City of New Cypress Hollow v. GreenGrid Utilities Corporation
City of New Cypress Hollow v. GreenGrid Utilities Corporation, Case No. 001 (2012), is the case that came before the Palmshire royal court presided over by the King Legion and decided on 6 December 2012.
Background
City of New Cypress Hollow approached Tom Magnum, a prominent developer, to help build city's first power plant, which was to be of solar power plant type. To undertake this project, Magnum formed a company called GreenGrid Utilities Corporation to build and maintain it. GGUC, as the company is known as, and the city made an agreement for the power plant which Magnum interpreted as requiring the city to provide funding for the power plant, which city disputed. City insisted it was only obligated to give power plant lands which it did and insisted that it owns the plant. GUCC insisted otherwise by arguing that city voided ownership on grounds of its failure to provide funding and thus GUCC's plant is not owned by the city. Ultimately, Magnum, acting in his capacity as the chief executive officer for GGUC, decided to take the city to the court and requested the King to try the case, an unusual request which is rarely granted. The King agreed to hear the case and issued the royal writ commanding both defendant and plaintiff to appear at his court to be held in Parliament chamber in city of New Cypress Hollow.
Arguments
At the trial, Tom Magnum, in representing the GUCC, argued that city has obligation to provide funding for city and since it failed to do so, the provision in agreement providing for funding in exchange for city ownership of the plant is void and null in light of this breach of the obligation. Thusly, GUCC owns the plant free and clear, not the city. Magnum also argued that no written contract was drafted for payment and thus GUCC could not surrender control and ownership of the plant, taking a loss for the company. Finally, the Magnum made it clear that material and labor are not free, hence the need for funding.
The Duke of Cypress Hollow, representing the city in his capacity as the Mayor, countered this by arguing that city gave GUCC the land for its power plant and that it had promised GUCC to be sole utility provider. Magnum then reiterated that GUCC understood this but questioned how to pay for construction and staffing of plant and also asked whether as sole utility provider, would GUCC be paid for electricity generated by its power plant?
Lord Cypress then wigged out, forcing the King to call for order to the court. Cypress then explained that revenue from electricity would simply cover the costs of labor and construction, more than enough to offset them. Magnum then inquired whether said revenue, after construction and payment for P1.4 quadrillion facility is completed, would revert to the city. Cypress affirmed and added that it would be part of city's utility budget, paying for staffs of the various departments, including the city's utility department itself.
The court then adjourned for brief time and then reconvened for the decision.
Decision and aftermath
In ruling, Legion I found against both parties in part. First of all, Legion found against the City by finding that the city has breached its obligation and thus voided the part of agreement that gave the city the ownership of the plant. However, the King also ruled that GUCC has breached its obligation as well and ordered it to pay the City a compensation in the amount of P1.5 million.
However, this ruling was shortly voided when both parties later made an out-of-court settlement whereas the city and GUCC agreed to the following new agreement:
- That City was to acquire the GUCC for undisclosed amount and that Tom Magnum was to remain as the head of GUCC while also being appointed the city's utility director, with GUCC reporting to the city's New Cypress Hollow Utilities.
- That revenue from selling the electricity generated to GUCC's customers was to be used to pay for power plant's construction and labor.
- That revenue was to be part of city's utility budget to cover expenses by city's various departments, including that of the Utility Department, after construction is completed.
- That the Cypress Fire Bar & Grill, under ownership of East Winter Company, was to be completed within reasonable time.
However, some legal analysts think that the final provision of agreement that calls for the bar owned by another company to be completed is legally questionable. They question whether it can be enforced and think that Parliament is likely to see it as ultimately unenforceable and could void it by an Act if it so desires. To this day, this question remains unsettled.