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Cross In Crossville

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Why is it so many of my stories about chess federations include the phrase "I'm not making this up"? First, the backstory. As mentioned in these pages here and later here, the United States Chess Federation was planning to move from New Windsor, New York to the town of Crossville, Tennessee. That was before the financial scandal, near bankruptcy, and an almost entirely new USCF board and leadership.

Now the village, sorry, city, of Crossville is threatening to sue the USCF for breach of contract. The Crossville law firm of Looney & Looney (really, I'm not making this up) has sent a very thorough and forceful letter to the USCF. (See below) If the USCF follows through and moves to Crossville it sounds like all will be forgiven. The USCF has asked them for an accounting of Crossville's expenses, perhaps hoping to arrange a settlement. This letter is only the first shot in what could be a protracted negotiation.

Apart from the seriousness of the subject, the timing is also ugly. The USCF was hoping to put on a happy face and roll out good news at their meeting at the US Open this week.

I am forwarding this correspondence to you in my capacity as City Attorney for the City of Crossville. It is with great concern and dismay that I read your correspondence to Mr. Harry D. Sabine, dated June 18, 2004, wherein you indicated that the United States Chess Federation Executive Board is, as you stated, not in favor of moving to Crossville. Of course, I have heard troubling rumors of the same from Mrs. Beth Alexander of our local Chamber of Commerce. Upon realizing that the USCF appeared to be poised to breach its agreement with the City, our Mayor, the Honorable J.H. Graham, III, and our City Council directed me to forward to you this correspondence with the hope that you would consider carefully the action that the Board apparently intends to take.

Frankly, the Mayor, the Council, and the numerous dignitaries and government officials who worled so hard to broker the agreement between the City and USCF for the relocation of the USCF headquarters to the property now owned by the USCF in the City are incredulous that the Board would now renege in such an embarrassing fashion. Our friend and very capable attorney, Mr. Harry Sabine, who persuaded the Mayor and the Council to do everything possible to reach an agreement with USCF for relocation to the City, worked countless hours to amend and reform the restrictive covenants in the office park area where the USCF property is now situated. To my knowledge, most, if not all, of Mr. Sabine's time was provided on a pro-bono basis for the benefit of the City and USCF. However, the City itself spent a significant amount of time and money in legal fees and otherwise to close the deal with USCF.

I am sure I need not remind you that we went to great lengths to bring the Governor of Tennessee himself, the Honorable Phil Bredesen, to the USCF in a personal meeting to encourage the relocation and subsequently publicly announce the same. The deal, once consummated locally in Crossville, with members of your Board present on July 15, 2003, was heralded widely in the media and even in placards and signs which, to my knowledge, still stand on the property, proclaiming the future home of the United States Chess Federation.

I purposely recite the facts of the foregoing paragraph as an example of the Herculean efforts made by state and local officials and others to close this transaction at no insignificant amount of stress, time, and money. Again, to speak in candor, local and state officials are indignant, embarrassed or both, that the Board can apparently so flippantly change its mind with absolutely no regard for all of the resources brought to bear on this transaction and for, what appears to be, either ignorance or a complete disregard of applicable law. To add insult to injury, both the Mayor and the Council had to discover such rumors and information, or misinformation, from second-hand or third-hand sources. To my knowledge, neither you nor any member of your Board or organization have bothered to communicate directly with either our Mayor or Council members or to discuss what, by all appearances, seems to be a sealed decision on your part. On a personal note it seems rather indecent that you have left my fellow in the bar and friend, Mr. Sabine, in the dark and open to ridicule along with the entire Chess Association in the State of Tennessee.

I should remind you that the incentives offered by the City and others, as you noted and for which you appeared grateful in said press release, along with the conveyance of the City's real property to USCF are not mere gifts. The USCF agreed, through various channels, including Mr. Sabine, the Mayor, the Governor's Office, and Mrs. Alexander, to approve and provide an approximate number of jobs, and, eventually, a significant amount of tax revenue, to the City in exchange for the City's conveyance of real property to the USCF along with, and not insignificantly, an agreement to change the restrictive covenants of the office park in which USCF is to locate, site preparation and public utilities. Further, the City agreed to obtain and pay for a survey and legal description of the subject real property and to pay such expenses as were necessary to consummate closing. The City fulfilled its side of the bargain, but it now appears that the Board is walking away from its obligations. The City conveyed the real property, obtained the survey and legal description, and spent the necessary legal fees to make everything work as originally promised by the City and, of course. public utilities are prsent and available for use by USCF. All of the foregoing facts and more are substantiated in USCF correspondence dated June 10, 2003, correspondence of the City of Crossville to USCF dated June 10, 2003, a resolution of the City of Crossville passed on June 9, 2003, and supporting resolutions from your own Board.

