7 NICS App. 138, NEFF v. PORT SUSAN CAMPING CLUB (November 2006)

IN THE TULALIP TRIBAL COURT OF APPEALS

TULALIP INDIAN RESERVATION

TULALIP, WASHINGTON

Paul and Joan Neff, Appellants,

v.

Port Susan Camping Club, Appellee.

Nos. TUL-CV-GC-2005-0368; 0390 (November 17, 2006)

SYLLABUS^*

Trial court declined to rule on whether private association’s termination of a membership was valid, and instead found that an oral agreement between the parties was a valid agreement and ordered the parties to put the agreement in writing and sign it. Court of Appeals holds (1) an oral agreement that cannot be performed in a year or less is void and unenforceable under the statute of frauds, and (2) trial court erred when it ordered the parties to sign an agreement that the parties had subsequently disavowed. Trial court order reversed and remanded for a determination of whether the association’s termination of the membership was valid.

Before:	Jane Smith, Chief Justice; Robert Anderson, Justice; Douglas Nash, Justice.
Appearances:	Cory D. Rein for Appellants; Larry M. Trivett for Appellee.

OPINION

Anderson, J.:

Introduction

The Port Susan Camping Club (Port Susan or Club) is a non-profit membership organization created under Tulalip tribal law to provide for camping privileges on certain tribal land within the Tulalip reservation. Corp. Charter Art. III, § 5. The charter further provides that Port Susan “shall operate in the manner of State of Washington non-profit corporations” and that Washington law shall apply except as inconsistent with the charter and bylaws. Id. Art. VI, § 1.

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Bylaws adopted on May 4, 1996 govern terms of membership and termination of membership. Bylaws Art. I, §§ 1 & 2.

The following facts are not disputed. Paul and Joan Neff (the Neffs) were members of the Port Susan Camping Club who became embroiled in dispute with Port Susan’s Board of Directors. Port Susan gave notice in July of 2005 of its intent to hold a hearing to determine whether good cause existed to terminate Mr. Neff’s membership. After a hearing on September 8, 2005, the Board first determined to terminate Mr. Neff’s membership, but then voted to suspend the termination if Mr. Neff agreed to certain terms and conditions. Mr. Neff gave verbal assent to the terms, but refused to sign a written document alleged to reflect the oral agreement when it was presented to him some time after September 8. Port Susan was of the view that the “agreement” reached regarding Mr. Neff’s conduct was a binding contract that was breached when Mr. Neff filed a Petition for Mandamus seeking certain information from Port Susan on October 31. Port Susan then “affirmed its earlier decision” terminating Mr. Neff’s membership. Port Susan Opening Brief at 8. The Neffs argue that no contract was reached at the September meeting and that Port Susan’s action terminating Mr. Neff’s membership was invalid. Appellant Neff’s Opening Brief at 7.

Proceedings before the Trial Court

Litigation commenced in late October 2005 when the Neffs filed a petition for writ of mandamus in Tulalip Tribal Court. By their writ, the Neffs sought an order directing Port Susan to (1) allow the Neffs to inspect Port Susan’s member records; (2) provide the Neffs a copy of the membership lists, including mailing addresses and telephone numbers; and (3) call a special meeting of the membership of Port Susan to consider a petition written by Paul Neff calling for the removal of six members of the Port Susan Board of Directors. Id. Port Susan opposed the petition on the basis that (1) it had already allowed the Neffs reasonable inspection of the member list; (2) it was under no legal obligation to provide the Neffs the mailing addresses and phone numbers and that to do so would be prohibited by the Washington Non-Profit Corporation Act; and (3) approximately one-quarter of the Port Susan members who signed the Neff’s petition subsequently asked to have their names removed because Neff obtained their signature by misinformation or coercion, leaving the petition short of the number of signatures required for the Board to call a special meeting of the membership.

Following this action, Port Susan claimed that filing the writ of mandamus was a violation of the September 8 agreement and took board action to terminate Mr. Neff’s membership. In response, the Neffs sought a restraining order, injunctive and declaratory relief, and damages from the trial court on November 14, 2005. The trial court issued a temporary restraining order, which was subsequently extended pending a hearing on the merits. Findings of Fact, Conclusions of Law and Judgment at 2 (April 21, 2006). After a three day hearing on the merits, the court determined that the verbal agreement reached on September 8, 2005 was valid and binding. Id. at 6. The court ordered counsel for Port Susan to put the agreement in writing

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and ordered both parties to sign the agreement to bring the agreement within Washington’s statute of frauds. The trial court did not address whether Port Susan’s September termination of Mr. Neff’s membership was valid.

Issues on Appeal

    While the parties set out a number of issues on appeal, the court views only two questions as necessary to reach a decision. First, was the September 8, 2005 verbal agreement a legally binding contract that would govern the terms of Mr. Neff’s continued membership in Port Susan? Second, if not, was Port Susan’s action terminating Mr. Neff’s membership valid?

Standard of Review

Tribal Ordinance 72 grants the tribal court jurisdiction to resolve disputes involving Port Susan and its members. That ordinance incorporates state law “to the extent not inconsistent with other tribal law provisions.” Ord. 72, § 2. Where no applicable Tulalip Tribal law, ordinance or custom law may be found, the Court may take guidance from the procedural laws of other federally recognized tribes, federal statutes and federal common law. Id. We review the trial court’s determination of whether the statute of frauds applies to the September 8 agreement, which is a question of law, de novo. See Pierce v. Underwood, 487 U.S. 552, 558 (1998); State v. Stevenson, 114 P.3d 699, 706 (2005) (questions of law reviewed de novo).

