Photo | Shane Rice
Some called his tactics shrewd and divisive, but in hindsight, Rick Norman’s efforts may have been prophetic. In the summer of 2018, when developer DR Horton was preparing to complete construction of its final houses in the subdivision and then hand over control of the Bellaton Property Owners Association (BPOA) to residents, Norman was talking to anyone who would listen about the suspicious mortgage on a common lot, Lot A1.
DR Horton was not the first developer of the neighborhood. The 221-lot Bellaton was originally carved out of an agricultural field off State Route 181 in Daphne between 2005 and 2006 by AC3 and Country Club Development LLC (CCD), whose members included Albert “Trae” Corte III and Clarence Burke. Burke is also a principal owner of Baldwin County Sewer Service (BCSS).
Plans for Bellaton originally depicted a clubhouse on Lot A1 but allegedly, as construction was underway, the developers ran out of money.
In May 2008, Burke and Corte turned to a long-time business partner of Burke’s, lender David DeLaney of Alabama Capital and Small Business Management Corp., who offered a $625,000 mortgage on Lot A1 — $200,000 to release a previous mortgage encumbering the lot and another $425,000 to build the pool. Notably, DeLaney is also principal owner with Burke of BCSS. CCD and AC3 accepted Alabama Capital’s loan as borrowers and eventually, the pool was constructed.
CCD made good on the payments for a while, but by 2010, the loan was in default. In 2011, Burke, who as developer was in control of the property owners association, thought he would pay back the mortgage with a $720,000 “special assessment” on 160 unsold lots in Phase II and Phase III of the subdivision.
DR Horton stepped in around 2012, interested in rescuing the neighborhood from foreclosure. But, unwilling to pay the special assessment of $4,500 per lot, “America’s Largest Homebuilder” opted to let the banks foreclose, and weeks later, purchased the lots on the courthouse steps. But Alabama Capital’s mortgage on Lot A1 remained.
At that time, CCD was indebted on the mortgage for $569,587.81, plus accrued interest, late charges and collection fees. With Lot A1 previously conveyed to the BPOA in 2008, in July 2012, Burke and DeLaney met a representative of DR Horton at the California Dreaming restaurant in Spanish Fort and hammered out a deal to pay the mortgage.
The deal they reached was an Extension Capitalization Agreement (ECA), a private document that inflated the balance of the mortgage to $656,033, established a 20-year term on the note and assigned a 5 percent interest rate for monthly payments of $4,329.53.
Crucially — and what the BPOA considers deceptively — the ECA also names the BPOA as an “intended third-party beneficiary.” As such, the lender “may accept payment of the indebtedness from the BPOA,” although it also noted that “no such interested parties making such payments shall incur any obligation or liability for the continued payment of said indebtedness by virtue of making such payments.”
In other words, the BPOA could voluntarily pay the debt, but if the payments were discontinued, Alabama Capital could take no action against the BPOA other than foreclosing on the mortgage.
The ECA was signed by DeLaney on behalf of Alabama Capital and Burke on behalf of CCD, but was not endorsed by any representative of the BPOA. According to evidence and testimony in a related trial in Baldwin County Circuit Court last week, the residents of Bellaton were never notified of the agreement, which afterward, was tucked into the file of a DR Horton-controlled property manager.
On Aug. 10, 2012, DeLaney sent a letter to both CCD and the BPOA — at DR Horton’s address on Profit Drive in Daphne — reminding both that the first payment was due. Three days later, the first of 53 monthly checks was cut from the BPOA’s operating account. With the ECA in place, each homeowner in the community — some of whom had private pools in their own backyards — were essentially assessed a fee of $235 per year to pay the community pool mortgage, or a total of $4,700 per lot over the term of the loan.
By 2018, as DR Horton was preparing to exit Bellaton, the neighborhood itself was suffering from a general lack of maintenance. Norman and other neighbors began to pepper the developer with questions about the BPOA’s budget, where the mortgage was only documented with an amortization schedule. Public records indicated AC3 and CCD, not the BPOA, remained obligated to the debt. With his frustration growing, Norman began to publicize the findings of his own investigation.

Bellaton is a 221-lot subdivision off Highway 181 in Daphne.
Further, at a time when the balance on the mortgage was approximately $524,000, Norman wrote that he had not been provided a copy of a rumored “promissory note” between Alabama Capital and CCD. Much to the chagrin of some, Norman printed and distributed campaign signs in the community warning prospective buyers that a “Bellaton home comes with $1 million community pool mortgage.”
“If we were to continue to pay Country Club Development’s note, this community will have paid over $1 million for this lot with our pool,” Norman continued in his email. “Thus, we commonly refer to our neighborhood as the ‘Home of the Million-Dollar Pool’ and not in a fond or proud way.”
