Palm Coast Council Candidate Darlene Shelley Preparing to Sue City and Council Member Theresa Pontieri Over ICI Vote

Darlene Shelley, a candidate for the Palm Coast City Council, last week filed suit against the city and against Council member Theresa Pontieri, alleging that the council violated due process when it approved the expansion of a housing development in the E Section and that Pontieri’s family could benefit from the approval.

Pontieri said the filing is frivolous on all counts, factually baseless and politically motivated. 

“It’s yet another frivolous lawsuit that is grounded in neither the facts nor the law. It has no merit at all,” Pontieri said. “It is yet another thing that’s going to cost the taxpayers money unnecessarily. We pay for legal fees directly from the general fund. General fund monies are tied to property taxes, so things like this do not help this city keep people’s property taxes low.” 

Pontieri also raised the possibility of seeking some legal buffer against Shelley. “It’s not the taxpayers’ jobs to pay for people’s frivolous, meritless lawsuits,” she said. “If somebody is meeting the legal standard for a vexatious litigant, they should not be able to file these types of things with impunity.” Though extremely rare–and in this circuit, unheard of in recent memory–a court may declare someone a “vexatious litigant,” meaning someone who files lawsuits serially to harass or intimidate or hurt reputations. A declared “vexatious litigant” would have to seek the court’s permission before filing another action. 

Shelley does not appear to meet that standard. She was among nine petitioners who filed a lawsuit against the city in 2022, challenging a council action that cleared the way for a storage facility near Hidden Lakes on Old Kings Road. The court rejected the challenge. 

Shelley filed the lawsuit regarding the E Section development electronically on March 19 through Flagler County Circuit Court’s e-portal. It was kicked back to a correction cue and will not be officially accepted until the filer fixes errors. The errors were minor. The filing lacked a signature and Shelley included a case number. Case numbers are assigned by the clerk. 

Shelley is representing herself, though she filed the suit under both her name and that of Concerned Citizens of Palm Coast, the corporation she created in 2022, let lapse, then reinstated in 2025. Outside of small claims court, corporations may not be represented by their principal, or by themselves. Shelley would have to either hire a lawyer or drop the corporation as a petitioner. 

The filing, nonetheless, indicates her intentions. Shelley did not return a call, an email and a text before this article originally published. 

Last Feb. 17, the City Council voted 4-1 to approve the expansion of a long-planned housing development in the E-Section, from 58 to 71 single-family houses. The development has been planned by ICI Homes for over two decades and was itself the subject of a lawsuit almost 25 years ago when ICI challenged the city’s restrictions on it. The settlement led to the agreement that it could build 58 homes, a few more than the city had wanted to allow. 

ICI returned a few months ago with an application to increase the number of houses and shrink the size of the lots. The council approved the expansion on first reading of the ordinance, conditional on ICI not diminishing lot sizes less than the city’s land rules allow, and on providing a public benefit. When the proposal was ready for second reading, the company announced that ICI would donate the land to a nonprofit, build the houses and sell them at or near cost–that is, under their market value–to first responders and similar professions, as a public benefit. 

The council approved the project. Members of the public objected to ICI’s and the administration’s method at second reading, with the nonprofit proposal sprung at the hearing itself rather than presented ahead of time with documentation. 

Shelley also objected, but not on those grounds. “This is nothing short of a bait and switch,” Shelley said, echoing Mayor Mike Norris. “We have property rights. We have rights to the peaceful enjoyment of our homes, the protection of our property values, and this is nothing short of a way to take that away from us.” She did not mention any of the issues she raised in the pending lawsuit. 

The document charges that the proposal at second reading was “entirely new and significantly modified from the First Read,” with no documents made available ahead of time, including ICI’s letter of intent to cede the project to its nonprofit. The letter was displayed on screens during the meeting. The action violated due process and transparency requirements, the suit charges. Turning to Pontieri, it states that since her husband is a firefighter, one of the groups that would benefit from the more affordable houses, Pontieri’s vote raises “a potential conflict of interest.”

The suit calls for quashing or vacating the decision. 

In an interview on Monday, Pontieri said the ICI matter did not have to be resubmitted because the changes were additional restrictions on ICI. 

“They were donating this land, which is a larger restriction on the applicant. Therefore, it didn’t need to go back to first read,” Pontieri said. “There wasn’t a lack of due process for the residents, because there was nothing that was prejudicial to the residents in this second read. What was provided by the applicant in the second read was a public benefit in the form of donating the land. As a matter of fact, in the second read, they actually increased the lot sizes.” Pontieri and Council member Ty Miller had insisted on larger lot sizes. 

At the time of the council’s approval, ICI companies had contributed $5,000 to Pontieri’s campaign for a County Commission seat. Pontieri said at the hearing that she was returning the money. She has since done so. 

“There are countless representatives in the city and county that have received donations from ICI Homes, and there are no conflicts that exist because of those campaign donations,” Pontieri, an attorney, said. She said legal precedents have made that clear. 

“It’s really important to keep in mind that ICI is donating the entirety of this land. They’re not getting a single dime from this project. So that narrative doesn’t even make sense,” Pontieri said.

The nonprofit would have been FBH Community, founded by Forough Hosseini, spouse of ICI founder Mori Hosseini. The connection raised questions of its own, even though FBH Community is running a similar operation in Volusia County. Today, Pontieri noted that rather than have an ICI-affiliated nonprofit build the homes, as originally planned, ICI may donate the land to the city for the city to find a nonprofit–if not create one–for the project. In essence, ICI would have no connection to the project. 

For first responders to benefit from the homes, they would have to be working in Flagler County. Pontieri’s husband does not work in this county. And the Pontieri household is dual-income, removing it from qualification regardless. “We wouldn’t qualify for something like this anyways. So again, these are just meritless” claims, she said.

“It’s terrifying to me to think that somebody who clearly has no understanding of the law or the facts or our code, or the manner in which things are approved or people are conflicted out” is bringing suit, Pontieri said. “These are basic tenets that somebody who is running for office should know and understand, and clearly this person neither knows nor understands nor cares to learn about what is actually a conflict of interest, how the process works, etc. She has never reached out to me to ask questions. She didn’t reach out to me about this project to ask me personally why it is I voted for it, and whether or not it’s actually a conflict of interest. She chose to fire off a frivolous, meritless lawsuit in what I think is nothing more than a political ploy.”

Norris, the mayor, filed suit against the city over the appointment of fellow-Council member Charles Gambaro and lost last July. The Flagler County Home Builders Association last October sued the city over a sharp increase in impact fees. The developer of Town Center sued the city in November over utility capacity. Those two suits are pending.