A South Florida land trust is hoping to get off the state’s hit list, claiming a lawsuit seeking to shut it down contains no evidence of actual damages to consumers.
The Florida Attorney General’s office filed a complaint last month in Broward County that says Whitestone Capital Land Trust and its owner Nicholas Torgerson violated Florida’s Deceptive and Unfair Trade Practices Act with a bogus business model that defrauds desperate homeowners.
It is one of three lawsuits filed in the past year by the attorney general against seven land trusts and their operators.
But West Palm Beach attorney Michael Pike, who is representing Whitestone Capital Trust and the 31-year-old Torgerson, said the attorney general doesn’t show any actual damages sustained by consumers, a requirement under the act. He filed a motion to dismiss the complaint this week.
“Florida’s Deceptive and Unfair Trade Practices Act is a tricky and complicated statute,” Pike said. “Just because the attorney general has attempted to allege a cause of action does not mean that the allegations have been proven against my clients, or that the allegations can’t be legally challenged.”
The attorney general’s office said it could not comment on active litigation.
While the complaint against the Boca Raton-based Whitestone does not name specific victims or incidents, it maintains the company misled homeowners by telling them the firm could cancel their mortgages and provide a new cheaper home loan. Whitestone allegedly charged homeowners up-front fees and had them sign their deeds over to the trust.
“Whitestone’s legal basis for the putative cancellation of a homeowner’s duly recorded mortgage is frivolous,” the complaint says.
Pike said Whitestone’s business model differs from other land trust operations. Instead of trying to cancel the mortgage, it asks the court to determine whether the mortgage is valid or not.
Whitestone had two homes in Palm Beach County deeded to it last year. They include a $319,000, 3,700-square-foot pool home in Boca Raton’s Hidden Valley neighborhood, and a Boynton Beach home bought in 2006 for $520,700. Torgerson owns a Lake Worth townhouse he bought in 2008 for $560,000. Court records show the home is in foreclosure.
Pike said Whitestone is still an active business, but not soliciting new clients.