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Mogilevsky vs. Rubicon Technology Inc. In 1999, Dr. Radion Mogilevsky and his wife Nanette bought an empty two-story industrial warehouse-style building in Franklin Park, Illinois.

Mogilevsky vs. Rubicon Technology Inc.

In 1999, Dr. Radion Mogilevsky and his wife Nanette bought an empty two-story industrial warehouse-style building in Franklin Park, Illinois. They leased the building to S & R Rubicon Inc., a company they largely controlled. S & R manufactured sapphire crystal for use in various commercial applications such as LED lighting. To make the building usable for that purpose, it purchased and installed a 2,000-amp electrical system and components of a cooling system to support the furnaces used in sapphire crystal manufacturing. The particular furnaces S & R used were of sufficiently large capacity to allow S & R to manufacture crystals of much larger size than its competitors' crystals. The cooling system included components inside, outside, and underneath the building, including a rooftop water tower and above-ground pipe loop that ran the water to the tower. A second pipe loop ran coolant water under the concrete floor of the building. Although Dr. Mogilevsky designed the system, Christopher Moffitt loaned S & R more than half a million dollars to purchase the furnaces, electrical, and cooling systems. As a result, Moffitt eventually became a 20 percent owner of S & R. Moffitt testified that he never intended that the systems would permanently remain on the premises because S & R had funded their purchase. In contrast, the Mogilevskys expected that the systems would remain permanently affixed to the premises because they had arranged for S & R to pay for the systems only for tax reasons. In 2000, the Mogilevskys and Moffitt organized Rubicon Technology LLC (the LLC) to succeed S & R and to facilitate outside investment in anticipation of eventually converting it to a publicly held corporation. The Mogilevskys entered into a new lease with the LLC for the warehouse. Neither the sale documents nor the lease mentioned the components of the cooling system or the furnaces, but the sale document did state in the preface that S & R intended to transfer "all assets of or used in the business." In January 2001, Rubicon Technology, Inc. (Rubicon) became the successor to the LLC. In 2005, the Mogilevskys and Rubicon entered into a five-year lease for the warehouse. The lease provided that at the conclusion of the lease, Rubicon would "at once surrender the Premises to Landlord, broom clean, in good order, condition, and repair, reasonable wear and tear excepted." At the end of the lease term in 2010, Rubicon surrendered the premises and abandoned the underground components of the cooling system, but removed the major components. The removal left holes in the walls and floors, which required patching. Also, the 2,000-amp electrical service had been removed, leaving a 1,200-amp service only. Dr. Mogilevsky had planned to continue to use the building and the electrical and cooling systems for a new company he had created to produce high-purity densified alumina, which is used as a raw material to produce sapphire crystal. Thus, the Mogilevskys faced significant repair and replacement costs. The Mogilevskys filed a lawsuit against Rubicon, seeking $950,000 in damages for breach of the lease and conversion.Was there a breach of contract. Are damages due.

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