Where litigation has ensued, golf in Minnesota has sometimes been more than the proverbial "a good walk, spoiled." But Minnesotans in droves continue to flock to the links, at least when they aren't fishing or boating.

by Marshall H. Tanick and Brian Dockendorf

Minnesota reputedly has more recreational features per resident than most other states. It leads, of course, in lakes, with more than 10,000 -- actually 11,842.1 This state also has the highest number of boat registrations per capita in the country.2

Minnesota probably leads the nation in lutefisk, hot dishes, and casseroles, too.

None of this is surprising given the contour, character and climate of the state -- especially the casseroles. But golf also is very prominent in Minnesota, with over 450 public and private courses.3 They criss-cross the state from the Arrowhead region of Virginia in the northeast to the Minnesota River Valley in the southwest and from the hilly country of southeastern Minnesota to the Red River Valley in the northwest.4 Minnesota also has more golfers per capita than most other states in the nation.5

The interest in golf was boosted last summer when the state hosted two major events: The Hazeltine Golf Course in Chanhassen was the site in August of the 84th annual Professional Golfer's Association (pga) Championship, one of the events that make up the Big Four of golf. Rich Beam was on the beam in edging Tiger Woods for the title. This was the fourth time the event had been held in Minnesota, the first time since 1959.

In September the Interlachen Country Club in Edina hosted the Solheim Cup, a competition between squads of top American and European women golfers, which was won with a breathtaking comeback by the American team.6

The number of courses and golfers in Minnesota, not surprisingly, breeds a fair amount of litigation.7 Like an errant golfer's drive, the lawsuits cover a wide range. They extend from personal injuries to patent law.8 Here's a look at some of the more interesting cases that have shaped the fairways, greens, and courtrooms of this state in recognition of Minnesota's ongoing love affair with the links.

"Fore" Failures

The shriek of "fore" on a golf course is a warning to others on the links to watch out for misguided golf balls. But the phrase frequently fails to fend off injuries and, when they occur, litigation often ensues, with mixed results for the participants.

A typical genre is a lawsuit by a golfer struck by a fellow player's misguided shot. In Minnesota, the courts impose a common law duty of due care upon golfers to avoid injuring other players. Hollinbeck v. Downey, 261 Minn. 481, 484, 113 N.W.2d 9, 11 (1962).

But a claim of negligence against the golf course where a golfer was injured after a ball struck him in the eye was not actionable in Davis v. Peterson, 1991 WL 132764 (Minn. App. 07/23/91) (unpublished). The golfer who brought suit lost his right eye after being hit by a golf ball struck by a colleague. The ball ricocheted off a three-foot-high post denoting the 150-yard distance to the green on the golf course. A golf course architect was not permitted to testify for the claimant that the marker constituted an unreasonable risk on grounds that he lacked expertise to testify about the safety hazards of the yard markers. Absent expert testimony, the Ramsey County Court dismissed the lawsuit.

The appellate court affirmed, holding that the consultant's testimony would not assist the trier of fact in determining whether the marker was "placed in an unsafe manner." The expert could not testify because he had "never dealt with the issue of safety hazards of yard markers" and, as a golf course architect, it was "not his job to deal with the golf course markers." Therefore, the court properly dismissed the lawsuit.

The threat of being struck by a wayward golf ball exists not only for players, but for others around the golf course. The liability of the golfer who hits the ball varies upon the circumstances.

In Hollinbeck v. Downey, supra, a caddy collecting balls on a practice range was injured by a ball hit by a golfer who was practicing hitting drives. Reversing summary judgment for the golfer, the Supreme Court stated that a golfer has a duty to "exercise ordinary care to prevent injury to others by a driven ball." 261 Minn. at 484, 113 N.W.2d at 11. The Court noted that, unlike those golfing on a regular course, golfers on practice ranges do not yell the "fore" warning before striking a ball. Without issuing this warning, golfers may be liable if they know or, in the exercise of ordinary care, should have known that someone else was in a "zone of danger and was unaware" that a ball was about to be hit. A golfer can discharge this duty by having given "a warning or desisted from striking the ball" until the zone of danger was cleared. Whether the golfer has done so creates a triable jury issue that precludes summary judgment.9

But a golfer in a tournament does not owe a duty to spectators against the possibility of being struck by a ball. In Grisim v. TapeMark Charity Pro-Am Golf Tournament, 415 N.W.2d 874 (Minn. 1987) a spectator struck by a golf ball sued the sponsor and golfer who hit the errant ball.

