Country Club Membership

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By: Rob Harris

USGA Rule of Golf 6-8 addresses discontinuance of play. Here’s what it says:

The player must not discontinue play unless: (i) the Committee has suspended play; (ii) he believes there is danger from lightning; (iii) he is seeking a decision from the Committee on a doubtful or disputed point… or (iv) there is some other good reason such as sudden illness. Bad weather is not of itself a good reason for discontinuing play.

Nearby lightning strikes usually qualify.

Well, golfers at Springfield (Missouri) Golf & Country Club recently had a more unusual opportunity to potentially invoke Rule 6-8.

Reportedly, club member Donald Weber was packing more than 14 clubs when he purchased a bucket of range balls and rented a golf cart before heading off to the maintenance building. Apparently, Mr. Weber is also a former employee of the club, having lost his job a number of months ago. Upset with his former boss, Weber confronted him with a gun. Fortunately, no shots were fired before police arrived and chased Weber down.

In the meantime, the “golf course had to pull golfers off the course.” Reports don’t indicate that a tournament was in progress, but presumably “man with a gun” would qualify as a reason equally compelling as lighning or sudden illness to warrant discontinuance of play.

Unless, of course, the tournament officials preferred to first review the video tape with the contestants at the end of their round.

By: Rob Harris

Louisiana’s Lakewood Golf Club, former long time home to the New Orleans Open (now, Zurich Classic), finds itself on the receiving end of a lawsuit filed by a former member, claiming that his civil rights were violated by the club’s creation of a hostile and abusive environment.

The member claims that the club’s starter shared with him racist comments about another Louisiana club that the starter recently had played. Having reported the incident to the club manager, the member was advised that the starter was ”sorry for what he said and he did not realize (the member) was black.”

The member filed a grievance with the club, seeking the firing of a “known racist.” As alleged, however, instead of firing the starter, the club terminated the plaintiff’s membership.

Additional information and a copy of the complaint can be found here.

By: Rob Harris

Over the years we have had the opportunity to discuss legal disputes arising between golf clubs and members regarding membership resignation rights and financial issues.

These disputes have gained prominence on the heels of the economic downturn of the late 2000′s and the decline in country club membership.

For those interested, Bloomberg has published an article discussing this issue, generally, and in the context of a lawsuit brought by members of Cape Cod’s New Seabury Country Club, owned by Carl Icahn.

By: Rob Harris

Escalante Golf purchased San Diego’s Crosby National Golf Club in 2009 when it was in the midst of a “financial death spiral.” Within three years, Escalante reportedly turned things around through “aggressive expense management and event sales.”

In 2012, however, governance of the homeowners association of the adjacent gated community changed. The new HOA board found the events hosted by the club–which included concerts, weddings, fashion shows, political fundraisers and corporate receptions–to be “distasteful and a nuisance.” The reconstituted board of directors caused the HOA to file suit against the club, claiming that “attendees of the events caused traffic jams getting into and out of the community, they parked on private streets and the community became ‘inundated with hundreds of members of the general public who wander throughout The Crosby.’”

On March 31, a federal judge sided with the HOA, finding that the zoning laws did not permit the private club to hold public events.

The club contends it needs the events to remain financially stable, but the residents offer a contrary view, contending “that the club will attract new members if it operates strictly as a private club, which will in turn boost its bottom line.”


By: Rob Harris

We noted a few days ago that the class action suit by members of the Club at Black Rock against the foreclosing bank had been submitted to the jury. The jury has now spoken….drum roll, please… the winner is….. the bank. The jury determined that the bank need not reimburse the members for their initiation deposits. The story can be found here.

By: Rob Harris

  • An article entitled “Lawsuit over Black Rock to conclude” reports that jury deliberations have begun in the class action suit brought by members of Idaho’s high end Club at Black Rock. The lawsuit seeks to recover “membership deposits” of up to $125,000 for which the members contend the bank that foreclosed on the property is liable. The bank argues that its pursuit of its legal rights began an ended with the real estate, not with the membership deposits that funded the developer’s limited liability company. Our previous post on the dispute can be found here.
  • The Beijing owner that recently purchased England’s historic Wentworth Club, with plans to cull the membership by imposing stratospheric initiation fees (see our previous post here), has backed down, according to a BBC report. The new owner claims to have engaged in a listening tour, which, together with suggestions that residents threatened to block roads during the European Tour’s PGA championship, held at the course every year, appears to have done the trick
  • As reported in “Lawsuit filed against Farmington golf course over raw sewage,” Arkansas’ Valley View Golf Course faces suit for discharge of untreated sewage. Describing the conditions to a local reporter, one neighbor suggested “wait until its 100 degrees outside. And go sit in an outhouse for about an hour, and you’ll know exactly what this smells like.” Thanks, but we’ll take your word for it.

By: Rob Harris

In May 2013, Golf Dispute Resolution wrote about the class action lawsuit filed by members of Florida’s Trump National Jupiter club, in which members alleged that Trump had unlawfully changed the terms of withdrawing from the club, while withholding from them their membership rights pending resignation.

This weekend, the New York Times’ Joe Nocera has authored a detailed and insightful article about the litigation and the personality behind it. The article, entitled “Golfers Say Trump Reneged on Deal,” can be found here.

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.

By: Rob Harris

As reported, “government attorneys allege four Nicklaus-owned entities filled close to an acre of wetlands [on Florida's The Bear's Club] in 2010 without permission from the U.S. Army Corps of Engineers in order to relocate a tee box, improve golfing conditions on the club’s 15th hole and make room for the development of five residential lots.”

The attorney for the Nicklaus organization disputes the allegations, asserting that the easement to the property authorizes the state, not the federal government, to address the wetlands issue.

The Justice Department takes issue with that assertion, contending that the Army Corps of Engineers has “jurisdiction over the wetlands under the Clean Water Act. The Bear’s Club violated the easement agreement by filling wetlands that were ‘not to be disturbed by any dredging, filling, land clearing, agricultural activities, or any other construction whatsoever.’”

By: Rob Harris

Here is an overview of golf legal disputes percolating in the past week:

 

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