Opinion ID: 2071303
Heading Depth: 2
Heading Rank: 2

Heading: The Club

Text: At the same time the Developer recorded the Restrictions and began selling undivided interests, it simultaneously created Cutty's Des Moines Camping Club, Incorporated (the Club). The Club was set up to manage and operate the campground. It also had the sole power to assess, collect, enforce, and spend dues for the benefit of the property. The Club claims the purchase of an undivided interest automatically made a buyer a member of the Club and obligated the buyer, as well as the buyer's grantees and heirs, to pay the Club dues each year for the upkeep of the property. [1] Dues were also necessary because the Restrictions required the Club to pay all property taxes levied on the campground. The Restrictions and the Club's bylaws contemplated various measures for members who did not pay their annual dues. The Restrictions stated those who did not pay their dues were personally liable for failing to do so. The Restrictions also stated that unpaid dues shall be a lien upon said Membership and Undivided Interest until paid. Lastly, the Restrictions granted the Club the right to purchase an undivided interest at a discounted price if a membership were terminated for failing to pay dues. The Club, however, has never perfected a lien upon an undivided interest and has not purchased a terminated member's interest. The Club's bylaws outlined a more specific procedure for addressing the nonpayment of dues. The bylaws stated that if a member did not pay his dues, the Club was required to notify him that he was a delinquent member. Upon certification to the Club's five-member Board of Directors that a member was delinquent by a majority vote of the Board of Directors, such member may be suspended from Membership in the Club. Any voting member so suspended shall not be entitled to vote [or] use Club facilities.... The Membership of any member who remains suspended for a period of six (6) months shall be automatically terminated.... Elsewhere, the bylaws stated that [t]ermination of a Voting Membership shall constitute a forfeiture, abandonment, surrender, release and relinquishment of all interest of such terminated voting member ... in and to the Club and its Property, and such terminated member shall ... have no rights thereto or therein unless reinstated by the Board of Directors. The Club did not send out delinquent member notices as required in its bylaws. Nor did it ever avail itself of this termination procedure. [2] The Club's longtime manager testified the Club has not terminated anyone's undivided interest in decades, if ever. In the early to mid-1980s, the Developer sold 2100 of the 3000 undivided interests it had created. In 1986, the Developer stopped selling undivided interests. Today the Developer retains 900. The Club owns another 400 undivided interests. (The Club received most of these interests from former members.) Should the campground ever be sold, proceeds will be divided proportionately based upon the number of undivided interests owned. Dues are not insignificant. Although in 1980 the dues were $96 per year, today they are nearly $400 per year. For reasons that are not clear in the record, the Developer does not pay dues. The Club's 400 shares do not pay dues, either. A five-member Board of Directors runs the Club. The Developer controls the Board. (In another lawsuit in California, the owner of the Developer conceded he controlled the Des Moines Club.) Although each owner of an undivided interest is entitled to one voting membership in the Club, every election the Developer votes its block of 900 shares by proxy. Because the Club holds 400 non-voting shares and many individual campers do not or cannot vote, the Board is perpetually run by three directors nominated by the Developer. These three Board Members, one of whom is the Developer's owner, live out-of-state and rarely, if ever, visit the campground. Two local campers round out the remaining seats on the Board.