The spectator was struck in the left eye, resulting in the loss of her eye, while sitting under a tree near a green, a spot she selected because the bleachers behind the green, which were designated for spectators, were crowded. The Court of Appeals allowed a claim of negligence against the organization that sponsored the event as well as the golfer who hit the ball. 394 N.W.2d 261 (Minn. App. 1986).

The tournament sponsor did not appeal, but the golfer did, and the Supreme Court reversed, holding that the claim was "barred by the primary assumption of risk doctrine." Comparing the incident to the injury of a spectator at a baseball game, the Court reasoned that the sponsor was obligated to provide only "a reasonable opportunity to view the participants from a safe area."10 The Court did not pass upon the liability of the sponsor, but held that whatever duty it had to "provide safe viewing areas for the public" could not possibly extend to a participant who "was merely playing in the tournament." Because the golfer did not have any "control over the arrangement for spectators," he could not be liable for breaching any duty to the spectator. The Court also rejected a contention that the golfer "breached a separate duty" by failing to shout "fore" to warn the spectators. As in the Downey case, in which the caddy shagging balls may have been unaware of the golfer's "intention to hit the ball," no warning was issued. In Grisim, the golfer "could not have any knowledge whether [a spectator] was aware that he was teeing off." The Court, therefore, limited the Downey ruling to "regular player practice," where golfers are "obligated to warn others," rather than in tournaments where spectators "have assumed the risks of straying too close to the playing area."

Stressful Impacts

Misguided golf shots can also cause damage to property. This issue underlay an action brought by the owner of a home near a golf course in Dakota County whose home was damaged by off-target golf balls striking the aluminum siding of the edifice. In Vogt v. Carriage Hills Golf Club, 418 N.W.2d 536 (Minn. App. 1988) the new homeowner sued the previous owner of the home, claiming that the seller's agent failed to inform the purchaser of the possibility of damage due to erroneous shots from the nearby course. Reversing a ruling in favor of the homeowner, the appellate court held there was insufficient evidence of reliance by the homeowner on any statements made by the seller or agent regarding safety of the home. Further, any reliance was not justified because the agent originally gave an opinion that she "assumed" that any problems had been checked out before the house was built. Lacking "any expression of certainty," her statement could not justify reliance as a matter of law.

Another type of injury, emotional distress attributable to being forced off a high school golf team, did not support an action by a minor against a juvenile golf team colleague. In Anderson v. Peavey, 1997 WL 343166 (Minn. App. 06/24/97) (unpublished), a student member of the Marshall High School golf team claimed that he had been afflicted with emotional distress by a teammate who schemed to drive him off the team and caused him to withdraw from school. The appellate court affirmed dismissal of the lawsuit on the grounds that the alleged symptoms of physical illness, confusion, anger and depression, were "not sufficiently severe to be actionable" for emotional distress under Hubbard v. United Press International, Inc., 330 N.W.2d 428 (Minn. 1983). Because of the lack of sufficient severity of distress, the court did not address whether the claimed distress was caused or connected to the forced departure from the golf team.

Moving Violations

A golfer sued the owner of a golf course after he was struck by an automobile while golfing. In Gresser v. Taylor, 276 Minn. 440, 150 N.W.2d 869 (1967), a golfer participating in a tournament at a golf course in Albany, Minnesota, was struck by a vehicle that rolled from its parked position down a hill while he was playing. The car was parked on a public street adjoining the golf course, but only a couple of feet from the golf course property line. The owner speculated that it may have moved because a third person entered the vehicle and disengaged the emergency brake, a proposition the court dismissively labeled "mere conjecture."

Regardless of what caused the car to move and strike the golfer, the course was liable because it allowed the car to be parked in a position in which it "should have perceived the danger." Further, the golf course failed to take minimal and inexpensive action in order to minimize the "anticipated risk." The lack of "normal precaution" invoked the principle that a "business proprietor may be liable for failure to use reasonable care to protect the invitees from negligent acts of persons outside the premises." 150 N.W.2d at 873. The owner of a car may also be liable on the grounds that the act of parking "may be negligent when the auto is left in a place where there is a risk of it accidentally starting up." Even if there was some intervention by a third-party to cause the car to move, the owner would still be liable because the car was left unlocked, which made intervention "to some degree, perhaps more foreseeable."

A moving golf cart can cause legal problems, as reflected in Brandt v. Commissioner of Public Safety, 1999 WL 562112 (Minn. App. 08/03/99) (unpublished). A golf cart carrying three people on a darkened roadway in Mille Lacs County was stopped by a deputy, who saw a man sitting in the driver's seat holding the steering wheel. When the vehicle stopped, the man was sitting on the driver's side behind the wheel, no longer touching the steering wheel. Appearing intoxicated, he was arrested for Driving Under the Influence (DUI) and his driver's license subsequently was revoked.

