Country Club Membership

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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.

By: Rob Harris

Christopher Walsh and his wife have sued Florida’s Boca Raton Resort & Club, seeking refund of their membership fees and  the return of “several items that they say were left in their club locker at the time they were kicked out: a set of golf clubs, various clothing items, and ’2 pairs [of] flip-flops,’ among other belongings.”

The basis for their suit? As reported, he alleges that the club

“served him ‘excessive amounts of alcohol … over a relatively short amount of time’ despite his history of alcoholism.     The staff had seen Walsh drinking too much in the past, and they should have put limits on how much he could be served…     Instead, …he drank to his heart’s desire and ‘suffered impaired judgment and loss of self control.’     Fed up with Walsh’s drunken behavior, the resort terminated his club membership in October 2013,..”

Walsh claims the resort’s staff “should have known” he was “a habitual drunkard.”

Sigh.

As reported in the New York Post:

“Sheri Astrachan slapped her estranged real-estate-exec hubby, Matthew, with a $20 million defamation suit after he allegedly cut off her access to the tony Old Westbury Golf & Country Club and various credit cards.The move triggered a golf-club rule that Sheri’s name — and even the amount of her debt — be listed in its public places, including in its men’s and women’s locker rooms, “proclaiming for all to see that she had not paid her bills to the club,” says the spurned wife’s Manhattan Supreme Court suit.”

The full story can be found here.

By: Rob Harris

Two Richmond, Virginia area country clubs–Meadowbrook and Lake Chesdin–merged in early 2013. Now, with the ink on the pre-nup barely dry, they have announced the end to their marriage.

According to a published report, the disagreement that pushed the two toward their divorce was Lake Chesdin’s unhappiness at the fees that Meadowbrook was charging for providing Lake Chesdin with accounting services.

So, the two clubs, each reportedly unprofitable, separately head back to the inhospitable club environment.

I’m unaware of this issue being litigated in the United States, but here’s an interesting case, as reported in The Asahi Shimbun:

HAMAMATSU–A transgender woman has won a lawsuit against the operators of a golf course who denied her membership after she changed her registered sex from male to female.

The Shizuoka District Court’s Hamamatsu branch on Sept. 8 ordered the golf course operators to pay 1.1 million yen ($10,380) in damages. The plaintiff, a 59-year-old company owner in Shizuoka Prefecture, had demanded 5.85 million yen in compensation.

Presiding Judge Kenjiro Furuya ruled that it was unlawful to reject membership on the grounds of a sex change and acknowledged the action caused mental suffering to the plaintiff.

“The act denied the very basis of the plaintiff’s personality, although she has established her sexual identity both physically and socially,” Furuya said.

He concluded the operators’ action was “illegal as it went beyond socially acceptable limits.”

People are born with their gender identity, so the rejection of the membership runs counter to the spirit of Article 14 of the Constitution that guarantees legal equality for all, the judge added.

The golf course operators defended their move, arguing that club members may feel uncomfortable and confused about sharing a bathroom and changing room with the woman.

Lawyers for the defendants said the operators “decided to refuse her membership without malice but out of concern for the potential negative effects on their business after hearing the opinions of club members.”

They added that they will decide on whether to appeal after thoroughly reading the content of the ruling.

By: Rob Harris

Attention casual readers: This entry may be destined for the “Best Of Golf Dispute Resolution”:

Free on $250,000 bail, Dr. James Simon has been charged with attempted manslaughter and assault with a firearm, after shooting William Osenton twice in the abdomen.

Here’s how a local news source described the incident:

“The shooting occurred July 17 on the 5100 block of Paradise Drive near Robin Drive. Police said both men were driving on Paradise Drive when a traffic conflict broke out.

“Police said Simon pulled into his driveway off Paradise Drive and into his garage, with Osenton trailing behind him. As the garage door closed, it struck Osenton’s Mercedes.

“Simon allegedly retrieved a .357-caliber revolver, fired one warning shot into the hillside across from his home, then shot Osenton two times in the abdomen.

“Police subsequently seized 50 guns, 200 boxes of ammunition and numerous magazines from Simon’s home. The items remain in police custody, as does Osenton’s car, which is being held pending examination by the defense.”

So, what does this unseemly example of road rage have to do with golf?

