PALO PINTO — Is Dallas-based developer Mike Ward a shrewd, hardworking businessman who has made a few mistakes? Or is he a power-hungry conman who used illegal transfers to steal millions of dollars over 20-plus years from the Property Owners Association at The Cliffs Resort?
Both sides were presented Monday on the first day of a trial before Texas 29th Judicial District Judge Michael Moore.
For an in-depth look by the Dallas Business Journal at the issues at stake in this power struggle along the shores of Possum Kingdom Lake, click here to read “Trouble in Paradise.”
Ward for 20-plus years served as president of the Property Owners Association at the Cliffs and, in the role, contracted out maintenance services and more to several of his own entities through Double Diamond Inc., a developer and operator of four gated golf and resort communities, including the Cliffs.
One of the biggest issues for homeowners at the Cliffs is water and sewer, Riddle & Williams lawyer Chad Robinson said in his opening statement in the trial at the Palo Pinto County Courthouse. A provision in the bylaws for the Property Owners Association says the POA has the power and duty to control the water and sewer systems at the Cliffs, but Double Diamond, which owns and operates the systems now, won’t turn them over to the POA, he said.
“At the end of the day, we want the right to own and control our water and sewer so we can provide potable water and don’t have sewage running down our streets,” Robinson said.
Michael Myers of the Silvera Law Firm in Dallas, representing Ward and Double Diamond, called Ward “a person, who had the foresight to purchase a piece of property out of basically bankruptcy, is successful in developing resorts, works hard in his job, (and) cares about the projects that he has.”
“Some people become successful through hard work and talent, and that’s what we have here,” Myers said.
Robinson told Judge Moore that he will present evidence and testimony that Ward and Double Diamond made improper transfers out of the not-for-profit Cliffs POA fund into Double Diamond accounts, including accounts at other resorts — and at least one out of state.
Myers countered that any such transfers were either permissible or were accidental and were quickly corrected.
“To err is human,” he said. “But they fixed it.”
Dan Dipprey, a Cliffs homeowner who was elected president of the POA after Ward’s tenure ended, said the water system at the Cliffs is inadequate for the development’s existing homes and condos. Dipprey, the first person to testify, said Double Diamond Utilities does not properly maintain the water and sewer systems.
Since Dipprey and five other new board members took over, the POA has contracted out golf course maintenance, general maintenance, payroll and other operations at the Cliffs. Those tasks previously were handled by Double Diamond entities that the Ward-controlled POA contracted, Dipprey testified. In each case, the POA has saved money by switching away from Double Diamond, Dipprey said.
The trial will settle who holds the power in a long-running struggle: Resort owner Ward and Double Diamond or the individual property owners who believe it is their right to self-govern the development.
For a longer version of this story, please visit the DBJ.