Rieser v. Dayton Country Club Co. (In re Magness)

The Dayton Country Club (Dayton) offered social events, dining, tennis, and swimming to its members. Dayton also offered a special category of golfing membership that was limited to 375 members. Selection of golfing members occurred in accordance with detailed rules, procedures, and practices to ensure that members were selected fairly. There was a substantial waiting list to become a golfing member. Thomas Magness and Harry Redman (debtors) were both golfing members at Dayton. After Magness and Redman separately declared bankruptcy, bankruptcy trustee John Paul Rieser sought to assume and assign Magness’s and Redman’s rights in their golfing memberships by selling the memberships to (1) Dayton members on the golfing-membership waiting list, (2) other Dayton members, or (3) the general public, as long as the purchaser became a Dayton member. Dayton did not consent to the assignments. The bankruptcy court found that the golfing memberships were executory contracts that Rieser could not assign, reasoning that Dayton’s rules for golfing memberships were anti-assignment provisions and that Ohio law excused Dayton from accepting performance by people other than the golfing-membership holders. While an appeal was pending in district court, Dayton canceled Redman’s membership for nonpayment of dues, mooting Redman’s appeal. The district court affirmed the bankruptcy court’s order prohibiting the assignment of Magness’s golfing membership. Rieser appealed.