November 3, 2000

Punta Banda residents file $75 million suit for lost homes.

San Diego attorney, John Payton, who is also qualified to practice law in Mexico, filed a $75 million suit against Mexico's Secretary of Agrarian Reform (SRA) and Grupo Koster's sole administrator (Administrador Unico), Carlos Teran del Rio on behalf of 200 American Punta Banda residents who have been evicted.

Grupo Koster is the company who entered into contracts with the Ejido Coronel Esteban Cantu for the development of the Baja Beach & Tennis Club in 1986 and 1987. The development included a hotel, spa, tennis courts, spa, and associated amenities, along with housing and condominium subdivision.

Over 300 Americans purchased and built homes, plus several hundred bought memberships for the use of the hotel and its facilities. The American residents were notified in October of 1999, that the court had held the property ownership was not part of the Ejido land, and the rightful owners had won their case to take possession of their land.

The original property's case had been pending in Mexican courts since 1989. They obtained a favorable ruling in 1991 later in the same year, the Appellate court upheld the lower court decision. In 1994 and 1995, the Ejido filed suit against those claiming the land didn't belong to them, the court ruled against the Ejido.

The case continued to be appealed until 1999 when the Supreme Court held in favor of the claimants. And finally on October 23, 2000, the Supreme Court gave the Secretary of the SRA 10 days in which to comply with their order or be removed from office.

On October 30, 2000, Federal officers in force, peacefully evicted the residents and gave possession to the rightful owners.

The court recognized the Americans had entered into contracts in good faith, but held that the rights of the actual property owners were greater than their right of those in possession. The residents had entered into a contract with the wrong people who were not the legal owners.