(CN) – A Florida golf course owned by President Donald Trump must repay $5.7 million to 65 former members denied membership refunds after he bought the South Florida club in 2012, a federal judge ruled.
Trump, through defendant Jupiter Golf Club LLC, a subsidiary of the Trump Organization, purchased the club from the Ritz Carlton and rebranded it the Trump National Golf Club in Jupiter.
According to a class action filed on May 3, 2013, immediately after acquiring the club, Trump, through Jupiter Golf Club, unilaterally began changing its terms of membership.
In doing so, lead plaintiffs are Norman Hirsch, Matthew Dwyer, and Ralph Willard said, the new owners of the club also disrupted the longstanding process by which members could resign from the club.
Under Ritz-Carlton, the complicated resignation process could take 10 years to complete.
First, resigning members had to request to be added to a waiting list in their membership classification.
After every fifth membership Ritz-Carlton sold in one classification, the person at the top of that resignation list would get their deposit refunded and be removed from the club rolls.
Meanwhile, members on the waiting list were still obligated to pay dues ranging from $8,000 to $20,000 per year, plus a $1,800 food and beverage fee.
But, as they waited to be former members, they would still have access to the club.
Shortly after Trump bought the club in November 2012, he called a membership meeting and told members on the resignation lists that if they didn’t rescind their notice, they would no longer be allowed club access starting Jan. 1, 2013.
Two months later, he informed the resigning members they would still be expected to pay dues until they reached the top of the resignation list.
The members said that by cutting off their access, Trump owed them their deposits within 30 days, citing a clause in their Ritz-Carlton contracts.
When the company refused to abide by this clause, the lead plaintiffs sued. Eventually the class party to the lawsuit would include 65 former members.
“Our clients doubled down on their commitment when we had the opportunity to go to trial against the Trump Organization — they’re a formidable adversary,” said Seth Lehrman, a partner at Farmer, Jaffe, Weissing, Edwards, Fistos & Lehrman, the Fort Lauderdale firm that represented the class.
Testimony last summer showed Trump got a below-market price for the club by agreeing to be on the hook for potentially $41 million in refundable membership deposits.
Also, the contracts the members signed with Ritz-Carlton stated that if that company sold the club, the new owner would be responsible for any refundable deposits that were due.
During testimony, the president’s son Eric Trump, who oversaw the club’s operation, conceded that paying dues without having access to the club “would violate a fundamental principle of life.”
On Feb. 1, U.S. District Judge Kenneth Marra ruled that Trump National Golf Club in Jupiter violated contracts the members had signed with the previous owner, Ritz-Carlton.
The average payment will be about $87,000 if the ruling is upheld.
“The judgment provides everything we asked for from the court, including prejudgment interests. What we sought to do was to win a refund of our clients’ deposits. We got every penny,” Lehrman said.
The Trump Organization vowed to appeal, saying in a statement that “We respectfully disagree with the Court’s decision.”
“At the time Trump purchased the Club, it was suffering financially, making it unlikely that these members would ever get back their deposits,” the organization said.