Subsequently, the City did convey the real property, of record at Book 1143, page 108, Register's Office, Cumberland County, Tennessee and, in fact, delivered the original recorded deed to the USCF. Of course, USCF now owns real property worth approximately $264,000, according to the most recent appraisal that I have seen. This, obviously, is substantial consideration for the agreement whereby USCF would move its headquarters to the City, providing jobs, potential tax revenue and other benefits as earlier set forth.

I respectfully submit that this matter is much greater than your Board simply deciding to disfavor the City; it is a matter of breach of contract by the USCF. The numerous documents cited above and the other collateral documents establish an express, written contract between the City and USCF. Further, there is no doubt an implied contract, particularly a contract implied in fact, exists between the USCF and the City under which the circumstances certainly show mutual intent or ascent to contract for the relocation of USCF headquarters to the City in exchange for the land, incentives and other forms of consideration nearly all of which has already been performed, granted or accomplished for the benefit of USCF. Further, the incidental damages for a breach by USCF, whether under express contract, implied contract or otherwise, are not insignificant.

I note with some interest that you mailed a copy of your Deed for the property to Mr. Sabine by letter dated June 18, 2004. You should be made aware that such effort neither has legal efficacy nor removes any liability for such breach of contract or other claims outlined herein. Further, at this point and time, the City does not intend to accept delivery of an instrument of conveyance from you for said property nor shall any recordation of any such instrument in the future be deemed acceptance by, or delivery to, the City without the express written consent of the City by and through its Mayor. The city entered into a contract with USCF for a reason, and the City intends that the Board uphold its agreements with the City in exchange for that which the City has already performed for the benefit of the Board and USCF.

Further, I do not profess to fully understand why the Board appears to be making an "about face" in its relocation to the City but I am reminded of one of our statutes, namely Tennessee Code Annotated 47-50-109, whereby the procurement of a breach of contract is made unlawful. "It is unlawful for any person, by inducement, persuasion, misrepresentation, or other means to induce or procure the breach or violation, refusal or failure to perform any lawful contract by any party thereto." Id. Further, the person, persons or entity found liable to inducing or persuading the breach of a contract is "liable in treble the amount of damages resulting from or incidental to the breach of the contract." Id. A treble damage claim in this matter is serious and significant. Further, our Tennessee Supreme Court in TrauMed of Am., Inc., v. Allstate Ins. Co,m 71 S.W. 3d 691 (Tenn. 2002), recognized the tort of intentional interference with business relationships which tort will be examined by the City in the event that it is discovered that someone or some entity is attempting to induce or procure the breach of a contract with the City.

Having procured a copy of your Minutes of the Meeting of the USCF Executive Board of March 17, 2004, as promulgated to your Delegates in preparation for the meeting of same on August 14, 2004, I question by what authority the Board calls for "bidding instructions for sites interested in housing the USCF offices", or whereby "the the relocation committee will present their recommendations for ratification" without even notifying the Governor's Office, the Mayor or the Council of such actions and completely in derogation of the contract with the City. The minutes of your Board meeting of March 17, 2004, indicate a "special delegate mailing" made available by April 15, regarding bidding instructions. I have no knowledge of any such bidding instructions or new requirements being forwarded to the City, or of any delegate mailing regarding this matter. I further question what specific requirements you alleged to now have inasmuch as I have not been provided with the same.

Further, according to Ms. Alexander, numerous invitations and overtures, as documented by her, have been made to you and the Board to visit the City to address this matter and, it is my understanding, that you have even been invited to hold one or more Board meetings in the City of Crossville. I question why you have rejected these offers and continued on your path toward breach of contract without trying to resolve this matter with the City.

Likewise, in the USCF Executive Director's Report, penned by you, I find it interesting that you state that "the previous board had voted to move to Crossville, Tennessee, but no contract was signed, and most on the current board appear to feel the Crossville location is too isolated." The existence or nonexistence of a "signed contract" is completely irrelevant at this point. Further, you do not even mention the time and money which would be absolutely forfeited by the City, which money was spent on behalf of the USCF, in the event that the Board moves forward with this breach of contract. I do not believe an express contract is hard to prove given all the signed and executed documents, or copies of the same, that I have read and that I have in my posession. Even so, under Tennessee law, the conduct of the parties under the circumstances is sufficient to show mutual assent to the terms of a contract even where no express contract exists. Givens v. Mullikin, 75 S.W.3d 383, 407 (Tenn. 2002). From the tenor of the communications offered by you, whether to Mr. Sabine, Ms. Alexander, or the Delegates, it would appear that the Board has already, though, in my opinion, unlawfully, made the decision to breach its agreement with Crossville and steal away to some location, the identity of which possibly having been pre-determined. Though your communications and activities of the Board appear callous at best, and have angered some while embarrassing others, the USCF would be warmly welcomed and greatly appreciated if it intended to remain in the City of Crossville. Further, it would enjoy the same benefits for which it contracted to move here in the first place.

