McNeill v. CP Boulders LLC

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Corbin A McNeill, Jr., No. CV-23-02481-PHX-SMM

10 Plaintiff, ORDER

11 v.

12 CP Boulders LLC,

13 Defendant. 14 15 Before the Court is Plaintiff’s Second Motion for Partial Summary Judgement. 16 (Doc. 37). The Motion is fully briefed. (Docs. 53; 59). For the following reasons, the Court 17 grants in-part, and denies in-part the Motion. 18 I. BACKGROUND 19 Since 2011, Plaintiff Corbin McNeill (“Plaintiff”) has been a member of The 20 Boulders Club, a private golf and social club located in Scottsdale, Arizona. (Doc. 1-1 at 21 5). Upon joining The Boulders Club, members receive a Membership Plan, The Boulders 22 Club Membership Agreement and Bylaws (“Membership Agreement” and “Original 23 Bylaws”), and the Rules and Regulations of the Club. (Id. at 4). The documents are 24 collectively referred to as the “Club Documents”. (Id. at 5). It is undisputed that the Club 25 Documents constitute a binding, enforceable contract between the members and the 26 ownership. (See Doc. 52). 27 Defendant CP Boulders LLC (“Defendant”) purchased The Boulders in 2015. (Doc. 28 1-1 at 7–8). When Defendant became owner of The Boulders, Defendant became bound 1 by the obligations of the Membership Agreement. (Id.) On March 10, 2023, Defendant 2 amended the Bylaws (“Amended Bylaws”). (Doc. 54 at ¶ 10). Plaintiff disputes the validity 3 of the Amended Bylaws as a whole, in addition to specific provisions to the Amended 4 Bylaws, leading to the instant lawsuit. The validity of the Amended Bylaws provisions 5 would impact the rights Plaintiff enjoys at The Boulders. 6 Plaintiff filed suit against Defendant in the Maricopa County Superior Court on 7 October 31, 2023, bringing claims for breach of contract. (Doc. 1-1 at 2). Plaintiff alleges 8 that the Amended Bylaws imposed by Defendant violate the Membership Agreement by 9 creating new membership categories and creating materially different rights and privileges 10 of members. (Id. at 14). As well, the Amended Bylaws are alleged to offer new categories 11 of membership with the privileges and benefits previously revoked by Defendant while 12 diminishing Plaintiff’s material rights and charging higher fees. (Id. at 15). The Complaint 13 also contains several requests for declaratory judgment on the rights and obligations of the 14 parties. 15 Plaintiff has filed six discrete Motions for Partial Summary Judgment. (See Docs. 16 36; 37; 45; 46; 60; 61). Plaintiff has since withdrawn one of his motions. (Doc. 80). In the 17 Second Motion for Partial Summary Judgment, Plaintiff moves the Court to find that the 18 Defendant breached the Bylaws by failing to engage an agronomic expert in 2017, 2018, 19 2020, 2021, and 2022, and by failing to deliver agronomic reports to the Advisory 20 Committee for those years. Further, Plaintiff moves the Court to find that Section 21 2.1(C)(i)(5) of the Bylaws does not limit the courses to which Defendant’s course should 22 be compared to only golf courses where members pay similar dues to Plaintiff. The Court 23 reviews. 24 II. LEGAL STANDARD 25 A party seeking summary judgment “bears the initial responsibility of informing the 26 district court of the basis for its motion[] and identifying those portions of [the record] 27 which it believes demonstrate the absence of a genuine issue of material fact.” Celotex 28 Corp. v. Catrett, 477 U.S. 317, 322 (1986). Summary judgment is appropriate if the 1 evidence, viewed in the light most favorable to the nonmoving party, shows “that there is 2 no genuine issue as to any material fact and that the movant is entitled to judgment as a 3 matter of law.” Fed. R. Civ. P. 56(c). Only disputes over facts that might affect the outcome 4 of the suit will preclude the entry of summary judgment, and the disputed evidence must 5 be “such that a reasonable jury could return a verdict for the nonmoving party.” Anderson 6 v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 7 III. ANALYSIS 8 A. FAILURE TO ENGAGE AN AGRONOMIC EXPERT 9 Plaintiff moves the Court to narrow the issues in dispute and enter an order finding 10 that the Membership Agreement and Bylaws constitute a valid enforceable contract by and 11 between Plaintiff and Defendant, and Defendant breached the Bylaws by failing to engage 12 an agronomic expert in 2017, 2018, 2020, 2021, and 2022, and by failing to deliver 13 agronomic reports to the Advisory Committee for those years. As an initial matter, it is 14 undisputed that the Membership Agreement and Bylaws constitute a valid enforceable 15 contract between Plaintiff and Defendant. (See Doc. 52). Further, it is undisputed that 16 Defendant did not obtain an agronomic expert report for 2017, 2018, 2020, 2021, or 2022, 17 nor was an agronomic report sent to the Advisory Committee in those years. (Doc. 54 at ¶ 18 6-7). Defendant contests the Motion on several grounds. 