REVIEW OF MOU


James,


Here is Frank Parks review which thankfully is in laymen's terms. For convenience of all parties, I have also included a PDF copy of the latest MOU.  If you need to contact Frank Parks his phone no. is  (602) 625-3174


P.S.  Frank Park's comment referring to Wendy Kane's email was:  "I did notice that you referenced the MOU and while it is fine that you are having a lawyer look over the document; it is my understanding that it is a non-negotiable agreement. It has been approved by the Clarkson legal department and the agreement is not nor has not been altered for any group wishing to commit to the agreement. I just wanted to let you know this piece of information before too much time and effort is expended on your end."  WK


Paul



Frank Parks <fap45@hotmail.com>November 28, 2012    12:31 PM

To: Paul Zolin <pfz1@me.com>

RE: Memorandum of Understanding


Dear Paul : I have reviewed the MOU as well as Wendy's " it is non negotiable " email to you. First, it is not one sided in favor of the University. Second it sets forth a workable menu for a fraternity on campus. Is it a well detailed definitive contract ( that's what it really is ) ? No it is not. I have seen apartment rental agreements that are far more detailed than this MOU. It is very very basic. However I do not believe that a contract need be so detailed that it covers every conceivable contingency. I have seen a contract for the construction of a custom home ,that was written on a cocktail napkin with the salient provision that the contractor will use his best efforts to follow the plans and specifications. Provided that you are dealing with two ethical and trustworthy parties, problems can usually be " worked out ". In contrast I am reminded of a lease story that justifies repeating. Back in the 60's, in Phoenix, the biggest bank here was Valley National Bank. Walter Bimson, the CEO of VNB decided to build the tallest office building in Phoenix and went to the bank law firm ( an independent firm with then 50 to 70 attorneys....the bank was their largest client ) and told them he wanted the firm to craft the tightest lease possible so any tenant that signed it could never get out of it. The firm did so ,and Bimson then said to the law firm B of D : " O.K. You are moving into the new VNB building, now sign this lease ! "  D.U./Lambda surely does not need an extremely detailed contract nor would that facilitate the desired result in the present setting, repeating that it is a " take it or leave it proposition . IOW, Paul, this is a rather rudimentary agreement that, under the circumstances , should work  with proper implementation.  


Parties to a contract wish that they had a more detailed contract when something bad happens. If something bad happens and there is no contract provision that addresses the situation, the contract is considered " ambiguous " and ultimately a judge tries to reconstruct the contract in conformity with the intent of the parties ( assuming the parties cannot self resolve the dispute ). Here there are two fundamental subjects matter that need to be discussed. The first is adequate D.U. insurance as required by the contract. I assume that once the insurance is obtained  that the Alumni Corporation is ready and able to cover the premiums for 20 years. ( I do not know the D.U. specifics so don't know the answer to this question : Does D.U. have a group policy that covers their chapters ? Maybe they have an excess policy ( umbrella policy ) that kicks in after first level coverage is exhausted. If so ,depending on the size of the excess and the requirement of a certain amount of primary coverage, it will drive down the premium on the first " layer" of insurance). Any potential carrier must be given a copy of the MOU and make it an attachment  to the insurance policy. The insurance policy must provide coverage for the University and its Board of Trustees under the indemnity agreement or else the Corporation will be corporately responsible for any indemnification exposure and attorney fees in the event of a legal matter. This is a critical provision and a reason that an indemnifying insurance carrier must sign off on this. Lets say at a party someone in the house gets intoxicated Lord forbid ) and someone is injured. Many times the person involved and the chapter are sued plus the institution. The claim against the University/ Board of Trustees would be lack of supervision / lax university oversight etc. The MOU as written would potentially require the organization to provide a defense and indemnify. Clarkson.There are lots of cases like this on the books which decide whether "lack of supervision by a university" is an independent act of alleged negligence rather than a derivative liability for the alleged negligence of a house resident.  What would happen under this circumstance must be discussed with the insurance company that elects to write the policy for the Alumni Corporation.Lastly, the policy should provide " contents " coverage as well. " The MOU requires that the Alumni Corporation carry " personal property " coverage which I assume is intended to cover the personal property ( non fixtures) bought by Clarkson. The D.U. policy should also cover " contents " similar to a renters policy. Again the specific wording of the prospective policy needs to be analyzed and questions asked of the insurance agent as to what is covered and what is not covered.


As the alumni corporation is going to be the contracting party, it is necessary that the corp have a resolution in their minutes that the president or secretary ,or whoever is going to sign, is authorized to do so. In most contracts there is an assertion that the " corporation " has authorized so and so to sign on behalf of the corp so the corporation is bound by the signature. Without that, the corporation could later assert that it did not  authorize the signing. Even though Clarkson's legal department has not placed such an assertion in the MOU, to protect the signatory, there should be a corporate resolution. A further consideration has to do with the financial responsibility to pay the rent. The MOU delegates the responsibility to collect rent to the Corporation. When I moved into 30 Elm Street I do not recall that my parents had to sign some financial responsibility agreement. I just moved in and somehow the monthly nut was paid.. In the MOU it specifically documents the duty to advise the members of the chapter of their housing financial responsibilities. This may be a potential problem as any collection of people will contain those who are financially unable to keep current or are financially irresponsible. I remember going to the annual D.U. meeting in 2004 in Potsdam. Much of that meeting had to do with the rent payment defaults where the fraternity had done nothing to collect payments that were due. Members were living in  the house that had not paid their rent for months. That will not work in this setting. Clarkson has made this, understandably, a business deal. They build and provide the house and we occupy it. The rent collection process needs to be tightened up. Under the MOU, Clarkson does the billing. We must know what the process is whereby they have some student/ parent guarantee rent payment in a timely manner. What are the University policies? When do they ,in effect, evict a student?  You see, if a DU doesn't pay rent and there is an arrearage, and it grows, the " Corporation " will be responsible for that.  Thus this needs to be managed as a landlord/ tenant relationship. While we obviously do not want to traumatize a  potential pledge  with the legal ramifications of all of this nevertheless I think that every resident  needs to sign a written lease agreement similar to whatever Clarkson uses. This can be done ,provided that a responsible party is watching the books. If it were me, I would have a local accountant monitor the situation. This could probably be done for two or three thousand a year.  



In closing, we want to make sure the party who will sign for the " Corporation " is authorized to do so by corporate resolution. Has the University asked to se the financial stability of the " corporation " ? If I was representing the University I would want to know that as this contract is to last 20 years......Let me know if you or others have further questions........Regards.....Frank