They signed a development agreement in September with Brazilian real estate developers Fabio Azevedo da Costa and Melina Zak Starostik da Costa, owners of Lalu Administradora de Bens. The da Costas agreed to put up a total of $22 million, including the land purchase, and Legacy Development was to be exclusive builder.
Located on Sherberth Road, the site is sandwiched between two new luxury townhouse developments, Magic Village and Magic Village 2, and just west of Disney's ESPN Wide World of Sports, making it an ideal site for vacation homes.
Lingering disputes over billing and the direction of the project led the owners to fire Legacy Development in February. The Winter Park developer then filed a Lis Pendens on the property and sue to and recover the more than $100,000 in unpaid fees.
Although the site is in Osceola County, the lawsuit was filed in Orange County's Ninth Circuit Court.
According to court documents, the original contract called for the development of at least 150 lots. The developers would convey 13 contiguous lots to the Brazilian firm, and Legacy would build three corporate vacation homes "at a reduced cost" for the owners' use. In addition, Legacy would build a $1.2 million vacation home for the da Costas.
Trover and Muto were to be responsible for all aspects of planning and permitting, setting up the HOA and getting Disney to sign off on the plans, as per the deed restriction on the land. The property was rezoned in early November from multifamily residential, which doesn't allow vacation homes, to commercial tourist.
Trover, whose company manages vacation home properties, appeared to drop out of the project just a few months into the partnership. His name was removed from the articles of incorporation in late October.
According to court records, the remaining partners agreed in November to pursue a different strategy: to develop a branded resort with a hotel tower. But the owners changed course in early February.
"Lalu is no longer interested in delaying any aspect of the development for the purposes of seeking any sort of hotel, condo-hotel or similar component," attorney Quinn Smith wrote on Feb. 5. "Time is of the essence, and Lalu would prefer to move forward on the development activities described in the agreement immediately."
Smith gave Legacy one week to turn over the Development Plan. He also told Muto the owners would not pay for disputed charges, such as travel expenses or interpreters.
Around that same time Legacy Construction terminated Muto and attempted to resolve the situation, offering to write off certain expenses but requesting reimbursement for actual costs. The firm delivered the development plans on Feb. 21.
But on Feb. 25 Lalu terminated the agreement, accusing Legacy of bad faith. The owner refused to pay invoices to Austin Environmental for removal of "turtles" on the property, and rejected a $45,000 invoice for engineering services provided by Hanson Walter.
"To be clear on the issue of invoices, Lalu-Gacy does not owe a single penny to Legacy Development on the invoices submitted," Smith wrote in the email.
Legacy attorney Gary Salzman, with Gray Robinson, sued Lalu on April 12, accusing the owner of breach of contract, and filed a Lis Pendens on the land.
Brock McClane, with Fisher Rushmore, has filed a motion to dismiss the case and dissolve the Lis Pendens. He argued that the litigation "makes it difficult for Lalu to find a buyer" for the land, and "materially affects" the purchase price and the owners' ability to market the site.
Muto and Lalu officials declined to comment for this story due to the pending litigation. Trover could not be reached.