The driver claimed that his license was not subject to revocation because he was not in "physical control" of the vehicle, a requirement for revocation under Minn. Stat. §169.121, subd. 1(a). The officer's testimony that the driver's hands were on the steering wheel while the car was moving was refuted by one of the other golf cart occupants, who testified that she, sitting in the middle of the golf cart, actually was driving it.

The appellate court affirmed the revocation, holding that the determination by the trial court that the driver was "in physical control" of the vehicle was a factual issue which could not be set aside on appeal. By sitting in the driver's seat with his hands on the steering wheel while the cart was moving, the defendant was not a passenger "merely along for the ride," but had "physical control" of the vehicle. Thus, the court upheld the dui conviction.

Other golf cart cases abound in Minnesota. A golfer, who slipped and injured his knee while boarding a cart parked on a steep golf course path, was not entitled to sue for negligent design of the course in Schnieder v. Lanesboro Golf & County Club, 2001 WL 537053 (Minn. App. 05/22/01) (unpublished). The injured golfer contended that the path was unsafe because it was too steep and surfaced with used conveyor belts which made it slippery.

The court held that the golf course had no duty to warn the golfer, who was injured on the fourth hole. It noted that he had already played the first three holes and was aware of the "hilly nature" of the course. That the course's condition was "visible" and known to him, or "obvious," obviated any duty to warn. The lack of duty was enforced by the absence of any other accidents on the path or any complaints over the past five years. The court also rejected a claim on the grounds that the perpendicular angle of the path violated the Uniform Building Code since the Code does not extend to golf cart paths.

In the matter of Welfare of M.L.H., 1998 WL 236152 (Minn. App. 05/12/98) (unpublished), a teenage girl drove some boys to a park to retrieve a golf cart she knew or suspected they had stolen.

The appellate court affirmed her delinquency adjudication for aiding and abetting the receipt of stolen property. The determination was proper even without proof that the girl was present when the golf cart was stolen or that she drove the stolen cart. In transporting the boys to the park, where they had hidden the stolen cart, she was "assisting them in reassuming possession of stolen property." Since the girl "did nothing to prevent the commission of the crime," and had "a close association" with the boys who stole the cart, she was culpable for driving them to the park so that they could retrieve the cart that she knew, or had reason to know, was stolen.

Crime Doesn't Play

Those who play golf rarely commit crimes on the course. But the places where the game is played and the instrumentalities of the activity often are involved in crime-related proceedings in Minnesota.

The theft of golf carts provided the basis for taking dna samples from a juvenile suspected of the crime, which was later used to support his delinquency adjudication for a different offense in In re Welfare of J.W.K., 583 N.W.2d 752 (Minn. 1998). A juvenile suspected of being involved in the theft of carts from a country club in New London, in central Minnesota, agreed to a blood test for dna testing. The youth was subsequently cleared of the offense, and the dna sample was not used for that purpose. However, the blood sample was used for dna testing in connection with a different transgression, a residential burglary. After being told that his sample matched the blood at the scene, the youth confessed. Finding that the boy gave only "limited consent" for the use of his dna testing, the trial court suppressed the evidence and threw out the subsequent confession, and the appellate court affirmed. 574 N.W.2d 103 (Minn. App. 1998).

But the Supreme Court reversed. While the 4th Amendment applies to the "physical intrusion of the blood test," it was not improper to submit the youth's blood sample for dna profiling in connection with a different crime than the one for which he had consented "without first asking for it and obtain[ing] the boy's permission."

While recognizing that the youth had made a "strong argument" against the use of the dna sample for a different offense than the one for which consent was given, the Court applied the "inevitable discovery exception" to the 4th Amendment. Under this doctrine, derived from Nix v. Williams, 467 U.S. 431 (1984), a 4th Amendment violation is excused if the evidence "would inevitably have been discovered." The Court reasoned that the boy and his mother "presumably" would have given consent to the use of the blood sample for testing in the burglary case, and, if they did not, the police "presumably" would have obtained a search warrant to secure a new sample or to allow the submission of the previous sample for dna profiling. Because it was "inevitable" the police would have obtained the evidence anyway, it was not suppressible. Nor was the subsequent confession barred under the "fruits of the poisonous tree" doctrine, which bars use of evidence that stems from a 4th Amendment violation. Therefore, the case was remanded for adjudication of the youth's delinquency.

