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Pecoraro v. Molfetta

A-6150-02T5 (N.J. Super. App. Div. 2004) (Unpublished)

MEMBERSHIP ORGANIZATIONS—Although courts will rarely interfere with internal governance matters of a private social club, it will require that there be basic procedural fairness, but only patently unfair treatment of a member will warrant judicial interference.

An expelled member of a country club brought suit against the club seeking to be reinstated to membership. The member claimed that his expulsion was motivated by bad faith, was arbitrary, was done in a way contrary to the club’s constitution and by-laws, and violated principles of fundamental fairness. His problem began when he berated a club employee for being too loud as the member was attempting a golf shot. A board member filed a grievance against the member. The berated employee did not file a complaint against the member. After a meeting, the board’s grievance committee recommended that a letter of warning be placed in the member’s file. Instead, the club’s board suspended the member for one month, placed him on probation for a year, and put a letter of reprimand in his file.

The member had not been given notice of the hearing nor was he advised of the details of the grievance or of the grievance committee’s decision. He objected to the board’s action and the board agreed to reconsider the matter by allowing the member to be heard at a future meeting. The member spoke at that meeting. Then, the board affirmed its original decision, stating that its decision was based on the information contained in the grievance committee report even though the committee’s report recommended no penalty.

While on probation, the member received a letter telling him that he had been charged with two more violations, again initiated by the same board member. Again, no complaint had been made by actual victims of the member’s alleged conduct. The charges were not referred to the grievance committee. The letter told the member that he could appear before the board in his own defense, and that the charges could result in his expulsion. At the meeting that followed, he was expelled from the club. He sued. Prior to the completion of discovery, the Chancery Division granted the club’s motion for summary judgment, dismissing the claim.

The Appellate Division reversed, even though there is no strong public policy protecting a private club member’s right to retain his or her club membership. Public policy limits its concern to expectations of fair treatment, but only patently unfair treatment warrants judicial intervention. The member first argued that the club violated its own rules. The Court responded that procedural due process rights do not generally apply to disciplinary proceedings of private voluntary associations. The only requirement is that there be basic procedural fairness and courts do not automatically intervene where a voluntary association fails to follow its own rules.

Nonetheless, the Court found unresolved questions of fact as to whether the club’s deviation from its established procedures deprived the member of reasonable safeguards of his membership interest. The Court questioned the failure of the grievance committee to fully investigate the complaint, to hold a hearing, and to issue a written report as required by the club’s by-laws. Furthermore, the club failed to notify the member of the initial board meeting at which he was suspended even though the by-laws required that seven days’ notice be given to him together with a copy of the charges. The board also bypassed the recommendations of its grievance committee without offering an explanation. Finally, the alleged victims of the member’s actions never filed written complaints as required by the club’s by-laws.

For those reasons, the Court held that the member may have been treated disparately from other members and may have been acted against with malice and in bad faith. In the Court’s view, summary judgment before discovery left these factual issues unresolved. Therefore, the Court reversed the decision of the lower court, and remanded the case so that the member could obtain complete discovery.

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