Colony dispute sent back to Tampa

The U.S. 11th Circuit Court of Appeals threw out an appeal filed by the Colony Beach & Tennis Resort Association today, sending the legal dispute back to Tampa-based U.S. Bankruptcy Judge K. Rodney May for further hearings.

The decision further delays a resolution to the Colony Beach & Tennis Resort development for the foreseeable future unless an agreement can be reached among all parties involved.

In a ruling issued Friday, the Court of Appeals granted Colony Beach & Tennis Club Inc.’s motion to dismiss the association’s appeal of the bankruptcy judge’s rulings “for lack of jurisdiction.”

In essence, the Court of Appeals said it’s premature for such an appeal and sent the matter back to May for further review and more hearings.

In July 2011, U.S. District Judge Steven D. Merryday reversed Judge May’s 2009 rulings, which led to the eradication of the longtime partnership with the resort’s 232 unit owners and Colony Beach & Tennis Resort owner Dr. Murray “Murf” Klauber. The rulings led to Klauber closing his 45-year-old resort.

When May’s rulings then went before Merryday, Merryday sided with Klauber on the fundamental argument Klauber has with the association. Klauber has always maintained the association was required to pay for repairs and make assessments to keep up the common elements of the property. Merryday’s rulings also meant Klauber may be able to seek damages from the association’s decision to reject Klauber’s previous proposals for resort redevelopment.

The association then pleaded to the appeals court, but the three-judge panel rejected the association’s claims.

Now, May will be charged with holding more hearings.

Colony Beach & Tennis Resort attorney Charles Bartlett said the decision means “the 11th Circuit agreed with us that the matter is not right for appeal because the judgment Judge Merryday entered requires us to go back to bankruptcy court for a final determination.”

Colony Beach and Tennis Resort Association President Jay Yablon said the decision only means a final resolution in the court system will take longer.

“We had hoped that everybody could avoid the expense and the delay of everything going back to Judge May,” Yablon said. “More than anything, this ruling means that if anybody is looking to the courts to provide a final resolution at the Colony, they are going to have to wait an awfully long time and spend quite a bit of money.”

With the Colony Association poised to make a development progress report update to the Longboat Key Town Commission at its Monday, March 5, regular meeting, Friday’s news doesn’t help the unit owners’ intentions to re-open a rebuilt Colony before a tourism-use extension expires on the property by the end of the year.

Town attorney David Persson said as far as the town is concerned, the unit owners need to have the resort rebuilt by the end of the year or ask the commission for another extension.

“It doesn’t appear that continued protracted legal wrangling is good for anyone involved, including the town,” Persson said.

Colony Lender LLC partner David Siegal told the Longboat Observer the Court of Appeals decision means that now more than ever all parties involved need to make a deal.

“If the 11th Circuit has upheld Judge Merryday’s rulings, I just hope all the parties make a deal and stop litigating the issues about who is going to run the Colony,” Siegal said.

Bartlett and Yablon also believe that’s the most ideal outcome for the Colony to be rebuilt any time soon.

“If all sides come to an agreement, this would stop immediately,” Bartlett said. “But there are several parties that need to be dealt with.”

Contact Kurt Schultheis at [email protected].