Leilani Hu / Sacramento Bee Staff Photo

The Granite Bay Golf Club in Granite Bay

Hole-in-one contest ends in dispute, threat of lawsuit

Published: Tuesday, Jul. 8, 2014 - 12:00 am
Last Modified: Thursday, Jul. 17, 2014 - 9:12 am

It was any golfer’s dream – a hole in one rewarded with a new luxury car prize.

Allan Ross thought it was reality the moment his ball bounced into the third hole at Granite Bay Golf Club during the Foundation Cup Golf Tournament in May.

“They had a brand-new Kia K900 on the tee,” Ross said. “That was the prize for the hole in one – at least that’s what I thought.”

In a matter of seconds, event organizers, other players and the Kia dealer – who had sponsored the par 3, 172-yard hole – erupted into a frenzy on the green, congratulating Ross.

“Everybody freaked out,” Ross said. “They were hooting and hollering. We were all taking pictures.”

With a starting retail price of nearly $60,000, the K900 is the South Korean automaker’s most expensive luxury sedan. It features a peppy V8 engine with 420 horsepower and dual chrome exhausts.

Ross said he was looking forward to switching out his 2007 Infiniti M35 sedan for the new Kia luxury car.

But hours later, dealer Jon Peterson of Folsom Lake Ford and Kia informed Ross the actual prize wasn’t the K900 parked on the tee box. Ross said Peterson told him the car was insured for only $25,000, not the full retail value and that Ross was only eligible for a credit of $25,000 toward a new vehicle purchase.

Vehicle prizes are a hallmark of charity golf tournaments, giving participants a chance to dream about winning a car with the perfect shot. One insurer estimated the odds of winning a car at 13,000-to-1.

It was the first time in 20 years that any golfer at the Eureka Schools Foundation event had accomplished the feat. The tournament annually raises money for the Eureka Union School District, whose K-8 campuses serve affluent neighborhoods in Granite Bay and east Roseville. The golf event raised more than $90,000 for Eureka Union schools, according to a news release.

Charity golf tournament organizers often do not specify the terms of hole-in-one prizes in programs or player literature, according to Dawyne L. Williams, a certified golf tournament consultant who has planned 90 such events in the last five years. Instead, he said sponsors typically spell out what a player is eligible to win at each hole, whether it is a trip to Hawaii or a certain car model.

But Peterson said that in the two previous years he sponsored a hole at the Eureka tournament, organizers provided a “tee sheet” that specified that his dealership’s prize would have a $25,000 limit. He also said that a sign at the hole provided by his insurer spelled out the same restriction in the past.

On Monday, he acknowledged that neither of those things happened this year.

After Folsom Lake Kia – in a since-deleted Facebook post – faulted Eureka Schools Foundation last week for not informing golfers, Peterson said Monday, “At the end of the day, I don’t like to blame anyone for anything. I was just trying to help out a charity, and they’ve got a lot on their plate, they’re volunteers. It’s a lot of work.”

Holes in one are so rare that sponsors typically obtain what’s known as prize indemnity insurance, which pays out in the off chance that someone wins. Policies can cover some or all of the prize value, according to Mark Gilmartin, president of Hole-In-One International, a Reno-based insurance company that specializes in such premiums.

Hole-in-one insurance runs about $200 for every $10,000 worth of coverage, according to Gilmartin. At that rate, fully insuring the Kia would have cost $1,200.

Peterson said his dealership purchased a $25,000 policy and intended to make no promise that the car on display was the actual prize. He said last week a sign mounted inside the K900 stated that the sedan was “for display only.”

Ross, 44, a Roseville chiropractor, said he saw no sign or disclaimer anywhere near the vehicle. One of his golfing partners that day, Greg Marmulak, also said there was no disclaimer.

“It was bait and switch,” Ross said. “There was no indication that the hole-in-one prize wasn’t a car.”

Eureka Schools Foundation officials, who organized the tournament, are aware of the dispute, spokeswoman Tiffany Jones said. Three foundation leaders, including board president Mark Goozen, did not respond to requests for comment.

“We simply don’t have all of the facts at this time,” Jones said in an email last week.

Ross said the $150 tournament registration fee entitled him to participate in the hole-in-one contest for the K900. He said tournament organizers did not provide literature stating the rules of the game but that hole-in-one car prizes are routine at charity golf events.

In a news release touting the success of the fundraiser, the foundation said Ross had shot the first hole in one in the event’s history and won a new Kia, courtesy of Folsom Lake Kia. The release did not specify which vehicle model he won.

Folsom Lake Kia posted a picture on its Facebook page of Ross and Peterson smiling and posing in front of the K900. The caption reads: “The gentleman in the middle just got a hole in one and WON a New Folsom Lake Kia or Folsom Lake Ford at the Eureka Schools Foundation Golf Tournament.”

Williams, the tournament consultant, said he had never seen a dealer drive a car to a hole with the intent of offering a lesser model: “They should have left that car at the registration area and brought another one to the hole for a prize.”

He added that tournament organizers ought to have been more cautious as well. “When they saw the signage for the hole in one, they should have told the dealer that it should say clearly what you’re winning, not a sign that just says, ‘Win a car.’ 

Curtis Rapton, co-owner of Mel Rapton Honda in Sacramento, has participated in similar fundraisers for 30 years. Rapton said he sponsors golf tournaments mostly for charitable reasons but also for exposure.

“If it’s $20,000 toward a purchase of a vehicle, the sign better say that,” Rapton said. “We have very specific guidelines for advertising in the auto business. What I say better be right or I’m going to get stuck.”

After getting the bad news, Ross had his attorney, Daniel Martinez, sent a demand letter June 17 asking for the K900 and threatening litigation. Two days later, Folsom Lake Kia responded in a letter saying that a sign “conspicuously states in oversized font that the hole in one prize is a new 2014 Ford or Kia and does not state ‘this’ or ‘this vehicle.’ ” The letter notes that the dealer was only a sponsor of the event and therefore shouldn’t be held liable.

Thomas Joo, a UC Davis School of Law professor who specializes in contracts, said Ross would need to prove he reasonably thought the car was the prize to win a claim in court, noting that the posed photograph could suggest that Ross won the vehicle.

“You have to reasonably believe they promised the car,” Joo said. “That’s the bottom line.”

Joo added that the Eureka Schools Foundation could theoretically be held liable as the event organizer. The foundation listed $1.25 million in assets on a 2012 IRS disclosure form, with $772,000 in revenues that year. The 2014 event chairmen were listed as Rick Phillips and Mike Murphy, who did not respond to a request for comment.

But Ross said he did not blame the foundation because he felt the dealer was responsible for the prize.

Peterson said a resolution is expected as soon as Tuesday, though he declined to specify which parties are involved.

“It’s going to get worked out,” Peterson said. “At the end of the day, I’m sure Mr. Ross is going to be happy.”

Call The Bee’s Richard Chang at (916) 321-1018. Follow him on Twitter @RichardYChang. The Bee’s Steve Pajak contributed to this report.

Read more articles by Richard Chang

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