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comment airport case

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  • Jurydoctor@aol.com
    I. Lawyers’ claims and whether I believe these claims: I believe the advice provided by the Company’s lawyer advising the Company to
    Message 1 of 1 , May 6, 2009
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      I. Lawyers’ claims and whether I believe these claims:
      I believe the advice provided by the Company’s lawyer advising the Company
      to enter into the agreement was sound. At the time the agreement was made,
      the Company’s lawyer had no reason to believe that the airport authority
      would not comply with its commitment to build hangars on the land.
      Furthermore, the Company would be saving money and would still accomplish its goals by
      allowing the airport authority to build the new hangar space. Moreover,
      the airport authority likely would have the right to keep any improvements
      attached to the leased space at the end of the lease, so it is economically
      beneficial to the Company to allow the airport authority to incur the expenses
      associated with building the hanger space.
      I cannot opine upon whether I agree with this lawyer’s argument that the
      language of the agreement required the airport authority to build hangars
      because I have not read the agreement. The lawyer should have included a
      condition that the Company agrees to exchange the leased space only upon
      completion of the construction of the additional hangar space by the airport
      authority. The lease also should have stated that if the airport authority fails to
      construct the additional hangar space, the Company is legally entitled to
      the lease of the additional space for its intended purpose.
      Note: The hypothetical does not clearly indicate what actions or claims
      were made by any other lawyer aside from the Company’s lawyer, although the
      questions refer to actions of lawyer(s). Was there more than one lawyer? Who
      is the other lawyer and who does he work for? Also, does the last paragraph
      refer to a statement made by the Company’s lawyer of the airport’s lawyer?
      If it refers to claims made by the Company’s lawyer, these claims are
      addressed in the answer to question number II, below.
      II. The Company’s claims and whether I believe these
      claims:
      The Company’s claims and the claims of the Company’s lawyer(s) are valid
      because the Company had a signed agreement and the new members of the airport
      authority were to be bound by the agreement of the former members. I
      disagree with the opinion of the Court because the only reason the Company gave
      up its lease is because the Company had the understanding that the airport
      authority would build hangars (thereby saving the Company money and still
      promoting its objective). Also, the Company was diligent in its efforts to
      obtain a signed agreement from the airport authority prior to foregoing the
      additional leased hanger space. The Company would not have given up the
      additional lease space had the airport authority not promised to build hangars.
      Therefore, the Company’s position is sound and the Court’s ruling is unfair
      because it does not enforce the intended agreement of the parties.
      II. Was there malpractice on the part of the lawyers?
      It is unclear whether there was more than one lawyer involved in the
      transaction, or whether this question is asking about the actions of the Company’s
      lawyer(s) only. No actions on the part of the airport authority’s lawyer
      are clearly included in the hypothetical. Furthermore, I need to read the
      lease agreement to provide a firm opinion. The answer also depends upon
      whether the new membership of the airport authority is bound by the actions and
      agreements of the former members. Also, did the parties discuss the fact
      that membership would change and that the new members are or are not bound by
      the actions of the old members? Did the airport authority inform its attorney
      and the Company’s attorney that new members were taking over? Did the
      attorneys include the condition that the Company is giving up its rights to the
      leased space upon the condition that the airport authority would build more
      hangers? It also is unclear whether the last paragraph is referring to the
      actions of the Company’s attorney or the actions of the airport’s attorney.

      Assuming the last paragraph refers to the airport’s attorney, and that the
      Company’s attorney(s) had full disclosure regarding the change of
      membership, and further assuming that the new members are bound by the actions and
      agreements of the former members, there was no malpractice if the lease
      included the condition that the Company is foregoing its rights to the leased space
      upon the condition that the airport authority would build additional
      hangars. Furthermore, both parties agreed the lease was proper when the lease was
      made (prior to the change in the membership). The Company’s attorney had
      no reason to believe the Court would refuse to enforce the agreement of the
      parties.
