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The Wade Hampton Golf Club was organized in 1986 and is one of the nation’s most high-end golf courses. Golfweek called it the No. 1 residential golf course in the country, and it is ranked the No. 26 course in the country by Golf Digest.
An attorney involved with the Wade Hampton Golf Club federal lawsuit has filed a motion to dismiss all but one of the claims made by more than a dozen ex-members involving redemption fees still owed to them by the organization.
In November, 13 ex-members of Wade Hampton sued the Cashiers golf club for $698,000, which they said was being improperly denied. Their case dates to a 2017 renovations project to the club.
The suit was filed on Nov. 5 in the U.S. District Court in Asheville. The plaintiffs claim that under the club’s bylaws, they are owed thousands in redemption fees and the club has refused to pay this under false pretenses, according to the suit.
The Wade Hampton Golf Club was organized in 1986 and is one of the nation’s most high-end golf courses. Golfweek called it the No. 1 residential golf course in the country, and it is ranked the No. 26 course in the country by Golf Digest.
The club’s bylaws say there are nine different classes of members, and each have different rights and obligations. There are approximately 300 current members at the club, according to the suit.
Asheville attorney Adam Peoples filed a motion on Jan. 3 to dismiss all but one of the claims filed by 13 ex-members of the golf club.
“The motion is the motion to dismiss, and it’s a procedural step before the lawsuit sort of jumps off in earnest,” Peoples said. “It’s an effort to narrow what the real issues are as opposed to just whatever happened. When a person files a lawsuit against somebody else, they can allege whatever claims they want and, very early on, in this motion to dismiss stage, the defendant can ask the court to say claims A and B are legitimate, we’re going to let those go, but claims C and D we’re going to get rid of because they can’t possibly win on those claims and it would waste everyone’s time if we were to litigate them for the next couple of years.”
Peoples said he believes the plaintiffs have tried to turn the case into “something much more than what it really is” and said the case boils to a breach of contract.
“I indicated to the court that we don’t disagree that this is a breach of contract case, and I think that is what this case is about,” Peoples said. “What it’s not about is all the other claims the plaintiffs have alleged, including unfair trade practices, fraud, misrepresentation and all those other things. They all arise out of the same alleged breach, but the plaintiffs want to sue the club five different ways for it.”
Peoples’ motion said all but two of the plaintiffs should be removed due to the statute of limitations. According to state law, breach of contract claims must be brought forward within three years of the alleged offense, and 11 of the 13 members left the club prior to 2018.
“The second level of my motion is to ask the court to take a hard look at whether most of them are even entitled to bring a claim,” Peoples said. “Many of the plaintiffs alleged they resigned in 2015, ’16, ’17, some before then. I think there’s a good argument that the statute of limitations bars all but two of the plaintiffs. That’s obviously something that can be litigated.”
Jay Babb, a Baton Rouge resident who owns a document recycling and shredding company, is the lead plaintiff.
“I resigned from the club in 2015, and the way the bylaws read, when a qualified member comes in, you go in line basically, once you resign, and I was up the list a ways,” Babb said in November. “They brought in quite a few members since 2014.”
“Thirteen of us agreed that we would, without complaint, offer Wade Hampton an opportunity to come to the table and discuss it.”
He said Wade Hampton offered two of the 13 plaintiffs a settlement two weeks ago but said it would not feel right if they had accepted it without the inclusion of the other 11 members.
New members must pay an initiation fee of $140,000 at the time they join the club, according to the suit, but when a member resigns or dies, the club bylaws state they are to be refunded their initiation fees when a new member replaces them.
Although the club holds itself out as a world class golf club and promotes a public aura of success and prominence, in truth it has been besieged by financial peril over a period of many years due to poor leadership and fiscal mismanagement, resulting in spiraling costs for upgrades and improvements that ladened it with unanticipated debt,” the suit said.
Babb and the other 12 plaintiffs suing the club allege they never received their returned initiation fees, which they are due when they resign.
Each of the 13 plaintiffs resigned from the club in the past five years, sometime between 2015 and 2019, after being members there since at least the early 1990s.They are asking to be repaid somewhere between $42,500 and $62,500, bringing the total lawsuit to $698,000.
After the Fourth of July in 2017, Wade Hampton Golf Club closed the golf course and much of the then-existing clubhouse in order to undertake significant renovations and improvements to both facilities.
Their plans included adding at least one new water retention pond, rebuilding all 18 putting greens that were built prior to the course’s original construction, performing drainage and bunker restoration work, replacing golf cart paths and resurfacing most of the access roads.
All told, this project was initially projected to cost close to $6 million. It ballooned more than 75 percent to approximately $10.6 million due to “poor estimating and changes to the scope of work,” the suit alleges.
“As a direct result of the significant cost overruns, the club was faced with severe financial pressures, which led the club to instituting a new, second assessment to be paid by the members (in the amount of $7,500 per member) and a significant increase in bank financing as the total debt incurred by the club during its projects ballooned to $11.7 million, in part to cover operating losses which were suffered by the club when both the golf course and clubhouse were closed for the renovation project,” the suit said.
A Dec. 18, 2019, letter from the club’s then-president Frank Kelly and treasurer Robert Rolfe told members at that time they would suspend the payment of redemption fees to former members until October 2020.
The $350,000 that had been owed to former members at that time was to be used as a “contribution’ to “cover accumulated debt,” which the suit said is a violation of the club’s bylaws and state law.
Because of an objection by former members, that was lifted in July 2020, according to the suit. But the repayment of these fees has not resumed despite the plaintiffs stating many new members have rejoined and the club’s finances have improved since 2017.
The plaintiffs had allegedly been told by the club at least twice in 2018 and 2019 their redemption fees would be repaid, but that has not occurred.
For example, the suit alleges although there were 14 new members in 2019, but the club has “failed to pay out 14 equity Redemption Amounts.”
Rolfe did not respond to a request for comment last week.
“Wade Hampton could probably stop this issue if they would admit their mistake and sit down and talk with us there,” Babb said. “But there’s people in leadership positions that don’t communicate with us. We were getting no communication unless we reached out over the years since 2015.”
Babb said that while he “absolutely loves” Cashiers and his time at Wade Hampton, it was time to do something about the situation.
“It’s the only way we felt that we could get the attention of certain people that we’ve tried to get to the table and talk to us,” Babb said. “We are willing to move the suit forward, we’ve got some money invested in this now. And we’re not backing down. We’re not looking to make money, we just want to get our money back. That’s all we’re looking for.”
Editor's note:
In the Wade Hampton lawsuit article in the Jan. 27 edition, it said that Wade Hampton Golf Club had not resumed repayment of redemption fees to the plaintiffs. The organization’s attorney, Adam Peoples, said two plaintiffs, including Jay Babb and Paul Neely, were repaid last month.
- By Michael O'Hearn/Crossroads Chronicle