Country Club Membership

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By: Rob Harris

From Illinois, we bring you the interesting case of Dr. Zaki Sheikh v. Sunset Hills Country Club, which the court recently held will live to fight another day.

As reported, Dr. Sheikh joined the club 40 years ago at a time when, in club tournament play, he was entitled to use his full USGA handicap. Lo and behold, a few years ago, the club changed its policy, permitting use only of partial handicaps.

“Unfair,” proclaimed Dr. Sheikh. To the courthouse he ran. Let’s let the Madison-St. Clair Record describe what happened:

“[I]n the summer of 2013, Sheikh alleges he entered a tournament at the club and learned that it no longer followed USGA rules, refusing to give a full handicap in match play to a golfer with a USGA-related handicap.

“Sheihk alleges he spent hundreds of thousands of dollars in fees to the country club. He found it difficult to participate in tournaments, depriving him of benefits promised by membership to the club, the suit states…”

The court dismissed part, but not all, of Dr. Sheikh’s claims. Gone are the claims of fraud and emotional distress. The remaining counts seem headed for a hearing on summary judgment.

 

 

 

By: Rob Harris

Parts of New York’s Rye Golf Club were rendered unplayable in 2010 due to the application of defective fungicide that burned out greens on the golf course.

The city-owned course extracted $2.5 million in settlement from the manufacturer. Now, club members are seeking reimbursement of dues since they were not able to play for several months.

The club has rejected the members’ claims, invoking its “no-refund policy which is built into membership contracts.” Three members have commenced suit.

City Councilman Terrance McCartney has asserted that “we think we have a clear case.” News to Councilman McCartney: litigation often proves cases aren’t that clear.

By: Rob Harris

By now, many of you have heard that Trump National Golf Club Jupiter has been found liable in a class action lawsuit and ordered to pay more than $5,700,000 in damages and interest. The court’s opinion makes for interesting reading and is attached here.

Before Trump purchased the club from the Ritz-Carlton, the plaintiffs were on a waiting list to resign their memberships and obtain return of their initiative fees. The operative rules permitted resignations to occur based on new members entering.  While waiting, those on the list were considered members, required to pay dues, and permitted access to the golf course.

Following its acquisition, the Trump organization unilaterally changed things. As the court explained,

“After closing on its purchase of the Club, Defendant held a town-hallstyle meeting on December 14, 2012, to discuss amendments to Club Documents and changes to aspects of operation of the Club.  At all times material to this lawsuit, Donald J. Trump5 held the top position of authority at Defendant’s company. After the December 14, 2012 meeting, under Mr. Trump’s authority, Defendant disseminated a letter to all Club members including those on the resignation waiting list. The letter was dated December 17, 2012, and bore the signature of Donald J. Trump, as owner of the Club.

“The letter communicated to Plaintiffs and the Class Members three options that they must choose by December 31, 2012: opt-in; opt-out; or remain on the resignation waiting list, but pay no Club dues and have no Club access.

“Those members who opted in were afforded a reduction in Club dues for three years and reciprocity with the other Trump-owned clubs, in exchange for forfeiting their rights to refunds. Those members who opted out kept their rights to refunds and Club access, but could not be on the resignation waiting list and would incur an increase in Club dues with no cap on the amount of Club dues. Plaintiffs and the Class Members fell into the third category communicated by the December 17, 2012 letter. Because they chose to remain on the resignation waiting list, Plaintiffs and the Class Members were denied permission to use the Club in exchange for a release of the obligation to pay dues.  In the letter, Mr. Trump, on behalf of Defendant, stated to Plaintiffs and the Class Members “as the owner of the club, I do not want them to utilize the club nor do I want their dues. In other words…if you choose to remain on the resignation list, you’re out.” Defendant’s general manager testified that it was clear from the letter that members remaining on the resignation waiting list were out of the Club after December 31, 2012. Defendant’s director of memberships likewise testified that the message expressed to Plaintiffs and the Class Members in Defendant’s letter was clear: that if they remained on the resignation waiting list, as of December 31, 2012, they would no longer be Club members and would no longer have access to the Club.”

The court concluded that Trump’s actions constituted a recall of the plaintiffs’ memberships, entitling them to prompt return of their initiation fees. Having been deprived of the opportunity to use the golf course while waiting for their resignations to take effect, they were entitled to return of their money.

By: Rob Harris

Regime change can be messy. Just ask the Obama administration.

So it was, too, a hundred years ago for Richard Jackson, Jr., the former secretary of Michigan’s iconic Red Run Golf Club.

In 2016, Red Run was but a two year old toddler, and on the financial precipice. The club needed money . On January 5, 1916, the club’s board of directors–having mounted a largely unsuccessful fund raising campaign–authorized Secretary Jackson to leave no stone unturned, passing a resolution that provided:

“Whereas, it having become imperative that some plan be adopted by which to raise sufficient funds to meet the obligations of the club, and

“Whereas, the further sale of bonds to members of the club seems improbable, and

“Whereas, there being $50,000 of bonds remaining of the $80,000 authorized and unsold, and

“Whereas; Mr. Richard Jackson, Jr., reports that he has assurances which will enable him to place said bonds at their par value if certain conditions obtain, now, therefore, it is

“Resolved: That the board of governors of the Red Run Golf Club hereby engage Mr. Richard Jackson, Jr., to secure purchasers for said $50,000 bonds and do hereby authorize and empower him to complete all necessary arrangements for the sale and delivery of said bonds….

