FOCUS TODAY - June 2004

When a Board Member Sues the Club

On Advice of Counsel—
If a tree falls in the woods, can it destroy your club?

By Terry A. Taylor

Our golf course is located in a heavily wooded area. Last fall, a board member and his wife were retrieving a lost golf ball. Suddenly, a dead tree fell and demolished their golf car. Fortunately, it missed the board member. His wife, however, experienced severe bruises and abrasions on her body, legs, and arms, and lost about one month of work. We referred the matter to our insurance company.

Recently, the board member sued the club, alleging its negligence in failing to remove the dead tree and failing to warn. Damages were unspecified, but included the wife’s actual and consequential damages and the board member’s “loss of consortium.” Needless to say, the other board members were shocked and angry. Our bylaws allow the board to remove a board member “for any…cause deemed sufficient.” Some board members think he should be removed; some think he should step aside while the suit is pending. What would you advise?

I advise that the board take no action other than to require the board member to recuse himself from the board-lawsuit discussions. And, I advise that the board members treat him with civility, even it if hurts. Why?

Unbridled lawyers and profit-conscious insurance companies can transform unfortunate situations into complete disasters. The situation above is typical. A member gets injured; the club “turns if over” to its insurance carrier. The carrier has no relationship to the member and plays hardball in settling the claim. The insurance company’s “unsympathetic” attitude angers the member, who “turns it over” to an attorney. The attorney then sues (as attorneys will do), making the club “shocked” and “angry.” Before you know it, the retaliatory strikes divide (and perhaps destroy) the club.

When engaging an agent, retain what I will call a “jerk” veto. When you “turn over the claim” or “turn it over to the lawyers,” make sure they understand that they must get your approval before taking any action that could make you look like a jerk. If you do not, you can be sure they will. Unlike you, these “agents” may have no long-term relationship to protect. Their short-term involvement incites them to play hardball. Not only do they perceive that it’s their job, but they also think that “being tough” is a good career strategy.

And, you can’t “hide” behind your agent and play it both ways. You may say, “The club doesn’t control its insurance carrier,” or “We were just doing what our lawyer told us to do,” but you are only fooling yourself. Your agent’s attitude and conduct is imputed to you.

Remember, you will have to clean up the relationship damage inflicted by your agent. When you feel like striking back, say to yourself, “This too shall pass.”

Terry A. Taylor, Taylor Advisors PC, Colleyville, TX
817-835-0345 – taylor4812@mailblocks.com