South Carolina Supreme Court denies petition to hear class action lawsuit by nearby homeowners over 190-acre tract, formerly golf course, in Myrtle Beach, South Carolina; decision likely frees property for development as new owners had originally planned
MYRTLE BEACH, South Carolina
April 18, 2014
(The Sun News)
– The S.C. Supreme Court has denied a petition to hear a class action lawsuit filed by homeowners around the former Deer Track North Course that attempted to prohibit redevelopment of the golf course property.
The denial ends a series of appeals and likely frees the property to be developed, and also allows for the advancement of a countersuit against the homeowners. The 190-acre tract has been owned since 2012 by its former lien holder First Trident Financial LLC.
Businessmen McCray Smith and Jerry Pettus purchased the course in 2006 through the company Deertrack Investors LLC with intentions of redeveloping the layout, which is one of two courses at Deerfield Plantation off U.S. 17 near Surfside Beach that closed in 2006 and remain undeveloped.
They filed a countersuit several years ago seeking a monetary award against the four individual homeowners who initiated the suit in September 2006 -- the original suit evolved into a class action suit that involves most or all of the 423 single-family homes that surround the former course in the Deerfield Plantation Phase I Property Owners Association -- the Deerfield Plantation POA and Deerfield Plantation Resort.
Complicating the property's future is the estrangement of its former co-owners and a suit filed by Smith against both Pettus and First Trident that claims he was defrauded by the two parties between 2010-12. Pettus has previously denied the accusation.
Smith said he'd like to settle all of the litigation involving the property.
"I think enough people have passed away, enough people have gone bankrupt, enough people have lost value on their homes at Deer Track since this started," Smith said. "A lot of people have lost a lot on this. It's crazy and ridiculous and it's time to end."
Deerfield Plantation Phase I Property Owners Association president Dick Johnson said the POA acknowledges the court's decision and otherwise has no comment at the moment.
Pettus declined comment other than to say he is reviewing the case. Representatives for First Trident Financial could not be reached.
In their now-dismissed suit, the homeowners contended that there was an easement on the property preventing redevelopment, evidenced by the fact they paid higher prices to live in a golf course community.
In 2008, Horry County Court of Common Pleas Judge Larry Hyman initially ruled in a Summary Judgment that the course owners were free to develop the property.
Hyman wrote in his judgment that there was nothing guaranteeing homeowners access to a golf course and "no document on public record expressly restricts the use of the [property] to a golf course and clubhouse." Hyman also found deeds stating "the developer will have no obligation or commitment to maintain the clubhouse ... or golf course for any period of time."
But he rewrote the judgment to allow the case to reach a courtroom.
Retired circuit court judge Thomas Cooper, acting as a special referee approved by attorneys in the case, twice ruled in favor of the course owners in 2010. But an appeal was filed on behalf of the homeowners and the case reached an appellate court, which again ruled in favor of the developers, leading to a petition of the state Supreme Court on behalf of the homeowners.
Deertrack Investors has already settled one suit involving the property. The company received $325,000 in 2011 in the settlement of a suit against Horry County seeking damages for Horry County Council's change in the property's zoning to a less dense designation against the will of the owners.
Smith and Pettus purchased the course in March 2006 for $8 million, according to court documents, when it was zoned a high-density R-7. They closed it in September 2006 and presented a proposal to build a housing development. But County Council down-zoned the property to a less dense R-3 at the behest of homeowners in November 2006.
First Trident foreclosed upon the property before purchasing it in June 2012 with a bid of $2.6 million at a foreclosure auction. There were no competing bids.
The amount was essentially equivalent -- minus outstanding interest and fees -- to the amount remaining on a loan Deertrack Investors received in 2006. First Trident acquired the note in December 2011 from the National Bank of South Carolina.
"Now is a good time for everybody to settle," said Smith, who added that he has already received a settlement offer from First Trident Financial that was "ridiculously unsatisfactory."
"There's nowhere for the homeowners to go so settling is in their best interest," Smith continued. "Jerry can't do anything with the property with my lawsuit out there so it's in his best interest to settle. ... I've been on the winning side of every single decision, and I will be until this is done."
Smith said the Deertrack Investors business agreement gave him one-third of the North Course and Pettus two-thirds of the course. He's confident he'll regain at least his third, and said he has a verbal agreement to sell all of the lots on his portion to a homebuilder with whom he has done a lot of business over the past two decades.
"It has been an absolute waste of eight years in everyone's life," Smith said. "I'd like to get on with the program and restore Deer Track to what it can be."
The former Deer Track South Course remains closed and undeveloped as lawsuits attempting to prohibit redevelopment of the property based on environmental issues are ongoing. Schaad Companies of Tennessee owns the former South Course.
Contact ALAN BLONDIN at 626-0284.
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