May 2004

Unlicensed camp still bills
Lifetime members of Willow Creek Resort

Contemplating Class Action Suit

By CHRISTINE BYERS ‚ Rockford Register Star

ROCKFORD — Murna Lindsey is hunting for unhappy campers who she believes are being scammed out of thousands of dollars through lifetime memberships to a now-defunct resort.

Near Greater Rockford Airport at 3509 South Bend Road, Willow Creek Resort once boasted a swimming pool, petting zoo and mini-golf course. Today, it looks like a ghost town. A woman who answered the phone said the owner was not available but contended that people still camp there.

But no one should be camping there because the resort lost its license two years ago, according to the state department of health.

Lindsey said that’s why people who signed up for lifetime memberships should not be responsible for annual maintenance dues that came along with their contracts.

Lindsey has taken her complaints to the state attorney general’s office, which is in the “mediation” process, according to an office spokesman. The office wrote to her last month, saying it had tried without success to contact Willow Creek.

Lindsey hopes to find others who are still paying fees. So far, she has contacted 88 members “all with stories to tell.” Her goal is to file a class action lawsuit against the resort. She estimates that she and her husband have dumped more than $10,000 into the resort over the years.

“ It bothers me as a person to see people being taken for a ride,” Murna said.

The dotted line

Lindsey’s husband signed a contract and bought a lifetime membership to the resort in 1986 for $5,340. He agreed to pay annual dues of about $200.

Ron Lindsey and his children enjoyed the petting zoo, fishing, swimming, pig roasts and other events almost every weekend during the summer until the early 1990s.

The last time the family used Willow Creek was for a graduation party in 1994. After that, they began looking for a way to cancel their membership.

Representatives from the resort met with the Lindseys on Oct. 3, 1993, and offered the couple a way to sell their membership. To do so, they paid $1,850 on top of the $5,340 that they paid initially.

They were told they were “No. 9” on the resale waiting list. Once the club sold the first eight on the list, they were told, the club would try to sell the Lindseys and after that, they’d be clear.

“ We thought that was the only way we could get out of it,” Murna said. “My husband still kicks himself for giving them more money.”

They never got a call saying their membership had been bought. And they still paid the yearly dues.

The couple was contacted again July 12, 1997, and offered another chance to get out of their contract, according to paperwork that Murna still has. This time, the price tag was $2,200. This time, they walked out. They continued to pay the yearly dues.

On May 7, 1999, the resort offered another offer for $1,962, and they walked out again.

The last time anyone contacted them was in June. Because of bad weather, the Lindseys rescheduled the meeting and have not been contacted since.

‘ The park was useless’

Murna Lindsey, 47, took a Rockford Register Star reporter and photographer through the campground last week. She pointed out an old building that used to be the clubhouse: Insulation is peeking out from behind the windows, and the roof is in disrepair. The pool where her husband used to swim after work is filled with chocolate-colored water and leaves.

The greens of the mini-putt and the hole numbers are still visible, but the course is grown over with weeds and brush. You can still see the cages of the old petting zoo; instead of animals, they house grown-over brush.

Five abandoned campers, some with broken windows and busted wheels, rest in campsites.

Near the clubhouse, a blue metal sign says “Please Excuse Our Dust, We’re Under Construction.” Murna remembers it being there since 1996.

Still, the woman who answered the phone, and who would not give her name, claimed that people do camp there. She insisted there is another side to the story, would make no other comment and would contact the owner.

Campground letterhead lists a Ronald S. Ulakovich, whom the Register Star could not locate.

‘ Going on for years’

Louis Orsinger of Rockford joined in 1993. Last month, he attended a meeting at the resort and was told he could pay $3,000 to get out of his contract. He and campground representatives, who would give only their first names, made an agreement to pay $2,100.

“ I think we were taken from the beginning,” Orsinger said. “But we elected a route to get out of it and that may or may not have been our only choice, but hopefully it’s over. We just have to chalk it up to experience.”

Nick Batson of Wauconda joined the resort in 1987 for $4,500. He paid $300 in annual maintenance dues until 2001.

That year, Batson brought about 12 kids from his church group to camp at the site. He found no fresh water, an unkempt pool and a flooded and grimy bathroom. The kids pitched tents and stayed for the night but left the next day.

“ We stopped paying because the park was useless,” Batson said.

Batson attended a meeting at the resort Oct. 4 and was told he needed to pay the dues he owed since he stopped paying in 2001. He walked out.

The representative gave her name as Marcy.

“ She told us your contract doesn’t say there has to be bathrooms or water in the pool,” Batson said. “She said we only have to have a place for you to come and camp.”

According to the state department of public health, the resort cannot operate as a campground.

