Preparing for “Action”

By | November 28th, 2017

Short of having Shakespeare’s wish to “kill all the lawyers” finally come true, club-related lawsuits are now an unfortunate part of the business that managers should be prepared to deal with.

During our searches for content to include in our daily e-newsletter briefings (if you don’t yet receive them, click here to sign up for a free subscription), we routinely find reports of club-related vandalism, theft, assault, embezzlement and other incidents that might obligate managers to not only handle required internal communications to members and staff, but also sometimes to appear in court and/or serve as a spokesperson for their property, as the media seeks information and comment about what has occurred.

In the past month or so, however, we’ve also come across a greater-than-usual flurry of reports on lawsuits involving club properties that have covered a wide range of issues:

Members of Boca West Country Club in Boca Raton, Fla., filed a class-action lawsuit claiming that poor management had decimated property values and caused $17 million in losses that led to an increase in dues (the suit was dismissed by a federal judge because of jurisdictional issues).

Disgruntled members have sued the Channelview (Texas) Golf Association and its directors, charging mismanagement involving misappropriated funds and the lack of regular elections or periodic membership meetings.

Homeowners in the Woodlake Resort and Country Club community in Vass, N.C., filed a class-action suit against its developer, charging that failure to repair a deteriorated spillway for a dam that creates the property’s centerpiece lake has caused home values to plummet.

A group of workers filed a class-action lawsuit against the Terranea Resort in Rancho Palos Verdes, Calif., alleging “wage theft” because of wage and hour violations, denial of meal and rest breaks, failure to reimburse employees for work supplies, and uncompensated time for extended commutes caused by a requirement to park in remote lots and use company shuttles when coming to and from work.

Orange Lake Country Club in Kissimmee, Fla., became a partner in a suit that charged a law firm with misleading advertising in soliciting business from time-share owners that interfered with Orange Lake’s contracts and relationships with its property owners.

• And then of course there is the ongoing back-and-forth between members of Trump National Golf Club in Jupiter, Fla., and The Trump Organization, over $5.7 million in disputed refunds for members who resigned before Trump’s 2012 purchase of the property (a lower court ordered in February that the refunds should be paid, but­—surprise, surprise—that ruling has been appealed).

It may just be an aberration that so many of these cases have come to light at the same time. But short of having Shakespeare’s wish to “kill all the lawyers” finally come true 500-odd years later, it’s probably an unfortunate fact of the modern-day club business that no property is immune from having some sort of legal “action” arise as a result of its operation. And that means that managers might be wise to take time to anticipate, and be prepared to deal with, these types of situations—regardless of what side they could be on or what the outcome might be—along with the more typical potential crises.

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