Class Action Suit Filed Against Marion County Development

Wednesday, January 28, 2009

A $13.5 million class action lawsuit has been filed against developers of the Sequatchie Pointe development in Marion County.

The suit filed in Marion County Chancery Court by attorneys Bill Killian and Valerie Epstein says lots were sold in the development, but steps were not taken to get various approvals for the project.

It also says that the project does not yet have water service.

Here is the full complaint:

IN THE CHANCERY COURT OF MARION COUNTY, TENNESSEE

DONALD BIRD AND WIFE, PATRICIA *

BIRD, JOHN HALLMAN AND WIFE, *

SHIRLEY HALLMAN *

*

Plaintiffs, * DOCKET NO.: ______________

v. *

*

SEQUATCHIE MOUNTAIN, LLC, * JURY TRIAL DEMANDED

AND JOE J. DETWEILER AND J.J. *

DETWEILER ENTERPRISES, INC. *

AND BRADLEY L. WATSON AND *

DAN GRABER AND JOHN BARRACK *

*

Defendants. *


CLASS ACTION COMPLAINT


Come the Plaintiffs, through their attorneys, and on behalf of the Class of persons who contracted or purchased property from the Defendants, and sue the Defendants, based upon the following:

PARTIES AND JURISDICTION

I.

That at all times relative hereto, the Plaintiffs are residents of various states of the United States of America.

a. That at all times relevant hereto, the Defendant, Sequatchie Mountain, LLC, is a limited liability company, organized and existing under the laws of the State of Tennessee and may be served through its registered agent, CT Corporation System, 800 South Gay Street, Suite 2021, Knoxville, Tennessee 37929.

b. That all times relative hereto, the Defendant, Joe J. Detweiler, is a resident of the State of Ohio and may be served at 2814 Edison Street, NW Uniontown, OH 44685.

c. That all times relative hereto, the Defendant, J.J. Detweiler Enterprises, Inc., is an Ohio corporation but doing business in the State of Tennessee and may be served through its registered agent, CT Corporation System, 800 South Gay Street, Suite 2021, Knoxville, Tennessee 37929.

d. That at all times relative hereto, the Defendant, Bradley L. Watson, is a resident of the State of Tennessee and may be served at 252 Sweetens Cove Road, South Pittsburg, Tennessee 37380.

e. That at all times relative hereto, the Defendant, Dan Graber, is a resident of the State of Tennessee and may be served at 135 Pryor Village Drive, Jasper, Tennessee 37347.

f. That at all times relative hereto, the Defendant, John Barrack, is a resident of the State of Georgia and may be served at 520 Dennis Road, Trenton, Georgia 30752.

FACTS AND ISSUES

II.

Beginning on or about July 2006, and continuing thereafter throughout the year of 2006, 2007 and 2008, the Plaintiffs entered into various purchase agreements, installment land contracts, land contracts, contracts for the purchase of land, deeds, and other transactions with the Defendants, for the purchase of certain real estate located in Marion County, Tennessee. Advertisements, promotional materials, oral and written comments, and other efforts were made and extended to the Plaintiffs by the Defendants, which proximately caused all of the Plaintiffs to purchase various tracts of land within the Sequatchie Pointe "development."

III.

After entering into the various contracts mentioned above, the Plaintiffs learned, at varying times and through various means, that Sequatchie Pointe was not, in fact, a development under county and state law as required. This "development" did not have the required final approval of the Marion County Planning Commission, the Marion County Road Superintendent, the Marion County Health Department, and other regulatory agencies. Furthermore, the "development" does not now, nor did it ever, have water service. In fact, a contract for the provision of water to this development has been executed by the owners of said development, but no action has been taken by them to fulfill their obligations under the contracts. The South Pittsburg Board of Water Works and Sewers is ready, able and willing to provide the water, but cannot proceed without the Defendants’ fulfillment of its obligations under the contracts. No water line construction or other efforts have been made by the Defendants to provide water lines to or within the development itself.

IV.

Developer has failed to obtain acceptable roads and has caused some lots to be substantially altered by changing roadways. It is the duty of the developer to take all steps necessary to obtain County acceptance of the roads within the subdivision.

V.

