If the Court approves a proposed settlement in a little-noticed lawsuit, thousands who purchased property directly from Ginn Development may be entitled to monetary compensation (strings attached).
Palm Coast, FL – December 19, 2013 – If the Court approves a proposed settlement in a little-noticed lawsuit (Demsheck v. Ginn Development and Lubert-Adler), thousands who purchased property directly from Ginn may be entitled to monetary compensation. GoToby.com urges all who bought from Ginn in Bella Collina, Cobblestone Park, Ginn Sur Mer, Hammock Beach, Laurelmor, Quail West, Reunion, Tesoro, Tesoro Preserve or Watersong to carefully read the proposed settlement documentation. The settlement has far-reaching legal and financial implications “as it affects your legal rights.”
GoToby.com is in receipt of a nine-page Federal Court notice (of a proposed settlement). Although the plaintiffs in the suit purchased property from Ginn in Cobblestone Park and in no other Ginn developed location, and although the suit was never granted class action, the proposed settlement agreement applies to a broad class. The notice states:
If you purchased real estate (e.g., undeveloped land, a condominium, a townhome, etc.) at a development operated or developed by a Ginn company, your purchase contract was signed between April 13, 2006 and April 13, 2009, and you took title directly from the Ginn company;
Then you may be a member of the proposed settlement class and entitled to reimbursement in connection with your purchase(s).
The Ginn developments at issue are: Bella Collina, Cobblestone Park, Ginn Sur Mer, Hammock Beach, Laurelmor, Quail West, Reunion, Tesoro, Tesoro Preserve and Watersong.
If the Court approves the proposed settlement, Ginn will provide class members a means of obtaining reimbursement in connection with their purchase(s). All persons or entities who accept these benefits will be barred from pursuing individual lawsuits against Ginn and others based on their purchase(s). [Emphasis added]
GoToby.com is troubled with this settlement on many levels. First, the proposed level of compensation is paltry. For many, it will amount to less than 1 percent of the purchase price of their property. The settlement fund will total a mere $700,000, from which will be deducted plaintiff’s counsel fees (not to exceed $275,000), an $15,000 incentive award to plaintiff John Demsheck, and compensation to the Claims Administrator for administering the settlement.
This likely will leave less than $425,000 to be distributed among potentially thousands of class members, many of whom individually paid more than $425,000 for their Ginn purchases. The final payout will depend on how many claims are approved from among those filed by class members who opt to participate.
More troubling than the paltry payout are the legal implications. If you opt in, you have the right to file an objection to the settlement but you lose other potentially important rights. First, you forgo any rights you may have against Ginn and others regarding the claims in this case. You must request exclusion to avoid the loss of those rights. Specifically:
…all Settlement Class Members who did not request exclusion from the settlement class shall be permanently enjoined from commencing or prosecuting any action, suit, proceeding, claim, third-party claim, counterclaim, or cause of action asserting any claims, counterclaims, defenses, etc., released in Section II(B) against the Released Parties in any court or before any tribunal…
If broadly interpreted, even those class members who did not receive a notice could be bound by it because they failed to request exclusion even though they remain unaware of the proposed settlement agreement and its concomitant consequences. Notice was sent to the purchasers’ last known address. Clearly, not all purchasers will have received the notice. Hardly seems fair, does it?
Why would Ginn and plaintiffs council strike such a bargain? The original complaint was filed in April 2009. Could it be that plaintiff’s attorneys sensing a bottomless hole, dug by continued litigation without compensation, decided that anything was better than nothing? Other lawsuits against Ginn-LA on similar grounds have been generally unproductive.
Clearly it’s a good deal for Ginn if they can trade $700,000 for a significant number of general releases. (Ginn and Lubert-Adler paid $25 million to settle Dillworth v. Ginn, the Tesoro bankruptcy litigation.) If this was not their motive, why would the Demsheck Settlement Agreement include the following statement?
Ginn shall have the option to withdraw from this Agreement, and to render it null and void, if the Settlement Class Members submit Requests for Exclusion which exceed the threshold specified in a separate supplemental agreement between the Parties (the “Supplemental Agreement”). The Supplemental Agreement will not be filed with the Court unless required by court rule or unless and until a dispute as between the Parties concerning its interpretation or application arises. [Emphasis added]
GoToby.com interprets “separate” and “unfiled” to mean “secret” in the above context. Further, the general release appears to be uni-directional. In other words, it appears that Ginn can go forward with lawsuits against non-excluded class members who have defaulted on mortgages from Ginn related entities while at the same time closing off the class members’ right to mount an affirmative defense against a foreclosure and any resulting default judgment.
GoToby.com (neither an attorney nor an attorney spokesperson) encourages ALL potential class members to download the pertinent documents from realestatedevelopmentsettlement.com and study them carefully. Further, you should promptly seek legal advice. There are strict time limits to file for exclusion, to object or to comment. A request to be excluded must be postmarked by January 16, 2014.
If you do not submit a clear and timely request for exclusion to the claims administrator, you will be bound by the settlement agreement and relinquish any claims against Ginn and Lubert-Adler or their affiliates relating to your purchase of Ginn Property directly from the Ginn Developers in a development operated or developed by the Ginn Developers during the aforementioned time frame.
This timing of this Notice (preceding the holidays) is reminiscent of the Christmas Eve 2008 Tesoro/Quail West chapter 7 bankruptcy filing. December is often believed to be a good time to bury bad news among holiday clutter and distractions.