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Newport American Legion post terminates yacht club as legal fight continues

Newport American Legion post terminates yacht club as legal fight continues
Valor, one of the American Legion Yacht Club's boats, participates in the 110th Newport Beach Christmas Boat Parade in December, not long after American Legion Newport Harbor Post 291 terminated the club's affiliation. (File Photo)

The American Legion post in Newport Beach has terminated its yacht club amid a legal battle over the club’s suspension in a dispute about what rules the club must follow.

The decision by leaders of Newport Harbor Post 291 to cut loose the American Legion Yacht Club accepts, in a sense, the club’s argument that it is a separate entity. It also restores the club’s access to its small fleet of boats, which the post had locked up on its Balboa Peninsula property.

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However, the club still is not allowed to meet at the post.

“The ALYC, having chosen to be a separate corporate entity … and not a program of the post, so be it,” Cmdr. Doug Nye said in a Dec. 11 letter to the club, which he shared in a bulletin to post membership. “The ALYC is no longer a program of the post and is free to go its own way as it chooses to operate as a yacht club separate from Post 291.”

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The post’s executive board voted “reluctantly but necessarily” at its Dec. 6 meeting to terminate the yacht club, Nye said in his bulletin. He said the decision was made because the club continued not to comply with requirements of the national office of the veterans’ organization. He said the post had a new affiliated yacht club in the works.

But the existing yacht club says the move isn’t legally enforceable and doesn’t end the lawsuit the club filed Oct. 31.

The overall dispute, which will head before an Orange County Superior Court judge Jan. 18, comes down to whether the club is distinct from Post 291 or is a subordinate subsidiary. The court hearing is about restoring the club’s access to the post facilities as the lawsuit proceeds.

The club sued Post 291 and its 15 officers about a month after the post suspended the club, citing violations of national rules governing subsidiary corporations. Among the rules are that all the subsidiary’s officers must be named by the post; the subsidiary must report to the post at least monthly, including financial reports; and all amendments to articles of incorporation or bylaws must be approved by the post.

The suspension included barring the club from holding meetings, events or other activities on the post’s waterfront property at 215 15th St., ceasing use of the four club-owned boats and canceling reciprocal agreements with other yacht clubs.

The club called the action a “hostile takeover” of an independent organization. The suit alleges breach of contract, trespassing, conversion of property and interference.

In a court filing, a club lawyer said post leadership doesn’t have the authority, per its bylaws, to terminate the club without putting the issue to a vote of post members.

Douglas Green, former commodore for the yacht club, previously said that post leaders “wrote new bylaws, passed them and just told us we had to accept them as a program of the post.” He said the club won’t follow new rules until they are incorporated by a club membership vote, as required by bylaws the club approved in 2006.

Nye denied the lawsuit’s assertions that post leadership wanted to take over the club and seize its assets.

“As commander, I have not put out statements about the controversy during more than a year of efforts to resolve the problem by good-faith negotiation. I have done that so as not to poison the atmosphere to such an extent as to impede or preclude resolution by negotiation,” he said in his bulletin. “But negotiations have failed.”

The club — known for being the world’s only American Legion yacht club — claims more than 950 dues-paying members around the world. It is one of about a half-dozen yacht clubs in Newport Beach and has been a local fixture since 1966.

It had, for a fee, shared headquarters with Post 291 and helped maintain the facilities, including the clubhouse and storage and dock space.

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