19 First, Defendant argues that the “expert report requirement is not an essential 20 element of the Bylaws, but merely ancillary to ensuring that the quality of the Golf Course 21 and practice facilities remain ‘no less than the current level of excellence.’” (Doc. 53 at 6). 22 Therefore, Defendant reasons, any violation of this requirement is “immaterial and trivial.” 23 Id. 24 The Court does not find such argument persuasive. It is not evident the damages 25 Plaintiff seeks by showing Defendant failed to obtain the reports. However, the Partial 26 Summary Judgment Motion seeks only for this Court to find that Plaintiff breached the 27 provision. With this limited scope, the language of the Bylaws is clear. The relevant portion 28 of Section 2.1(C)(i)(5) of the Bylaws provides: “[Defendant] will engage an agronomic 1 expert no less than once per year to evaluate the condition of the golf courses and confirm 2 that the agronomic practices are consistent with other first-class golf facilities in the 3 Phoenix metropolitan area.” (Doc. 38 at ¶ 5). The word “will,” like the word “shall,” is a 4 mandatory term, unless something about the context in which the word is used indicates 5 otherwise. Nat. Res. Def. Council, Inc. v. James R. Perry, 940 F.3d 1072, 1078 (9th Cir. 6 2019). The Court finds no context that suggests anything other than the use of “will” as a 7 mandatory, contractual promise. The use of “and” proceeding “confirm” states a second 8 obligation of Defendant (“to confirm that the agronomic practices are consistent with . . 9 .”). This second obligation may be the goal of the first obligation, as argued by Defendant, 10 but it does not alleviate the duty to perform the first obligation, made mandatory by the use 11 of the word “will.” Defendant failed to engage an agronomic expert in 2017, 2018, 2020, 12 2021, and 2022, and failed to deliver a report to the Advisory Committee for those same 13 years. Such failure, without a legally cognizable excuse, is a violation of the plain language 14 of the Bylaws. 15 Alternatively, Defendant argues that it should be excused for failure to engage an 16 agronomic expert in 2020 and 2021 because doing so was rendered impracticable by reason 17 of the COVID pandemic and resulting lockdowns and restrictions. (Doc. 53 at 5). The 18 doctrine of impossibility of performance provides that if a party's performance is rendered 19 “impracticable without his fault by the occurrence of an event the non-occurrence of which 20 was a basic assumption on which the contract was made, his duty to render that 21 performance is discharged.” Restatement (2nd) of Contracts § 261. 22 Defendant states that the lack of a global pandemic was a basic assumption upon 23 which the contract was formed. (Doc. 53 at 5). Further, Defendant points to the Declaration 24 of General Manager and Board Member Mr. John Maskovich, who states that there was 25 very little activity at the course in 2020 and 2021, due to COVID-19. (Doc. 54-1 at ¶ 15). 26 The defense for impossibility requires the showing of “a substantial impediment to 27 [its] performance.” VEREIT Real Estate, LP v. Fitness Int'l, LLC, 255 Ariz. 147, 155, ¶¶ 28 27-28 (App. 2023). Defendant’s general reference to the pandemic, without extrapolating 1 further as to how it prevented Defendant from retaining an agronomic expert, does not 2 satisfy this high bar. The only mention of the pandemic, in the declaration, was the 3 statement that “there was limited activity at the Boulders . . . resulting in no agronomic 4 reports for those years.” Id. Nor does Defendant articulate an argument that the COVID 5 pandemic alleviated any need for the reports. Therefore, Defendant is not excused for not 6 performing in 2020 and 2021 under a theory of the defense of impossibility. 1 7 Defendant argues that it should be excused for the failure to produce a report in 8 2022, “because the extensive renovations that the 2019 report recommended were finally 9 able to be done in 2022, which further disrupted the resort and rendered obtaining such 10 report for that year impracticable—although [the agronomic expert] TROON did provide 11 an informal assessment and recommendations.” (Doc. 53 at 4). Again, Defendant does not 12 provide an explanation as to how the renovations, which occurred from February 2022 13 through October of 2022, created “a substantial impediment to [its] performance.” (Doc. 14 54-1 at ¶ 15). Further, the “informal report,” referenced by Defendant, was procured to 15 address “the putting greens and their likelihood of recovery following an apparent 16 misapplication of a specific herbicide.” (Doc. 54-2). Such a report is not the promised 17 “agronomic report . . . to evaluate the condition of the golf courses,” as it was used for a 18 limited purpose—to evaluate the putting greens after a maintenance mistake. (Doc. 38 at ¶ 19 5).2 Defendant is not excused for failing to procure an agronomic report for 2022, under a 20 1 Defendant’s position is further eroded by the fact that golf was declared “an essential 21 business” in Arizona by former Governor Doug Ducey:

