Welcome

I have discovered that there is no shortage of interesting, sometimes humorous and occasionally outright quirky legal disputes that have a golf connection. Please enjoy

I also invite you to join the Golf Dispute Resolution Linked In group, which you can access here.

Please don’t hesitate to share ideas for either the blog or the Linked In group.

By way of background, I am an attorney who serves as general counsel to a financial services company.  I also frequently serve as a mediator and arbitrator. And, of course,  I enjoy golf, most often at the Yale Golf Course. You can learn more about my experience here.

Now, for the required disclaimer, so I can remain in the good graces of the legal ethics powers-that-be:  This website, which may constitute Attorney Advertising in some jurisdictions, is for informational purposes only and does not constitute legal advice.

Best,

Rob Harris
rharris@golfdisputeresolution.com
914-482-2448

 

 

By: Rob Harris

I subscribe to the view that the most important provisions in an agreement are those that set forth what occurs in the event of a dispute. Indeed, absent a dispute, the parties often never have need to refer to the agreement once it has been signed. When problems arise, however, and the attorneys eagerly devour the sections of the agreement that set forth the types and amounts of recoverable damages, which state’s law is to apply, and whether a dispute is to be mediated, arbitrated or presented to a judge or jury.

A recent example of the importance of a contract’s dispute resolution provisions recently arose in Ohio, where a federal court denied a party’s attempt to force a dispute into arbitration.

A company called Revolution Sales & Marketing developed and manufactured golf balls with a hollow metal core. The plaintiff company contracted with the defendants ostensibly for a joint venture to market the golf balls. Plaintiff alleges that it provided confidential information about their research, development and planned marketing activities, and that the defendants then usurped that information. Plaintiff alleged that the defendants, to resolve the dispute, agreed to purchase 100,000 dozen golf balls, but then reneged on the deal, indeed having no intention to purchase the golf balls.

Thus, for the plaintiff, the upshot of its ill-fated relationship is that it provided the defendants with the valuable, confidential information about the product and marketing plans, which the defendants unlawfully misappropriated.

From the plaintiff’s perspective, these facts, if substantiated, would make a good story for a sympathetic judge.

The defendants, however, accused of fraud and misappropriation, would prefer to keep this case away from an overly sympathetic jury. The defendants thought they had an opportunity to divert the case to arbitration, because one of the contractual documents contained a provision that

“all claims, disputes and other matters in question among the parties arising out of or relating to this Agreement, other than any demand for equitable remedies such [as] an injunction or specific performance, shall be decided by arbitration in accordance with the Arbitration rules of the American Arbitration Association in effect as of the date of this Agreement.”

Invoking this language, the defendants moved to dismiss the lawsuit, asserting that the plaintiff needed to assert its claims in arbitration.

The court, however, disagreed.   Focusing on the italized language quoted above, the court noted that, in its complaint, “plaintiff seeks a preliminary and permanent injunction prohibiting all Defendants from directly or indirectly manufacturing or selling HMC balls or other balls which incorporate confidential information developed by Plaintiffs.”

Because the plaintiff was seeking injunctive relief, plaintiff was not subject to the arbitration provision, since it expressly excluded “any demand for equitable remedies such [as] an injunction….” Consequently, plaintiff was allowed to pursue its lawsuit in the judicial forum that it preferred.

By: Rob Harris

According to documents he filed with a Michigan federal court, Robert Jesse “was a healthy young man with no vision problems until he swung a golf club at Dick’s Sporting Goods. The Plaintiff walked into the hitting room with perfect vision and after being struck in the eye by a golf ball, came out with a lifetime of vision problems.”