Washington law provides that “any agreement, contract and promise [that by its terms is not to be performed in one year from the making thereof] shall be void, unless such agreement, contract or promise, or some note or memorandum thereof, be in writing, and signed by the party to be charged therewith[.]” RCW § 19.36.010.¹ This statute was applied to an alleged agreement with the Port Susan Camping Club in Port Susan Chapel of the Woods v. Port Susan Camping Club, 746 P.2d 816, 822 (Wash. App.1998) (refusing to enforce alleged oral agreement for 75 year lease). Failure to put an agreement that cannot be performed in one year or less in writing renders it void and unenforceable.

The record in this case reveals that there were contentious relations between Mr. Neff and Port Susan. After Port Susan terminated Mr. Neff’s membership in the Club, the parties orally expressed terms that would allow the Port Susan’s termination of Mr. Neff’s membership to be suspended. Both parties contemplated that the agreement would be put in writing and become effective when signed. See Appellant Neff’s Opening Brief at 8-11; Respondent’s Opening Brief at 6-7. Mr. Neff refused to sign the written agreement. The express terms of the statute of frauds

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precludes finding that the agreement, which would have been in effect for five years, is enforceable.² In addition, the policy behind the statute of frauds supports its application in this case. The agreement was intended to settle a contentious dispute between the parties. The notion that oral promises would stabilize the relationship between these parties and allow each to be aware of their rights and obligations for a five-year term is not credible. Rather, an oral contract would likely foster further disagreements regarding the details of the “agreement.” This is precisely the type of agreement that should have been reduced to writing as required by the statute of frauds. Because it was not, we find that no enforceable contract existed as of September 8, 2005. The trial court erred by forcing the parties to sign an agreement.

Further, there is not equitable ground for finding that the purported oral agreement is binding. With the exception of contracts involving real property, Washington courts have consistently refused to apply the doctrine of part-performance to agreements that cannot be performed in one year. Union Sav. & Trust Co. of Seattle v. Krumm, 152 P. 681, 686 (Wash. 1915) (“In the nature of the case, where the statute is directed solely to the time of performance and not to the character or subject-matter of the contract, part performance could not remove the ban of the statute without in effect repealing the statute.”); French v. Sabey Corp., 931 P.2d 204, 206-207 (Wash. App. 1997) (part performance does not remove oral contract for services from the statute of frauds; refusing to expand the exception allowed in real property transaction).³ Port Susan has failed to show that they changed their position relying on the promise in a way that would cause in a “gross injustice” if the court does not enforce the agreement. Port Susan’s reliance consisted of suspending the termination of Mr. Neff for a little over a month while they waited for him to sign the contract. The consequence of finding the agreement void is that Mr. Neff’s previous termination from Port Susan remains in effect. There is no continuing harm to Port Susan.

2. Termination of Mr. Neff’s Membership

Because the trial court found that there was an enforceable contract, it did not rule on whether Port Susan’s original termination of Mr. Neff’s membership was valid. As a general rule, courts refrain from interfering with the internal affairs of a private association. Anderson v. Enterprise Lodge, 906 P.2d 962 (Wash. App. 1995). Exceptions are made for claims involving property rights or disciplinary actions inconsistent with a Club’s by-laws, but the scope of review

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is limited. Id.⁴ Courts should only conduct a limited review and must uphold a club’s actions absent finding the club clearly breached its by-laws or that their interpretation of the by-laws was arbitrary or unreasonable. Anderson, supra.; see also Garvey v. Seattle Tennis Club, 808 P.2d 1155, 1157 (Wash.App.1991) (“The relationship between a social club and its members is one of contract. When courts intervene in the internal affairs of a social club it is only to determine whether the club has violated it own rules.”).

Conclusion

The trial court’s ruling that there was an enforceable agreement reached is reversed and the court lacked authority to remedy the statute of frauds infirmity by ordering the parties to sign a court-ordered agreement. Because the trial court did not rule on the Neffs’ challenge to the September termination of Mr. Neff’s membership, the case is remanded for determination of that issue, under the narrow standard set forth above.

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The syllabus is not a part of the Court's Opinion. The syllabus is a summary of the Opinion prepared by the publishers of this Reporter only for the convenience of the reader. Therefore, the syllabus should not be cited in whole or part as legal authority. Only the Opinion, which follows the syllabus, may be cited as legal authority.

There is no applicable Tulalip tribal law on this point so we apply Washington law.

There is also substantial doubt as to whether there was an “agreement” at all – aside from the failure to comply with the statute of frauds. “If an intention is manifest in any way that legal obligations between the parties shall be deferred until the writing is made, the preliminary negotiations and agreements do not constitute a contract.” Plumbing Shop, Inc. v. Pitts, 408 P.2d 382, 386 (Wash. 1965). Intent is inferred based on the objective manifestations of the parties. Morris v. Maks, 850 P.2d 1357, 1360 (Wash. App. 1993).

This is not a dispute over property rights. See note 4, infra.

Port Susan’s articles of incorporation disclaim any intent to transfer or otherwise create any interest in tribal property managed by the Club. Corp. Charter, art. III, § 5. Rather, membership confers a “privilege” to use property as provided by the Charter and Bylaws. Id.