The accouterments of golf occasionally constitute instrumentalities of criminal offenses rather the chip shots, birdies, and bogeys for which they were designed. In State v. Carlin, 1989 WL 94455 (Minn. App. 08/22/89) (unpublished) rev. denied (Minn. 10/13/89), a hitchhiker was assaulted with a golf club by two friends of the driver, who were in the car, and robbed the victim. One of the attackers challenged his conviction in the St. Louis County District Court for attempted murder, assault and robbery.

The appellate court affirmed the conviction, holding that the testimony of the driver was sufficiently corroborated by the evidence, coupled with the defendant's initial lie to the police that he was home and that he was not in the car, and the discovery in his home of a blood-stained jacket. Additionally, the defendant had told the police "where to find the golf club" that was used in the attack. Although the trial court erroneously allowed inadmissible hearsay evidence of a woman who told the police that she saw the defendant that night with "blood on his jacket," it was harmless because of the substantial other evidence supporting the conviction against the golf club attacker.

A more innocuous use of a golf club did not minimize the sentence for a conviction of terroristic threats in State v. Morris, 609 N.W.2d 242 (Minn. App. 2000), rev. denied (Minn. 05/23/00). A participant in a domestic altercation in St. Paul barricaded himself in his room and threatened to shoot police, who responded to the incident. After a long standoff, police decided to enter his room after seeing through a window what "appeared to be a shotgun or rifle" in the hands of the suspect, pointed towards the door. After entering, and, after apprehending him, they discovered that what they thought was a gun barrel actually was "the grip end of a golf club." A presentence report suggested the presumptive guideline of 24 months' imprisonment, but the Ramsey County District Court, finding aggravating circumstances, sentenced the barricaded man to five years, the statutory maximum for terroristic threats.

The appellate court affirmed the sentence, holding that the trial court did not abuse its discretion in departing from the presumptive guideline and imposing the five-year maximum. While aggravating circumstances generally warrant only a doubling of the presumptive sentence, if those circumstances are "severe," a trial court may impose a sentence "greater than double the presumptive sentence" up to the statutory maximum, as occurred here. The trial court properly determined that the defendant's conduct was "more ... serious than that typically involved" in making terroristic threats because of the number of people involved and the risks to a large number of officers who were at the scene during the standoff, which necessitated that residents of nearby homes be evacuated. Because the standoff was "wrought with the risk of serious physical injury to police officers and the residents of the surrounding neighborhood," the trial court properly departed from the presumptive sentence in imposing the statutory maximum.

The golf club in the Morris case was bulging from a blanket, rather than in its customary position in a bag of clubs. But golf bags have been the source of criminal convictions in Minnesota. In Neal v. United States, 114 F.2d 1000 (8th Cir. 1940), the conviction of a Minneapolis man as an accessory after the fact to a theft by his brother was affirmed by the 8th Circuit Court of Appeals. The brother had stolen money from a federally insured bank and his brother, with whom he lived, had stashed the "stolen money in a golf bag."

The appellate court found sufficient evidence to uphold the conviction and decided a jury could properly reject the defense testimony that "all of the money" had been stolen before the federal law went into effect. Since the government's theory that at least a portion of the money was stolen after the law went into effect "was just as plausible and just as substantial and convincing," the court sustained the verdict against the golf bag bandit.

A sexual assault on a golf course led to a conviction for criminal sexual conduct and kidnapping in State v. Olsen, 359 N.W.2d 67 (Minn. App. 1984), rev. denied (Minn. 03/13/85). A man picked up a woman at a bar in St. Louis Park and, while driving her home, forced her to have oral sex in his car and then drove to a golf course, where he attacked her and attempted to rape her. The assault continued in his car while driving to his house, and again in his home. He then drove the woman back to the golf course to look for his shoes and, after not being able to find them, drove her to an area near her home and released her. Convicted by the Hennepin County District Court, he appealed on the basis that the woman consented to the sexual activity.

The appellate court rejected the contention, noting that the fact the woman promptly called the police after she was released, coupled with "physical evidence" reflected the assaultive behavior. The trial court properly allowed evidence of a tape recording of a telephone call that was made to the police, which showed her "state of mind" shortly after the incident. The court also rejected the defendant's claim that his post-arrest silence was used to impeach him. The impeachment was based upon only his "prearrest" silence, which preceded his postarrest acknowledgment of the sex and claim that it was consensual.

Fun & Games

Golf courses have been the focal point of civil litigation as well. The fun of the game was reflected in Chester-Pollard Amusement Co. v. Popular Games, Inc., 34 F.2d 409 (8th Cir. 1929), a patent infringement case. The dispute concerned a coin-operated golf game, which was operated by a player using levers to swing a golf club held by a small mechanical figure "for the purpose of propelling the ball" on a board that simulates a small golf course. A claim of patent infringement was brought against a competing device that had "some striking similarities."

