Ill. AG’s Lawsuits Alleges Campground Broke Contracts in Failure to Clean Up After Flooding

Illinois Attorney General Lisa Madigan has filed a lawsuit in Winnebago County alleging a once idyllic members-only campground became anything but beautiful after floods in a nearby river caused extensive damage and owners failed to bring the facility back to state public health standards.

Madigan’s lawsuit alleges the Willow Creek Resort, located on the banks of the Kishwaukee River at 3905 S. Bend Rd., in Rockford, failed to provide contracted services, including electrical hook-ups, sewage disposal systems and drinking water systems, after floods in 1993 and 1996 damaged the property. Madigan’s office has received 40 consumer complaints against Willow Creek.

The lawsuit charges Ronald Ulakovich, developer, owner and operator of the campground, Willow Creek Resorts Ltd., owner of the campground property, and Willow Creek Resort Corporation, a dissolved not-for-profit corporation that operates and manages the campground, with violations of the Illinois Consumer Fraud and Deceptive Business Practices Act.

“Some Willow Creek members signed long-term contracts in the hopes of spending many years to come relaxing with family and friends in a beautiful campground environment,” Madigan said. “When the facility was no longer a sanitary or desirable place to vacation, however, members found themselves unfairly trapped in contracts and facing collection actions.”

Opened in 1985 as a members-only campground, Willow Creek provided members with amenities including utility hook-ups for recreational vehicles and access to a waste dumping station, clubhouse, pool, petting zoo, miniature golf course and fishing. Madigan said members of the 140-site campground signed contracts – some for 99-year enrollments at the campground – and paid membership sign-up costs of $4,495 and higher. Once enrolled, consumers also paid yearly membership dues averaging $400 per year.

In spring 1993 and again in spring 1996, heavy rains caused the Kishwaukee River to overflow its banks and flood Willow Creek with as much as five feet of water. After failing to restore the property to suitable operating conditions, the campground was repeatedly cited between 1996 and 2001 by the Illinois Department of Public Health (IDPH) for failing to meet state codes. Willow Creek’s Recreation Area license expired in February 2002 and was not renewed until August 2004, when the campground was returned to proper, operating condition. A separate license to operate a pool at the campground has not been renewed since it expired in May 2002.

During the same period that the site was in decline, owners of the campground began aggressively attempting to collect dues from members who no longer used their memberships and who stopped paying dues. In some instances, Willow Creek reportedly told delinquent members they could walk away from their contracts if they agreed to pay their overdue fees and additional “walk away” fees ranging from $1,000 to $2,500.

Willow Creek allegedly told other members interested in terminating their contracts that the only way to get out of a contract would first be to upgrade to a 99-year “Charter” membership at a cost of between $1,824 and $2,995. Those members allegedly were told that only after the upgrade was paid for would the campground be able to resell the memberships.

Madigan’s lawsuit alleges Willow Creek violated Illinois’ consumer protection laws by failing to improve and maintain its facilities as represented in its contracts, operating without a recreational license between February 2002 and August 2004 and continuing to sell membership upgrades during the period when the campground did not have an operating license.

In addition, Madigan’s lawsuit alleges Willow Creek used language in various contracts and certificates that was unfair to consumers because lifetime members were required to pay dues regardless of whether they used the facilities. Willow Creek also allegedly told members they could not abandon their memberships even though the campground was offering “buyouts” to other members, represented the campground would resell memberships on behalf of members but then failed to do so, and failed to maintain accurate financial records.

Madigan’s lawsuit asks the court to prohibit the defendants from further violating Illinois’ consumer protection laws. The lawsuit also seeks a civil penalty of $50,000 and additional penalties of $50,000 per violation found to be committed with the intent to defraud.

Additionally, Madigan’s lawsuit asks the court to order the defendants to allow members to abandon their membership contracts without being required to pay dues.