Rock Spring Golf Club Cheated Out of $11 Million Sale of the Company

By MatadorAdminClass Action

Golf club members who terminate their memberships continue to discover just how difficult it is to recover their initiation fees. This is notwithstanding contractual clauses in their membership agreements that clearly promised fee refunds. In early 2021, for example, a New Jersey appeals court affirmed the dismissal of a lawsuit by 26 former members of the Rock Spring Golf Club because their refund rights had been terminated by the sale of the club to new owners.   

At Kantrowitz, Goldhamer & Graifman, in conjunction with attorney Robert Dowd, we represent former golf club members in individual and class action lawsuits to recover gold club initiation fee refunds. In many cases, the golf clubs either delayed or refused to reimburse the fees– relying on technicalities or unilateral modifications of membership agreements.

What are the details of the Rock Spring Golf Club matter?

Members who joined the Rock Spring Golf Club before 2015 received membership certificates. These certificates stated that they would be entitled to a share of the sale proceeds if the club shut down and sold its 18-hole, 138-acre golf course.

After encountering financial problems, the club became a subsidiary of the Montclair Golf Club, which assumed a $3.75 million mortgage held by Rock Spring. The merger agreement obligated Montclair to continue golf operations at Rock Spring for three years and to compensate former Rock Spring members if the club were sold in that time.

Montclair completed a sale of the club to West Orange Township for $11 million in 2019, after the expiration of the three-year period. Twenty-six former Rock Spring members sued to recover a portion of the sale proceeds, but a trial court dismissed their lawsuit. The club’s agreement with Montclair was a merger and not a liquidation which would trigger a refund per the original membership certificates. The appeals court affirmed that decision, leaving the former Rock Club members out in the cold.

Do the former Rock Club members have any further recourse?

The lawsuit filed by the 26 former Rock Club members was decided based on summary judgment. This suggests that, as to those members, there were no disputed material facts about their claims. Further, their causes of action had no legal basis to proceed to trial. The appeals court observed that the plaintiffs might have overcome this conclusion with affidavits or certificates that established materials, facts, or critical information to support their claims.

Former golf club members seeking to recover their initiation fees or any other amounts due to them can take some instruction from the Rock Club lawsuit.

First, they should carefully read any contract or agreement that might adversely affect their refund rights. The sale of the Rock Club course to the West Orange Township was not foreseen in 2015. Members of other clubs experiencing financial problems should confer with knowledgeable golf club lawyers to determine if any contractual clause can save at least a portion of their rights in the event of similar circumstances.

Second, if a club refuses to return promised fees, former members should immediately retain experienced attorneys who can thoroughly investigate the matter and develop claims in a lawsuit. Groups of aggrieved former members can join forces in a class-action lawsuit against their club to gain a more even playing field to recover promised fees.

Call Lawyers at Kantrowitz, Goldhame & Graifman and Attorney Robert Dowd for Representation  

The attorneys at Kantrowitz, Goldhamer & Graifman, in collaboration with attorney Robert Dowd, offer the most professional and discrete representation in lawsuits by golf club members who seek to enforce their contractual rights against their former clubs.

We represent golf club members in Rockland and Bergen counties and elsewhere in New Jersey, both in contract negotiations and litigation to recover initiation fees.  Please see our website or call our offices to discuss your right and opportunity to recover golf club membership fees that may be owed to you when you terminate a membership.

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