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Ottawa River Estates Litigation History

Removing the Obstacles of Housing Discrimination and Going Forward

Preferred Properties, Inc. v. Indian River Estates and Duane J. Tillimon is a case that involves discrimination in housing and breach of contract. Preferred Properties, Inc. is the plaintiff and Indian River Estates, Inc. and Duane J. Tillimon are the defendants. A jury trial was conducted on February 29 – March 2, 2000, at the conclusion of which the jury returned a general verdict in favor of Preferred Properties on all issues. The jury awarded compensatory and punitive damages, and ordered the defendant’s to sell eight lots to Preferred Properties. After an unsuccessful appeal, and a failed attempt to petition the U.S. Supreme Court, the defendants continued to refuse to comply with the District Court’s order.

In October 2000,The U.S. District Court for the Northern District of Ohio at Toledo granted a motion by Preferred Properties for a permanent injunction and ordered the defendants, Indian River Estates, Inc. and Duane J. Tillimon to sell eight lots in a 23 lot subdivision named Indian River Estates, for the development of proposed housing development for persons with disabilities. Subsequent to that order, and a failed attempt at bankruptcy, Skybank filed a complaint in foreclosure against Indian River Estates, Inc. and Ottawa Trail Estates on May 9, 2003 concerning a tract of land, containing twenty three (23) lots, and under a blanket mortgage. Because Indian River Estates, Inc. refused to comply with the Federal Court Order, Preferred Properties, Inc. was forced to purchase Skybank’s interest in the Open-End Mortgage, in order to protect its specific interest in the eight lots. Preferred Properties, in the place of Skybank, pursued the foreclosure.

On September 7, 2004, Judge David A. Katz, in a rare use of judicial authority, entered an Order vesting title to the eight lots that were the subject of the discrimination case, in the name of Preferred Properties. Judge Katz entered the Order because Indian River Estates, Inc. and Duane J. Tillimon refused to obey the Federal Court Order requiring them to transfer title in the eight lots to Preferred Properties, Inc. for the agreed sales price more than four years before. This unusual judicial action enabled Preferred Properties to proceed to, and complete the Initial Closing with the U.S. Department of Housing and Urban Development in May 2005. Construction of the units started in July 2005 and is scheduled for completion in July 2006. On April 27, 2005, Preferred Properties, purchased the remaining fifteen lots in the Indian River Estates subdivision, and will sell them to a private developer.

Our experience with the Ottawa River Estates development demonstrates that major barriers may have to be removed to achieve the important goal of creating housing for persons living with disabilities. The amendments to the Fair Housing Act, and other protections against housing discrimination must be vigilantly applied in the face of illegal discrimination such as that which occurred with this development.