Jack Nicklaus battling with residents at the Bear's Club he founded in Florida
Earlier this year, residents of the exclusive Bear’s Club community, built by golf great Jack Nicklaus, overwhelmingly approved a measure (...)
Earlier this year, residents of the exclusive Bear’s Club community, built by golf great Jack Nicklaus, overwhelmingly approved a measure pitched as giving homeowners more control over their Jupiter community.
The move came after two years of litigation between the club and two Bear’s Club residents who said the Jupiter, Florida, golf club had too much power over the ritzy residential community.
In May, 88% percent of residents voted for the new amendments, which reduced the club’s voting majority to 32% from 51%, among other measures. The changes, according to legal documents, were made to address concerns raised by some residents about club control of the homeowners association.
“While disputes can always arise in any community, these issues have had a public impact on us, which in turn affects our property values here at the Bear’s Club,” three association board members wrote homeowners earlier this year.
But the May vote by homeowners did nothing to mollify Bear’s Club resident Gary Sellers. Since 2019, he has been locked in litigation with the Bear’s Club and various Nicklaus affiliates over control of the homeowners association.
In August, Sellers sued the Bear’s Club Property Owners’ Association and its five board members, including Nicklaus’ son Gary Nicklaus, alleging the just-passed amendments still deprive homeowners of control.
The litigation provides a window into the world of elite golf country clubs.
The Bear’s Club, east of Interstate 95 and just north of Donald Ross Road, is a 400-acre community featuring about 80 homes, villas and cottages, situated around The Bear’s Club golf course and clubhouse. There is an 18-hole golf course and a 40,000-square-foot clubhouse.
At the Bear’s Club, membership costs hundreds of thousands of dollars and homes sell for millions of dollars. Residents include luminaries from the sports world, including NBA great Michael Jordan and pro golfer Rory McIlroy.
But for all their money, some residents fear challenging Nicklaus, the project’s developer and leader of the golf club, court records say.
“There are people who are afraid of being kicked out of the club,” said Joel Kenwood, an attorney for Sellers. “The board members are appointed by the club, and the club controls the board.”
At issue: Does Nicklaus, as developer, still control the homeowners association via his alleged alter ego, the golf club?
And can residents ever complain about it, risking their access to the club?
The Bear’s Club golf club is owned by 35 founding members and led by Nicklaus. When the Bear’s Club residential community was created by Nicklaus 20 years ago, the golf club maintained majority control of the residential association. This was done, Nicklaus told residents in a 2018 letter, so the club would always have control, and the community would avoid disputes that afflict other residential communities.
In the 2018 letter, Nicklaus said he was aware some residents didn’t share his views about the organizational structure of the association, but he said the club’s founders would not bend to coercion.
“A single fight over principle will avoid perpetual fights over the years to come,” Nicklaus wrote.
Nicklaus also wrote that the Bear’s Club residential community is not a residential community with a golf course. Instead, it is a place where homeowners “bask in the glory of adjacency to a spectacular golf facility.”
Nicklaus’ lofty language upset some people, including Bear’s Club resident David Nissen. The letter “sets Nicklaus up as the king and residents should be lucky they are his minions,” said Spencer Sax, a Nissen lawyer.
But in a 2019 interview, Eugene Stearns, an attorney for the Bear’s Club, said Nicklaus’ letter was misunderstood. Stearns said Nicklaus was trying to explain why exclusive golf clubs “are very special. There’s a certain golf mystique about how you conduct yourself.”
Regardless, in 2018, Nissen filed a Palm Beach County Circuit Court lawsuit against the Bear’s Club Property Owners’ Association, The Bear’s Club Development Co., the Bear’s Club Founding Partners and other Nicklaus entities.
The lawsuit was filed by Nissen individually and on behalf of the homeowners as a derivative lawsuit. The complaint is a bid to shift control of the property owners association to the homeowners from the developer, as Nissen said, as required by Florida law after 90% of a development is sold to residents.
In the lawsuit, Nissen also sought to recoup assessments paid by the homeowners instead of the golf club for the care of the community, a figure described as millions of dollars.
Nissen filed his lawsuit after Sellers was bounced as president of the property owners association for also questioning the way the association was being controlled by the golf club and developer.
Sellers, a former partner in the New York law firm of Simpson, Thacher & Bartlett, not only lost his position as association president for making waves; he also was kicked out of the golf club and lost his $350,000 club initiation deposit.
In a March 2019 lawsuit, Sellers sued to recoup his money and his membership.
The club responded that it was well within its rights to oust Sellers for “improper conduct.” The club also said courts don’t have jurisdiction over private clubs anyway. The lawsuit is ongoing.
In June 2019, Sellers also filed a derivative suit on behalf of the Bear’s Club Property Owners’ Association, claiming the community continued to be controlled by the developer, Nicklaus and the club, instead of the homeowners.
The Bear’s Club and various Nicklaus entities repeatedly have denied they are alter egos. They also say Nissen and Sellers’ claims are barred by the statute of limitations.
The Nissen and Sellers lawsuits have since been combined into one case, but the case is on hold, pending an appeal of a judge’s ruling by the Bear’s Club defendants.
Now comes the August lawsuit filed by Sellers against the just-passed amendments, which he says violate Florida law.
This litigation revives the issue of control, particularly since the amendments restrict the ability of the association and its members to sue the developer, the club or any of its officers or directors.
This is what Sellers and Nissen are doing now with their derivative lawsuit filed on behalf of the association.
But the amendments only become effective if Sellers and Nissen drop or settle their lawsuit against the property owners association, the Bear’s Club Development Co., the Bear’s Club Founding Partners, and various Nicklaus entities.
Kenwood, the attorney for Sellers and Nissen, said his clients have no intention of doing so.
The new amendments are “a pressure tactic to get them to dismiss their lawsuit,” Kenwood said.”It’s all just a game that they’re playing.”
Although the amendments make it seem as if the club is giving up control of the homeowners association, “they’re just doing it through another approach,” Kenwood said.
Stearns, an attorney for the Bear’s Club, could not be reached for comment. Another Bear’s Club attorney declined to comment.
Kenwood said his clients aren’t filing these lawsuits or personal gain.
“There’s no big pot of gold for them,” Kenwood said. “Nissen and Sellers are spending huge amounts of money to benefit the homeowners and preserve the governance rights of the homeowners. It’s a matter of principle.”
Alexandra Clough writes about real estate, law and the economy for the Palm Beach Post. Contact her at email@example.com or @acloughpbp on Twitter.