A dispute over nearly $915,000 in special assessment funds has led a major real estate developer to file a federal lawsuit against a Louisiana city government and its officials, raising questions about the handling of public improvement monies collected from private landowners. According to court documents, the conflict centers on whether surplus funds generated by assessments for a specific development project should have been refunded to the developer or redirected by local authorities for broader municipal use.
The complaint was filed by D.R. Horton, Inc. — Gulf Coast in the United States District Court for the Western District of Louisiana on March 19, 2026. The defendants named include the City of Westlake; Mayor Hal McMillin; members of the City Council; the West Trace Community Development District; its Board of Supervisors; and individual board supervisors Bobby LeTard, Andrew Mattingly, and Andrea Mahfouz.
According to D.R. Horton’s filing, the dispute traces back to January 22, 2018, when the City Council created the West Trace Community Development District under state law to finance infrastructure improvements for a residential development known as West Trace. To fund these improvements—such as roadways and utilities—the district issued $7.275 million in Series 2018 Special Assessment Revenue Bonds. These bonds were repaid through special assessments levied on land within the district that benefited from those improvements.
D.R. Horton alleges it became responsible for these assessments after acquiring all lots within Phase I of West Trace through a series of transactions completed between 2019 and 2021. The company states it prepaid all required assessments during lot closings and asserts it was recognized by both previous developers and district authorities as entitled to any refunds or reimbursements associated with bond proceeds or surplus assessment collections.
The legal conflict intensified after all outstanding bonds were redeemed following payments made by D.R. Horton—culminating in a final redemption on September 26, 2024—which left approximately $914,685.67 remaining across several trust accounts originally established for project construction costs and reserve requirements.
D.R. Horton contends that both contractual agreements (including a Developer Rights Assignment consented to by district officials) and state law require such surplus funds be returned to them as sole payor once project obligations are satisfied: “Defendants cannot now assert that D.R. Horton lacks legal entitlement to the Remaining Trust Monies when the District itself consented, in writing, to the assignment of precisely those rights.”
Instead, according to court filings, on February 17, 2025—five months after final bond redemption—the Board of Supervisors adopted a resolution authorizing transfer of these residual monies to the City via a Cooperative Endeavor Agreement without notice or hearing involving D.R. Horton. On that same day, presided over by Mayor McMillin, the City Council passed Resolution 3718 approving receipt and use of these funds “to be used by the City solely to pay for costs of [unspecified] public improvement projects … in order to induce economic development and reduce blight within the City.”
The complaint argues this action violated both federal constitutional protections (the Takings Clause under Fifth Amendment as enforced through Section 1983) and procedural due process rights because it deprived D.R. Horton of property without just compensation or adequate notice: “The transfer … constitutes a taking without just compensation in violation of the Fifth Amendment.”
Additionally, D.R. Horton claims breaches under Louisiana’s Constitution regarding takings without adequate compensation or proper public purpose: “Funds derived from benefit special assessments levied for specific infrastructure improvements … cannot be repurposed as a general revenue source for unrelated municipal projects without satisfying … Louisiana law.” The suit also alleges violations related to improper application of special assessments under state statutes governing community development districts.
The developer is seeking recovery totaling $914,685.67 plus interest—representing what it claims is an overpayment resulting from prepayment of all project-related assessments—as well as attorneys’ fees pursuant to federal civil rights statutes (42 U.S.C §1988) and other relief deemed appropriate by the court.
The document details extensive correspondence between D.R. Horton’s counsel and attorneys representing both district management and city government demanding justification or return of funds prior to litigation but reports no substantive response was received.
As outlined in court records spanning more than forty pages (Case No.: 2:26-cv-00889), attorneys representing D.R. Horton include those whose names appear on various attached exhibits referenced throughout their filing; no judge is explicitly named in available excerpts.
Source: 226cv00889_DR_Horton_v_City_of_Westlake_Complaint_Western_District_of_Louisiana.pdf
