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Brannock Berman & Seider Obtains Reversal in Dispute Over Country Club Bylaws

In an opinion written by Chief Judge Meredith Sasso just before her appointment as the newest Florida Supreme Court Justice, the Sixth District Court of Appeal embraced arguments made by Brannock Berman & Seider on behalf of a Lee County country club.

The case turned on the club’s ability to amend its bylaws. Those bylaws gave the club the right to impose special assessments to ensure that it could, for example, fund improvements to the facilities. Historically, the special assessments were fully refundable to members. But as time went on, this model proved unworkable and began to jeopardize the economic health of the club. The model also made little sense: members could receive and enjoy the full value of the improvements yet receive a full refund of the price even if the improvements no longer existed or were fully depreciated when the members departed. To address the problem, the members voted to amend the club’s bylaws to provide that, going forward, new special assessments would no longer be refundable. Previously issued assessments, though, remained fully refundable.

When the members later voted to impose a non-refundable special assessment on themselves, 15 of the club’s 437 voting members sued, arguing that they had a “vested right” in the original form of the bylaws, which had made assessments fully refundable. On cross-motions for summary judgment, the trial court agreed with the minority of members, effectively ruling that the bylaws could never be changed. The club appealed.

In written briefs and in the first-ever oral argument held by the Sixth DCA, Brannock Berman & Seider argued that the trial court’s decision was out of step with the text of the bylaws and with the right of membership organizations to effectively govern themselves, including by amending their governing documents. The appellate court fully agreed. The court held that, because the bylaws were always subject to amendment, they created no vested rights. The court thus reversed and remanded for entry of judgment in the club’s favor.