OCTOBER 20, 2019 – Fast forward two years.
Another client, from Florida, had just bought out of bankruptcy, a short-line railroad running from a small manufacturing town 60 miles west of the Twin Cities to a railyard in Minneapolis. He hadn’t acquired the railroad for its freight-hauling business. He’d bought it for all the “sleeper” right-of-way agreements allowing homeowners to cross the railroad tracks to their fancy homes along legendary Lake Minnetonka. For many years, the agreements had been in place for very nominal annual fees ($50 to $100) that hadn’t been adjusted in decades, despite the railroad’s right to do.
My client’s plan was to jack up the crossing fees sky high, make people squeal, then negotiate something more reasonable—by comparison. I knew my letters to the fancy folks would create a firestorm. My phone certainly caught fire. Imagine your own reaction if you’d received this letter:
Dear Mr. and Mrs. Fancy People,
I represent Smart Wheels Railroad. As you know, access to your property over the Smart Wheels track is subject to the Railroad Right-of-Way Agreement dated [eons ago] and recorded against your property on [eons ago] as document no. [XXXXX]. Under paragraph X of the Agreement, upon 30 days’ notice, Smart Wheels has the right to adjust annually, the fee chargeable to your property.
This letter serves as notice that effective [in 30 days], your annual fee will increase to $20,000.00, due and payable on [specified date].
Please remit payment to Smart Wheels, P.O. Box 123, Miami, FL. 12345
Thank you.
Sincerely,
Me
As anticipated, Fancy People went ballistic. After my client let them stew in their own expletives for a week, he negotiated more reasonable (but still exorbitant) sums. His plan worked: he’d turned the once bankrupt little railroad into a cash cow.
But my guy wasn’t finished. Apart from the fancy homes along his railroad was a fancy country club with the bad fortune of having two holes on the wrong side of the tracks.
At my client’s direction, I wrote a letter demanding that the club pay [big bucks] or my client would weld to the tracks, 12 box cars that he’d already parked between holes X and Y on the one side, and the rest of the golf course on the other side.
The club went crazy. Then they got clever. They hired the same golf course architect I’d hired in the Renowned Club case! They directed him to redesign the course fitting holes X and Y on the same side of the tracks as the rest of the holes, and asked for an estimate of the cost of construction. Using that estimate, the club applied exactly the same tactic against my railroad client that I’d deployed on behalf of Renowned Club!
It worked. My guy got some money out of the ensuing settlement, but the club wound up paying much less than if they’d had to relocate the two holes.
What goes around, comes around, in golf and in law.
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© 2019 Eric Nilsson
