Finn v. Beverly Country Club

683 N.E.2d 1191, 289 Ill. App. 3d 565, 225 Ill. Dec. 528
CourtAppellate Court of Illinois
DecidedJune 11, 1997
Docket1-96-1749
StatusPublished
Cited by19 cases

This text of 683 N.E.2d 1191 (Finn v. Beverly Country Club) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Finn v. Beverly Country Club, 683 N.E.2d 1191, 289 Ill. App. 3d 565, 225 Ill. Dec. 528 (Ill. Ct. App. 1997).

Opinion

JUSTICE CAHILL

delivered the opinion of the court:

Plaintiffs sued the Beverly Country Club (the Club) and members of its board of governors (the Board) seeking veteran member status and damages. Plaintiffs alleged breach of contract, breach of fiduciary duty and promissory estoppel. The trial court granted summary judgment for defendants on the breach of contract and breach of fiduciary duty claims. After a bench trial, the court ruled in favor of plaintiffs on the promissory estoppel claim. Defendants appeal, and plaintiffs cross-appeal. We reverse the judgment of the trial court on the promissory estoppel count and affirm the summary judgment for defendants on the breach of contract and fiduciary duty counts.

The Beverly Country Club is a private social club formed for pleasure, social recreation and the promotion of outdoor sports, especially the game of golf. The Club’s business affairs are managed by a board of governors. The bylaws provide that "in all questions of administration or interpretation of these [bylaws], or other matters relating to the [bylaws], the decision of the Board of Governors shall be final.” The Board may amend the bylaws by unanimous vote but must submit amendments for ratification at the next membership meeting.

The Club’s bylaws provide that a member who is 70 years old and has been a regular member for 25 years is eligible to apply for veteran membership. The bylaws further provide:

"Upon application for transfer to Veteran status and appearance before the membership committee, the Board of Governors may from time to time elect any eligible member to veteran status.”

A veteran member does not pay dues or special assessments, but must pay a house account.

Excepting Frank Schaffer, plaintiffs met these requirements when they applied for veteran membership. They allege that, for as long as they have been members, the Board has automatically allowed transfers to veteran membership to applicants who met the requirements. But their transfers to veteran status were delayed because of actions taken by the Board. As a result, they sued.

At the subsequent trial on the issue of promissory estoppel, James Finn testified that, in selecting a country club, the Club’s veteran member program was one of the features he considered. Charles Gilmartin testified he decided not to join another country club because he did not want to lose time accumulated toward the 25 years needed for veteran membership at Beverly. Finn and Gilmartin testified that they understood that the Club promised them an automatic transfer to veteran status upon meeting the eligibility requirements since such transfers had been granted to all qualified applicants for as long as they had been members. The parties stipulated that, if called to testify, the testimony of the other plaintiffs would be substantially similar to that of Finn and Gilmartin.

Edward Joyce, testifying for the defense, said that in early 1993 the Board became aware of a concern among members that the growth of veteran membership contributed to a financial problem at the Club. In response, the Board adopted a bylaw that limited the number of golfing veterans to 35 and required golfing veteran members to pay 40% of the regular dues. The cap on the number of veteran members prevented plaintiffs from becoming golfing veterans when they applied. At the next annual meeting of the membership, the bylaw was not ratified.

In March 1994 the Board, again concerned about the Club’s financial condition, adopted a policy to defer requests for election to veteran member status until the Club had 250 regular members.

The trial court entered a judgment for the plaintiffs on the promissory estoppel claim. The trial court dismissed plaintiffs’ claim for specific performance as moot because all plaintiffs had been elected to veteran membership while this case was pending.

Defendants assert several errors on appeal: (1) once the trial court found a contract between plaintiffs and the Club, it should have dismissed plaintiffs’ promissory estoppel claim; (2) the trial court erred in finding promissory estoppel; and (3) the trial court erred in intervening in the internal affairs of the Club. We find it necessary to address only the last of these.

As defendants note, Illinois courts have long recognized that voluntary associations have great discretion in conducting their internal affairs. Their conduct is subject to judicial review only when they fail to exercise power consistently with their own internal rules or when their conduct violates the fundamental right of a member to a fair hearing. Lee v. Snyder, 285 Ill. App. 3d 555, 558-59, 673 N.E.2d 1136 (1996); Kendler v. Rutledge, 78 Ill. App. 3d 312, 316, 396 N.E.2d 1309 (1979). Generally, a court will not interfere with the internal affairs of voluntary associations absent mistake, fraud, collusion or arbitrariness. Proulx v. Illinois High School Ass’n, 125 Ill. App. 3d 781, 787-88, 466 N.E.2d 620 (1984), citing 4 Am. Jur. Associations & Clubs § 17 (1936). If there has been no mistake, fraud, collusion or arbitrariness, our supreme court has endorsed the exercise of jurisdiction only when a substantial property, contract, or other economic right that implicates due process is at stake. Van Daele v. Vinci, 51 Ill. 2d 389, 394, 282 N.E.2d 728 (1972).

In granting summary judgment for defendants on the breach of contract count, the trial court found that the Board acted consistently with the Club’s bylaws when it imposed the cap on veteran members. The trial court’s review of this case should have ended there.

Plaintiffs argue that, because their injury is economic, judicial intervention is warranted. But Illinois courts have never held that classifying an injury as economic is sufficient to subject a voluntary association’s decision to judicial review. Not all economic injuries implicate due process concerns. Review has been limited to cases that concern "economic necessity.” In Van Daele v. Vinci, our supreme court reviewed the decision of the board of directors of Certified Grocers of Illinois, Inc. (Certified), to expel a member when his "opportunity [to earn] a livelihood” was at stake. Van Daele, 51 Ill. 2d at 394. Certified offered substantial economic benefits to its members, including lower grocery prices and rebates. Van Daele was an exception to the general rule of nonintervention based on the character of the organization and "its assumption of a purpose which exceeds merely that of a social organization.” Van Daele, 51 Ill. 2d at 395.

Unlike Certified, the Beverly Country Club is a social organization and the economic impact asserted by plaintiffs does not affect their economic livelihood. If we found that plaintiffs had asserted a sufficient economic necessity to warrant review, the requirement set out in Van Daele would be stretched to a point where it no longer has meaning.

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Bluebook (online)
683 N.E.2d 1191, 289 Ill. App. 3d 565, 225 Ill. Dec. 528, Counsel Stack Legal Research, https://law.counselstack.com/opinion/finn-v-beverly-country-club-illappct-1997.