Mr. Jesse provided the court with the following details, which Dick’s Sporting Goods did not dispute:

On or about August 18, 2011, the Plaintiff and his uncle, Doug Jesse, were shopping for golf clubs at DSG when approached by DSG’s employee Curtis Ebbitt. Mr. Ebbitt offered the Plaintiff the opportunity to swing the golf clubs on a trial basis in the stores (sic) hitting room…  Mr. Ebbitt unlocked the hitting room and allowed the Plaintiff, his uncle and Mr. Ebbitt to all enter the hitting room. The Plaintiff handed Mr. Jesse the clubs he wanted to try and Mr. Ebbitt left the hitting room to remove the security tag and place tape over the head of the golf club. Mr. Ebbitt then returned with the golf club and handed it to the Plaintiff to swing on a trial basis. Mr. Ebbitt and Doug Jesse then left the hitting room. The Plaintiff placed a golf ball on the golf mat which is part of the equipment, along with the Golf Achiever II (a laser measuring device that the golf ball travels through after being hit… that was manufactured by Co-Defendant Focaltron Corporation… and installed at the DSG store.

Plaintiff struck the golf ball with his selected club, following which he suffered a serious injury to his left eye. Plaintiff came out of the hitting room with a napkin to his eye, which was bleeding. Plaintiff alleges it was the golf ball which ricocheted against something in the room and returned to strike him in the eye. He alleges severe and permanent injuries to his left eye, including the eye remaining bloodshot as well as issues with depth perception, blurry vision, glaucoma, lazy eye/eyelid, and cataracts.

According to Mr. Jesse (and his attorney), this state of events should have been sufficient for him to prevail on a claim of negligence against Dick’s Sporting Goods.

The company, however, had a different view. As the court summarized the company’s argument,

“DSG  argues that plaintiff has not come forward with even a theory of causation, let alone any actual evidence concerning how the incident injuring his left eye occurred, and thus that it cannot possibly face any liability here. DSG points to the testimony of plaintiff, plaintiff’s uncle, and the DSG employees present that day, none of which provides anything remotely concrete about how the injury occurred. For instance, in deposition, plaintiff ‘didn’t know’ if anything was wrong with the driver, what caused the ball to come back and hit him in the eye, what the ball hit in the room, if anything, or even whether he may have topped the ball, causing it to come back and hit him in the eye. Neither plaintiff nor his uncle, who was not in the room, heard the ball hit anything after it was hit by the golf club. Likewise, the sales associate did not hear the ball strike anything. Furthermore, plaintiff has presented no evidence giving rise to permissible inferences of negligence by either defendant. There are a multitude of possibilities to explain how the hitting room or equipment might have contributed to plaintiff’s injuries, but none more likely than the others.”

The court ruled in favor of Dick’s Sporting Goods, holding that without some claim or evidence as to what caused the accident, plaintiff’s case must be dismissed. According to the court, “it remains that all plaintiff has is speculation, and no opinion–expert or otherwise–to support his case.”

Referencing applicable law, the court explained that “‘the happening of the accident alone is not evidence of negligence.’ Stated another way, evidence of a bad result, in itself, is insufficient to prevail under this theory. In short, plaintiff asserts only that the ball hit either defendant Focaltron’s equipment or something placed in the room at DSG (or the wall of the hitting room itself), and cannot even rule out a freak ball topping incident. This kind of alternative liability argument (if not x, then y) simply is not enough to create liability…  Thus, this case has not moved from the ‘realm of conjecture’ into a ‘field of legitimate inferences,’ and plaintiff’s speculation is simply not enough…”

Accordingly, the court entered judgment for the company, and plaintiff was left without recourse for the injuries he suffered.

 

By: Rob Harris

In 2006, Barack Obama had not yet announced his candidacy for President–for the first time. However, it was then, eight long years ago, when two South Carolina businessmen, McCray Smith and Jerry Pettus, purchased the losed Deer Track North Course, with the intention of converting the golf course property into residential housing.

Now, finally, the nearby residents’ attempts to forestall the development have been judically ended and the Smith / Pettus team are geared up and ready to go…. except for a couple of  things. During the litigation delays, they lost the property to foreclosure. And, Smith has sued Pettus and the foreclosing lienholder (First Trident Financial LLC), claiming that they acted to defraud him. Otherwise all systems are go…..

