Hedge fund hotshot Robert Mercer files lawsuit over $2M model train, accusing builder of overcharge

[Newyorkcentralfan]

http://www.nydailynews.com/news/2009/03/31/2009-03-31_hedge_fund_hotshot_robert_mercer_files_l-2.html

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[Midnight Railroader]

 Now, see, if he'd built the thing himself, he wouldn't be dealing with this at all.

[IRONROOSTER]

 I find it hard to believe that this guy shelled out $2.7M and then decided he wasn't getting his money's worth.  Sounds more like he is trying to stiff Rail Dreams for his changing his requirements after the work was underway. Given the 10's and 100's of millions these guys have gotten away with, I'm surprised he even noticed a measly $2.7M.

Paul

[modelmaker51]

The 2 mil for a 1/2 basket court size - museum quality layout does not sound unreasonable to me having worked for a major layout builder myself. On locatiion costs can build up real fast depending on the size of the crew. On average our layouts took 5 days, 6 to 10 crew. The costs would be delivery, (depending on size, multiple tractor trailers), motels, per diem (food and personal), labor (usually time and half and double time on sundays when on location). It sounds like in this case the on location time was a lot longer due to a deadline they had to meet. Building a large layout can take from 3 months to a year or more depending on size and level of detail, museum quality can take a long time. Our in-house crews tended to be about 10 to12 full-time  professional crafts people, including carpenters (cabinet grade), licensed electricians, scenic artists (many from theater and film industries), model builders and a couple of advanced model railroaders for the strickly mr stuff. The $700 000 would barely cover materials for that size layout.

I think it's a case of sour grapes he must of lost his money in the stock market plunge and is trying to get out of paying..

[CAZEPHYR]

And I thought I had overpaid for my Z8 from Division Point.  Seems like a bargain now.

CZ

[Railphotog]

I know I hate it when that happens! 

[loathar]

modelmaker51 -Yep, and consider the crew is staying on Long Island which aint a cheap place to stay and do work. I would be curious to see the exact details for $2 million in over runs though. It's not often a project exceeds it's estimate by over 200%. It's not like we're talking about $10k going up to $30k.

[selector]

With a hedge fund fella, it's not personal, it's business!!

[ereimer]

 my mind boggles at spending $700,000 on a layout . or $2.7 million . or having half a basketball court to build it in .

and why would it matter if it was done in time for his daughter's wedding ? is she a model railroader too ? were they having the reception in the layout room ?

and what did the guy do with the other half of the basketball court ?

 there are too many unanswered questions in this story

 

ernie

[Packers#1]

 Lordy, 2.7 million!!!!! of course, the layout is half a basketball court and museum quality. The problem is the hedge fund guy will most likely win.

[steveiow]

Point is,has he told the wife yet.

Steve

[galaxy]

Well, first, they have to make a profit building it for him!!!! 

Well, GOLLY GEE!

I guess my "TOY" 3x5 FOOT HO layout doesn't compare!

And yes, he'd have had more satisfaction building it himself out of his "pocket" or "walking around" money. Then again, maybe $700,000.00 IS "walking around money" to him!

If only I had HIS problems.....

Then again, maybe not....

DCC anyone? anyone? anyone?

[wholeman]

He is probably mad because that was his bonus.  I agree he would have been more satisfied building it himself, but he was probably on his private yacht.

Will

[vsmith]

Midnight Railroader

 Now, see, if he'd built the thing himself, he wouldn't be dealing with this at all.

...but at 50' x 50' museum quality, how old would he be when he finished it.

What I find so funny is this guy problably paid for the layout with the money he slushed off his investors. Now he's accusing someone of ripping him off. Should be an interesting case to hear the builders side.

[blownout cylinder]

Let's see. Items consistently added to, changed, added costs due to fuel costs going up, ah--gee. Bud, y'know--them's the cost of wanting a high priced item---if one factors in square footage by around $250-275---HMMM---definite chin stroking time---

BTW--what is the actual square footage of a basketball court anyways?

[lvanhen]

Can he get the death penalty for filing a frivilous lawsuite?

He sure as HADES deserves it!!!

And with additional "cruel and inhumane" treatment!!!

[andrechapelon]

Just more proof that the hobby is dying because:

1. It's overpriced.

2. The manufacturers are gouging the poor hedge fund running hobbyist.

3. Craftsmanship is no longer valued.

       

I thought this was an April Fool's piece. It's even funnier as "serious" news.

Andre

[dwRavenstar]

 Pro basketball court is 94x50 = 4700 sq feet

Halve that x $275/sq ft = $646,250.00

Sounds like he was getting a deal and suffered buyer's remourse.

[vsmith]

blownout cylinder

BTW--what is the actual square footage of a basketball court anyways?

50' x 100' or 5000 sq ft, so this guys layout is about 50' square or 2500 sq ft. Must be nice

[Left Coast Rail]

You know what they say, a million dollars here, a million dollars there, pretty soon you're talking about real money. His layout would cover up a small corner of the one in Hamburg Germany.