Two years later, with residents in control, the BPOA filed a lawsuit against Burke, DeLaney, DR Horton and related companies for a release from the obligations of the mortgage. In last week’s trial, the BPOA reached settlements or was awarded damages totaling over $1 million. Perhaps now, the neighborhood can be more boastful about its nickname.
TESTIMONY
Although the settlement was characterized as confidential, Judge Jody Bishop announced during a break in proceedings that prior to the commencement of the trial March 11, the DeLaney defendants had settled with the BPOA for $100,000. Still, David DeLaney’s son Brooks DeLaney was called as a witness.
Brooks DeLaney is vice president of Small Business Management Corp., and spoke of the DeLaney family’s decades-long business and personal relationship with Clarence Burke. At the time Bellaton was developed, the DeLaneys and Burke were not only equal partners in BCSS, but also in a property development company called Pennstar LLC.
Brooks DeLaney admitted the BPOA did not sign the mortgage or promissory note on Lot A1, and CCD remains responsible for repayment.
Under cross-examination, Brooks DeLaney told Burke’s attorney, Lynn Perry, the DeLaney family has extended “dozens of loans” to Burke’s companies, on assurances Burke’s “collateral is good.” But Brooks DeLaney said 2008 presented “the greatest financial disaster in my lifetime,” and it became increasingly difficult for builders to obtain loans.
“Borrowers couldn’t get money, builders couldn’t get money … It was a very tough time for anyone in the development business,” he said.
Brooks DeLaney also acknowledged CCD and Alabama Capital, in another private document, entered into a “participation agreement” to fund the mortgage. Only half of the money — $312,500 — was put up by Alabama Capital while the other half was provided by another Burke company, Wolf Creek Industries. In essence, Burke and David DeLaney, through Wolf Creek Industries and Pennstar, were both borrowers and lenders on the loan.
During testimony, Brooks DeLaney grabbed a calculator to show Alabama Capital received payments totaling $539,934.88 on the loan, including more than $200,000 in profit from its initial $312,500 investment, but the mortgage was not considered repaid.
Rick Norman testified he was concerned about the BPOA’s finances at the time because the high cost of dues were not reflected in the condition of the neighborhood. During his first inquiries about the pool mortgage, he was told the same as everyone else: The choice is to pay the note or be foreclosed upon. Norman began to dig into public records and discovered the BPOA was never a party to the mortgage.
“I figured out we were paying somebody else’s note and it felt very wrong,” he said.
Further, Norman’s discovery included an amortization schedule showing the total payments to Alabama Capital would be more than $1 million over 20 years.
READ OUR ‘STRAW MAN’ SERIES OF STORIES ABOUT CLARENCE BURKE, DAVID DELANEY, AND BALDWIN COUNTY SEWER SERVICE
In the first of three recorded phone conversations with David DeLaney, Norman didn’t appear to have any knowledge about the history of DeLaney’s relationship with Burke, and DeLaney didn’t volunteer much information. DeLaney did acknowledge the mortgage itself, explaining “we financed [the loan] because one of the [developers] was a business associate with us on some other things.”
He also admitted the “BPOA is not legally obligated to pay that debt,” but warned, “if y’all don’t pay the note we’ll have to foreclose on the lot and develop it.”
DeLaney, who was driving at the time of the first phone call and didn’t have immediate access to his file on the mortgage, told Norman his recollection of Burke’s company, CCD, was “they went broke … I don’t think CCD has any assets themselves.”

Photo Shane Rice .. Baldwin County Sewer Service co-owner Clarence Burke
“There’s no telling what y’all are wanting to do … but if you all quit making payments and we go to foreclosure — we think it’s worth going to foreclosure and we would do something with [the lot],” DeLaney said.
But DeLaney also offered — if BPOA wanted to go ahead and pay off the mortgage — Alabama Capital would be willing to “take a little loss.”
When Norman suggested he could refer his findings to criminal investigators, DeLaney distanced himself from the borrower.
“All we did was lend the money,” David DeLaney said, suggesting he’d get a valuation on the property to offer some payoff or financing options to the BPOA. “I’ll cooperate best I can with you and with y’all but we’re trying to get as much as our money back within reason.”
The second time they spoke, DeLaney told Norman he had reviewed the mortgage file and he was rescinding his offer to negotiate. DeLaney claimed the BPOA was on the hook for “common payments and assessments” on the lot via a 2006 amendment to the declaration of covenants, but he also admitted Burke and Corte “agreed to pay the mortgage when it was due.” Then, DeLaney made a statement that hung over the entire trial four years later:
“None of those people have any way to pay, to my knowledge,” DeLaney said.