22 When the virus forced lockdowns in March, Arizona Gov. Doug Ducey kept golf courses open by declaring them as essential businesses. As part of his 23 executive order, clubs had to close many indoor areas and facilities, but the courses themselves remained open for business. 24 For the most part, courses in the state did more than just stay open. Many 25 saw their businesses thrive and even expand in some cases. Several courses have reported an increase in the number of rounds played since the onset of 26 the virus earlier this year.

27 Nick Hedges, Arizona’s golf scene thrives during COVID-19 pandemic, AZBIGMEDIA (Dec. 21, 2020), https://azbigmedia.com/lifestyle/arizonas-golf- 28 scene-thrives-during-covid-19-pandemic/. 2 The report does display a need for agronomic expert reports. 1 theory of the defense of impossibility. 2 Therefore, the Court finds that Defendant was not excused from failing to procure 3 an agronomic report for the relevant years, nor is it excused for failing to provide the report 4 to the Advisory Committee. As such, the Court finds that in so far as the Bylaws promise 5 such actions, the Defendant breached the Bylaws. The measure of damages, if any, is left 6 for another day. 7 B. INTEPRETATION OF SECTION 2.1(C)(i)(5) 8 In its Motion for Partial Summary Judgment, Plaintiff moves the Court to find that 9 Section 2.1(C)(i)(5) of the Bylaws does not limit the courses to which Defendant’s course 10 should be compared to golf courses where members pay similar dues to Plaintiff. (Doc. 37 11 at 4). The relevant language of the provision provides: “[t]he quality of the Golf Course 12 and practice facilities shall be no less than the current level of excellence comparable to 13 other first-class golf facilities in the Phoenix metropolitan area.” (Doc. 38 at ¶ 5). 14 Plaintiff makes this request pursuant to his declaratory judgment claim, under Count 15 Fourt of his Complaint, which seeks “a judicial determination of the respective rights, 16 obligations, and duties of Plaintiff, on one hand, and [Defndant] on the other hand, under 17 the Club Documents,” including a judicial determination that “[Defendant] is required 18 under the Club Documents to maintain the Golf Courses in a manner consistent with other 19 comparable first-class golf facilities.” (Doc. 1-1 at 19-20). 20 The declaratory judgment claim was brought under the Arizona’s uniform 21 Declaratory Judgments Act. Ariz. Rev. Stat. §§ 12-1831 to 12-1846. However, courts in 22 this district have found that the Federal Declaratory Judgment Act is a procedural statute, 23 and therefore, under the Erie doctrine, Federal courts should apply the Federal Declaratory 24 Act rather than the Arizona uniform Declaratory Judgment Act. LaCross v. Knight 25 Transportation Inc., No. CV-15-00990-PHX-JJT, 2024 WL 249162 (D. Ariz. 2024), citing 26 757BD LLC v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 330 F. Supp. 3d 1153, 1159 27 (D. Ariz. 2016) (internal quotation omitted). 28 The Federal Declaratory Judgment Act provides that “[i]n a case of actual 1 controversy within its jurisdiction,” a court, “upon the filing of an appropriate pleading, 2 may declare the rights and other legal relations of any interested party seeking such 3 declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a) 4 (emphasis added). “The Declaratory Judgment Act was an authorization, not a command. 5 It gave the federal courts competence to make a declaration of rights; it did not impose a 6 duty to do so.” Pub. Affairs Assocs., Inc. v. Rickover, 369 U.S. 111, 112 (1962). 7 “Declaratory relief is appropriate (1) when the judgment will serve a useful purpose in 8 clarifying and settling the legal relations in issue, and (2) when it will terminate and afford 9 relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.” 