The Dallas developer of an upscale golfing community on the shores of Possum Kingdom Lake was cleared Friday of wrongdoing and won’t have to pay millions of dollars in damages to resort property owners who claimed they were harmed by a slew of alleged misdeeds spread over 20-plus years.
Mike Ward, the developer of the The Cliffs Resort at Possum Kingdom Lake, and several of his Dallas-based Double Diamond companies, were being sued in a case filed by property owners seeking millions of dollars and other relief, including the right to own and control the water and sewer systems at the resort. Double Diamond Utilities, one of Ward’s entities, provides water and sewer at the resort and collects fees from the property owners to do so.
Texas 29th Judicial District Judge Michael Moore ruled in favor of Ward and Double Diamond — and against the property owners challenging the developer and his companies — on all of the nearly two dozen issues contained in the property owners’ lawsuit.
The dissident property owners also claimed that Ward rigged elections and used otherwise unscrupulous means to maintain his position as president of the Property Owners Association at The Cliffs for 24 years. Ward wielded that power to give jobs such as golf course maintenance to other Double Diamond entities without bidding them out, his opponents claimed. The property owners also accused him of improperly channeling millions of dollars of the nonprofit POA funds from dues to for-profit Double Diamond entities.
“Obviously, I’m very happy with the ruling,” Ward said in an interview with the Dallas Business Journal. “I think it’s the correct ruling. As I’ve stated many times, we did nothing wrong. Double Diamond and its people worked very hard to do a great job for The Cliffs and for The Cliffs POA.”
Dan Dipprey, the POA president voted in last year after Ward was voted out, said the property owners will appeal multiple aspects of Moore’s ruling, but added that it’s too early to say which ones.
“The judge basically handled it like a divorce,” Dipprey said. “He wasn’t going to give us any money, but he wasn’t going to give them any money, either.”
One of the property owners’ many claims against Ward and Double Diamond is that the water supplied by the utility is at times dirty and unsafe to drink, and the water pressure is at times inadequate because the plant’s capacity is too low. In addition, property owners complained that the water system lost more than half of its supply through leaks.
Ward, who at one point took a swig of tap water from The Cliffs while he testified to attest to its drinkability, contended that the property owners’ water and sewer concerns were overblown. Moore agreed with him in his ruling.
Dipprey wondered if the outcome of the case might have been different if it had been heard by a jury. “It would stand to reason that if you had 12 people who work for a living — they work at a tire store, insurance agents, a doctor, they work at Walmart — whatever they do, they would look at some of these things (differently),” he said. The plaintiffs didn’t explain why they didn’t seek a trial-by-jury, and neither did their attorney, who chose not to comment because of the possibility of an appeal.
Dipprey added that Moore’s rulings contained some bright points for the plaintiffs.
For instance, Moore ruled that Ward and Double Diamond have no claim to, in the future, request for the POA to repay a contested $1.5 million to $1.8 million, Dipprey said. Ward has said outside the courtroom that the POA owes Double Diamond that amount because the company covered various expenses for the POA. But Ward and Double Diamond didn’t seek repayment as part of this case.
“Now they can never come back on the POA and say, ‘You guys owe us a note,’ because that’s been vacated,” Dipprey said. “They didn’t ask for us to pay them at trial, so the judge said, ‘Since they didn’t ask for it, they can never ask for it again, now.”
For a deeper look at the high-stakes power struggle at The Cliffs, which resulted in Ward’s ouster from the POA board, visit the Dallas Business Journal.