“That the compensation of Mr. Richard Jackson, Jr., for selling said $50,000 bonds be 5%, such compensa­tion to be due and payable when the full amount of $50,000 for the sale of said bonds be deposited to the credit of the club in the Security Trust Company.

“That the limit of time given Mr. Jackson to sell said bonds is two weeks from January 6, 1916.”

At the time, Mr. Jackson was already feeling besieged, believing himself working too hard for too little.  He was not happy with compensation which “at first [was] 10% commission on moneys taken in [and] was later changed to $200 per month. He explained thathe wanted to get out, that he had devoted his entire time to the club and said of his services: “My duties as secretary of the club were as greens keeper; I also had to do everything around the club that was supposed to belong to other people to do. In fact, I did all the work that was to be done around there.”‘”

And, lo and behold, Mr. Jackson succeeded. Contrary to the expressed view of the board that “the further sale of bonds to members of the club seems improbable,” Mr. Walter E. Flanders, an automobile pioneer credited with enabling Ford to produce 10,000 cars a year, stepped up and took the entire $50,000 of bonds. His beneficence was not without condition, as he insisted upon regime change. The existing club officers thus resigned and a new board was elected.

However, when Mr. Jackson asked for his 5% kicker, the new administration said “no”, contending that Mr. Flanders’ financing was effectively a done deal before Jackson negotiated the terms of his finder’s fee. The board contended that the 5% commission was really a scam concocted by Jackson to compensate him after-the-fact for the underpayment he claimed he had suffered over the years.

The jury, however, agreed with Mr. Jackson, and the Supreme Court of Michigan affirmed. As the court explained, Jackson, “denied all charges of concealment or unfair conduct and told his story of the transaction which, taken in connection with the written records of the club, entitled him to recover if the jury, who saw and heard all the witnesses, believed him.”


By: Rob Harris

Pine Orchard Yacht & Country Club has been around for 115 years. Plans for its 9 hole golf course were drawn in 1901. The club is private, and its website has this to say about its membership:

We are a private club and bring in new members who are known to the membership: family, co-workers, social acquaintances and neighbors.  Many people have already visited the Club as guests for dinner, playing tennis or being the “guest” in a member-guest golf tournament before applying for membership.  Others get to know our facility by attending a private event sponsored by a member – a wedding in our charming Ballroom, a tournament on our golf course, a business lunch conference in our spacious Dining Room.

Kamran and Kara Farid are co-founders of Edible Arrangements, the franchised company which turns flowers into fruits.

Kamran and Kara Farid have filed suit against Pine Orchard, alleging the club’s failure to offer them permanent membership after a two year trial was based on racial discrimination. According to the complaint:

“Certain members of the club had, over the course of the plaintiffs’ provisional membership, made derogatory and racially insensitive comments about the plaintiffs’ race, religion, color, national origin, and/or ancestry…”

Although the club has not yet responded to the complaint–which may include arguments that the club, if it chooses, can discriminate since it is private–it has issued a statement through its attorney, denying the allegations.

“The reasons that Mr. Farid was denied membership are completely legitimate reasons, and are not related to race not related to the national origin, and not related to religion…It was unprecedented for the club what they received in terms of response from their own members.”

 

 

 

By: Rob Harris

Somehow I missed this jewel of a story, published last month in South Africa’s Estland and Midlands News about an elderly golfer who claims that he has been wrongfully deprived of victory in his club’s “Monthly Mug” tournament:

“An 81-year-old golfer has labelled the club’s committee biased, especially when it comes to awarding senior members prizes. Speaking out against the golf results published in the Estcourt News on August 12, the golfer says that the results were incorrect, explaining that he should’ve taken first place for that competition, he substantiated that it was not the first time that the reported results were incorrect.

“We asked one of the people in charge about how the scores work and he told us to play on our handicap. We also go by the computer at the club, which we were instructed to do. If this is the case, then I was misled because we were told to play on the handicap but my score was cut,” explained the resident.

Adamant that the winners names and scores of the August 6 monthly mug was not a true reflection, the resident challenged the golf club committee to explain themselves via the media.

Competition Secretary George van Niekerk explained that senior players who played off the ladies tee box immediately forfeited four shots off their score. This, he said, was a directive from the Natal Golfer’s Union, which was explained to all club members.

He has requested a meeting with the golfer in order to explain the rules but this was refused by the golfer, who wanted a response via the Estcourt News.

 

By: Rob Harris

Three years ago, we wrote about the jury verdict rendered against the former Spokane Country Club, finding it liable for gender discrimination by providing men premium tee-times on Wednesdays and Saturdays while limiting women’s play to Tuesdays and Thursdays. The verdict led the club to file for  bankruptcy protection.

As the Seattle Times reports, the club subsequently was sold to the Kalispel Indian Tribe, which operates it as a semi-private facility.