But the 8th Circuit, affirming the federal district court in Minnesota, determined that the game did not infringe because of significant differences in how the games were played and operated. The court also rejected a claim of unfair competition, noting that the manufacturer of the alleged infringer made no effort "to deceive the public" of the source of the game and its device "did not resemble the general appearance" of the claimant's amusement.

Constructing a real golf course, rather than a mechanical game, can be a much greater undertaking, especially in light of contemporary land use requirements. However, an Environmental Impact Statement ("eis") was not deemed necessary for the development of a golf course in Iron Rangers For Responsible Ridge Action v. Iron Range Resources, 531 N.W.2d 874 (Minn. App. 1995) rev. denied (Minn. July 28, 1995). Environmental protection groups challenged the determination by St. Louis County that an eis was not necessary for the construction of a golf course sponsored by the Iron Range Resources and Rehabilitation Board (irrrb. The county also granted a Conditional Use Permit (cup) which was predicated on four conditions that were achieved. The appellate court, agreeing with the St. Louis District Court, held that an eis was unnecessary. The project, consisting of 150 noncontiguous wooded acres fragmented by the Giants Ridge Ski Area, did not necessitate an eis because there was insufficient evidence of "significant impact on the environment." The court found no harm to forest areas, ground and surface waters, and rare or endangered aquatic species. Since there was no "potential for significant environmental effects," it was not necessary to engage in a study of alternatives for the project. The court also upheld the agreement between the county and irrrb that the county, rather than the agency, be the governing authority for the project. This determination was appropriate in light of the county's greater experience in land use and environmental issues.

A shipment of peat-moss used to construct golf course greens did not constitute a warranty by sample justifying the buyer to reject a second shipment that did not conform to the first one in Pioneer Peat, Inc. v. Quality Grass Services, Inc., 2002 WL 31655007 (Minn. App. 2002). The buyer, which uses the peat-moss in a mixture to create putting greens, refused to pay for the second shipment on grounds that it deviated from the first production. Affirming a ruling of the Polk County District Court, the Court of Appeals held that the claim was not actionable.

The first shipment did not create a "warranty by sample," which would require all subsequent shipments to conform to the first one, because the parties did not intend that "the composition of the first shipment forms a basis for the bargain." The court also determined that the buyer failed to timely notify the manufacture that the second shipment was unsatisfactory, as required, under the Uniform Commercial Code. Since the buyer already was blending a substitute peat when it rejected the second shipment, it could reasonably be inferred that the substitute was ordered "well before" the buyer notified the seller "of the rejection." The untimely notice also precluded the seller from "having a reasonable opportunity to cure" any defect, which also barred relief under the UCC. The court also awarded $500 in attorney's fees to the seller, the largest amount recoverable, under an "ambiguous" contractual provision.

A dispute regarding a financial obligation stemming from a golf course owned by a partnership in McGregor, Minnesota, was at issue in Winter v. Liles, 354 N.W.2d 70 (Minn. App. 1984). Two of four partners of a golf course agreed to withdraw and sell their interest to the other two. They received promissory notes that were due in three years and contained a clause excluding personal liability of the two remaining partners if the facility was conveyed to someone other than them.

The two remaining partners subsequently transferred the course to a new partnership, including one of the partners and his father-in-law. The other partner did not know of the transaction. After the golf course went bankrupt, the two withdrawing partners sued the innocent partner, who had not been involved in the conveyance, seeking personal liability on the note. The Hennepin County District Court ruled in favor of the withdrawing partner, holding the other partner personally liable, notwithstanding his lack of knowledge of the conveyance that triggered the personal liability.

The appellate court reversed, holding that the other partner's transfer of the course to himself, and a new partnership of which he was an owner, without the knowledge of the other remaining partner, constituted a breach of fiduciary duty. Thus, the conveyance was "ineffective to pass any interest in the property" under Minnesota statutory partnership law and common law. Since the conveyance of the golf course did not constitute a valid "transfer," the nonacquiescent partner was exonerated from personal liability.

A similar falling-out between owners of a golf-related business resulted in imposition of personal liability upon the guarantors of a promissory note in TriCounty State Bank of Ortonville v. Golf Properties, Inc., 395 N.W.2d 409 (Minn. App 1986). Six months after they relinquished their shares in the company, two stockholders signed, "absolute, unconditional, and continuing" personal guarantees to the bank for what they thought was short-term financing. They claimed they were told by the other shareholders they they would be released from the guarantees as soon as the debt was replaced with other financing. But the bank later sued on the guarantees and the Hennepin County District Court held the former shareholders liable.

