By: Rob Harris
Financial obligations between private golf clubs and their members typically are matters of corporate governance and contract. New members ordinarily enter into a membership agreement with the club that will set forth many of the rights and obligations of members. The agreements often will specify that the club’s bylaws govern, and that the bylaws may be amended.
Scottsdale (Arizona’s) Desert Mountain Club recently filed suit against former–and potentially current–members Thomas and Barbara Clark. The club claims that the Clarks’ purported termination violates the club rules as set forth in their membership agreement and the club’s bylaws, as amended. The club asserts that the Clarks are subjected to a surrender list, and that they maintain the obligation to pay dues and a substantial surrender fee to extricate themselves from their obligations. The complaint sets forth a series of bylaw revisions over the years, and asks as its first claim of relief that the court declare the club’s interpretation of these governing documents to be as it contends.
A website maintained by former member Gary Moselle presents a competing version of the club’s interpretation of the various documents. The website also includes a February 10, 2015 letter from a law firm to Mr. and Ms. Clark, purporting to outline the defense to the litigation that the Clarks can mount. The letter suggests that, under Arizona law, the club may have difficulty convincing a court to subject members to onerous surrender terms based upon bylaws that were amended subsequent to the execution of the membership agreement.