December 11, 2003 

Scott & Wendy McEntire
24920 Derby Dr.
Sorrento, FL 32776

Re:       Sweetwater Holdings, Inc. v. Scott and Wendy McEntire

Dear Mr. and Mrs. McEntire:

This is being sent for your review and may be distributed to all owners in the Cross Tie Ranch development.   Because of recent events it may be that all of the owners are unaware of what is occurring in the various legal actions that are pending which involve their interests. This letter addresses only some of the issues involved in the various actions. Any interested owner should review the respective court files or contact their own legal counsel to learn their rights, obligations and liabilities. I would also recommend that any interested owner check the website at www.CrossTieRanch.org.

The litigation began when Sweetwater Holdings, Inc., sued concerning the alleged rights under a landscape and irrigation easement for Cross Tie Ranch. That lawsuit resulted in your having to sue the various homeowners’ associations that may have an interest in this action. These associations include Cross Tie Ranch of Lake County Homeowners’ Association, Inc., Cross Tie Ranch at Black Bear Reserve Homeowners’ Association, Inc., Cross Tie Ranch at Black Bear Reserve Homeowners Association, Inc., Cross Tie Ranch Homeowners’ Association, Inc., and Cross Tie Ranch HOA, Inc.  

Now Cross Tie Ranch HOA, Inc., the purported association that claims it has the right to govern the affairs of Cross Tie Ranch has filed a new lawsuit.  It has sued the present owner of the common grounds, Rapid Retrieval, Inc., as general partner of Upson Downs Limited Partnership, a Colorado Limited Partnership, for a constructive trust asserting that the HOA has an interest in the common grounds although Rapid Retrieval owns the property.  The owners should also know that the common grounds were almost sold at a  tax certificate sale but that was recently put on hold.  Based upon the filing of the recent action by the HOA a substantial legal question arises as to whether Cross Tie residents have been paying assessments for the upkeep of property the HOA does not own or for which the residents have no legal right to use.  There is also a substantial legal question as to whether the various associations have any right to file liens against those owners who have not paid assessments.

        The common grounds were part of the property held by the original developer. When the developer was forced into chapter 7 bankruptcy, the common grounds became property of the bankruptcy trustee who then sold it to Sweetwater Holdings, Inc. Rapid Retrieval now holds that property.  In the event it is judicially determined that the HOA has no legal or equitable interest in the common grounds, then the collection of assessments may have been illegal and improper. By the HOA’s own admission in their current civil suit, the Covenants, Conditions and Restrictions are a contract between the homeowner and the association.  Since the common areas are not owned by the residents of Cross Tie Ranch, one can argue that the contract is in breach and therefore not enforceable in any way.  We will examine the actions of the associations and the board members as to their liability in participating in the collection of the assessments. The board members may be held personally liable for their actions in taking part in collection of assessments for common areas they do not own. These board members should have taken affirmative action to verify the facts and not rely upon statements made to them by persons who have their own self-interest in mind.

There is currently a task force appointed by Governor Bush to make recommendations on homeowner association reform.  Certain Cross Tie Ranch residents have publicly presented the Cross Tie horror story to that task force.  Cross Tie residents are welcome to post their views on the web site (www.CrossTieRanch.org) or speak to the task force themselves.  Some Cross Tie residents have no idea of the facts or the legal morass involved or how it may adversely affect property values.  Others have not been fully and accurately informed as to the true situation. I would recommend that when contacted by any owner that you advise them to research this matter on their own.   Rest assured that we will apprize the court of all the facts and these facts may not bode well for the residents of Cross Tie Ranch.

If you have any questions, please advise.

Very truly yours,

John A. Leklem, P.A.

Attorney at law