Suit filed over country club sale

Deepa Bharath

NEWPORT BEACH -- A group calling itself the Founding Members of the

Newport Beach Country Club filed a lawsuit Tuesday alleging breach of

contract against the country club, a subsidiary of the company that also

owns the Balboa Bay Club.

According to the lawsuit filed in Orange County Superior Court in

Santa Ana, the owners of the Newport Beach Country Club violated an

agreement they had made with founding members -- members who had joined a

top-tier, exclusive membership level -- when they decided to offer the

company for sale to prominent Orange County businessman William J.

Popejoy in October 1999.

The agreement that is the basis of the lawsuit was made in 1985 when

then-owner Irvine Coast Country Club decided to sell the club to

International Bay Clubs, the company that owns both the bay club and the

country club.

David Wooten, an executive with the bay club, said Wednesday he did

not know about the lawsuit. Club Chairwoman Beverly Ray could not be

reached for comment.

The lawsuit states that in 1985, the owners of the country club made a

deal with its founding members concerning the future purchase of the

club.

In exchange for a 15-year, interest-free loan to the country club

ranging from $3,500 to $4,500 per member, called a performance deposit,

those who chose to make that deposit would have the right as a group to

buy the club if the owners decided to sell out to an unrelated third

party, the lawsuit alleges.

David Grant, attorney for the founding members group, said his client

did not “want to go to this extent.”

Grant charged that the 1985 offer was made to the founding members to

placate them because they were close to buying the club at the time. He

said they put up the deposits based on the agreement that they would have

the right of first offer if the club were to go up for sale again.

“But they were upset that they were not made the first offer to

purchase the club,” Grant said. “Going to court was a last resort for

them.”

He said they did not want to go to court as soon as they heard about

the Popejoy deal.

“They waited and they investigated the issue,” Grant said.

The lawsuit states that the founding members learned about Popejoy’s

$73.5 million offer to International Bay Clubs in January 2000 and wrote

to the country club saying they were entitled to the first offer. But

club officials did not respond, the suit alleged.

Popejoy, meanwhile, has been embroiled in a legal battle with the bay

club since early 2000, when his business relationship with Ray soured and

he demanded a $4-million payment for his services as a consultant.

In May 2000, both simultaneously filed lawsuits against each other,

with Popejoy seeking $50 million and club officials asking for a ruling

that they have no further financial obligations to Popejoy.

Popejoy also filed two lawsuits alleging slander -- one in June 2000

against Wooten and the other in May against Ray. Those issues remain

unresolved.

The identities of the 394 founding members of Newport Beach Country

Club are not known but the list, it has been said, would read like the

Who’s Who of Newport Beach.

The lawsuit also seeks injunctive relief asking that the club not be

allowed to terminate the memberships of any of the plaintiffs in

retaliation to the lawsuit.

* Deepa Bharath covers public safety and courts. She may be reached at

(949) 574-4226 or by e-mail at o7 deepa.bharath@latimes.comf7 .