Hole in One

Today, you’ve become one of those fabulously lucky people we’re always hearing about.  While playing in a local golf tournament, you hit a hole-in-one!  You did this in full view of the other members of your group, so you have plenty of witnesses to back you up when you tell the story.  To top it all off, your hole-in-one was on the tenth hole, and a local car dealer had promised a brand new car to anyone who hit a hole-in-one on that hole.  Could this day possibly get any better?

Probably not, but there is potential for it to get a lot worse.  Your fortunate shot was just the first step in claiming your car.  There may be more hoops to jump through.  Over the years, there has been a surprising amount of litigation surrounding golfers hitting holes-in-one and not getting their promised prizes.   The main issue in these cases has been whether there was a contract between the golfer and the person offering the prize.

One of the earliest cases discussing this issue is Las Vegas Hacienda, Inc. v. Gibson, 77 Nev. 25, 359 P.2d 85 (1961).  In that case, Mr. Gibson entered a hole-in-one contest sponsored by a golf course operator.  The course operator offered $5,000 to any entrant who hit a hole-in-one.  Mr. Gibson paid the entry fee, teed up, and hit a hole-in-one.  When he went to claim his $5,000 reward, he was told that the transaction was a wager, and so the prize offer was unenforceable in Nevada courts (although licensed gambling is legal in Nevada, courts have held that no lawsuits could be brought to collect money won in gambling.  77 Nev. at 27).  The court held that the contest was not a wager: Las Vegas Hacienda made an offer to pay a sum of money to anyone who complied with certain conditions, and Mr. Gibson performed those conditions.  His performance was his consideration, and a valid, enforceable contract was created.  It was not a wager, where each party stands the chance of winning or losing.  In this case, the Hacienda won nothing if a golfer did not make his or her shot.

Golf Ball Falling

Other courts have agreed that hole-in-one offers are contracts, rather than bets.  In Chenard v. Marcel Motors, 387 A.2d 596 (Me. 1978), a case with a nearly identical fact pattern to Gibson, the prize for hitting a hole-in-one at a charity tournament was a new Dodge Colt offered by a local dealer.  The dealer was not the sponsor of the tournament.  Mr. Chenard hit his hole-in-one on the thirteenth hole, but the dealer refused to turn over the car.  The dealer claimed that the offer was for a wager, and wagering contracts were illegal under Maine law.  The Maine Supreme Court disagreed.  A wager contract offers the possibility of “something for nothing.”  In cases involving tournament prizes, a person is required to make some performance before being entitled to receive the prize.  The fact that Mr. Chenard had to do something beyond pay his entrance fee to be eligible to win the car meant that the prize was not a prize for a wager.

Does that mean you’re going to get your car?  Not yet—there still may be other difficulties.  In Cobaugh v. Klick-Lewis, 561 A.2d 1248, 385 Pa. Super. 587 (1989), the dealer who had offered the prize said it was all a mistake.  The sign that said a car would be awarded to the golfer who hit a hole-in-one off a particular tee was for a tournament played two days earlier, and it was supposed to have been taken down before Mr. Cobaugh hit the links.  The court did not accept this argument.  A person reading the sign would reasonably understand that he or she could win the car by shooting a hole-in-one.  The Cobaugh case is also interesting for the colloquy between members of the court as to whether a hole-in-one is a matter of chance, or a matter of skill.  By a vote of two to one, the Pennsylvania Superior Court held that it is a matter of skill.

In Harms v. Northland Ford Dealers, 1999 S.D. 143, 602 N.W.2d 58 (1999), Ms. Harms thought she won the new Ford Explorer that was being offered to the first golfer to hit a hole-in-one on the eighth tee.  When she went to claim her prize, she learned that she was ineligible.  Her hole-in-one was shot from the amateur women’s tee box, but the prize would be awarded only for a hole-in-one shot from the amateur men’s tee box.  This rule was not announced before the tournament.  The court held that the unannounced condition would not deny Ms. Harms her prize, and found that Northland was in breach of contract for failing to award the car as promised.

If you’ve complied with all of the requirements, and there are no hidden conditions, your golfing prowess has just secured you a new car.  But be sure you know who sponsored the prize, and why.  In United States v. Krilich, 159 F.3d 1020 (7th Cir. 1998), the prize was a choice between a 1931 Cadillac, or $40,000 cash.  The “prize” was actually a cover for a bribe to the mayor of a city.  The mayor and a developer agreed that the developer would palm a golf ball to make it look like the mayor’s son had hit a hole-in-one.  If the scheme had worked, the cost of the mayor’s bribe would have been passed on to the insurer indemnifying the tournament sponsor against the cost of the prize (“Hole-in-one insurance” is technically known as “prize indemnity insurance”).  Krilich was sentenced to sixty-four months in prison for conspiracy to violate the Racketeer Influenced and Corrupt Organizations statute (18 U.S.C. § 1014) and for fraud (On appeal after remand, the District Court was ordered to impose a sentence in the range of 135 to 168 months.  United States v. Krilich, 257 F.3d 689 (7th Cir. 2001)).  It’s a lesson worth keeping in mind on the links.