That the Defendants caused the Plaintiffs, along with all of the purchasers of various tracts of land within the "development" to be sent bills purportedly from the Marion County Tax Assessor on said land. In fact, no clear title can be obtained or transferred to the lots purchased by the Plaintiffs, due to the failure of this "development" and lots to qualify as a development under the regulations of the Marion County Planning Commission. In addition, the price agreed upon, and a portion or all of the same paid by the Plaintiffs to the Defendants, was based upon the misrepresentation that all regulations and other laws concerning this land and this development had been satisfied by the Defendants, and that the sale of these lots was therefore authorized by the law.

VI.

The Defendants fraudulently represented that an initial down payment would result in a valid warranty deed to a lot inside an approved and legally authorized development. In fact, the Defendants knew that final approval had never been issued by the Marion County Planning Commission and they knew or should have known that they could not deliver a valid warranty deed. Instead they misrepresented that the property was in an approved planned development and took the Plaintiffs’ cash knowing they did not have the authorization to deliver a warranty deed. In addition, the Defendants represented that they would finance the remaining purchase price of the property. However, they did not issue a Deed of Trust nor did the Defendants comply with the federally mandated Truth in Lending statutes. 15 U.S.C. § 1601 et seq.

VII.

That the aforementioned actions of the Defendant constitutes a violation of the Tennessee Consumer Protection Act, Tenn. Code Ann. § 47-18-101(b)(5), (12), (19), (21), (22), and (27). That the actions of the Defendants also constitute a violation of the Tennessee Residential Property Act, Tenn. Code Ann. § 66-4-101, et seq., and Tenn. Code Ann. § 66-5-101 et seq.; Tenn. Code Ann. § 66-5-204; Tenn. Code Ann. § 66-5-206; Tenn. Code Ann. § 66-5-212; Tenn. Code Ann. § 29-6-132; Tenn. Code Ann. § 39-11-106 (d)(13); Tenn. Code Ann. § 47-18-104; Tenn. Code Ann. § 47-18-109; Tenn. Code Ann. § 47-18-125; and Tenn. Code Ann. § 47-18-125.


VIII.

That the Defendants' concerted actions, described hereinabove, constitute intentional misrepresentation, negligent failure to disclose adverse facts, fraudulent misrepresentation, negligent misrepresentation, breach of contract, violations of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq., and violations of the Racketeering Influence and Corruption Organization Act, 18 U.S.C. § 1961 et seq.

IX.

That the Defendants wrongfully targeted out of state elderly persons. Specifically holding home “parties” in Land O’ Lakes, Florida and offering a “mini vacation” as an incentive. Exhibit A. Defendants failed to mention that no water, no roads and no final approval had been granted to the “development” in violation of the Tennessee Elder Protection Act, Tenn. Code Ann. § 13-3-101 et seq.

X.

That the Defendants failed to give the Plaintiffs proper notice of foreclosure of their property. The property was then fraudulently conveyed to other uninformed individuals. At no time did the defendants refund any monies to the Plaintiffs or properly notify them of the foreclosure of Plaintiffs’ property. Any and all fraudulent conveyances by the Defendants should be immediately set aside.

XI.

That all of the aforementioned actions of the Defendants proximately caused losses and damages of money to the Plaintiffs in varying amounts. A specific list of the specific losses of each Plaintiff will be presented at the trial of this cause. That furthermore, due to the intentional and fraudulent nature of the transactions, the Plaintiffs are entitled to exemplary and punitive damages as provided by statute, including but not limited to, treble damages, attorneys fees, and the expenses of this litigation.

XII.

That the fraudulent misrepresentation of the price of the lots purchased by the Plaintiffs caused the Plaintiffs to grossly overpay for said lots, based upon the actual fair market value of lots, not in an approved development. That the Plaintiffs possess no other legitimate or feasible way to secure their losses, other than a lien lis pendens on the Defendants' real property, currently owned by the Defendants in the "development." That a lien lis pendens against the Defendants is being filed with this Complaint.

XIII.

That the Defendant real estate agent failed to provide the Plaintiffs with any disclosures or restrictions on the property until after the property was sold and payment was made. Real estate agents are required to disclose certain facts about property that materially affect the sale. The real estate agent did not disclosure the lack of roads, water, sewer, clubhouse, etc. This is a breach of Tenn. Code Ann. § 66-5-206.

XIV.

