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Judge clears county
Appeal could follow in subdivision lawsuit
greenleaf 2 jd
Abandoned subdivision Greenleaf in northern Forsyth County is at the center of a lawsuit. - photo by File photo
The attorney representing five California residents seeking legal action against several defendants for property they bought in an abandoned subdivision said he may appeal a judge’s decision to dismiss claims against Forsyth County government.

Those who filed the November 2006 suit want damages for fraud, nuisance, trespass and inverse condemnation on lots they bought in the Greenleaf subdivison near the Dawson-Forsyth county line.

In an order signed Jan. 25, Fulton County Superior Court Judge Tom Campbell ruled in favor of Forsyth County’s motion for summary judgment.

“The county is very pleased and this litigation appears to have resulted in a favorable ruling,” Forsyth County Attorney Ken Jarrard said. “The next step is to see whether an appeal gets filed.”

Attorney Kurt Hilbert, who represents the plaintiffs in the case, said he’s not sure whether his clients will want to appeal the order.

The neighborhood remains unfinished while some of those connected with the stalled development received time in prison.

Darryl L. Cooper was sentenced in January 2008 to one year, six months in federal prison for creating fraudulent appraisals that reflected completed construction of the homes in the neighborhood.

Cooper must also serve three years of supervised release and pay $4.7 million in restitution.

A federal judge also sentenced one of the subdivision’s developers, Jeffery Alan Teague, in October 2007 to 15 years, eight months in prison.

In addition, Teague was ordered to pay $7.8 million in restitution.

The charges against Teague were based on two builder-based mortgage fraud schemes involving $15 million in fraudulent loans on unfinished or nonexistent homes in Forsyth and Rockdale counties, according to the U.S. Attorney’s Office Northern District of Georgia.

Teague also used the alias Jeffrey Bryant. Both he and Cooper are listed as defendants in the lawsuit filed by the out-of-state investors.

Hilbert said his clients included the county as a defendant in the lawsuit because “they were the ones who brought [Teague] in.”

Teague owned 18 of the subdivision’s 68 lots, which he bought from the original developer, Don Hairston Sr.

Some of the lots were reportedly those on which the county had placed fines in January 2006 for erosion and sedimentation control violations.

Hairston appealed the charges to the county’s zoning board of appeals.

Criminal citations were also filed in connection with the properties.

That next month, Teague reached an agreement with the county that allowed him and his Maryland-based corporation, the Pacific Group Inc., to buy the lots from Hairston.

The deal made Teague responsible for the fines and the appeal.

Teague had agreed to pay $50,000 in fines to the county right away and another $40,000 once certificates of occupancy were issued for the homes.

Teague was also required to install retaining walls with county-approved plans.

Teague reportedly made the first payment, but his plans for the walls were rejected.

He was given an Aug. 4, 2006, deadline for submitting new plans, but was arrested by the FBI on Aug. 3 of that year.

Court documents allege that a man named Chris Northup, working with Teague, told investors about the properties.

“The investment was described, in general, as an opportunity to purchase a residential lot at below market price and then to sell shortly after closing for a profit of $20,000 to $100,000,” documents show.

The investors signed closing documents on the properties without conducting their own investigations of the sites.

Instead, they trusted photographs Teague and Northup sent them of what appeared to be completed homes and the fact the lender was willing to provide them money.

In addition, court documents show, the investors trusted appraisals provided by Teague and forged certificates of occupancy.

The buyers discovered they had been duped in June 2006. Two of them came to Georgia to check on the properties and discovered the houses on the lots were not finished.

In April 2008, the court ordered the titles to the properties go back to Value Homes Ltd., which Hilbert said was started and owned by Hairston.

Hilbert said there is a factual dispute over who actually owns Value Homes because a one-page asset purchase agreement between Hairston and Teague details how Hairston sold Value Homes LLC to Teague along with all its properties.

The sale “enabled Teague to ostensibly have freedom to go to the banks and draw down on the rest of the construction loans ... but there’s a big problem because Value Homes LLC never existed and doesn’t exist,” Hilbert said.

“It was my contention that that contract was useless and that Value Homes Ltd. is still owned by Donald Hairston,” he said.

Attempts to reach Hairston’s attorney Monday were not successful.

With the exceptions of Forsyth County, Hairston, Joselyn Hairston, Clermont Home Builders and Conservation Land Developers, Hilbert said everyone else listed as a defendant in the case has “either settled, went bankrupt or is in prison.”

Hilbert was not sure of the relationship between Don Hairston and Joselyn Hairston, only that they live in Forsyth County.

According to the order, the county asked for summary judgment on the grounds that the entity is entitled to sovereign immunity, which means the local government can not be sued without its consent.

The county also contends the plaintiffs: failed to properly notify the county of the suit; lack standing because they no longer hold titles to the property; and have failed to establish that the value of the property has diminished.