Say What?! – Did I Really Hear That?

Originally published by State Bar of Texas .

From Frank Douglass of Austin (Scott, Douglass, etc), these excerpts from the deposition “given by a Ph.D in accounting” in an arbitration proceeding. The dispute concerned this paragraph in the contract between the parties:

“13. Operating Overhead. To compensate X for overhead costs incurred in the operation of the Plant, X shall charge the Plant Account an amount equal to 15 percent of the total operation and maintenance expense of the plant, including insurance, taxes, plant shrinkage costs, which compensation shall be in lieu of the salaries and expense of X’s principal business office, division offices and district offices.”

On direct examination, the “expert” testified that the intent of the parties was “fuzzy.” On cross, Frank asked the witness “point out the fuzzy words” – and, with Frank’s help, new dimensions of fuzziness were established.

A. Okay, “operating overhead,” “overhead” is fuzzy; “to compensate” … I don’t quite know what that means. “Incurred in the operation of the plant” is not clear.

Q. You skipped a few there. “To compensate X for the overhead costs.” … The second overhead is fuzzy, too?

A. “Overhead,” wherever it occurs …

Q. How about “operating,” that is okay?

A. “Operating” is all right. … And the two of them together (“operating” and “overhead”) are less fuzzy than “overhead” by itself.

Q. That improved the fuzziness of “overhead,” to put “operating” in front of it?

A. It would make it less fuzzy, yes, sir.

[The witness then testifies that "to compensate," "overhead costs" and "incurred in the operation of the plant" are all fuzzy].

Q. All right. [Any] fuzzy words in [the next phrase]? …

A. Medium fuzzy, but not nearly like the others that we have talked about.

Q. The whole phrase is medium fuzzy?

A. Yes. But I’d put it on the lower – that one is reasonably concrete to me.

***

Q. All right. Continue …

A. And the final phrase, “of X’s principal business office, division offices and district offices,” is, for me, somewhat open to interpretation.

Q. Semi fuzzy?

A. Semi fuzzy.

Q. Let me ask you about the [next phrase]. “Rates” fuzzy? “In practice” is fuzzy?

A. Oh, yes, very definitely.

Q. Maximum fuzz?

A. Maximum fuzzy, yes, sir.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

from Texas Bar Today http://saywhat.texasbar.com/2014/10/july-1990-did-i-really-hear-that.html

via Abogado Aly Website