[dknelson]

What's worse, this guy might win his lawsuit because it reads as if the layout builder did not timely file an answer in court, figuring the litigation would settle.  If someone sues and the other party does not file an answer in court, even if they are "talking" to each other on the side, the court under its rules regards the party being sued as agreeing with every allegation in the lawsuit.  With no opportunity by the way to prove otherwise.  The case is over, and the plantiff wins regardless of the real merits of the case  It is called a default judgment and a lot of people have been tricked into trying to settle a case while letting the time period for filing a formal answer in court go by.  I hope this is not what happened here but it is very very common. 

I can tell you based on the business I am in, that there are a lot of people who were rich on paper but aren't rich today, and they are looking for every angle to get out of contracts they enterred into or things that they bought.  In some ways it is like all those rich people we'd read about were in reality just actors in a play and not rich at all.  The only reality is that broke people really were broke.  A strange world we live in. 

Dave Nelson

[steamage]

Sorry but I cant understand how the contractor layout builder didn't didn't get payments as progress went along on the layout. Some years ago I contracted to do a 3x4 foot scale model (not a train layout) and it was 'pay as you go' with one third payments on its progress until the model was finished. He knew the final price and was happy with this payment method.

[wm3798]

 Another safety net for the builder would have been having the client sign change orders, with an associated estimate for the cost of the changes.  This applies to just about any industry, but is especially critical in construction, where specifications can be very fluid throughout the project as options are settled on, unexpected conditions arise, and schedules get affected by numerous things that may be beyond the contractor's control.

If the owner said "change this" and the builder said "okay" then the builder is on weak and shifting sand.  If the owner said "Change this," and the builder said "here's how much the change will cost, and here's the new schedule, please sign here" then the owner is full of piffle.

Gray areas are dangerous territory if your building something for others, whether it's a 30 story office tower or a 2'x 4' model railroad.

Lee

[reklein]

Theres some good info coming out of htis. It looks like some of us do a little custom work. So we should take note of the pitfalls and take care of business as it comes up and keep the owner in tune with whats going on at all times. I bet this isn't just a one sided story. Yeah its true there are guys who buy this hobby and its up to us modelers to make sure thaey by it from us. Nice to be payed for play BILL

[mobilman44]

Hi!

I surely can't say who is "at fault" here, but given the money involved, there are contracts and other pieces of tangible evidence that the Court will be able to work with and decide the issue.

It is immaterial as to where and how Mr. Mercer got the money to have the layout built, and should not enter into the trial proceedings.  What does matter are the contracts and testimonies and witnesses brought forth.

My personal opinion is that I find it a "good thing" that our Hobby will get some press, and that a very wealthy man thought enough of it to put a whole lot of money into it.  

Meanwhile, I'll continue to build my own..........

ENJOY,

Mobilman44 

[JBCA]

 

Don't you love the lead sentence in the article "A hedge fund hotshot's lawsuit over a toy railroad

[BRAKIE]

JBCA

 

Don't you love the lead sentence in the article "A hedge fund hotshot's lawsuit over a toy railroad

 

But,of course!

 

But,we know its a media spun high impact statement to fire up the hordes.

 

After all those are just "toy" trains to the general public.

[tomikawaTT]

JBCA

 

Don't you love the lead sentence in the article "A hedge fund hotshot's lawsuit over a toy railroad

Did you really expect better from a typical (technologically challenged) journalist?  These are the same folks who insist on calling almost any railroad yard a, "Marshalling yard."

Since I know exactly nit about the merits of this particular case, I'm not going to give an opinion.  OTOH, I can see where hyperdetailing a layout could easily raise just the cost of materials to several hundred dollars a square foot.  Ever think of making a crowd scene with pre-painted figures?  How about working chase lights on that theater marquee?  Somehow, I can't see Sir Fatwallet settling for plain-Jane woodlands (unless every tree was a ready-to-install premade.)

The one thing that stands out like a lighthouse in all of the above is, "A verbal agreement isn't worth the paper it wasn't written on."  With my background (aircraft maintenance) I've long since learned to document EVERYHING!

Chuck (Modeling Central Japan in September, 1964 - myself, pay as I go)

[loathar]

If you want to apply logic to this based on the initial estimate of $700k, this guy would have had to COMPLETELY changed the concept and design of this layout 2-3 times. I wonder how much of the $2.7 mil price was based on the "butthead" factor?

[G Paine]

IRONROOSTER

Sounds more like he is trying to stiff Rail Dreams

My wife used to own a real estate company; her experience is rich people are more likely to complain or sue to get an agreed upon price reduced that the average person.

ereimer

why would it matter if it was done in time for his daughter's wedding ?

Maybe the owner wanted a new toy to show off to the wedding guests?? Maybe the train was supposed to deliver the drinks like Reggie Van Gleason.

No one has mentioned the possible additional manpower and/or overtime the contractor needed to complete the project for the deadline once all the scope changes to the project delayed the construction. Did the contractor have to take apart and rebuild already completed work to suit the client's changing mind?? That kind of stuff would really run up the cost quickly. Hopefully the contractor documented all the customer demands for changes.

Midnight Railroader

 Now, see, if he'd built the thing himself, he wouldn't be dealing with this at all.

What is the probabability that the hedge fund guy could even put together a couple pieces of flextrack?