Cross In Crossville

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