Reference no: EM133286162
Assignment:
Ronnie Robbins is a famous motivational speaker who has made millions of dollars by conducting two-day seminars in major cities in the United States. Robbins' advance team always takes the following steps in preparation for a Robbins' seminar: (1) travel to the city where a Robbins' seminar is planned; (2) lease an arena in the city for the two-day Robbins' seminar in advance; and (3) advertise widely on local television and in other media concerning the upcoming seminar during the three months preceding the seminar. Thousands of entrepreneurs customarily paid Robbin's seminar fee to attend a seminar and receive the seminar materials.
In June 2018, Robbins' advance people leased the Southwest Arena in Dallas, Texas, for an upcoming two-day Robbins seminar. The agreed lease amount in the written lease agreement was $100,000, payable three days before the Dallas seminar in Dallas. The Robbins seminar in Dallas was scheduled for September 5-6, 2018. The representatives of Southwest Arena, like many people in the world of coliseums and arenas, know of the thousands of people that customarily pay to attend a Robbins seminar. For example, Robbins had just made a net profit of $250,000 in a two-day May 2018 seminar held in the Miami, Florida Tropics Times Arena. Robbin's advance persons advertised in the Dallas media through the middle of August concerning the September 5-6 seminar at Southwest Arena.
However, on August 20th, the Southwest Arena representatives sent an email and telephoned Robbins' advance team, notifying them that the arena would not be available on September 5-6. The Southwest Arena representatives explained that a yearly safety inspection of the arena by the City of Dallas had recently been completed. The inspection results were returned to the owners of Southwest Arena on August 17th. The owners of Southwest Arena were notified by the City of Dallas that the inspection revealed severe fire hazards. Further investigation revealed the fire hazards were due to an arena structural failure that occurred in July 2018 that had not yet been repaired.
The Southwest Arena owners had been aware of the structural failure but considered it minor. The Southwest arena owners had formed this opinion that repairs could wait, based upon the July 2018 review of the structural failure and the opinion of Acme Engineering ("Acme"), the company scheduled to make the repairs. The Southwest Arena owners had no idea that the structural failure created any fire hazard or danger to persons entering the arena. Thus, the structural repairs had been scheduled with Acme to commence in late September 2018. On August 17th, The City of Dallas additionally issued an administrative order prohibiting the use of the Southwest Arena until the structural failure was corrected, and the arena passed a second inspection. On August 18th, Southwest Arena officials immediately consulted Acme concerning the fastest time in which the structural repairs could be made. Acme reiterated it would take at least four weeks to complete the structural repairs on Southwest Arena to pass a second inspection.
Robbins's advance people were outraged upon receiving the August 20th notification that the Southwest Arena would not be available for the September Robbins conference. The team spent the next three days looking for another Dallas arena available to lease for Robbins' September seminar. Robbins' advance team located another arena in Dallas, known as the Vickers Arena, that could be available for Robbins' September seminar dates. Given the short notice, Vickers Arena representatives were required to negotiate with another group to postpone that group's use of the Vickers Arena from September 5-6. Ultimately the Robbins' advance team leased the Vickers Arena for the scheduled seminar for $140,000. The Robbins' advance people immediately commenced a second media blitz of Dallas to notify the public of the new location for the seminar at Vickers Arena.
The Robbins seminar was held at the Vickers Arena on the originally specified September dates. Still, the seminar attendance was disappointing given the late change of plans and the fact that Vickers simply was not as impressive of a venue for the seminar. Robbins and the advance team had fully expected a $250,000 net profit from the Dallas seminar but only realized a disappointing net profit of $175,000. Robbins soon filed a lawsuit against the owners of the Southwest Arena, requesting recovery of monetary damage caused by the failure to make the arena available as leased.
1. Are the owners of Southwest arena liable for their notification to Robbins' representatives that the arena would not be available in September as provided for in the written lease agreement?
2. If you conclude that the owners of Southwest Arena are contractually liable for damages to Robbins, describe the categories of damages and how to calculate the amounts that Robbins should recover.
3. Discuss what facts were critical and what legal principles you applied in reaching your conclusions on Questions 1 and 2.