16 golfers are sued over memberships they can't afford

CAMERON PARK - Doug Scholz viewed it as an investment when he spent $17,500 in 2000 for his golf membership at Cameron Park Country Club.

He thought being a part-owner would give him a greater stake in the place where he spent every Sunday.

Nearly a decade later, Scholz's investment has turned into a burden he can't afford. Scholz no longer is part of a two-income family. Now he's a single father facing furloughs at work.

For about three years, he has had his membership for sale on a list maintained by the country club in the foothills east of Sacramento -- with no takers. Finally, in January, after the club refused to accept his hardship claim, Scholz stopped using the facility and stopped paying his monthly dues of about $500.

The club responded by suing him and 15 others who wanted out but couldn't find buyers.

The legal dispute provides a public glimpse at the trouble facing private country clubs around the nation as once-flush members seek to cut nonessential expenses.

"If their financial situation has deteriorated to (where) they can't afford it, they're doing the right thing leaving," said Jim Singerling, chief executive officer of the Club Managers Association of America, a membership group

for about 3,000 private clubs.

Nationwide, membership at private clubs was down about 13 percent in 2008 from its peak, which for many clubs came in about 2000, according to the National Golf Foundation. About 15 percent of the private clubs that belong to the foundation reported that they were in serious financial straits.

Private clubs depend on steady membership to stay afloat, and Sacramento area clubs have been hit hard by departures. Some, such as Cameron Park, are taking a harder line than others with people who want to leave.

"When you have less members paying dues, just like any other private club, you have to support yourself," said Peter Lam, general manager for Cameron Park, who declined to comment specifically about the lawsuit. "If we have less members, the rest of the membership may have to share the burden."

Scholz's financial situation began to change about five years ago, when his daughter, now 7, was a toddler. He and his wife divorced, and Scholz, who works for the Sacramento Convention and Visitors Bureau, became the sole caretaker of their child.

"My daughter is my one concern, not just day-to-day expenses but saving for college," he said. "It was just really clear I couldn't prioritize golf."

The club's bylaws require members to sell their memberships to leave. Scholz put his on the sale list, and the club listed it for $12,000. But the number of people trying to leave had swelled, exceeding the number of people on a waiting list to buy memberships.

Scholz said the club warned him that it would take a while to sell, so he waited.

Apparent policy change

As time passed, Scholz said the club changed its policies to allow members to set their own price and established an exit fee of $6,000. If Scholz's membership had sold at $12,000, he and the club each would have received $6,000 from the sale.

Scholz said the club began letting some members -- about 40 by his count -- leave without selling their memberships. The club then put those memberships up for sale for as little as $1,000.

At that point, paying a $6,000 exit fee "was really not palatable, especially the way they changed the protocol to undermine my attempt to get out," Scholz said.

He resigned his membership Dec. 31. In a letter, he explained his financial reasons for resigning and offered to pay $250 a month, about half of the average monthly dues, until the club sold his membership.

He received a letter from the board president denying his request to leave.

Court documents filed by the club's attorney claim that the 16 defendants, including Scholz, didn't abide by the club's bylaws and collectively owe $25,000, which includes past dues "and other liabilities." Other defendants didn't want to talk about the lawsuit while it's pending.

More people are playing golf these days, but the increase has come on public rather than private courses, according to Golf Datatech, which tracks the industry.

"People still want to play but are being more budget conscious," said Jeffrey J. Schott, a senior fellow with the Peterson Institute for International Economics, who has spoken on the future of the golf industry.

"In a sense, it's a settling out after a boom time," Schott said. "There's going to be a reduction in the number of courses. Some investment properties are going to go bust, and some are going to be facing some difficulties for a while but will able to survive and recover. This is a normal shakeout."