Indeed, so goes the legal (at least the litigation) system.

Here’s the relevant chronology of events that have occurred since 2006:

  • Deer Track North Course closes.
  • Smith and Pettus, through a limited liability company, purchase the course.
  • Four homeowners bring suit to block the residential development. The suit evolves into a class action. Smith and Pettus countersue.
  • Meanwhile, the County, arguably bowing to neighborhood pressure, changes the permissible zoning density, depriving Smith and Pettus of the opportunity to build as many homes as they had planned. Smith and Pettus sue the County.
  • In 2008, a court initially throws out the residents’ suit, but then decides that certain claims can go to trial.
  • In 2010, the court rules in favor (twice) of the course owners. However, the homeowners appeal.
  • In 2011, the County settles the zoning density lawsuit by paying Smith and Pettus $325,000.
  • Also in 2011, First Trident acquires a promissory note owed to the bank that provided financing to Smith and Pettus.
  • In 2012, First Trident forecloses on the property and acquires it at auction for a fraction of what Smith and Pettus had paid.
  • Also in 2012, the South Carolina Court of Appeals upholds the lower court’s rejection of the neighbors’ claims. The neighbors appeal to the South Carolina Supreme Court.
  • In April 2014, the South Carolina Supreme Court affirms the Court of Appeals decision, clearing the way for the development of the property no longer owned by Smith and Pettus.
  • Also in April 2014, Smith proclaims its time for all litigation to end–including his fraud claims against his former partner–offering these pearls of wisdom:

“I think enough people have passed away, enough people have gone bankrupt, enough people have lost value on their homes at Deer Track since this started.  A lot of people have lost a lot on this. It’s crazy and ridiculous and it’s time to end.”

Amen, Mr. Smith, amen.

By: Rob Harris

Those who view golf as the embodiment of sportsmanship might have their illusions dashed by reading a recently issued appellate decision from California–at least when it comes to fights between golf-related businesses and their lawyers.

In 2006, the Roger Cleveland Golf Company ended a ten year relationship with an Asian distributor of their products. The distributor brought suit against Cleveland, and also proceeded to register the “Cleveland Golf” trademark in Hong Kong and Macau, which resulted in Cleveland bringing suit against the distributor.

The litigation did not go well for the distributor. It lost its attempt to maintain its rights as a distributor, and the court–putting it mildly–was not pleased with the distributor’s registration of the “Roger Cleveland” trademark:

“The Court fails to see where Sportsmark gets the Chutzpah to claim it can register Cleveland’s name. As a distributor, Sportsmark cannot appropriate Cleveland’s trademark. Whether or not the distributor agreement was terminated properly does not affect the trademark issue.”

Nonetheless, refusing to take its victory and move on, Cleveland opted to file a malicious prosecution lawsuit against the distributor and its attorneys, claiming they “maliciously filed and continued to prosecute the underlying proceeding without probable cause as no reasonable party, entity or attorney would have recognized or believed that Sportsmark possessed a legally tenable claim against Cleveland Golf .”

Supporting the claim of malice, Cleveland pointed to a statement made by one of the distributor’s attorneys who, when told that the case was frivolous, responded by saying “That may be true, but all I have to do is get the case to a jury.’”

The court, noting that lawyers will be lawyers, was not persuaded, holding that “these comments were typical of comments attorneys make to one another during the course of litigation.” Accordingly, the court found that, “even if the underlying case was lacking in merit, there was insufficient evidence that the distributor’s attorneys subjectively acted out of malice.”

 

By: Rob Harris

Larry Rose allegedly was injured in October 2008, while riding in a cart at New York State’s Tee-Bird Golf Club.  According to the court that recently allowed his lawsuit to proceed, “on a steep and winding section of the paved golf cart path that allegedly was covered with wet leaves, the cart skidded and flipped over, resulting in plaintiff being injured.”

