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Article
Courtesy of The Sarasota Herald
Published April
21, 2009
Laurel
Oak Country Club refused to let Dale Berkowitz give up her membership after
her husband died, and kept charging her monthly dues that included a fee for
the golf locker he once used.
When she stopped paying, the club sued.
Berkowitz is one of several dozen people who have been sued by Laurel Oak -- a
country club that makes it nearly impossible for its longtime members to
leave.
The club has sued more than a dozen people since 2007, then filed suit against
24 more members last week after they tried to resign and stopped paying.
One couple had moved back to Pennsylvania. Another couple say they cannot play
golf any more because of health problems.
"It's golf slavery," said Fred Hallas, who was sued last week
despite paying $600 monthly dues for five years after resigning his
membership. "I joined a club to play a little golf and have some fun, and
I end up getting sued to leave."
Laurel Oak members paid as much as $27,500 to join under promises that the
membership "will be bought back for every penny you paid for it."
They say they never saw the fine print: The monthly bill keeps coming until
the club transfers that membership to someone new.
That can take years, and new club rules make it highly unlikely anyone will
ever want to take over one of these older memberships.
Laurel Oak's general manager, Dave Whalen, said in a written statement that
the club's policies are controlled by its members, and that the exit policy
balances the desires of those wanting to leave with those of the people who
stay.
Whalen also said 86 members with the older memberships left the club in the
last 15 months under a new policy that allows them to buy their way out for an
additional $18,000.
Jim Singerling, chief economic officer of a national golf club organization,
said he has never heard of a country club suing so many people as they tried
to leave.
But on the other hand, "these are extreme times," he said.
"The club is a business. If the business has people who owe it money,
they have to go after the money."
A big swing
Laurel Oak Country Club sits on Bee Ridge Road east of Interstate 75, a
moderately priced private club that was looking to attract a certain type of
golfer back in 2004.
The club borrowed millions of dollars to expand its clubhouse and rework one
of the two 18-hole courses, making it much more difficult to play.
But senior golfers more used to rolling the ball toward the flagstick suddenly
faced deep bunkers in front of the green and 10 more strokes on their scores.
Some longtime members left, and in 2006, financial records show the club lost
$2.4 million -- twice as much as the year before.
And as people left, they found that the rules that guaranteed members their
$27,500 "equity" payments back required the club to purchase them.
But the club bought back only one older membership for every three new
memberships it sold.
The waiting list to have the club repurchase membership grew to more than 100
names. One year, members say they moved up only one position on the list.
Under growing pressure, the club changed rules to allow members to get out
more quickly, if they offered to forfeit some of that equity money. People bid
as low as $100, essentially offering to walk away from a $27,000 investment.
But the club bought few of them back, and the waiting list to leave stayed
stocked.
Last January, the club changed rules to allow members to forfeit the $27,000,
plus pay up to $18,000 to quit.
Otherwise, the monthly dues keep coming.
Attorneys say the club's decision to create a second, "B" level
membership that is easier to quit has only further reduced the chances that
anyone will take over an older, "A" level membership.
"They, on the fly, have changed the way you can get out of it," said
John Colton, a Sarasota attorney who has filed a countersuit that accuses the
club of mismanagement.
Paying but not playing
James Pacific and his wife sold their home in Sarasota and moved to
Pennsylvania full time. But they are still being billed for monthly dues.
"I'm going broke belonging to this club," Pacific said. "They
started calling collection agencies."
Pacific says he is the one who should be collecting on his $29,000 in equity
that the club has kept.
Colton represents a couple who sold their Laurel Oak home and left the
community, only to learn they could not transfer the country club membership
to the new homeowners.
The club sold the new owners a new membership, and Colton's clients, the
Lahners, went onto the list of people waiting to leave.
In the meantime, the club billed the Lahners for 13 months of dues before
suing them.
Joseph Zaksas, the president of Laurel Oak's board, said the club has
attracted more new members than other private clubs in the area and is not in
financial trouble.
He says the real story will come out in court.
"We obviously feel we have a strong case; we obviously feel we will be
upheld in court," Zaksas said.
Berkowitz, the widow, is off the hook for now. The club sued her in 2007,
three years after her husband's death. Attorneys for the club later dropped
the case "without prejudice," meaning they reserve the right to file
it again in the future.
Berkowitz declined to comment for this story, saying she did not want anyone
to change their mind.
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