Bankruptcy Court Judge Louise Adler has awarded ailing Warner Springs Ranch to the low bidder, denying it to the Pala Indians, but an unusual twist suggests to some skeptics that the tribe will eventually get the rundown 2500-acre resort with hot springs, tennis courts, casitas, horse stables and golf course. The ranch was set up in 1980 with 2000 intended owners, but only 1200 ever signed up. Developers had financial woes from the outset. In recent years, something akin to a war has broken out between two sets of users. A few live nearby in the Los Tules area and use it all the time. The others live long distances away, and seldom if ever use it, and a few years ago launched plans to sell the facility -- heresy, of course, to those living nearby. San Diegan Greg Maizlish, vice president of the ranchowners association, points out that in 2009, a full 69% of the owners wanted to sell it -- "more than a super-majority," he says. But lawsuits piled up, along with land disputes, forcing the bankruptcy early last year.

A tribe of Indians was forced by the U.S. government to evacuate the Warner area 110 years ago; they now belong to the Pala Band of Mission Indians, who consider Warner sacred ground. In a bankruptcy court auction, Pala bid against Bill McWethy, representing Pacific Hospitality Group. Pala bid $13.4 million and McWethy bid $11.75 million with one interesting twist: he would do the deal without title insurance. As Maizlish points out, "He won't have a clear title unless he gets a policy on his own." There are multiple easements, encroachments, and land-based encumbrances.

Patrick Roche, a ranchowners association board member, says, "I doubt that [McWethy] can get title insurance, and if he can't get title insurance, I don't know whether he can get financing." Warner is "a dying resort with 31% occupancy," says Roche. Refurbishing the resort will be extremely expensive, and it will be very hard to recruit members who will pay enough money monthly to give the ranch the capital it needs to do the modernization.

Doug Elmets, spokesman for Pala, says, "The tribe is very disappointed that the judge elected to select a lesser offer and to not acknowledge the significance of the ancestral connection to the tribe." Then Elmets makes a revealing comment: "The tribe is hopeful that one day it will be able to own their historical property and to be able to make the ranch what it should be, which is a first class resort." The tribe, 38 miles from Warner, has a gambling casino and leases property to a company that operates a motocross speedway on tribal property.

Los Tules residents are celebrating their victory, but Maizlish thinks it may be premature. "I hope that if Pacific Hospitality Group cannot get the title insurance policy, they will sell the ranch to the tribe," he says. The dispute between the two factions remains: "There is racism among the people who live in Los Tules. People who live in Los Tules have white skins and don't want their backyard owned by people with red skins or brown skins."