Tee-Bird argued that the court should dismiss Rose’s lawsuit, relying on legal precedent holding that ”golfers are deemed to assume the risks of open topographical features of a golf course” … and they are “held to a common appreciation of the fact that there is a risk of injury from improperly used carts.”

Rose, however, convinced the court that his lawsuit should continue, claiming that there were external factors at play. As the court explained:

“Although plaintiff was an experienced golfer, he had not previously played on this particular course. He claimed that he was driving slowly and cautiously when the car simply slid out of control on wet leaves. Defendant acknowledged that the golf course path where the accident occurred was steep and winding. While defendant disputes the amount of wet leaves that plaintiff contends were on the path, it is uncontested that there were leaves present and that defendant’s employees had inspected the area earlier in the day. Significantly, plaintiff produced proof via the testimony of the person with whom he was golfing that,after the accident, he observed that the tires on the golf cart were ‘bald.’”

Although Tee-Bird disputed that the tires were in bad repair, the court held that issue was one of material, disputed fact that would need to be addressed at trial. According to the court, “a golf cart with bald tires rented to someone unfamiliar with the course on a day when wet leaves covered a steep and winding section of the cart path could create a situation where the occupants of the cart were exposed to a hazard beyond the normal dangers associated with golfing in such conditions.”

Thus, at least for now, Mr. Rose’s claims remain alive.

By: Rob Harris

In late 2012, an entity known as Stuck in the Rough LLC acquired, and shortly thereafter closed, the former Escondido Country Club. The plan? Turn the land into a housing development.

Not surprisingly, resistance emerged. The Escondido Country Club & Community Homeowners Organization was formed with one stated purpose:  ”To prevent conversion of county club property into a housing development with as many as 440 new homes.”

The city responded to a neighborhood petition drive by declaring the land permanent open space. The owner, complaining that the city should have put the matter to a public vote, brought suit.

Meanwhile, purportedly taking care of its open space, the owner spread chicken manure over several fairways. The neighbors alerted the Air Pollution Control District, who sent an inspector out to…. well, inspect. And inspect he did.

According to Inspector Mesplay, “I could smell it yesterday quite strongly by the fence line, and then today I was granted access behind a house and had a Level 5 odor coming right off the fairway. Level 5 is bad. Level 5 will just about make you gag.”

Responding to the city’s announced plans to cite the owner for public nuisance, the owner claimed that it is utilizing “an industry-standard landscaping program,” but did announce that a less-odorous fertilizer will be used in the future.

“A Lakewood man is accused of setting fire to the garage of a family member’s Westlake home after police said he damaged furnishings with a golf club, swung the club at relatives and fought with officers at the scene.”

You can find the story here.

By: Rob Harris

A New York City McDonald’s faced a dicey public relations dilemma this past winter when it sought to “evict” a group of elderly Koreans who had turned the restaurant into a daily hangout. Purchasing a cup of $1.09 coffee, the crowd made a full day of it, occupying a sufficiently large number of tables so that paying customers could not find a seat to scarf down their Quarter Pounders. Eventually, a compromise was reached, but not before the displaced elderly and their supporters launched a boycott marked by tasty sound bites such as “Senior citizens should not be treated as criminals. They should be respected.”

Thirteen retired Pacific Grove, California city employees recently found themselves as the golf equivalent center of attention. For thirty-five years, Pacific Grove offered retired city employees free golf on the municipally owned Pacific Grove Golf Links. However, when the city sold the course to a private operator, the freebie went bye-bye, leaving thirteen retirees sufficiently angry to file suit.

The city and the golf course operator, perhaps recognizing they would be hard-pressed to win the public relations battle even if they pulled out a victory in court, caved, restoring the retirees to their benefit. The city, however, did eliminate free golf prospectively, so future retirees may choose to spend their days drinking coffee in a nearby McDonald’s

 

By: Rob Harris

A federal appeals court issued a decision last week that provides a cautionary reminder to banks and other golf course financers who believe acres of beautiful land provide sufficient collateral even if the golf course venture proves unprofitable.