      There was malpractice if the last paragraph of the hypothetical is
      referring to the Company’s attorney and not to the attorney for the airport. If the
      Company’s attorney believed that no agreement could be written that would
      protect the Company’s unlawful monopoly, and if the law is interpreted as
      such, the Company’s attorney was required to disclose the law and he should not
      have written the agreement. He also likely wrote the agreement vaguely if
      he had such a belief, which would be malpractice. His ethical duty was to
      write the strongest, most legally enforceable agreement possible and to
      disclose to the Company that the law provides that no agreement can enforce an
      unlawful monopoly.
      III. My opinion of the monopoly argument that was raised:
      I agree that no agreement can enforce an unlawful monopoly because no
      agreement is enforceable in a court of law if it enforces an unlawful activity.
      IV. Whether there was a loss of profits:
      Assuming the agreement was lawful, there was a loss of future profits by
      the Company because the Company would have profited from the additional
      hangars. The Company had acquired the rights to the additional hanger space prior
      to the agreement with the airport authority. Furthermore, the Company and
      the airport authority both believed that the lease was proper when they
      entered into the agreement. It was the change in the membership of the airport
      authority that led to the Company’s loss of future profits, but an agreement
      had already been reached by the time the membership changed.
      V. How the profits would be determined:
      It is unclear whether $60 million is a reasonable amount of lost profits.
      We must include the time spent in litigation. Furthermore, since the court
      ruled that the agreement was not enforceable as written, it would be fair to
      calculate the lost future profits by placing the parties in the position
      they would have been in had the promise not been made by the airport
      authority. This means that the Company would have been leasing the additional space
      and that the Company would be responsible for the cost of building and
      maintaining the additional hanger space. The lost profits could then be
      determined as follows:
      First, hire a neutral expert agreed to by both parties to calculate the
      total cost to build the hanger in the new leased space. Second, add to that
      cost the costs of supplying the necessary equipment and maintenance services
      for 20 years, plus the amount of the lease payments for the lease term of 20
      years, and any other taxes and expenses. Third, hire a neutral expert
      agreed to by both parties to evaluate the company’s fuel profits over the past 20
      years for an area of airport hanger space that is similar in size and
      earning capacity (add in present and future value- the expert will know how to do
      this).
      Add the costs to build the hangar to the cost of supplying the equipment,
      maintenance services, lease payments and other taxes and expenses. Subtract
      this amount from the amount of the average profits based on the expert’s
      analysis of the past 20 years, considering the present and projected future
      value. If the parties do not agree on the amounts calculated by the neutral
      experts, go to mediation. Pick a retired judge as the mediator. Get his
      opinion on the court’s ruling and on the method used to calculate the profits.
      Hopefully the judge will facilitate a reasonable agreement between the
      parties. If this does not work, the parties should proceed to litigation,
      keeping in mind the opinions provided by the neutral experts and the retired
      judge.
      VI. My opinions regarding the fuel hangars:
      Based on the facts provided, the additional hangars would not have been
      beneficial to the users of the airport or to the city. The increased traffic
      caused by the hangars would increase pollution and fuel consumption. Since
      the Company is a private company, only private investors would benefit from
      such increased traffic. Furthermore, the monopoly on fuel that the
      additional hangars would support would benefit only those private investors, and may
      lead to increased fuel prices. There is no indication that the hangars were
      needed to improve the services provided by the airport to the public.
      However, there was a written agreement that should be enforced if it was not
      unlawful to do so. Furthermore, both parties believed the lease was proper
      when the agreement was made. There may be additional facts that I am unaware
      of.
      VII. My opinions regarding the agreement where the court ruled
      that the airport authority was free to change its mind and do anything with
      the property it wanted to do once the company gave up its lease:
      I disagree with the court’s ruling that the airport authority was free to
      change its mind and do anything with the property that it wanted to do once
      the company gave up its lease. Based on the facts provided, the reason the
      Company gave up its lease is because the Company had the understanding that
      its main objective (more hangar space) would be met by the airport authority,
      thereby saving the company money in building and supply costs. Therefore,
      the airport authority was not free to change its mind if the agreement was
      not unlawful, and if the agreement included the condition that the Company is
      foregoing the leased space upon the condition that the airport authority
      will build additional hangars and maintain them for 20 years. As such, I
      disagree with the court’s ruling.
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