D.R. Horton was found guilty last week of 'deceptive practices' regarding the Majorca Isles Master Association in Florida. U.S. Bankruptcy Judge A. Jay Cristol ruled that the national home builder violated Florida's Deceptive and Unfair Trade Practices Act and owes punitive damages of $16.3 million.

The case is in regards to a community in Miami Gardens that D.R. Horton started developing in 2005. The builder sold just more than half the units before it stopped developing the property when the recession hit. The problem revolves around the four employees D.R. Horton placed as directors of the Majorca Isles Master Association until the project was complete.

According to Cristol’s ruling, the four D.R. Horton employees in charge of the master association decided to divert funds due to it and pay the expenses of the five condominium associations. This was a breach of fiduciary duty to the master association, the judge ruled.

“When it appeared that the deficit funding obligation to D.R. Horton was reaching $50,000 per month, D.R. Horton, through its employees, decided to shift the economic loss of D.R. Horton to the home owners by cutting services and amenities, which the home owners were entitled to receive, and stopping the deficit funding that D.R. Horton was obligated to supply,” Cristol ruled. “The actions by D.R. Horton can only be classified somewhere between not nice and evil.”

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