United States Steel developed an Alabama subdivision, called Heatherwood, in the 1970s. The court described the project as follows:

“The centerpiece of the subdivision was an eighteen-hole golf course. The plat maps for the subdivision=s first three sectors showed a golf course at the heart of the subdivision and indicated that all the subdivision=s roads would have golf-themed names, such as ‘Masters Lane’ or ‘Oakmont Road.’ The first set of general covenants, restrictions and easements for the subdivision also referenced a golf course, requiring each residential lot to have a ‘golf cart storage area’ and barring fences ‘adjacent to the golf course fairways, tees or greens.’”

In 1999, certain subdivision homeowners and others grouped together to buy Heatherwood Golf Club from U.S. Steel. After a period of time, these individuals sold the Club, as a result of which an entity called Heatherwood Holdings, LLC took title. Needing funds to pay for renovations, Heatherwood secured a $4 million loan from First Commercial Bank, for which it provided the bank a mortgage on the golf course property.

Unfortunately, the golf club did not fare well under Heatherwood, and it eventually filed for bankruptcy. Heatherwood, together with the Bank, seeking to recoup its loan, found themselves confronting an obstacle to liquidating the collateral. The Bank made its $4 million loan with the expectation that the land could be turned into a residential development. After all, there was no formal deed restriction that limited the use of the property to a golf course.

The residents of the Heatherwood subdivision, however, objected, seeking to preserve the land for use as a golf course.

In its recent decision, the appellate court affirmed the bankruptcy court’s finding that the property was subject to an “implied restrictive covenant,” precluding its development. As the court noted,

“USX recorded numerous plat maps which identified the property as a golf course and listed the names of the roads in these maps, all of which were derived from the names of golf courses and tournaments. Moreover, the deeds to each residential lot in the subdivision makes  reference to the various covenants and easements which note that the Heatherwood subdivision is a planned residential and golf community. The deeds required owners of residential lots to construct a golf cart storage area and prohibit the construction of a fence on those lots adjacent to a fairway, tee or green on the golf course property. Prospective lot purchasers were told that every homeowner must be a member of the Heatherwood Golf Club. USX created various marketing materials highlighting the benefits of living in a golf course community and erected a sign at the entrance of the development noting that the Heatherwood subdivision is a ‘golf course community.’ Notably, the community was used exclusively as a golf course community since it began operating in 1986. Lastly, based on testimony from witnesses, the bankruptcy court determined that most, if not all, Heatherwood homeowners were induced to buy based on the inclusion of a golf course in the subdivision and that USX always intended for the Heatherwood subdivision to be a golf course community.”

Accordingly, the bank found itself with rights to golf course collateral at a value that fell short of the amount of its debt.

Message to lenders: be darn sure about the uses to which you can put your collateral, just in case the borrower can’t meet its obligations.

 

By: Rob Harris

Quite a few professional golfers decided to forego the completion of their formal high school education, preferring to spend their days in pursuit of fame and fortune. Neither Kevin Na, Sean O’Hair, Justin Rose and my home town golf celebrity Bobby Mitchell (I mean, how many golfers beat Jack Nicklaus in sudden death at the Tournament of Champions) made it all the way to their senior prom.

If Meadow Lands golf course in Phoenixville, Pennsylvania has its way, hundreds of students–elementary school students, no less–will have their education curtailed due to golf.

Meadow Lands happens to be the place that the Phoenixville Area School District identified as the ideal location for its new early learning center and elementary school. The new facilities are needed, according to the District, because the existing schools cannot accommodate the growth of the young student population. Without the new school, the student population will exceed capacity by at least 143 as of the 2016-17 school year.

Meadow Lands is not necessarily averse to turning over the keys to the course in furtherance of education. However, it wants $8 million to do so, while the school district’s offer is $5 million. Seeking help from a third party of the black-robed variety, the school district has commenced an eminent domain proceeding. The next hearing date is scheduled for May 16–prime time for golf and end-of-school-year festivities. Stories about the dispute can be found here and here and here.

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