Friday, April 27, 2007

Dave Hickman is an idiot

Dave wanted Beilein to touch him there.I hate to call people out. Actually, that is a lie. I love it and Dave Hickman you may be a poor sports writer, but you are a terrible lawyer. Hickman wastes two pages in today's Charleston Gazette verbally fellating John Beilein and the correctness of the buyout. That's fine, you loved Beilein and wanted to have his baby, but science won't let that happen yet even though Arnold got preggers in that one movie. Unfortunately, Hickman then tries to explain the purpose of the buyout.

Now, before anyone decides that the settlement between West Virginia and Beilein should be taken as a signal to try to barter down that tuition you owe, or the check you’re about to write for season tickets, it’s apples and oranges. This isn’t money owed to West Virginia for services rendered, but rather a punitive award.
Well I'm not a contract lawyer, but my first year in law school contracts taught me that there is almost never a punitive award in contracts. The goal in contract law is to put the non-breaching party in the position they would have been had there not been a breach. Liquidated damages must be proven both to have been reasonable in light of the anticipated or actual loss and difficult to prove at the time of the drafting of the contract to be enforceable. Should a liquidated damages clause look penal (not the organ but a punishment) then it is unenforceable. Whether the clause in Beilein's contract could be construed as punishment is reviewed by OS here and here.

WVU clearly settled for one reason alone. The liquidated damages clause was vague and high enough it could be construed as punishment. If so, a judge would not lower the clause, but throw it out giving WVU actual damages which are the cost to bring in Huggybear. So going to court would have been $2.5 million or basically $0, plus the expenses of court. WVU looked at the situation and said $1.5 million is still a lot, so lets take it. Whether it was right or wrong is as the Dude would say, "like your opinion man." Personally, I would have taken it to court because the precedent is set that WVU will back off during later negotiations, but then again I don't have to answer to the state had WVU lost. $1.5 million may not purchase a new scoreboard, but it would at least be able to buy some new sound effects during introductions. I'm sending Dave a link for his response. And Dave if you do drop by you also screwed this up recently, too. Dummy.

*Note from Option Spread: To let you guys know, all three of the contributors to this site are admitted to the practice of law in various states. Its not a brag, its to let you know that we're not just coming up with this crap off the top of our heads or from research on the googles or the ebays. We actually know what we're talking about and we have the student loan debt to prove it.

Further, the information contained in this article and other posts on this site, if legal in nature, is merely provided as information and is not to be construed as legal advice. If you have a legal matter similar to Beilein's or otherwise, please contact a local attorney immediately as the factual nuances in each case differ and are often times essential to the correct analysis of your situation. Since very few of our readers know our actual names and/or identities, this post, and others like it, are also not solicitations or advertisements for legal services. Sorry for the legalese, the ethics rules require this stuff.


Option Spread said...

Ah, let's not forget I predicted 1.7 - not too far from the 1.5 it settled for.

I just, you know, like wanted to point that out, man.

Option Spread said...

On a substantive point...

I think its important to note that the overwhelming majority of WVU fans feel the purpose of this buyout clause was to penalize Beilein for leaving early. From commentators to sports writers to joe on the street, the clause is referred to time and time again as a "penalty". If the clause has already been deemed to constitute a "penalty" by the jury of public opinion, its quite likely that an actual jury would also consider the clause penal in nature.

If the jury found that the clause was penal in nature, then it would be unenforceable and WVU would get essentially $0 from Beilein.

So to clarify tummysticks's rant: Hickman, by your own argument, the clause is penalistic in nature (heh, "penalistic"). Consequently, it is most likely not enforceable. And therefore, WVU did good by settling.

The thing I can't understand: I came up with $1.7 based upon the iffiness of the contract and reducing the amount by current value accounting. However, CVA only applies if the entire sum is paid today. According to what I've read, the $1.5 is payable over the next 5 years. So apparently, the attorneys involved felt the language was even more iffy than I initially predicted.

To further get WVU fan's panties in a bunch, $1.5 million paid over the next 5 years is really only about the same as $1.2 million paid today. So we got approximately 1/2 of what y'all expected.

letsplaytummysticks said...

Most feel it is a penality because they don't understand the essence of contract law. They simply see a number that you pay if you breach, hence it is a penalty. What doesn't help is to have writers not diligently perfoming research before vomiting their opinion on a page and making matters worse. Hickman could have used his column to inform the readers of the real reasons for the clause, but is too lazy, stupid or both. This is bad journalism and fuels the misbelief people have. Dave if you ever have legal questions we can attempt to answer them for you. Don't take matters into your own hands just because you stayed at a Holiday Inn Express last night.

letsplaytummysticks said...

Various states include state of undress, state of inebriation, state of love and trust (pj bitches), and guam.

Brave Sir Robin said...

I am confused, or am licensed in the state of confusion. Not only are we lawyers, apparently ethical ones at that- but remember... we're french waiters now.

For those of you who were wondering, we have also played basketball in Long Beach, swam with sharks, and one of us even took a shark a long way from the water- showed it to the other two- and then took it back down to the water. Don't call PETA- the sharky was fine.

letsplaytummysticks said...

We also flied kites, used walkie talkies to make OS's head move involuntarily, and tried to knock down big ol' walls.

chutta said...

Hate to be a lawyer, but if it was found "penal in nature" (hee hee) the law would try to put WVU in the position as if the contract were not breached. It would thus try to determine the difference between Beilein and Huggins and their salaries. I think the difference is approximately one healthy liver, so that is what WVU gets dammit.

letsplaytummysticks said...

Yeah, that's all covered by OS earlier. If penal the clause is no good and you move to actual damages. blah blah blah.