A county judge has ordered the parties in a dispute over alleged racial discrimination at Gibson Island back to the negotiating table.
The order, issued yesterday by Circuit Judge James C. Cawood Jr., comes two weeks after lawyers for the officials from Gibson Island's community association went to court seeking dismissal of a complaint filed by three island residents who allege systematic racial discrimination on the private enclave.
The judge dismissed parts of the three residents' $8.2 million suit, including the portion alleging "de facto segregation," but he gave the plaintiffs 45 days to amend their segregation claim by specifying which laws would be violated under the club's alleged practices.
The three residents -- all white -- are seeking to change the way the Gibson Island Corp. has conducted business since it bought the island 50 years ago for $150,000. Under the current system, property owners on the island are shareholders in the corporation, which owns a golf course, clubhouse, yacht basin and other recreational facilities. The corporation rents these facilities to the tax-exempt, non-profit Gibson Island Club, for use by club members only.
Most of the 198 property owners on the island are club members. The plaintiffs -- Richard Carson, an anesthesiologist, his wife, Kelley Carson, and Frederick B. Hetzel, a real estate broker and former pro basketball player -- were rejected for membership in the club.
Thus, they have complained, they don't get to use the facilities they own as shareholders in the corporation. The club has more than 600 members who are not property owners.
It is through this arrangement, Carson contends, that minorities are discouraged from buying property on Gibson Island. He said minorities get the hint they won't be allowed to use the club facilities, so they drop their bids to buy homes on the island.
The suit says no blacks or Jews have ever belonged to the club or owned property on the island.
In a letter contained in court files, Benjamin R. Civiletti, a former U.S. attorney general representing directors of the Gibson Island Corp., said the corporation directors were not aware of any discrimination at the club. He said Carson's allegations were based not on merit but on the belief that he could intimidate the corporation and its board by threatening adverse publicity or a government investigation.
Carson and his co-plaintiffs have chosen to attack what they see as discrimination through a "derivative suit," in which a shareholder sues on behalf of the corporation charging corporation officials with breaking the law. In this case, Carson says that although legally a for-profit corporation, the organization operates on a break-even basis, a violation of law.
As an example, the suit says the corporation rents assets worth $12 million to $30 million to the Gibson Island Club for only $40,000 a year -- a fraction of the going rate.
The plaintiffs also contend the corporation should be paying dividends.
Judge Cawood said if the plaintiffs knew they should not expect a profit, they cannot claim corporation officers are negligent in not returning one.
But the judge ruled the argument on whether the corporation improperly uses its assets can proceed to trial.
The judge granted the directors' motion to remove from the public court file letters exchanged during a previous attempt to settle the suit. Those letters show the three plaintiffs turned down offers of club membership for all shareholders and, later, club membership for the three plaintiffs, in exchange for dropping the suit.
The judge said the two sides should resume settlement negotiations, and he said he would consider appointing a mediator for the case if it remains unresolved after the first of the year. Cawood also said the two sides should agree on a schedule to move the case to trial. That was in response to complaints from Marc Apelman, attorney for the plaintiffs, that the defense strategy was to stall.
In his order, Judge Cawood quoted 17th-century English metaphysical poet John Donne, who wrote: "No man is an island; each man is part of the continent, therefore, seek not to find, O Man, for whom the bell tolls. It tolls for thee."