Horseshoe Bay Resort files $1M lawsuit against POA

A civil lawsuit filed by the Horseshoe Bay Resort against the Horseshoe Bay Property Owners’ Association seeks over $1 million in financial relief, a temporary injunction to freeze the POA’s financial account, a court order to compel an audit of the POA, and a court-appointed receiver to take over the association. The suit was filed Friday, Oct. 27, in the 33rd Judicial District Court in Llano County over accusations the POA has failed to uphold its 52-year-old agreement with the resort. 

The lawsuit — Horseshoe Bay Resort Development, LCC & Horseshoe Bay Destinations, LLC v. Horseshoe Bay Property Owners’ Association, Donald Beeman, & Belinda Roberts — adds to the controversy swirling around the two entities and the city of Horseshoe Bay’s mayoral election.

Recently, resort owner Jordan Jaffe publicly banned POA board members from Horseshoe Bay Resort amenities, charging the board with mismanaging its finances. He also revoked POA President Donald Beeman’s membership. Beeman is challenging Mayor Pro-tem Elsie Thurman for the mayor’s office in the November election. 

The small-town race has resulted in some big-time campaigning not usually seen in cities with a population under 5,000. A political action committee, Safe and Beautiful Horseshoe PAC, mailed out high-dollar campaign flyers opposing Beeman’s candidacy. Beeman accused Jaffe of starting the PAC to undermine his campaign. Jaffe is yet to respond to that accusation or answer calls for comment from DailyTrib.com.

The suit, filed by attorney Clark Aspy of Naman, Howell, Smith & Lee PLLC in Austin, claims POA officials violated an agreement with the resort to use funds generated by property owners to meet POA landscaping standards and obligations.

“Defendants owe a fiduciary duty to Plaintiffs because the Reservations give Defendants the duty and obligation to receive money collected from residents and use it to benefit Plaintiffs and the HSBR community,” the filing reads.

The agreement in question, known as the Declaration of Reservations, was signed in 1971. According to the lawsuit’s plaintiffs, the POA is legally mandated in that agreement to spend any funds over $50,000 to “improve the Horseshoe Bay Resort community.” 

The defendants disagree, citing Section 7 of the 1990 Easement, Covenant, and Declaration of Restrictions, also an agreement between the POA and resort, as the basis of their argument against spending additional dollars. 

The most recent amendment to the 1971 Declaration of Reservations, was signed in 1991. It covers the collections and distribution of funds to the resort. 

“If they want to contest it, let the courts decide whether (Section 7) is a binding agreement,” Beeman said.

According to the lawsuit, Section 7 of the Restrictions states “the POA does not owe Plaintiffs more than a specified base amount for landscaping, subject to a Consumer Price Index adjustment.”

That amount is currently $47,830. The POA must still meet the requirements of other duties listed in the Declaration of Reservations agreement.

Plaintiffs claim that, in previous years, the POA fulfilled its duties to maintain Horseshoe Bay Resort by striking a deal with a third-party amenities owner to manage upkeep of resort property. That all changed in 2023, according to the civil suit. 

“This year, Defendants instead chose to discontinue longstanding successful practices and referred Plaintiffs to Section 7 of the Restrictions to justify its failure to spend its funds to maintain the community,” the filing reads. “Even further, Defendants sent a community-wide email to residents of HSBR claiming they did not have to fulfill their obligations, citing Section 7, and failing to mention the existence of the more recent (1991 amendment).”

The plaintiffs accuse the POA of withholding hundreds of thousands of dollars from the resort out of the over $1.5 million the association collected in 2023.

“Upon information and belief, Defendants currently hold more than $800,000, far in excess of the $50,000 permitted (in the 1991 amendment),” the suit reads. “Under Defendants’ incorrect interpretation of their duties, their only increasing financial obligations would be the (Consumer Price Index) adjustment, even with the large number of homes built and extra money collected.”

Beeman is unfazed by the lawsuit’s claims.

“I’m glad they filed the lawsuit because now we get discovery,” he said.

Evidence provided in the legal document includes the aforementioned agreements, Horseshoe Bay home values over the past three years, and fund balance sheets from the POA.

Beeman called the lawsuit “garbage” and claimed it was part of an effort to dissuade him from running for mayor.

“This is what they try to do to get good people not to run,” he said. “I can work with the resort, but I don’t work for them. I’m not the one they want to see for mayor because if I’m elected mayor, I will not work for the resort. I can work with them, but I will work and represent the citizens of Horseshoe Bay.”

The lawsuit claims the POA’s actions are hurting Horseshoe Bay Resort. 

“Plaintiffs and Defendants are both interested in HSBR, and Defendants’ actions put the property in danger of material injury,” the filing reads. “Defendants’ breaches have already resulted in damage to the property. The replacement of landscaping, trees, plants, and other property, along with appropriate routine maintenance, is something that must be consistently undertaken and maintained, especially at a place of the caliber of HSBR.”

nathan@thepicayune.com