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C.A. Revives Suit Over Ouster From Disney’s Private Club
Expulsion From ‘Club 33’ Membership Cannot Be Justified Based on Good-Faith Perception That Man Was Drunk on Disneyland Premises When It Was Later Recognized He Had Been Undergoing an Allergy Attack
By a MetNews Staff Writer
Div. Three of the Fourth District Court of Appeal has reversed a summary judgment in favor of a unit of The Walt Disney Company in an action brought by a company whose corporate membership in Disneyland’s exclusive Club 33 was terminated after park personnel determined that the company’s president was in a drunken state on the premises.
Disney declined to reinstate the membership after it became aware that the man had actually suffered a severe allergy attack.
Although conceding that Scott Anderson, president of an Arizona consulting company, was, in fact, not intoxicated on Sept. 3, 2017, contrary to the impression of security personnel at California Adventure Park, Disney argued that the summary judgment, granted by Orange Superior Court Judge Layne H. Melzer, must stand because it acted in good faith when it stripped Carlton Enterprises of its membership.
In any event, it contended, it had the unfettered prerogative of bouncing any member in light of a blanket proviso in its rules that, in addition to enumerated bases for ejectment, it could act upon “any other reason in Club 33 Membership Administration’s sole discretion.” While Melzer found that persuasive, the Court of Appeal did not.
Justice Raymond J. Ikola wrote the opinion which was filed Monday and was not certified for publication.
Club 33 Guidelines
Ikola pointed out that the section in the club guidelines on extinction of membership provides, in the first sentence:
“Termination is the last step in resolving issues inconsistent with the spirit of the Club 33 Membership program or as provided by the rules herein.”
Various possible rules violations which could lead to termination of membership are enumerated, followed by the clause that says that an ouster may be predicated on “any other reason.”
The jurist said that the guidelines, which he denominated an “agreement” among the parties, “explicitly says that termination may be a consequence of one of two things: a rule violation or conduct inconsistent with the spirit of the Club 33 membership program.”
Provision’s Application Restricted
He reasoned:
“Given this language and the list of specific violations preceding the catchall phrase, we conclude ‘any other reason in [Disney’s] sole discretion’ refers to its discretion to determine what is within the spirit of the Club 33 membership program. Having a medical condition is within the spirit of the Club 33 membership program.”
He went on to say that where both Melzer and the parties to the appeal “went wrong” in their discussions “is in failing to incorporate the first sentence of the termination section in their analyses” which refers to violating the “spirit” of the club.
Ikola said:
“Neither the court nor the parties even mention that sentence. Yet it is the sentence that broadly defines—and limits—what may constitute the basis of a termination decision. It is also the sentence that gives structure to the discretion Disney has in the ‘any other reason’ provision.”
While the opinion reverses summary judgment on a cause of action for breach of contract, it affirms as to two other causes of action which Ikola said were surplusage.
Restricted Membership
Club 33 has three restaurants at Disneyland, restricted to members and their guests, which are the only places at the park where alcohol is served. There is an initial $50,000 membership fee with annual dues of $15,000.
There is a lengthy waiting list for membership; the consulting company owned by Scott and Diana Anderson, applied for admittance in 2003, which was not granted until 2012.
The company, Carlton Enterprises, alleges in its complaint that the actual reason for its expulsion was that the Andersons had voiced criticism of the club’s new general manager, Luke Stedman, who was hired in July 2016. They had alleged that Stedman allowed “favorite” members to harass certain other members and staff personnel.
The complaint sets forth that the Andersons complained in an email of a member verbally assailing a moribund member, and were retaliated against based on that communication.
A Disney spokesperson said, after the lawsuit was filed:
“Like other private clubs, Club 33 has rules and regulations that address, among other things, member conduct. All members must abide by these rules and regulations so that all members may enjoy Club 33 benefits without disruption. In this case, the termination of membership was due to multiple violations of Club 33 rules.”
The complaint specifies that the first alleged violation was that Diana Anderson had “used a raised voice” on an occasion, sparking a temporary suspension. It says the Andersons were falsely accused of having violated club rules by recording performance there.
Joseph Cosgrove, one of Club 33’s initial members when it opened in 1967, was booted out as Jan. 1, 2015, and brought suit the following year. His offense was that his Disneyland passes were auctioned at a charity event and he and his wife, Jennifer Cosgrove, had, on other occasions, conferred benefits on non-members.
Hos complaint said he was expelled “unilaterally, unceremoniously and abruptly terminated despite his 45 years of loyal Club Membership” and that the action was in violation of “the protections provided by California’s financial elder abuse laws.” It alleged that Cosgrove was “having his contractual and personal rights trammeled by a new generation of millennials trying to convert ‘Club 33’ into a billionaires’ exclusive domain.”
The Orange Superior Court lawsuit was settled out of court in 2018, with the terms not being disclosed. However, Jennifer Cosgrove did say that she and her husband, then 87, would not be returning to Disneyland.
Copyright 2021, Metropolitan News Company