10 Guerra v. Sutton, 783 F.2d 1371, 1376 (9th Cir. 1986) (internal quotations omitted). 11 The Court finds that Plaintiff’s request is premature, and not proper for adjudication, 12 and therefore will exercise its discretion to deny Plaintiff’s Motion. At this point, the 13 factual record as to the state of Defendant’s course is not developed. Further, the 14 enforceability of Section 2.1(C)(i)(5) is an underlying assumption to Plaintiff’s request, an 15 assumption that the Court is not ready to accept. 16 The provision appears to have an illusory promise nature, resulting from the lack of 17 definition of what a “first-class golf facility” is. The phrase may have many meanings, and 18 may be so vague, as to be unenforceable in a contractual setting. It is clear to the Court that 19 many different factors will go in to determining whether Defendant’s course is comparable 20 to other first-class golf farcicalities in the Phoenix metropolitan area. One of those factors 21 could very well be dues. Further, what is a “first-class golf facility” may change year-over- 22 year, adding weight to the view that the term is too vague to be enforceable. 23 Plaintiff asserts that holding that the standard golf course to serve as a comparison 24 point for Defendant’s golf course is not limited to golf courses whose members pay a 25 similar amount in dues to Plaintiff would simplify the litigation, and narrow discovery. 26 Plaintiff is correct in so far as stating that dues cannot serve as a limitation of comparison. 27 Defendant attempts to read “comparable” as an adjective before “first-class golf facilities.” 28 However, “comparable” appears before “to.” Therefore, the provision reads that the golf || course “shall be ... comparable to. . . first-class golf courses in the Phoenix metropolitan 2|| area,” rather than “shall be ... comparable to .. . [comparable] first-class golf courses.” 3 However, the Court does not find that granting the Plaintiff's Motion would serve to simplify this litigation. Relevant is the Latin maxim, “lex non cogit ad inutilia”, which 5 || translates to “the law does not compel useless things. At this point of the proceedings, the || Court finds that articulating interpretations of the Section 2.1(C)(i)(5) may be compelling || Defendant to a useless act. 8 For these reasons, the Court denies Plaintiff's Partial Summary Judgment Motion 9|| as it relates to the interpretation of Section 2.1(C)@)(5). 10 IV. CONCLUSION 11 For the reasons stated above, the Court grants Plaintiff's Second Partial Summary 12 || Judgment, in full. However, as the Court stated above, and will reiterate here, this Order is 13 || limited to the scope of the Partial Summary Judgment Motion. The Court finds that Defendant breached Section 2.1(C)U)(5) of the Bylaws by failing to commission an 15 || agronomic report and provide a report to the Advisory Committee in 2017, 2018, 2020, 16 || 2021, and 2022. The Court makes no findings on whether such a breach caused recoverable 17|| damages. The Court denies Plaintiff's Motion, in-part, exercising its discretion by declining, at this time, to interpret the provision in the manner Plaintiff requests, by issuing an order stating that the golf courses to which Defendant’s course should be compared is 20 || not limited to those courses whose members pay a similar due structure to Plaintiff. 21 For good cause shown, 22 IT IS ORDERED granting, in-part, and denying, in-part, Plaintiff's Second 23 || Motion for Partial Summary Judgment. (Doc. 37). 24 Dated this 30th day of July, 2025. 25 26 dais.) wt 27 Stephen M. McNamee 28 Senior United States District Judge

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