Homebuyers sue Ranch's developer

LAKEWOOD RANCH — At its most basic level, the lawsuit is about three parties.

One who approved a contractor for use.

A second who hired that contractor.

And, a third who didn’t finish the work it promised to do — the contractor.

It’s also about a company that burst through the secure, gleaming gates of Schroeder-Manatee Ranch and its award-winning master-planned Lakewood Ranch and let down the developer and its homeowners.

Five individuals and 17 married couples in Lakewood Ranch filed March 15 a $5 million lawsuit in Manatee Circuit Court against Lakewood Ranch developer Schroeder-Manatee Ranch for approving Paradise Homes to build in the community.

In October Paradise Homes filed for bankruptcy, leaving customers with unfinished homes.

Sarasota attorney Alan Tannenbaum, representing the plaintiffs with his brother, Marc Tannen, says SMR misled homeowners by including Paradise Homes, run by Jim Butler, a career high-end kitchen contractor without experience in building an entire home, on its list of approved homebuilders.

He charges SMR with violating Florida’s Deceptive and Unfair Trade Practices Act, for “misrepresenting Paradise’s ability, experience and finances.”

Homeowners can only enter contracts with SMR-approved homebuilders — businesses listed on the Lakewood Ranch website under the heading: “Builders must meet rigorous standards in order to be invited to build at Lakewood Ranch.”

SMR determined Paradise Homes met those standards when it approved the builder in late 2009.

“We sympathize with all of the people who have been harmed by the situation, but this situation is the result of the actions of Jim Butler and his fellow executives at Paradise Homes, not the actions of SMR,” said Daniel Perka, SMR general counsel.

During the approval process, Butler had met face-to-face with SMR representatives.

He filed a formal application and submitted references — both financial and from subcontractors.

From 2010 to 2012, Paradise successfully built roughly 30 homes in Lakewood Ranch and had many happy customers, Perka said.

Then, suddenly, Perka said, in late October 2012, Butler’s Paradise Homes and its two affiliated corporate entities, Extreme Remodelers of Sarasota LLC and Paradise Lifestyle LLC, filed for Chapter 7 bankruptcy, citing zero assets. Paradise had contracts for, but had not started work on, 12 homes.

In a Dec. 19 meeting of creditors, Butler revealed he owed money to 233 creditors.

“Looking backward, it’s apparent (Butler) must have misled a lot of people,” Perka said.

Butler worked under the license of general contractor Kirk Blackburn, who was arrested in Hillsborough County in 2006 for grand theft and earned a felony conviction. Blackburn has continuously held a general contractor license with the Florida Department of Business Professional Regulation from 1999 to present, with no complaints against him.

Samuel Poots, a plaintiff in the suit and an Ireland native who moved to Florida with his family for business, saw Lakewood Ranch selling a dream.

He signed a contract with Paradise Homes to build a home in the Lake Club in 2012. It was set to be finished in December.

Now, renting in Country Club West, Poots must wait until August to move into his home. He hired Henson Contractors — at a higher cost — to finish the project.

SMR has allowed homeowners to hire the builder of their choice, some of which are not on their preferred list, to finish jobs.

“Lakewood Ranch’s pitch is to come and live in a five-star home built by its approved builders,” Poots said. “How did Paradise become a builder? SMR needs to protect homeowners. The problem lies at their door.”

Paradise Homes became a builder because of Butler’s experience in the building process. He hired plumbers, electricians and granite experts to build fancy kitchens. He supervised those subcontractors and watched as they delivered jobs on time and on budget, Perka said.

“It was a natural transition for him to move from building a significant part of a house to building the whole house,” Perka said. “There’s no rule that says you have to have specific experience building the entire house to build the entire house. If that were the case, how does anybody get started?”

Once SMR approved Paradise Homes and Butler signed individual contracts with homeowners, as in any contract between two entities, law told SMR to get out of the way, Perka said.

“There are limited number of things you can do,” Perka said. “You don’t want to be accused of interfering with contractual relationship.”

At the point, when Paradise violated those contracts and left homes underground, SMR could have written checks and given money away — to homeowners and to Butler.

“But why would we or anybody else do that?” Perka asked. “We legally are not financially responsible for the actions of Paradise Homes.”

Since 1995, homebuilders in Lakewood Ranch have built nearly 8,000 homes.

“This is an unprecedented situation,” Perka said.

But that fact means nothing to Poots.

“I am still waiting,” Poots said.

Contact Josh Siegel at [email protected].