At that point, Norman knew Burke was an owner of Baldwin County Sewer Service, and told DeLaney he believed Burke could pay the note.
“He is not a majority owner, but he is an owner,” DeLaney said, revealing his own insight into the state’s largest private sewer utility. “His interest is used to pay some debt to Trustmark Bank. It’s a complicated thing.”
The third and final time they spoke, DeLaney told Norman the language Norman was using in emails was misleading and defamatory, and again suggested if the mortgage fell into default, Alabama Capital would foreclose. Norman asked how the mortgage increased from $625,000 originally to more than $656,000, which was reflected in the documents the BPOA had access to, but DeLaney did not elaborate.
Instead, he made one final plea for the BPOA’s cooperation on paying the note, even offering to lower the interest rate from 5 percent to 3 percent, for a savings of some $10,000 per year. At that point, Alabama Capital had already received some $454,000 in payments on the mortgage.
Scott Whitehurst, regional president of DR Horton’s Gulf Coast region, testified that since he was hired in 2005, Bellaton was the only DR Horton community he was aware of that had a mortgage on the pool lot. Generally, he said pools are built as an amenity the company uses to lure prospective buyers to a community.
When DR Horton expressed interest in Bellaton, the pool mortgage was already in default, he said. He attempted to renegotiate the debt before purchasing the undeveloped lots and property directly from CCD, but DR Horton was unwilling to pay the special assessment. When the lots and undeveloped property did go into foreclosure months later, Whitehurst purchased them at a courthouse auction.
Still, the mortgage on Lot 1A loomed, so Whitehurst said he accepted Burke’s offer to meet David DeLaney and negotiate a solution. Whitehurst admitted when there is conflict of interest between the developer and the POA, the developer has an ethical obligation to act in the best interest of the POA. He explained that when he and DeLaney negotiated the ECA, it was an attempt to keep Lot A1 out of foreclosure.
Although DR Horton refused to pay it, Whitehurst also defended Burke and CCD’s $720,000 special assessment.
“CCD was acting in the best interest of the POA, they were just prevented from doing so by the bank,” Whitehurst said. “[Clarence] was out of bullets — he didn’t have any money.”
Decorated veteran Marine Col. Richard Jaehne testified that he built his retirement home in Bellaton in 2006, but didn’t live there full time until 2012. Jaehne first learned about the pool mortgage at the BPOA’s annual meeting in 2013, when the property manager at the time, Tom Poulous, disclosed it on budget documents.
Jaehne said in ensuing years, residents were told nothing other than they owed the monthly note, and it would be withdrawn from BPOA dues. He added a year or two before residents took control of the BPOA from DR Horton, they were provided an amortization schedule, but no other documents related to the mortgage.
“There was a lot of angst and quite frankly a lot of dissatisfaction. We weren’t happy with the way the properties were being maintained,” he said. “We weren’t happy with the construction standards in subsequent phases. Horton had made a number of unilateral decisions, and we weren’t happy with any of them.”
Jaehne’s neighbor is attorney and Daphne Municipal Judge Michael Hoyt, who is also chairman of the Baldwin County Republican Executive Committee. Hoyt testified about a pair of meetings he attended in 2018, during a “transition period” to resident-control of the BPOA. The first, in April, was held in Daphne City Hall and was an opportunity to discuss outstanding issues with DR Horton. According to Hoyt, DR Horton did not disclose details about the mortgage then, or in June 2018, at a private meeting at the law offices of Hand Arendall in Fairhope.
There, Hoyt and Jaehne represented all residents at a roughly one-hour meeting with DeLaney and Burke, along with Scott Whitehurst and Rachel DeQuattro of DR Horton. Both Hoyt and Jaehne testified that the other parties in the meeting offered no substantive information about the mortgage, with Jaehne suggesting the other parties remained largely quiet, while he and Hoyt expressed their concerns.
“There was no dialogue; it was a monologue,” he said.
On Day 3 of the trial, just before Clarence Burke was called to testify, it was announced he reached his own $100,000 settlement with the plaintiffs, as well as an agreement to award the BPOA fee simple title in Lot A1 and release the BPOA from the obligations of the ECA. But Burke was called as a witness anyway.
The enigmatic proprietor of BCSS arrived at the trial a day after it began. He told BPOA attorney Will Chason he flew in Sunday from Costa Rica, where he has a $1 million condo and 53-foot sport fishing yacht. Chason, seizing on an opportunity to show the jury Burke always had the ability to pay the debt, also got Burke to acknowledge the cattle ranches he owns in Lowndes County and Robertsdale.