The appellate court affirmed, rejecting their assertion that the bank was aware that they were no longer shareholders in the company and were only providing the guarantees until new financing was in place. Any agreement the shareholders had between themselves "is irrelevant to the bank's right to proceed" against the signatories, particularly in the absence of any evidence that the bank waived its rights against the shareholders.

Another heated golf course financial dispute was addressed in Sievert v. First National Bank, 358 N.W.2d 409 (Minn. App. 1984), in which a bank financed construction of a 68-acre golf course in Lakefield in southwestern Minnesota. The case arose after a series of transactions were made in an attempt to shore up the financially failing course. The owners of the course ultimately prevailed before a Jackson County District Court, obtaining a verdict of $225,000, including $175,000 in lost profits, against the bank for being forced to transfer the course in order to obtain refinancing of indebtedness and for a prospective sale that fell through. Meanwhile, the bank's claim for an unpaid loan was denied.

The appellate court reversed, noting that there were "several flaws" in the proceedings, including the failure to apply the proper standard of "honesty in fact" under the Uniform Commercial Code, rather than the "standard of commercial reasonableness" used by the trial court. But, the main deficiency was that the jury's verdict was "tainted by speculation" and encompassed "overlapping items." The main claims were based upon "sheer speculation" of the potential value of the golf course and its anticipated profits, which were based on the "unsubstantiated, self-serving prediction" of its principal owner. The damages were "too uncertain" because the course never generated profits.

The court also condemned the conduct of the attorney for the claimant who was "consistently rude, argumentative, and abusive to witnesses and the Court." The court also lambasted the attorney for "unwarranted and totally unprofessional" conduct in examining an expert witness, which "exceeded all legitimate boundaries of vigorous cross-examination" and which it viewed as an attempt to "humiliate a witness for self-gratification." Accordingly, the verdict was reversed and the trial court was directed to enter judgment for the bank in the amount of the unpaid loan.

The owner of an indoor recreation and golf entertainment center was held to a listing agreement with a real estate broker and obligated to pay commission to the broker in 20/20 Group, Inc. v. Pure Golf, Inc., 2000 WL 462978 (Minn. App. 04/25/00) (unpublished). The agreement provided for a commission of 8 percent if the broker provided a "ready, willing and able" purchaser during two years, and also included a clause providing that any potential purchasers who came forward during that period would be placed on a "protective list" and would be subject to a commission if they bought the facility after the listing expired.

Shortly after the listing expired, the owner leased the center with an option to purchase to a couple, who were on the "protective list." This transaction triggered a claim for commission by the broker.

Affirming a ruling of the trial court, the appellate court held that the broker was entitled to a commission for the transaction. The listing agreement was not ambiguous since it specifically included any leases. The lessees "became aware of the business through the efforts of the broker" and were explicitly identified on the "protective list." The court rejected the owner's claim that he had been fraudulently induced to enter into the listing agreement based upon a representation by the broker that a commission would only be due if the broker actually sold the business. Reliance upon any oral representation was not justifiable since it "plainly contradicts" explicit terms of the written agreement.

A restrictive covenant requiring the original owner of a golf course be provided with free golf club memberships did not apply to future purchasers in McKush v. Hecker, 559 N.W.2d 725 (Minn. App. 1997). The original owner sold the course in Scott County, reserving a right to six free golf club memberships and further requiring that the purchaser extend this obligation to "his buyer" in the event of the sale of the premises. The golf course was subsequently sold, with no reference to the subject of the free golf course memberships of the original owners. The new owners and the original developers then litigated the issue whether the free membership provision was binding on future purchasers.

Reversing a ruling of the Scott County District Court, the appellate court held that the "free membership" clause did not encumber the property and, therefore, did not apply to future purchasers beyond the first sale. The court relied upon the "overriding principle of law that agreements for use of property are strictly construed against limits on use." Because the original contract bound only the original buyer and "his buyer," the free membership did not run with the land or the first buyer's successors.

Tax Topics

Golf is a taxing sport, both literally and figuratively. A number of Minnesota cases have considered tax-related implications of the game.

Annual membership dues received by country clubs are not subject to sales and use tax in Minnesota. In Northland Country Club v. Commissioner of Taxation, 308 Minn. 265, 241 N.W.2d 806 (1976), the Supreme Court reversed a ruling of the St. Louis County District Court, holding that membership dues do not constitute payments for the "use of amusement devices" and that a country club did not constitute a "place of amusement," nor were its facilities "amusement devices" for purposes of imposing a sales and use tax.

