GOLF LAW: WHAT GOES AROUND, COMES AROUND (PART II OF III)

OCTOBER 19, 2019 – (cont.) I’ll never forget the settlement meeting that ensued.  The developer was owned by two brothers who’d immigrated from Italy years before.  The older brother had been a tank commander in North Africa under Rommel’s command in World War II.  Of the Renowned Club principals in the room, one was a founder, a former Navy officer who’d fought in several key battles in the Pacific during World War II.  Near the outset of the meeting, these two opposing war veterans plunged into an argument so visceral, they literally raised their fists at each other.  With the threatened replay of World War II, the meeting went south from there.

As is so often in war and litigation, you eventually figure out what you should have done at the outset.

Accordingly, I urged the following approach:

FIRST, retain a recognized golf course architect to provide a preliminary design for a low-end golf course that would cover the entire area of the land subject to the option; the lowest cost golf course that judge would most definitely call “a golf course.”

SECOND, detail the cost of construction.

A short time later, the architect gave us plans and cost detail: $1 million to build a perfectly legitimate “golf course”—which, of course, would have to be built by October 1, 1989 to defeat the option.

I then approached the  lawyers for the developer and said, “Here’s the deal, guys.  We’ve hired [renowned architect] to design a golf course—one that even you will have to concede is a golf course. I’ll gladly show you the plans.  The cost of building that golf course is $1 million.  You can knock yourselves out reviewing the itemization.

“But just so you know, here’s where we’re going with this:  my client is ready and able to spend that $1 million to defeat your client’s rights under the option, in which case your client will get ZERO, zippo, a giant whiff swing.  OR . . . OR . . . my client will pay your client $50,000 cash, immediately, just to walk away.  Fifty grand that they will not see, feel or touch, if my client is forced to spend the million. I’d call it a ‘win-win’ for our clients.  Whaddya say?”

The approach worked.  After a week of horse-trading over a settlement figure, the developer got some dough (more than $50,000) but Renowned Club got control of the land for a very manageable fraction of the architect’s estimate of $1 million to build “a golf course” that would’ve decidedly defeated the option.

Everyone went home happy, and Renowned Club hosted a highly successful tournament.

Stay tuned for tomorrow’s eagle . . . I mean, bogey . . . I mean . . . “what goes around, comes around.”

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© 2019 Eric Nilsson