Burke also confirmed his ownership interest in Pennstar, BCSS, Wolf Creek Industries and Magnolia River Management, where he employed former County Commissioner Tucker Dorsey. Burke said Dorsey was at the meeting between Whitehurst and DeLaney at California Dreaming, but his name also emerged several other times during testimony. Former DR Horton HOA Manager Lisa Strickland said at the insistence of residents, she had been asking for information about the pool mortgage for months, but her supervisors wouldn’t consent. One day in 2018, a big white binder appeared on her desk.
“In it was management agreements and other records that dated way back for Bellaton. It had Tucker Dorsey’s name on it, [former manager] Tom Poulous’ name on it, and at that point, I felt totally betrayed because I had been lied to,” Strickland said.
Continuing with his own testimony, Burke admitted Wolf Creek Industries collected $13 million in disbursements from Baldwin County Sewer Service over a 10-year period, not including the $24,000-per-month rent collected by another one of his companies, Summit Industries.
Bizarrely, Burke testified that the $720,000 special assessment was an attempt to “trick the bank.”
“The objective was getting the bank to go along with [it] so we could take money from closing and apply to the mortgage,” he said. “The bank wanted the net proceeds. I refused to allow them to have the net proceeds and they foreclosed on me. We attempted to pay an assessment. The bank had to accept the payoff at that number and they refused to accept. We were trying to trick the bank. We were trying to get them to sign up. We were trying to get the bank to allow the mortgage to be repaid through the title company, but they didn’t let that happen.”
VERDICT
In the end, Judge Jody Bishop tasked the jury with seven charges of action against DR Horton: breach of contract, negligence, wantonness, breach of fiduciary duty, fraudulent suppression, fraudulent misrepresentation and civil conspiracy. Only if the jury found the defendants liable for the first two causes of action, could they impose punitive damages in the last five causes of action.
After about three hours of deliberation, the jury found in favor of the BPOA and against DR Horton. The jury imposed compensatory damages of $599,820.33 and assessed punitive damages of $200,000. Included with Corte’s own $15,000 settlement, the total amount of settlement or damages awarded to the BPOA is $1,014,820.33.
Indeed, Bellaton is now “Home of the Million-Dollar Pool.”
Chason, who represented the BPOA along with attorney Patrick Collins, said his clients have been made whole.
“[The jury] clearly thought some fraud was involved, that explains the punitive damages,” he said. “It’s almost like they were passing that mortgage around like a hot potato.”
Chason said the testimony that stood out to him was Burke’s admission about the special assessment, but also a more subtle fact about the ECA.
“DeLaney was always a very shrewd businessman,” he said. “An example of him and Clarence really harming the homeowners was they misstated the mortgage debt in the ECA. I don’t know if that was lost in the testimony, but I thought it was a very big deal. The mortgage debt from CCD to Alabama Capital was roughly $328,000 where in the ECA they put the mortgage debt at nearly double that. So that was a very deceptive thing in my mind.”
Chason said the circumstances were reminiscent of another lawsuit he filed against Burke and DeLaney, for a “straw man” land deal when BCSS was scoping out locations for a new sewer plant in 2010. That lawsuit was eventually tossed out a week before the trial was scheduled to begin.
“[That case] involved a misstated purchase contract amount for a straw man, and here we’re talking about a misstated mortgage debt,” Chason said. “The DeLaneys and Clarence have so many business dealings together, it’s hard to keep score of all their deals. But Scott Whitehurst testifying Clarence didn’t have the money, that’s why [DR Horton] didn’t go after him is comical. That simply wasn’t true. We thought the reason they didn’t go after them is because they need the sewer company to build all these subdivisions. They have these huge conflicts of interest, and they are just not going to do anything adversarial to each other.”
In fact, according to discovery, BCSS and DR Horton have jointly developed some 38 subdivisions in Baldwin County, representing thousands of lots. BCSS charges a tap fee of $3,500 per lot for new service to each home, then imposes a monthly service charge of $54.50. Chason said the conflicts grow larger when you introduce elected officials into the mix.
“Tucker Dorsey worked for Clarence for years under the umbrella of Magnolia River Management while he was a county commissioner, not only when they were doing this ECA but also as DR Horton was developing subdivisions all over the county,” he said. “So again, it comes down to will DR Horton do something adversarial to Clarence when Tucker Dorsey works for him? When you then have to go to the County Commission to build a subdivision? It’s a very incestuous kind of deal where everybody is taking care of everybody, except the homeowners. It’s not that complicated. A lot of it is greed.”
Attorneys for DR Horton, Chris Williams and Brad Smith of Hand Arendall, did not respond to a request for comment after the verdict.
“DR Horton, they build, build, build, build and it seems to me they have a responsibility to the community, to the citizens, to treat people fairly and look out for the long-term interest of the community given their huge footprint,” Chason concluded. “It really shouldn’t always be about the bottom dollar.”
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