In describing the club’s legal transition, the Seattle Times explains that the jury verdict followed a “ruling made by Spokane County Superior Court Judge Linda Tompkins in 2011″:

She ruled the club was not exempt from public-accommodation provisions of state anti-discrimination laws. Usually, private-membership clubs are exempt from these laws on grounds of preserving rights of privacy and freedom of association.

In other words, the private club had to operate as if it were a public business and be vigilant not to offend anyone or face legal consequences. Suddenly, a club policy such as designating a block of tee times for one gender could make it a legal target on grounds of discrimination.

In making the ruling, the judge cited examples of how the club had been operating in some ways as a public business to boost revenue. She noted the ease of gaining membership, that nonmembers could rent the club for weddings and other occasions, that the general public could shop in the pro shop and that college golf teams used the course.

The article provides interesting insight into what has followed–on the one hand, private clubs taking steps to ensure they can never be accused of operating a public facility, and, on the other hand, the resurgence of Spokane Country Club/Kalispel Golf and Country Club under its new ownership.

By: Rob Harris

Perhaps my chickens are coming home to roost. Having written this blog for 5+ years, I find myself an unwitting participant in an emerging golf dispute that threatens my golf playing equilibrium.

I have been fortunate to play at the Yale golf course for many years. Yale, a product of Charles Blair MacDonald and Seth Raynor, is viewed by many as one of the best classic courses in America. Carved from a 750 acre land grant to the university almost 100 years ago, its rolling topography, large greens, massive bunkers, provide a four hour experience with no houses or cars to be seen. Democratic with a small “d”, a chairman of an academic department and a dispatcher in the facilities group can expect to be treated the same.

A couple of miles from Yale lies the former Woodbridge Country Club, renamed as the Country Club of Woodbridge after the town was effectively required to acquire the course seven years ago when the privately owned club went bankrupt. Even with outsourced management, the town has struggled with an unprofitable facility, and has explored the various options clubs around the country have considered, e.g. real estate developing, recreation lands, keeping 9 holes of the course.

Enter Roland Betts, college buddy of George W. Bush, developer of New York’s Chelsea Piers andformer Senior Fellow of the Yale Corporation.

Betts has put forth a proposal that would dramatically alter the Yale golf experience. He seeks to lease the Yale course, acquire the Country Club of Woodbridge, and build a hotel, turning the area into a golf destination. Plans call for Gil Hanse to take on the Woodbridge facility to “transform existing course, parking and clubhouse areas to create a new design.” Hanse would also”restore and renovate [Yale] to its full potential.”

The anxiety-of-the-unknown already is taking hold. Public disclosures and surrounding rumors have Yale being taken from its current membership, student and faculty constituencies and turned over to outside destination visitors willing to pay big bucks to play the course. Loyal and long serving pro shop and grounds staff worry about the loss of their jobs.

Betts still needs to jump through hoops–approval by Woodbridge, by the Yale corporation, and potential legal challenges. He will face issues surrounding the right of access to the course by university students, faculty members, and members who paid initiation fees. The unions to whom Yale employees belong will have a voice.

This emerging dispute will provide a fertile vehicle for dialogue and potentially more formal mediation.

My personal interests aside, it will be interesting to watch it unfold.

 

 

By: Rob Harris

Over the past several years we have discussed many lawsuits involving golf course owners’ desires to transform the use of the property into something that will generate better returns (or avoid losses). Frequently, there is pushback from neighbors, from members, and from local governments.

I commend to those interested an article by Pat Clark at Bloomberg that discusses the issues raised by these disputes and market forces. As Clark explains:

“More than 800 golf courses have closed nationwide in the last decade, as operators grapple with declining interest in the sport and a glut of competition. Many of those shuttered courses were built on land proscribed from redevelopment by local zoning codes seeking to preserve open space—or…by deed restrictions intended to protect homeowners who had paid a premium to live near a golf course.

“That leaves some golf course owners with the real estate equivalent of an unplayable lie: They can’t make money running the course, and they can’t recoup their investment by selling it….

“In the face of declining interest and competition driven by oversupply, course owners have gone searching for ways out. Some have donated golf course land to nature trusts and local parks, taking a tax break in return for preserving the open space. Others have inked deals with homebuilders—though those deals are often contingent on winning approval from homeowner associations or local governments.”

The full article is available here.

By: Rob Harris

“Republican presidential nominee Donald Trump says his words shouldn’t always be taken at face value because sometimes he’s just negotiating.”

So begins a Bloomberg article on the commencement of the lawsuit brought by members of the Jupiter Golf Club who have sued to recoup their initiation fees.

The article reports that “a scheduled three-day trial got under way in West Palm Beach, Florida, Monday with a video deposition from Trump explaining why he told members who resigned that they would no longer be allowed to use any of the facilities at Trump National Golf Club Jupiter, although their contract said they could until they were paid back their deposits.

“’The letter said that, yes,’ Trump said in the video, played to the judge. Later in the deposition he said: ‘It’s called negotiation.’”

The full article can be found here, and a great background piece on the dispute authored by the New York Times’ Joe Nocera is available here.

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