“ The resort has been denied a license to operate as a campground for the last two years, and health inspectors regularly check the property to make sure no one is camping there,” said Clay Simonson, acting regional supervisor for the department’s Rockford office. “We’ve had inspectors out there all the time to see if they’re operating as a campground, and we’ve never found anybody out there camping.”

Simonson would not reveal details or deficiencies inspectors found at the resort.

“ I think the members are doing what they have to do, and I sympathize with them,” Simonson said. “This has been going on for two years.”

‘ Mad as hell’

This type of complaint against a resort or campground is not unusual, said Dan Hopper, who leads the National Association for Members board. Murna Lindsey contacted the group this year to help her in her campaign. Last month, she was named the group’s Illinois president.

The 3,000-member nonprofit advocacy group started as a result of a class action lawsuit filed in 1996 against a resort company in Florida under similar circumstances, Hopper said.

“ Typically, someone like Murna will stand up and say, ‘I know about this situation, and I’m mad as hell and I’m not going to take it anymore,’ ” Hopper said. “We can share with them our experience and what to expect.

“ The key is that these people are very aggressive and heavy-handed and full of confidence that one-on-one they can beat you. On the other hand, there’s strength in numbers. What does your intuition tell you about a company whose doors are not even open and they’re trying to extract money for services they can’t even provide?”

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Attorney: Willow Creek Case
has Familiar Ring

By CHRISTINE BYERS ‚ Rockford Register Sta r

Douglas Napier, a trial attorney with the Iowa-based law firm Napier Wolf & Napier, said the Willow Creek story sounds all too familiar to him.

Napier has been involved in about 10 campground organization cases, including a class action lawsuit involving 80,000 members who paid more than $220 million in membership dues to a company called Thousand Acres (Adventures).

“ You could change the name of the company and have the same story,” Napier said. “The facts remain the same. There are some variations, but it’s very much the same pattern. It’s the same scam.

“ Their angle on making payments and to say they bought 99 years of access and use is preposterous. If they’re not providing that, they should have no obligation to pay for what they’re not getting. If they strip away what you paid for, then that’s breach of contract. And if they’re saying this isn’t what they have to provide you, then they’ve sold the contract under false pretense.”

Napier said companies typically use high-pressure sales methods to get people to “buy out” of their annual obligations. “Most people are afraid that it will damage their credit ratings, so most will pay even to keep the phone from ringing,” he said. “If the members expressed interest in getting out and no longer used the campgrounds, I don’t think he has any legal grounds to come back and demand that they pay.”

Former member Murna Lindsey of Rockford plans to organize a series of meetings during the next few months to inform as many members about their rights as she can. She hopes to find enough members who would be willing to pursue a class action lawsuit.

“ I’m very optimistic,” she said.
“My phone rings every day with another person who has a story to tell.”

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Unpaid Dues Blamed for Resort Woes

Willow Creek’s owner says he was unable to make all the repairs needed after a 1996 flood.

By CHRISTINE BYERS ‚ Rockford Register Star

ROCKFORD — The pool could double for a swamp. The greens of the mini-putt course are almost buried by brush and overgrown grass. The roof of the community building needs repair.

“ The lifetime resort members are to blame” said Ron Ulakovich, owner of the once-thriving Willow Creek Resort, 3509 South Bend Road.

Ulakovich spoke last week after a Rockford Register Star article detailed complaints of a former member who is trying to find others, possibly to sue the defunct campground.

Ulakovich told a different story, one of members who fell so far behind on annual maintenance dues that he couldn’t afford to maintain the resort. Conditions got so bad that the Illinois Department of Public Health revoked the campground license two years ago.

All will be taken care of when a new owner closes on the property later this year, Ulakovich said in a telephone interview from his Chicago home. The resort will be running by spring, he said. Meanwhile, Ulakovich hired a consulting firm to offer members a way to pay dues before the property is sold. Getting members to take his offer hasn’t been easy.

The state attorney general’s consumer fraud division contacted the resort in September after Ron and Murna Lindsey made their complaints. The Lindseys of Rockford are trying to find others who say they’ve invested thousands in the resort and wonder where the money went.

“ The company is not cooperating with our mediation efforts, so we are looking at what the next steps we plan to take are going to be to help the consumers that are affected by this,” said Melissa Merz, a spokeswoman for the attorney general’s office. “There clearly seems to be a problem here, so we want to try to help these consumers.

“ We’re actively looking into this. The more evidence we have of an alleged problem is helpful, and we encourage anyone with a problem to call our consumer hot line.”

A flood of activity

Ulakovich bought the property in December 1984. As membership base grew, Ulakovich vowed he would add amenities to the property.

A letter titled “Fact Sheet Expansion Planning” promised that a teen center (sales center), comfort station and entrance, children’s playground, volleyball court, horseshoe pits, fitness trail, mini-golf, shuffleboard courts, tennis courts, ball field, swimming pool and deck, 100 additional camp sites, clubhouse, whirlpool, fitness center and lounge were “planned for construction in 1987 through 1989.”

