Bass v. Tour 18 At Rose Creek, L.P.
| Decision Date | 30 March 2018 |
| Docket Number | Case No. CIV-17-006-R |
| Parties | ANDY BASS, TRUSTEE OF THE ANDY BASS FAMILY TRUST, et al., Plaintiffs, v. TOUR 18 AT ROSE CREEK, L.P., Defendant. |
| Court | U.S. District Court — Western District of Oklahoma |
Before the Court are the Motion for Summary Judgment filed by Defendant Tour 18 at Rose Creek, LP ("Tour 18") (Doc. No. 70) and Plaintiffs' Motion for Summary Judgment (Doc. No. 73). Plaintiffs responded in opposition to Defendant's motion and Defendant responded in opposition to Plaintiffs' motion, and both Plaintiffs and Defendant filed reply briefs. In addition, with leave of Court, Plaintiff filed a sur-reply, which drew a Motion to Strike from Defendant (Doc. No. 94), to which Plaintiffs objected. Defendant's Motion to Strike is hereby DENIED; the Court is capable of determining whether Plaintiffs' filing exceeded the scope of the permission granted by the Court. Furthermore, if the Court concluded that Plaintiffs had exceeded the scope of their authority, it could have ordered Defendant to file an additional brief. No such brief is necessary to dispose of the parties' motions, and thus the Court turns to the substance of the motions for summary judgment.
Summary judgment should be granted "if the pleadings together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Reeves v. Churchich, 484 F.3d 1244, 1250 (10th Cir. 2007). When a motion for summary judgment "is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading" but must set forth "specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). A disputed fact is "material" if it is essential to resolution of the claim under the relevant law. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998). A dispute is "genuine" if the evidence might sway a jury to return a verdict in favor of the non-movant. Thomas v. Metropolitan Life Ins. Co., 631 F.3d 1153, 1160 (10th Cir. 2011).
Plaintiffs each claim membership at Rose Creek Country Club, owned and operated by Defendant Tour 18, pursuant to a 2009 Master Membership Agreement. Tour 18 offered Master Memberships and sold fifty, utilizing substantively identical contracts. The Master Membership Agreement indicated that Tour 18 was in the process of purchasing the golf course and related amenities in the Rose Creek Development. In exchange for a payment of $30,000 to an escrow account held by Rose Rock Bank, Tour 18 agreed to provide each Master Member certain privileges.1
Member's payment of $30,000.00 shall constitute payment of Lifetime dues and entitle Member to Lifetime privileges at the Rose Creek Gold Club for his/her family including spouse and any children 22 years or younger, full time student, or still living at home.
Doc. No. 70-4. Without any fee, a Master Member could pass his or her membership to an immediate family member at any time. Upon death, absent contrary instructions in favor of a son or daughter, the membership would pass to the Master Member's spouse. For a $3,000.00 fee payable to Tour 18, a Master Member could sell the membership at any time. The Master Membership Agreement constrained Tour 18 in certain respects:
In the event Tour 18 at Rose Creek, LP should sell, transfer, or otherwise dispose of the Rose Creek Golf Club, voluntarily or involuntarily, or discontinue operations of the Golf Club, the $30,000 will be refunded in full to the Masters Member.
Id. The contract provided the Master Members the right to book tee times up to fourteen days in advance and furnished twelve free guest rounds per year in addition to other recognitions not relevant to the instant dispute. The final paragraph of the Master Membership Agreement provides:
Should Member's membership be terminated by Tour 18 at any point in time pursuant to the club rules as established and published by Tour 18, Member shall be entitled to a refund of his $30,000.00 less an amount equal to the number of months he has been a member multiplied by the monthly family dues member would have paid for a golf membership during the time period prior to his/her termination.
