By: Rob Harris
In 2006, Vincent and Beth Gualtieri joined their neighborhood golf club, forking over a $40,000 initiation deposit. The agreement they signed provided as follows with respect to refund of their initiation:
Members who join the club after 180 days of the date of their real estate contract and later resign their membership will be refunded their initiation deposit previously paid subject to a “one in, one out” refund policy. Under the refund policy, the resigned membership will be placed on a resigned waiting list for that membership category. The Club will pay a refund of the initiation deposit to the first person on the resigned list upon every sale of a membership category.
The documents signed by Mr. and Ms. Gualtieri also provided as follows:
I hereby acknowledge receipt of Verandah Club Membership Plan and the Rules and Regulations and agree to be bound by the terms and conditions thereof as the same may be amended from time to time by the Club or [Verandah] and irrevocably agree to fully substitute the membership privileges acquired pursuant to the Club Membership Plan and Rules and Regulations for any present or prior rights in or to use of the Club Facilities.
In 2009, the club amended the Membership Plan. Gone was the refund ratio of one refund to one resigned member. The amended policy provided for a ratio of one refund for every three new memberships issued.
In 2014, the Gualtieris wanted out. They resigned their membersip, seeking refund of their $40,000 initiation. The club told them they would receive a refund in accordance with the amended policy of one refund for every three new memberships. Get in line, Mr. and Ms. Gualtieri.
The Gualtieris sued. The trial court, and just this month, the appellate court, ruled in their favor.
The club, of course, argued that the agreement signed by the Gualtieris entitled the club to amend their policies and, therefore, the club could not be bound by the original one refund to each new member policy.
The court, however, concluded otherwise, focusing on the specific language contained in the agreement. According to the court,
Contrary to Verandah’s arguments, these provisions only pertained to the Gualtieris’ rights in or to use the Club Facilities—the Gualtieris agreed to unilateral amendments by Verandah pertaining to “any present or prior rights in or to use of the Club Facilities” and agreed that their membership did not confer a vested right “to use the Club Facilities.” This language did not permit Verandah to amend the refund policy contained in the Membership Agreement.
Having determined that the Gualtieris were entitled to be considered for a refund based on a 1:1 ratio, the court sent the case back for further proceedings to determine how many new members had joined and how many refunds had been granted since the Gualtieris tendered their resignation.