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REAL ESTATE VALUE CO. v. USAIR

September 30, 1997

REAL ESTATE VALUE COMPANY, Plaintiff,
v.
USAIR, INC., Defendant.



The opinion of the court was delivered by: BUCKLO

 Real Estate Value Company ("RVC") sued USAir, Inc. *fn1" ("USAir") for breach of contract and fraud. The parties filed cross-summary judgment motions. USAir also moves to strike the testimony of the plaintiff's expert. For the following reasons, RVC's motion for summary judgment is granted, and USAir's motion for summary judgment is granted in part and denied in part. USAir's motion to strike is granted.

 Background2

 RVC was incorporated in January, 1991. The concept behind RVC was the purchase of discount travel certificates from travel suppliers such as airlines, hotels, rental car companies, and cruise lines, and the resale of such certificates to others for use as marketing incentives in promotions. James George is the president, sole stockholder, and sole employee of RVC. USAir operates a commercial airline.

 In early January, 1991, Mr. George approached Pat Dewey, Senior Director of Advertising and Sales Promotions at USAir, and discussed the concept of using air travel certificates for promotions. Later in January, 1991, Mr. George wrote to Michael Buckley, Senior Director of Business Sales of USAir, regarding the purchase of discounted air travel certificates for use in RVC promotions. Negotiations between RVC and USAir regarding the sale of discounted air travel certificates continued over several months. On June 10, 1991, Mr. George sent USAir a packet of information including a proposed contract, a legal memorandum prepared by RVC's attorney concerning the legality of RVC promotions under the Real Estate Settlement Procedures Act of 1974 and the Illinois Title Insurance Act, draft advertising materials for the promotion of title insurance, and other materials. On July 25, 1991, RVC sent USAir a letter that noted the parties were very close to agreeing on terms for travel certificates and presented a list of items that needed to be clarified before a final agreement was reached.

 On July 30, 1991, USAir sent RVC a letter which is reproduced in full:

 
Dear James George:
 
Regarding your letter of 7/25 USAir is willing to sell the Real Estate Value Company the following value in Certificates:
 
. $ 350 value units at $ 225.00
 
. $ 300 value units at 25% discount
 
. $ 400 value units at 25% discount
 
. $ 500 value units at 25% discount
 
All certificates have the following restrictions/rules
 
. Non refundable
 
. 14 day advance reservation
 
. Fare chosen determines booking class
 
. No blackouts
 
. Good for travel within the contiguous 48 states and San Juan
 
. Cannot be used in conjunction with any other coupon/certificate offer, previously issued tickets, promotional offerings, senior citizen "Golden Opportunity Book", student, convention group, military tour, family plan, travel industry discount or USAir travel voucher.
 
. Certificates are not transferable and may not be brokered or sold
 
. Certificates is [sic] void if altered, counterfeited or copied
 
. Lost, Stolen, or otherwise destroyed Certificates will not be replaced
 
. Original Certificates can only be redeemed through USAir's City Ticket Offices, Airport Ticket Offices or authorized travel agency
 
. Certificates will have a 13 month "Valid for Travel" window. The date of issue of the Certificate will determine expiration date.
 
Only one Certificate may be used in the purchase of a ticket from USAir. You cannot use multiple Certificates to offset the price of a single ticket. Certificate is deemed fully used when exchanged for a ticket from USAir.
 
USAir will extend a rolling 150 day window to the Real Estate Value Company to renew the agreed purchase price. If no order is placed within the 150 day window the agreement is terminated. There will be no refund to the Real Estate Value Company on the $ 350 units, for Certificates issued but not used. USAir will review the program at the close of the 13 month period to determine usage on the $ 300/$ 400/$ 500 Certificates. Those determined as "Not used" will be valued at the selling price and travel authorization for that amount will be issued to the Real Estate Value Company. No cash will be refunded. The resulting travel authorization will have a validity of 12 months from the date of issue.
 
The Real Estate Value Company will be required to submit a list of those individuals who have received Certificates on a monthly basis.
 
The Real Estate Value Company cannot use USAir's name in any promotion or marketing effort in merchandizing its product to the general public or other third parties involved in selling of same without the express written authorization of USAir.
 
USAir requires a minimum purchase of ($ 25,000) twenty-five thousand dollars to start this Program. You can select from the pricing structure the number of units ...

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