That’s what prompted members like Armida and Raul Rivera of Rockford to join.

The couple paid $5,995 in March 1988 to become lifetime members, with an additional $170 annual maintenance dues. “What they showed us would happen never did,” Armida said. “That’s the only reason people stopped paying is because there is nothing there to do. It was nice at first and that’s why everyone joined.”

Ulakovich said he has made good on all of the amenities he promised.

“ My paperwork is to a T,” Ulakovich said. “I’ve been in sales since 1968 and I know how people lie and make up stories. We guaranteed when we had 200 members we would put this amenity in and so on. Everything is done.”

Ulakovich said he didn’t install tennis courts because members wanted a pond instead. But almost all the amenities were damaged after the campground flooded in 1996, Ulakovich said. “We lost $540,000 in the flood, and I had no help from anyone,” he said. “We got no help and everything rested on my shoulders. I had to stop selling memberships after the flood

because our sales center was ruined. I couldn’t afford to open the sales center again.”

Last chances

At least some annual maintenance dues kept coming in, with thousands of dollars that members paid at numerous meetings to get out of their lifetime contracts. Ulakovich informed members about the meetings to “eliminate future maintenance costs” through letters.

All the offers came with a cost, according to members who have contacted Murna Lindsey.

A 1997 letter signed by Ulakovich states that a special services staff had been hired to analyze each member’s use and the resort had “devised a formula to reduce or eliminate” maintenance fees. This also would be the “only opportunity to eliminate future maintenance fees.”

The next year, Ulakovich sent a letter that read: “If you are not using your membership to the fullest extent and do not want to pay forever, then act now. Find out how you can keep your benefits intact, yet never owe another dime.”

A letter sent in 1999 stated, “This is the one and only chance you will have to eliminate all future maintenance fees.” That was the year the Riveras made their last visit to the resort. “We couldn’t even camp there or use the pool,” Rivera said. “How can you pay dues when there is nothing there? That’s why people stopped paying their dues. There’s nothing there to do.” Ulakovich said he stopped putting money into the resort in 2000.

“ I have put millions in that place out of my own pocket, and I just got tired of feeding the place out of my pocket,” Ulakovich said.

That doesn’t mean the members could stop paying, too, he said. “What happens is, people use it on the weekends and, at the time, everybody’s happy,” he said. “But when the kids grow up and go to college, their lifestyle changes and people don’t want to pay anymore, but they don’t realize they have a 99-year lease.”

All the money members paid for their initial startup fees, plus the dues they did pay and the money collected at the meetings throughout the past decade, does not add up to what Ulakovich needed to run the resort, he said. “I’ve got the papers and the books to prove it,” he said.

He plans to take each individual to court who owes him money.

The offer on the table

Ulakovich hopes to avoid taking members to court by giving them another offer.

He hired Jeff Hall, a consultant, in August to offer members another chance to pay their dues. Hall said his company, Resort One, is the only resort contract mediation service in the country. Hall’s company is offering a membership to his resort group in exchange for whatever amount members owe in back dues or what they owe on the remainder of their lifetime contracts.

Normally, memberships to his company, called the Hall Group, start at $8,995 and include benefits to campgrounds and resorts across the country. Willow Creek members would not have to pay annual maintenance dues to his company, Hall said. “I think it’s commendable on his part,” Hall said of Ulakovich’s offer. “It’s my expert opinion that the members only have themselves to blame because they’ve messed it up for the ones who have paid their dues. The members forced the resort out of business.”

Hall estimated that 1,034 members are behind in dues, totaling almost $2 million. He said the last time members were billed for maintenance dues was 2001.

Larry Burd of Earlville said he was billed and paid his $250 in annual dues through this year. He joined the resort in 1987 for $4,400 and paid his dues every year, even though he stopped using the resort five years ago.

Three weeks ago, he met with a woman named Marcy, who Hall said is a Resort One employee. She offered Burd a $3,750 chance to pay up 10 years of annual dues and never have to pay Willow Creek again.

He accepted the offer and paid “close to” $3,750, he said. “I’m happy with the decision I made because it’s like the girl explained, I feel like I’ve sold my obligations for my heirs or anybody that I will it to, so no, I don’t believe I’ve been ripped off,” Burd said.

Burd didn’t know the Health Department shut down the resort two years ago. “That makes me feel a bit different now,” he said.

Murna Lindsey, meanwhile, said her phone has been ringing nonstop and her e-mail account is full of messages from other members who are upset. She said she has a list of at least 800 additional members.

“ This is bigger than we ever thought,” Lindsey said. “All we want to know is, why should we pay for something no one was using? And what came first, members not paying their dues or the place falling apart?”

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