bond funds. The PUD’s attorney has stated that the PUD could use revenue bonds (that do not require voter approval) or bank financing.

• But, if the PUD changes the terms of the original deal and wants to use park bond funds, the homeowners plan to re-file the lawsuit, and Judge Baker will grant an immediate hearing on a temporary injunction.

• If the PUD signs a contract with the developer that changes the original acreage and land-use restrictions, it runs the risk that Judge Baker will stop them from using bond funds.

• Practically speaking, this means that the PUD should have an alternate funding source secured (other than taxpayer bond funds), or it risks a breach of contract lawsuit from the Developer.

Champion Forest Homeowners’ Next Steps

• Our clients will closely monitor the PUD’s actions, and plan on re-filing the lawsuit if the PUD votes to use park bond funds to close on a contract with the Developer that differs from the original acreage and land-use restriction terms.

• Because the Court has not ruled on the merits of our case, and the Judge has indicated her willingness to take up a re-filed suit immediately, the PUD is on notice that it should proceed with caution and respect for its promises to the voters.

• Our clients are pleased with this outcome, because the community is now aware of these developments.

• As always, our clients continue to extend their offer to the PUD and developer to work this out so everyone wins and we avoid secrecy, uncertainty, and further litigation.

Resources

Proposed Agreed Order submitted to the Court by the parties