That all times relative to the Complaint, J. J. Detweiler Enterprises, Inc., conspired with Sequatchie Mountain, LLC and the other Defendants regarding all of the foregoing allegations against them. That alternatively, all of the foregoing allegations contained herein were committed by J. J. Detweiler Enterprises, Inc., as agent of and under the full authority, and within the course and scope of the authority of an agency with Sequatchie Mountain, LLC. That alternatively, all of the foregoing allegations were committed by Sequatchie Mountain, LLC, as an agent of J. J. Detweiler Enterprises, Inc., during the course and scope of such agency. That alternatively, all of the foregoing allegations were committed by J. J. Detweiler Enterprises, Inc., individually. That alternatively, all of the foregoing allegations were committed by Sequatchie Mountain, LLC, individually.

CLASS ALLEGATIONS

XV.

That all of the allegations contained herein proximately caused the Plaintiffs' collective losses, either individually, severably, or in any combination with each other.

a. Plaintiffs bring this action individually and as representatives of the Class of consumers, persons, and entities who purchase lots from Defendants in the State of Tennessee.

b. The questions of law and fact in this case are common to the Class.

c. The claims and defenses of the representative parties are typical of the claims or defenses of the Class.

d. Prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for the party opposing the Class, or adjudications with respect to individual members of the Class would, as a practical matter, be dispositive of the interests of the other members not a party to the adjudications or substantially impair or impede their ability to protect their interests.

e. Defendants have generally acted or refused to act on grounds applicable to the entire Class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the Class as a whole.

f. The questions of law and fact common to the members of the Class predominate over any questions affecting only individual members, and a Class action is superior to other available means of administration.

g. The Defendants fraudulently concealed from Plaintiffs and the Class their deceptive and illegal practice to exploit and overcharge consumers for undevelopable property.

WHEREFORE, the Plaintiffs sue the Defendants based upon the allegations contained in the foregoing Complaint for violations of the Tennessee Consumer Protection Act, Tennessee Residential Property Act, the Truth in Lending Act; the Real Estate Settlement Procedures Act, Tennessee Elder Protection Act, fraudulent misrepresentation, intentional misrepresentation, negligent failure to disclose adverse facts, breach of contract, negligent misrepresentation and violations of the Racketeering Influence and Corruption Organization Act.

PRAYERS FOR RELIEF

XVI.

a. Plaintiffs request the Court order Defendant to award actual economic damages and provide restitution to the Class and to disgorge the monies due and owing to the Plaintiffs and the Plaintiff Class in the amount of $13,500,000.00.

b. On behalf of themselves and the Class, Plaintiffs request that they recover all penalties, interest, and reasonable attorneys’ fees and costs as authorized by governing law.

c. Plaintiffs individually and on behalf of the Class request both prejudgment and post-judgment interest at the maximum rate allowed by law.

d. Plaintiffs request that the Court enjoin Defendants from further, future violations of governing laws.

e. On behalf of themselves and the Plaintiff class, Plaintiffs request the following relief and pray for judgment in their favor against Defendants.

i. For an order certifying this case as a Class action against Defendants and appointing the named Plaintiffs and the undersigned counsel as Representatives of the Plaintiff Class pursuant to Rule 23 of the Tennessee Rules of Civil Procedure;

ii. For judgment against Defendants and in favor of Plaintiffs and the Class on all claims asserted in this Complaint;

iii. For disgorgement and restitution plus interest due thereon at the legal rate;

iv. For treble damages and attorney fees pursuant to the Tennessee Consumer Protection Act;

v. For costs of suit incurred herein;

vi. For prejudgment and post-judgment interest to the extent allowed by law;

vii. For penalties as allowed by law;

viii. For injunctive relief requiring Defendants’ future compliance with the laws; and

ix. For such other and further relief as this Court may deem appropriate.

Plaintiffs hereby demand trial by jury on all issues.

Respectfully submitted,


By: _________________________________

William C. Killian BPR#02425

Attorney for Plaintiffs

1 Oak Avenue

Jasper, TN 37347

423-942-5801 – telephone

423-942-5816 – facsimile


BERKE, BERKE & BERKE


By: ________________________________

Valerie W. Epstein BPR# 013785

Attorney for Plaintiffs

420 Frazier Avenue

P.O. Box 4747

Chattanooga, TN 37405

423-266-5171 telephone

423-265-5307 facsimile


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