Request By:
Mrs. Ruby Evelyn Burch
Burch Interiors
4 Fountain Place
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Thomas R. Emerson, Assistant Attorney General
This is in reply to your letter raising questions involving the Capital Plaza Authority and the leases made by that organization with the various merchants doing business in the Capital Plaza Complex. You allege that the leases of some of the merchants do not require that they belong to the Fountain Plaza Merchants' Association although the director of the Capital Plaza Authority has assured the merchants that all the leases contain such a provision. Your lease contains a provision apparently added in 1975, stating:
"Lessee shall become a member of the Merchants' Association and shall pay any dues so agreed upon by the Association and shall abide by the By-Laws of the Association."
You then refer to a section of the Articles of the Merchants' Association, which you say was written and adopted in 1973, and which provides as follows:
"Each shop of Fountain Place is afforded membership in the Association. In order to maintain membership, dues must be paid. Any member delinquent in dues for more than 90 days is ineligible to vote, and is inactive as a member. For complete removal from the Association, a majority of three-fourths of the voting members must carry."
Your letter concludes with the following "Question for an opinion" which asks:
"How can the Director of the Capital Plaza Authority step over into the business of the merchants association; organized by the merchants, and run for the betterment of the merchants, when the Capital Plaza Authority had not met since the commercial area had become active, to give any kind of orders which does not pertain to the rental of said property? How can some of the tenants be exempt from this order? Seems as if favoritism abounds."
Although your letter has set forth some facts and statements prior to the above-quoted question, much of that material does not appear directly related to the question presented. You have attached to your letter copies of letters concerning payment and collection of Merchants' Association dues, so we presume that you are primarily concerned about that matter.
The director of the Capital Plaza Authority has advised this office that the leases of all retail merchants doing business in the plaza complex now require that they become dues paying members of the Fountain Place Merchants' Association. Nonretail establishments such as the branch office of the bank and a radio station are not required to be members of the merchants' association but those organizations apparently have become dues paying members. We suggest you check with the treasurer of the merchants' association to determine the membership and dues status of the nonretail establishments located in the plaza complex.
The Fountain Place Merchants' Association, as indicated by its Articles, is an association whose purposes include promoting and publicizing Fountain Place, Capital Plaza, Frankfort, Kentucky. The association has a treasurer who shall maintain the financial arrangements of the association, including dues reports. In one specific instance the Fountain Place Merchants' Association requested the assistance of the Capital Plaza Authority in collecting back dues of a plaza merchant. While the Capital Plaza Authority did assist in the collection of those substantially delinquent dues, the Capital Plaza Authority does not routinely serve as the dues collector for the merchants' association nor does it regulate or interfere with the business of the merchants' association. The Capital Plaza Authority only renders assistance in the collection of dues (back dues) when requested to do so by the merchants' association or a representative of that association and its only involvement with the merchants' association is in connection with the enforcement of the terms of the leases of the merchants. Any questions you have as to the dues of the members of the merchants' association as well as the organization's financial status should be directed to the treasurer of that association.
While the Articles of the merchants' association do indicate that each member is afforded membership in the association which implies something less than mandatory membership, this particular provision was adopted prior to the change in the leases requiring retail merchants to belong to the association and pay dues thereto. Unfortunately the Articles have not been amended to be consistent with the changed terms of the leases. However, we find no state statute preventing the Capital Plaza Authority from requiring all lessees of the plaza complex to be members of an association not controlled by the Plaza Authority and organized for the advancement of the merchants' interests. Any questions involving the interpretation of federal statutes as related to your question (for example, alleged restraint of trade under the Sherman Anti-Trust Act and alleged unfair methods of competition under the Federal Trade Commission Act), will have to be litigated in the federal courts. See a copy of a letter to Mr. A. L. Hubbard, dated May 1, 1975.