While the imposition of a sales and use tax upon such membership fees constituted a "rational" interpretation of the sales tax statute, the law was "sufficiently doubtful" to require it to be interpreted in favor of the "taxpayer." The Court noted that the majority of club members "do not play golf at all" and may belong merely to attend social functions or for other purposes. This distinguishes country clubs from those facilities where sales taxes have been imposed on admission fees for use of the facilities. The Court also refused to follow reasoning applied in the case of a bowling alley bingo parlor, noting that the facilities of the golf club were, with limited exceptions, "real property," and do not constitute an "amusement device" subject to a sales tax. Nor was the country club itself a "place of amusement" for purposes of applying a sales tax. The language of the statute does not extend to "either social clubs or recreational activities." While statutes in some other jurisdictions, notably Wisconsin, expressly make membership dues subject to sales tax, the Minnesota Legislature chose not to use similar language, an omission that the Court deemed to be a "deliberate" means of avoiding such tax.

Sales taxes also are not required to be paid by a company that sells "range" golf balls to owners of practice driving ranges and golf courses. In Spalding & Evenflo Companies, Inc. v. Commissioner of Revenue, 1998 WL 547046 (Minn. Tax Ct. 08/27/98) (unpublished), the Tax Court held that the sales are exempt from sales tax because the balls are used for eventual resale by range and golf courses.

The court rejected the argument of the commissioner of revenue that "range" balls are not resold to customers, noting the issuance of tax exemption certificates to the ranges and courses attesting that their balls are used for eventual resale. Under the exemption statute, a seller is not required to investigate the purchaser's "ultimate use of the balls." Thus, "range ball" sellers need not collect or pay sales taxes for balls sold to those who have "resale" exemption certificates.

A ruling by the Tax Court partially lowering the property value of a golf course in Dakota County was affirmed by the Supreme Court in Orchard Gardens Country Club, Inc. v. Commissioner of Revenue, 294 N.W.2d 701 (Minn. 1980). The Tax Court affirmed the county assessor's market value of $3,500 per acre on the property, but it reduced the "open space" value by nearly half to $1,184 per acre. The court affirmed, holding that the nine-hole, par three golf course in Burnsville was properly assessed, as were all of the other golf courses in Dakota County. A uniform $2,200 per acre for valuation of all golf courses in the county was invalid because the underlying statute for taxation of open space property, Minn. Stat. §273.112, contemplates several classes of open space land and recognizes that open space has different values. Because the Legislature "envisioned varying values of golf courses," the tax assessor erred in valuing all golf courses in the county equally.

The Tax Court properly determined the value per acre for open space should be based upon the ratio between the highest market value for a golf course in the county and the open space value. This formula makes determination of open space value "a practical and simple" methodology and assures that the open space value will be "directly proportional to the market value." By assuring that recreational lands will not be taxed at full value, this method encourages "retention of the lands as recreational facilities."

The value of a country club golf course was properly reduced from $1.7 million to $1.6 million, despite a claim for a $1 million reduction by the owner in Minnetonka Country Club Association, Inc. v. County of Hennepin, 1993 WL 531787 (Minn. Tax. Ct. 12/20/93) (unpublished). The Tax Court, reviewing the market value assessment of a 90-acre country club and par 71 golf course for the third time, found that the county's assessment was more accurate than the club's valuation. Rejecting the "income approach" because it was "not very reliable" in the case, the court pointed to the "market approach" as a "better indication of value" because golf courses are continually "being built and selling for higher prices." The "cost" approach, consisting of the price paid per hole, excluding buildings, also constituted a "good unit comparison." Under these circumstances, the facility should have been valued at $1.6 million, about $100,000 below the county's assessment, and some $1 million above the owner's appraisal. The court rejected the owner's claim that the course was "below average" in many respects, noting that it was an "aesthetically attractive, well maintained course" with rolling fairways, "good definition" and many mature trees. The court also pointed out that the number of rounds played per year had increased, along with a rise in membership. These considerations justified a figure closer to the assessor's calculation than the owner's analysis.

Lawyers Litigation

No review of golf-related litigation in Minnesota can overlook lawyers. They not only represent parties, they are litigants themselves.

Misconduct relating to golf led to disciplinary action against an attorney in In re Disciplinary Action Against Meaden, 628 N.W.2d 129 (Minn. 2001). The attorney, who was licensed in Minnesota, was suspended from practice in New Jersey for three years, an action which the Supreme Court held warranted "identical discipline" in Minnesota.

The basis of the discipline was identity theft by the attorney, using the name and credit card of someone else, to order golf equipment. The lawyer, who had a bipolar disorder and suffered mental illness, was subject to discipline in Minnesota because he had received "fundamental fairness and due process in the New Jersey proceeding."

