California Files Lawsuit Against Dallas-Based ClubCorp Over Unreturned Membership Fees

The country clubs were under contract to return deposits to members after 30 years, according to the suit.

California’s Attorney General has filed a lawsuit against ClubCorp, a Dallas-based company that touts itself as the nation’s largest owner and operator of private golf and country clubs.

The lawsuit filed Tuesday accuses the company of violating the Unfair Competition Law and the False Claims Act by not returning deposits to members after 30 years as stated in their membership contracts.

Five of the company’s clubs are located in our region including one in Riverside.

They are Bernardo Heights Country Club of San Diego, Canyon Crest Country Club of Riverside, Symphony Towers Club, Inc of San Diego, Morgan Run Club & Resort of Rancho Santa Fe, Shadowridge Golf Club of Vista.

ClubCorp has failed to repay more than $10 million owed to its more than 9,000 California members, Attorney General Xavier Becerra said in a news release.

When someone is accepted as a member of a club run by ClubCorp, they are required to pay an initial membership fee ranging from $300 to $7,500.

The country clubs were under contract to return deposits to members after 30 years, according to the suit.

In its 60 years, ClubCorp has collected more than $717 million in initiation deposits, according to the complaint. As of June 13, deposits due to be returned to current and former members totaled $178 million according to the court document.

The lawsuit estimates 9,000 members in California are owed refunds totaling more than $10 million. Read the complaint here.

California's Unclaimed Property Law requires that any property left for more than three years must be turned over to the state.

"For over 60 years, ClubCorp has treated its members – of all ages – fairly, equally and in full compliance with its obligations," said Patty Jerde, Communications Manager at ClubCorp.

"It is irresponsible to suggest we have taken unfair advantage of seniors or anyone else. We believe that the agreements our members accept, which are consistent with practices throughout our industry, fully comply with the law," Jerde said. "We have always and will continue to honor those commitments. ClubCorp will defend itself vigorously against the Attorney General’s inaccurate and meritless claims." 

The company, which went private in 2017, served approximately 430,000 members at the time according to Bloomberg. 

It was ranked fifth on Club Industry’s list of top health clubs of 2018 with a reported revenue of $1.19 billion in 2017.

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