Former Rarity partner stokes lawsuit battle

Stooksbury: Ross moved parcels to dodge claims

By Josh Flory
The relationship between a Maryville developer and a former partner is still causing legal sparks.

Robert Stooksbury Jr. has filed another lawsuit against Rarity Communities founder Mike Ross and affiliated companies, accusing them of fraudulently transferring property through dozens of quitclaim deeds that should be part of the first two suits. Stooksbury filed the suit July 7 in Blount County Chancery Court and is seeking a lien against the properties in question. Also named as defendants in the suit are Rarity Management Co. LLC and HDP Properties LLC of Wyoming.

Stooksbury sued Ross and companies he owned in April 2009 in Blount County Chancery Court for damages related to the Rarity Pointe development, and that suit still is pending. Ross and two companies he owns filed a counter-complaint against Stooksbury, alleging that the former partner's claims and his threat of litigation were motivated by Stooksbury's desire to force Ross into buying Stooksbury's interest in a development firm.

Stooksbury later sued Ross, Rarity Management Co. and a slew of other defendants in U.S. District Court in Knoxville, alleging that property was sold based in part on false representations and that a portion of the proceeds from lot sales in various developments was diverted for the personal use of Ross and/or others, and to begin other projects, instead of being used to benefit the developments in which the lots were sold.

The suit goes on to claim that Stooksbury and others invested significant amounts of money "only to see significant portions of their investments misappropriated, misused, and/or devalued."

Ross' lawyer has said his client strongly denies allegations in the federal suit, which is ongoing.

Ross and Stooksbury have fallen out over Rarity Pointe, a waterfront development in Lenoir City in which the two men are partners via a limited liability company called Tellico Landing. Earlier this year, local investor Joseph Ayres, through a different LLC, bought the debt for unsold lots, the golf course and other property at Rarity Pointe and initiated foreclosure proceedings. Tellico Landing responded by filing for bankruptcy protection, forestalling a planned foreclosure auction.

The latest lawsuit claims Ross and associates have fraudulently transferred nearly 40 parcels in multiple counties between June 2010 and April that have hindered the Blount Chancery and federal lawsuits and that Ross has failed to comply with court orders.

Stooksbury is asking the court to place a lien on the transferred properties while the lawsuits still are pending. Ross could not be reached for comment on Tuesday.