Although criminal records about the attorney had been expunged, he had "admitted misconduct" in New Jersey. Also, the New Jersey proceeding gave significant consideration to the "mitigating factor" of his mental illness.

Attorneys came out more favorably this spring in Star Centers, Inc. v. Faegre & Benson L.L.P., 2002 WL 992392 (Minn. 05/16/02). A law firm that represented a company in seeking financing for an indoor Twin Cities soccer arena also represented a company from which the financing was sought, which the law firm timely disclosed to the arena client. The finance company later was found to have engaged in fraud in a separate lawsuit, involving refusal to finance a golf course in Denver. The law firm represented the prospective financier in that case through the firm's Denver office, unaware that the law firm's Minneapolis office represented the arena seeking funding from the same source.

After the financing fell through for the indoor soccer arena in the Twin Cities, the promoter learned of the Denver lawsuit, and the soccer developer sued the law firm claiming it should have disclosed this financing failure.

The Hennepin County District Court granted summary judgment for the law firm, and the appellate court concurred. 2001 WL 605088 (Minn. App. 2001) (unpublished). The Supreme Court affirmed, holding that the law firm did not breach any fiduciary duty to the soccer client because information the law firm knew about the Denver golf course litigation was not "material" to the financing of the Minnesota soccer stadium. The oral allegations of fraud in the Denver financing fiasco were too "unsubstantiated" to create a duty of inquiry by the law firm although the Court continued that attorneys in similar circumstances "must be alert to allegations that have truth to them" when coupled with evidence "indicating a colorable claim."

19th Hole

These cases, running a gambit from "A" (attorneys) to "Z" (zoning) reflect the broad impact that golf has on Minnesota litigation and vice-versa. As golfers continue to mount their assault on Minnesota courses, they are likely to engender and encounter even more litigation in the future.

Meanwhile, they can take a respite from litigation and enjoy the many fine courses the state has to offer this summer.

Notes
1 The DNR reports this number of lakes ten or more acres in size. See www.dnr.state.mn.us/water.html.

2 www.dnr.state.mn.us/water.html.

3 www.minneapolis.about.com.

4 Virginia, the state, not the city, is for lovers; Cleveland rocks; and Minnesotans golf.

5 www.ngf.org/faq.

6 Bob Rosburg won the pga when it was played at the Minneapolis Golf Course, located in St. Louis Park, in 1959. He triumphed with a birdie, one shot under par, on the final hole of the event. Prior pga tournaments were held twice at Keller Golf Course in St. Paul in 1932 and 1954. Minnesota has twice hosted the U.S. Open, one of the other crown jewels of professional golf. It was played at Hazeltine, in 1970, on then a new course, and was won by Tony Jacklin. The Open returned to Hazeltine in 1991, when it was won by Payne Stewart. Other major golf tournaments held in Minnesota included the Women's Open in 1966 and 1977. In 1930, legendary Bobby Jones, himself a graduate of Emory University Law School, won the U.S. Open at Interlachen in Edina on his way to a sweep of the four major events at that time. He was the last golfer to accomplish that feat. Hazeltine will also host the 2009 pga Championship and the 2016 Ryder Cup.

7 Minneapolis attorney Reed K. MacKenzie has ascended to the presidency of United States Golf Association after more than three decades of volunteer service to the same.

8 Even the pros on the pga Tour have their share of litigation woes. David Duval's legal endorsement contract battles are speculated to be part of the reason for his recent struggles. Bob Harig, "Injuries, Legal Woes Nagging at Duval," ESPN Golf Online, 03/22/2002.

9 Other jurisdictions are split on whether a golfer may sue for negligence when he is struck by a shot hit by a member or someone with whom he is golfing. Compare Schick v. Ferolito, 767 A.2d 962 (N.J. 2001) (golfer hit in the face by a ball hit by a member of the same foursome can sue for negligence) and Allen v. Donath, 875 S.W.2d 438 (Tex. Ct. App. 1994) (a stricken golfer may not sue for negligence).

10 See M. Tanick and M. Munic, "Baseball Law in Minnesota," Bench & Bar of Minnesota, Vol. 45, No. 3 (April 1988).

MARSHALL H. TANICK is a senior partner with the law firm of Mansfield, Tanick & Cohen, P.A. He is an avid golfer whose biggest weakness is gauging the rotation of windmills on some holes.

BRIAN R. DOCKENDORF, an associate attorney with Mansfield, Tanick & Cohen, P.A., also is an enthusiastic golfer who plays in the 80's, and maintains that "if it gets any hotter, I stay off the courses."