Id. (emphasis added). This provision was invoked by Tour 18 in a letter dated December 1, 2016, addressed to "All Master Members"
Asserting that the termination of the Master Member Agreements was improper, Plaintiffs filed the instant action alleging breach of contract. The Court denied Plaintiffs' request for preliminary injunctive relief. As noted, both Plaintiffs and Defendant seek summary judgment. Plaintiffs contend the membership termination was in violation of the Master Member Agreement which should be considered without reference to the Rose Creek Rules & Regulations. However, even if the Court concludes the Master Member Agreement incorporated the Rules and Regulations by reference, Plaintiffs contend they are nevertheless entitled to summary judgment. Defendant argues it is entitled to summary judgment, because the Master Member Agreement incorporated by reference the Rose Creek Rules and Regulations, including the provision that "Rose Creek management may terminate a member at any time if deemed necessary." Defendant contends that for financial reasons it deemed termination of the Master Memberships necessary and that pursuant to the Master Member Agreement, no master members were entitled to a refund upon termination.
In order to prove a breach of contract, a plaintiff must prove three elements: (1) formation of a contract; (2) a breach of the contract; and (3) actual damages suffered from the breach. Interpretation of the Agreement isgoverned by Oklahoma law. See United States v. Hardage, 985 F.2d 1427, 1433 (10th Cir.1993).
Walker v. Builddirect.Com Techs. Inc., 2015 OK 30, ¶ 11, 349 P.3d 549, 553. There is no dispute that the Master Membership Agreement created a contract between the signatories. Defendant contends, however, that the terms of the agreement include provisions from the Rose Creek Rules and Regulations pursuant to incorporation by reference. Without incorporation by reference of the above-quoted provision from the Rose Creek Rules and Regulations Defendant lacked the right to terminate the Master Member Agreements in the manner undertaken in this case.
A contract may include a separate writing or portions thereof, if properly incorporated by reference. See Continental Supply Co. v. Levy, 1926 OK 449, 121 Okla. 132, 247 P. 967; Aetna Life Ins. Co. v. Bradford, 1914 OK 636, 45 Okla. 70, 145 P. 316. As Samuel W. Williston explains, extrinsic material is properly incorporated when the underlying contract makes clear reference to the separate document, the identity of the separate document may be ascertained beyond doubt, and the parties to the agreement had knowledge of and assented to the incorporation. See 11 Williston on Contracts § 30:25 (4th ed.1999). Incorporation however, is ineffective to "accomplish its intended purpose when the provisions to which reference is made do not have a reasonably clear and ascertainable meaning." Id. When incorporated material is properly referenced, "that other document, or portions to which reference is made, becomes constructively a part of the writing," forming a single instrument. Id.; See High Sierra Energy, L.P., 2010 OK CIV APP 96, ¶ 14, 241 P.3d 1139, 1144; See also Okla. Stat. tit. 15, § 158.
Id. Defendant contends the language in the final paragraph of each Master Membership Agreement, referencing termination "pursuant to the club rules as established and published by Tour 18," was effective to incorporate the provision granting it discretion to terminate membership as it deemed necessary.
The Court disagrees with Defendant's contention that the Rose Creek Rules andRegulations were incorporated by reference into the Master Membership Agreement. The Master Member Agreement does not use specific words of incorporation. Although there are no magic words required for incorporation, Walker, ¶ 13, 349 P.2d at 553, the language must convey a clear intent to incorporate the terms. The undersigned concludes that use of the phrase "pursuant to" is insufficient to incorporate by reference either the entirety of the Rose Creek Rules and Regulations or any specific provision thereof into the Master Member Agreement. "Pursuant to" is not a term of art, nor does the phrase upon which Plaintiff relies in the Master Member Agreement reference any particular provision of the Rules and Regulations, nor is there a specific section of the Rules and Regulations devoted to termination of a Master Membership.2
The term "pursuant to" has multiple meanings and its use does not automatically trigger incorporation of the referenced agreement or statute. "The term 'pursuant to' is generally defined as 'in compliance with; in accordance with; under [or] . . . as authorized by . . . [or] in carrying out.'" United States v. DeCay, 620 F.3d 534, 544 (5th Cir. 2010)(quoting Black's Law Dictionary (8th ed. 2004)). The context of the sentence determines whether the phrase merely references the source of an obligation or actively incorporates an extrinsic agreement. See, e.g., In re Phar-Mor, Inc., 172 F.3d 270, 274 (3d Cir. 1999)( where court...
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