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Longhills stockholders seeking court action regarding covenant

January 14, 2013

Longhills Inc. is seeking a declaratory judgment in Saline County Circuit Court in regard to a 1986 covenant that restricted the use of the property to a golf course and related activities, such as a tennis court, swimming pool and pro shop.
This action is sought through a lawsuit filed by Longhills stockholders, which include Jeff and Mary Jean Busken and Jeff and Sam Hamm.
The owners are asking the court to stop the enforcement of the covenant.
Several property owners of Longhills Village and financial institutions that hold mortgage interests in the various properties are named as defendants. They are: Longhills Properties LLC; Timothy Nazaruk; Simmons First National Bank; Mark D. Bowling; Kristen L. Bowling; Wells Fargo Bank, N.A.; James Paul Ward; Carolyn Ward; Metropolitan National Bank; James B. Martin, trustee of the Jim Martin Revocable Trust dated Aug. 11, 2005; William George Lenz; Abel Giron; IberiaBank Mortgage Co.; IberiaBank; Summit Bank; Terry Jensen; Lisa Jensen; Charles R. Wright; Shirley D. Wright; Mark Henningsen; Deana R. Henningsen; CitiMortgage Inc.; Doug Stracener; Cindy Stracener; Summit Bank; Bancorpsouth Bank; L.C. Qualls; and Lynda A. Qualls.
The suit stems from the golf course owners' attempts to sell the property to a development firm that included an apartment complex in its plans for the area. Property owners were divided in their reaction to the proposal and took their comments to the City Council. A vote on the proposal was delayed after the existence of the restrictive covenant became known during the debate.
Bud Busken, speaking about the litigation, said, "We're trying to save the golf course for the community, for the school district, for the tax revenue, which is over half a million dollars every year, while upholding the property values of the individual owners," Busken said.
"This the only way to do it," he said.
"We're part of it," he acknowledged in regard to the suit, but added that "the more important part of it is what's important to the community and what this community needs.
"We haven't had any new apartments in Benton in a long time," he pointed out. "There are few places to live in Benton unless you buy a house because the options are limited. What are these people going to do who are coming here for the e-Commerce program at UALR-Benton Center? They probably will stop off in Bryant.
"We feel like this apartment project of Lindsey & Associations will bring people to Benton, maybe on a temporary basis at first, but if they like it, they'll stay on.
"We're truly trying to do what is best for Benton," Busken said. "And this proposal is the only option for the golf course. We're doing what we have to do to keep the golf course for the community."
Busken said he and the other stockholders "don't like lawsuits any more than anyone else does, but there are no other other options on the table to buy the golf course. We've tried to sell it for four years now.
"The proposal from the Lindsey firm of Fayetteville is still on the table. This (lawsuit) is step 1."
In the suit, it notes that Longhills Inc., or its predecessor, the Benton-Bauxite Golf Association, has owned and operated a golf course, swimming pool, tennis courts and pro shop on the property since 1955. The change in name reportedly was documented with the Arkansas Secretary of State's Office on Aug. 8, 1986.
The suit points out that around Jan. 14, 1986, William T. Martin, who developed the property and continued to own it for many years, executed and delivered a document titled "Covenant" that placed restrictions on the use of the property, noting that certain parts were to be used "solely as a golf course, together with such related activities as a tennis court, swimming pool, and pro shop."
The covenant was recorded in the real property records of the Saline County Circuit Clerk's Office on April 8, 1988 (Book 99, Page 551).
According to the litigation, a portion of the subject property was conveyed by Longhills Inc. to Longhills Properties LLC in 1999 for the purpose of development of the property. That firm proceeded to subdivide the property it purchased into residential lots, conveying all of its interest in the subject property to third parties. At the time that Longhills Inc. conveyed a portion of the property to Longhills Properties for subdivision and development, all parties reportedly intended for the covenant to be released as related to the conveyed property, according to the plaintiffs.
The suit notes that William T. Martin, who had executed the covenant on behalf of Longhills, died before 1999. To effectuate the release of the covenant, his heirs, William Morgan Martin and Carol Berneice Martin Blann, executed a release of the restrictive document. This was recorded in the real property records of the circuit clerk's office on May 26, 1990, in Book 99 on Page 29018.
The suit notes that the lots and property now owned by the individual defendants named in the suit were included within the property identified in the 1999 release of the covenant. The only exceptions reportedly were Timothy and Eleanor Nazaruk, who purchased Lot 276 in Longhills Village Phase 5 around March 23, 2007.
The suit further notes that around April 12, 2012, Longhills Inc. executed a release of the covenant against the entirety of the property to the extent the restriction had not already been released. This was recorded in the real property records of the circuit clerk's office on April 13, 2012.
The suit notes that lots owned by separate defendants Nazaruk, Bowling, Ward, Martin, Lenz, Giron, Jensen, Wright, Henningsen, Stracener, Williams and Qualls in the Longhills Village development each contain improvements including single-family residences.
The various financial institutions named as defendants hold a present mortgage interest in one or more of the lots, the suit points out.
In the section of the suit titled "declaratory judgment," it states that Longhills Inc. conveyed portions of the property to Longhills Properties Inc. knowing that the conveyed property would be developed, subdivided and sold to numerous property owners as residential lots. Both entities, Longhills Inc. and Longhills Properties LLC, fully intended that the property being conveyed to Longhills Properties LLC be released form the restrictions contained in the covenant, the plaintiffs state.
Representing the plaintiffs in the action is attorney Mark W. Hodge of the Little Rock law firm of Chisenhall, Nextrud & Julian.

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