Apparently, Mr. Osenton is a golfer and is a member of the Meadow Club, described in the aforementioned news report as “Marin County’s most exclusive golf club.”

According to Dr. Simon’s defense attorney, Mr. Osenton is reputed to have quite a temper, which he believes he has displayed at the Meadow Club. Apparently seeking to bolster a claim that Dr. Simon acted in self-defense when he shot Mr. Osenton, defense counsel sought to require the club to produce records regarding Mr. Osenton:

“Seeking to discredit Osenton, Simon’s defense attorney subpoenaed Osenton’s records at the Meadow Club… The defense attorney, Charles Dresow, said he had information that Osenton, a 69-year-old Tiburon resident, has a history of aggressively confronting other members and damaging club property in ‘fits of rage.’”

The club objected, the judge reviewed the records privately, and determined they contained nothing relevant.

However, according to GHIN, Mr. Osenton, carrying a 10.7 handicap index, indeed may have been injured fairly seriously. He has entered no scores since July.

By: Rob Harris

I’m not sure if Waccabuc Country Club has a waiting list. If so, it’s likely one person shorter.

Local news reports that, “authorities say Bronxville (NY) lawyer Timothy Griffin lived large — and stole over $1 million from his clients to help pay for it.”

“According to the state Attorney General’s Office, between April 2009 and February 2014, he stashed the cash in his personal bank account and used it to pay for a membership at the Waccabuc Country Club, a BMW, a Lexus, expensive jewelry and other personal items.”

 

By: Rob Harris

There is a fascinating article about the legal dispute between Westchester’s famed Quaker Ridge Golf Club and neighbor who is upset about the golf balls ending up on his property. The dispute–about which we first commented three months agohas resulted in the entry of a preliminary injunction requiring the club to prevent the golf ball onslaught. The club has attempted to comply by installing netting and by moving the second tee 115 yards forward.

This week, an appellate panel refused to grant the club’s motion for reargument. Next steps–the case will return to the trial court for consideration of damages issues. Only then, will the club be able to take a full appeal of all issues.

Meanwhile, according to online local news outlet Lohud, the case is creating concerns among courses throughout metropolitan New York and beyond. What makes the Quaker Ridge case particularly troublesome is that the homeowner built and moved into his home almost ninety years after the course was established. Nonetheless, the courts to date have found in favor of the newcomer, finding that it’s the club’s responsiblity to take action to prevent the golf ball incursion.

The distinct possibility that the club will need to permanently redesign the A.W. Tillinghast course to accommodate the neighbor strikes some as highly inappropriate. As the article quotes one:

“Quaker Ridge is one of Tillinghast’s most famous designs,” said Bob Trebus, a member of Baltusrol Golf Club in New Jersey and president of The Tillinghast Association. “It would be a shame to alter his design. … That’s like painting a mustache on the Mona Lisa.”

By: Rob Harris

You have to love the cash management strategy followed by Harris Golf Co., which owns or manages ten golf courses in Maine.

Claiming that it is protesting abusively high tax assessments on its courses, Harris Golf has adopted a corporate policy of permitting tax liens to be filed on its courses, and paying the overdue taxes before the expiration of the 18 month period the government must wait before it can foreclose.

According to Harris Golf’s president, “We believe that we’re being overcharged. If you look back at the history since we bought it, it’s a pattern. We always pay the taxes before the liens mature. For us, it’s the normal course of action. It’s how we run our business.”

Choosing to vote with its wallet, president Jeff Harris proclaims: “That is the only way we can get a vote — by dollars — holding them back. It is what it is, and the only thing you can do [to object] is withhold the money. It’s a very sore subject for me because we feel like we’re being abused.”

 

‘When you dish out illegal stock tips at the golf course, there are no mulligans.”

So begins the interesting and informative article by Patrick Temple-West in Politico discussing two insider trading cases recently brought by the Securities and Exchange Commission “that center on the relationships between golfing buddies and how their chitchat in the tee box or at the 19th hole turned into lucrative and illegal trading bonanzas.”

According to a former official in the SEC’s enforcement division, quoted by Temple-Best, “[g]olf is becoming a recurring theme in insider trading cases.”

Golf Dispute Resolution’s posts about the two cases discussed by Temple-West can be found here and here.

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