An imposing land tycoon
Usually when we tell you about cases, the names are changed to protect the parties involved. This case is a bit different. It involves Austin Eldon Knowlton, the eccentric millionaire better known as Dutch. Dutch was a wealthy architect, businessman, and part owner of the Cincinnati Reds. He was also a shrewd real estate investor and industry tycoon.
Bad business practices
Our client, an Ohio real estate development company, was interested in growing its business and developing the community. So when they found a large property ideal for commercial development in the outer belt of Columbus, they contacted the owner, Dutch Knowlton. They made him a fair offer, which he readily accepted.
The agreement was contingent on the results of engineering and soil studies, which our client would pay for, to make sure the land could be developed commercially. Our client paid Knowlton an earnest money deposit of $250,000 to secure the agreement, and then proceeded with the studies. The studies went well, and our client was ready to close the deal and start their new real estate endeavor.
But Knowlton had sold the property to another buyer.
Before coming to us, our client sought assistance from another law firm in town. They hoped the other Ohio business attorneys could seek an injunction and help them recoup their losses. They were quickly disappointed. The developers were told all they could hope to recover was their earnest money, and that the legal fees to do so would likely be as much as the deposit. Knowlton’s deep pockets would allow him to drag the case out to ensure the developers would walk away with nothing but frustration and lost time.
Thinking they had run out of options, the developers came to us because they heard we handled business litigation on a contingency-fee basis. This way they could afford to go after someone as rich and intimidating as Knowlton and still hope to recover a portion of their deposit. They were even more elated when we explained they could seek the lost earnest money as well as the amount of profits they would have earned had the commercial property been sold to them as initially agreed.
We set out to firmly establish the costs of real estate development and the potential profits our client would have made from the purchase. Using the records they supplied on previously-developed properties, we decisively proved that their profits would have been substantial.
Not seeing eye-to-eye
Usually parties involved in lawsuits see their sides very differently, but often as the case develops some middle ground is established and a settlement can be reached. Not Here. Knowlton’s legal team insisted we were barking up the wrong tree. They said our client wasn’t entitled to recover the profits or even the deposit.
Eventually they invited us to meet for lunch to discuss a settlement. Thinking they had finally come to see our point of view, we met with them. We sat down and things were very cordial. After some small talk, they finally presented their offer:
Knowlton was willing to pay for the lunch plus one dollar!
At that point, it was quite clear that Knowlton wasn’t ready to see eye-to-eye with our client.
Righting a deal gone wrong
The case went to trial. We were concerned about how the jury would react to Knowlton, because he had proven to be quite charming when we had taken his deposition. To our surprise, however, Knowlton didn’t bother to show—he had opted to go sailing instead.
We proceeded to present the facts to the jury and argued that in this instance, Ohio law entitled the real estate developers to receive lost profits in addition to their earnest money. The jury agreed and a substantial judgement was returned in favor of our client.
Not only did our client feel a sense of relief, but they were able recover the profits lost on a deal gone bad. They were able to use that money to grow their company and make future deals that improved the area. Without the ability to use affordable, contingency-fee-based litigation, they never would have been able to take down their wealthy, imposing opponent and right a business deal gone very wrong.
If you find yourself in a similar situation, don’t hesitate to reach out to the Ohio business attorneys at Cooper & Elliott for legal assistance. We’re here to help.
The outcome of any client’s case will depend on the particular legal and factual circumstances of the case.