The Mayor has authorized me to investigate filing a complaint in the Chancery Court of Cumberland County against the USCF, its Executive Board, and all who may be complicit in the procurement of the breach of contract for damages, incidental and otherwise, to enforce the terms of the contract, and, if necessary, for injunctive relief. I believe that the resolution passed by the Board on March 17, 2004, of which I was recently made aware, is alone sufficient grounds for the filing of said suit in Chancery. However, the Mayor has requested that I refrain from filing the same for a reasonable time sufficient to discern the intent of the Board as to whether it actually is leaving the City of Crossville.

If you or your organization is represented by legal counsel, please forward this communication to such counsel immediately and request that the same contact me at the address or telephone number listed above.

On a personal note, it was through the work of Mr. Sabine and other men and women like him with USCF that I first became interested in chess at a very young age. Until now, I have held the USCF and its efforts in high regard, tainted only now by the Board's disregard for its obligations and the poor manner in which it has handled this situation since last year. I would hope that the Board would govern this transaction with the City with the same rules of honesty and fair play promulgated for observance in its tournaments.

Sincerely, LOONEY & LOONEY

Kenneth M. Chadwell


Let me see if I understand this:

a) No contract was signed
b) USCF owns the proerty in TN
c) USCF decided not to relocate there
d) Both sides in the dispute have spent time and money trying to make this happen (probably in somewhat equal portions)
e) Crossville feels it deserves money back for all the time and effort it spend on an effort that had no signed contractual guarantees.

How does this make sense? This would be like a potential home buyer putting in an offer on a home with the condition that the house must pass inspection; when it doesn't pass inspection they can back out of negotiations (since nothing has been signed). The home owner has no right to sue in such circustances; this happens every day in all kinds of negotiations. Can I sue every potential employer I've interviewed with that decided not to hire me for my lost time and gas milage?

Not to sound cliche, but there are too many lawyers in this world with not enough to do.


Even if the threatened lawsuit is absurd, it will waste away more money, time, and good will that should be spent trying to promote chess - so, permit me to sigh...

Let me simply add my "sigh" to Charles'.

Why would Crossville really want the USCF now. The size of the workforce has been much reduced from what was planned before. The amount of business the office will generate is down also.
The USCF probably can't really afford to move to Crossville. Also the USCF I believe is giving the land back that was part of the deal.

It ain't absurd. If the city spent money while relying on USCF's promise to move, there is certainly a colorable claim. The problem isn't too many lawyers, it is there weren't enough; e.g., USCF should have had legal counsel during this whole process. There is a reason corps don't go running around shooting off their mouths about deals that aren't finalized.

Under Tennessee law there is a contract, bottom line. Once again the USCF has screwed up.

Is it possible that after all the USCF's other
problems, this final result of this suit will
be that the city of Crossville, Tennessee
becomes the owner of US Chess?

The key sentence to this letter is where it says:

"The USCF agreed, through various channels, including Mr. Sabine, the Mayor, the Governor's Office, and Mrs. Alexander, to approve and provide an approximate number of jobs, and, eventually, a significant amount of tax revenue, to the City in exchange for the City's conveyance of real property to the USCF along with, and not insignificantly, an agreement to change the restrictive covenants of the office park in which USCF is to locate, site preparation and public utilities."

This is very surprising. First, it is surprising that the USCF agreed to provide jobs to the local residents. I thought that one reason for the move was to reduce staff and to shift everybody that was needed from New Windsor to Crossville.

More importantly, the deal included that the USCF would pay "a significant amount of tax revenue to the City". How is that? The USCF is a non-profit corporation that pays no taxes. Even were that to change, the USCF has lost money eight years in a row and would have a big tax loss carry-forward even were it to become profitable.

Somebody has a lot of explaining to do.

Sam Sloan

Sam, Non profits still have to pay property taxes as the USCF has done for years in NY. As for Crossville, my study has shown that the property taxes there are about 10% of New York's. Another issue is employee taxes, Tennessee has NO personal income tax and other employer related taxes such as disability, workmans comp and unemployment are substantially lower.

So, what is the final on all this? Are they going to Crossville or not?

In looking through everything available I was horrified to learn that Crossville is the meth capital of the south. Is this really where it should be located? Do staff members really want to live in such a town?

Who came up with all this stuff?

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    This page contains a single entry by Mig published on August 10, 2004 11:24 PM.

    Winning Is In was the previous entry in this blog.

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