Profits from Formerly Joint Swimming Pool – part III | Beit Din Eretz Hemda - Gazit | Beit Midrash

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Case: The defendant (=def) owns vacation units. In 2013, the plaintiff (=pl) agreed to install at def’s location a large but movable swimming pool for def to operate. No written agreement exists regarding the terms of profit sharing. In 2021, pl demanded to get the pool back and was told that it was dismantled. At that time, def wrote a signed admission that the pool belonged to pl, that he used it, and that he had to pay for its value. Later in 2021, def informed pl that the pool had been burnt in a brush fire. Pl claims that he was to receive all of the profits from the pool until they covered its cost (16,769 NIS) and subsequently, they would split them equally. (Pl guesses that the direct profits were 48,000 NIS, and he points out that its presence boosted def’s business). So far, he has received nothing. Def claims he stopped using the pool in 2015 due to its lack of a water heater, and that he made his own pool by excavating a boulder. Although def made up with pl to sell the pool, he did not succeed to do so. Def claims that he signed the admission because pl was embarrassing him publicly, and that it is false. He admits to needing to share some profits, but, giving no estimate of how much, claimed that pl exaggerated profits.

Ruling: We conclude the series with different opinions on splitting profits.

P'ninat Mishpat (801)

Beit Din Eretz Hemda - Gazit

737 - P'ninat Mishpat: Late and Flawed Apartment

738 - P'ninat Mishpat: Did Any Furniture Go to the Buyer? – part II

739 - P'ninat Mishpat: Did Any Furniture Go to the Buyer? – part I

Def claimed that there were very few profits from the pool, as expenses almost equaled revenue and the pool was used for a short time. Beit din already concluded that it was not for a short time, and also considers that def refused to provide beit din any financial details. In such a case, we apply the thesis of the Rosh (Shut 107:6) that one who refuses to provide information that we believe he has is treated like one who possesses proof against himself. On the other hand, we cannot accept pl’s estimations in full, but must come up with a fair estimation.

Def’s admission is telling, as it says that pl should be paid the value of the pool. This could mean only that pl owned the pool, which is meaningless since it has been destroyed. However, there are various indications that the intention is that profit payments should at least be enough to cover the pool’s cost. However, the dayanim disagreed on the proper formula.

Dayan 1 – Every "pool season" has around 50 days, and the revenues can be up to 400 NIS a day. We will estimate that def arranged for a total of 20 full days a season and that expenses were 10% of revenue, giving pl profits of 180 NIS a day. Thus pl’s part is 3,600 NIS per summer X 6 summers = 21,600 (which exceeds the price of the pool).

Dayan 2 – Since pl intended to make a profit on his investment and it is guesswork how much profit there was, we will give him the equivalent of profits had he invested in a standard, medium risk investment. [Sparing the reader the tables on various investments,] the amount that resulted was 21,861 NIS.

Dayan 3 took a very different and complicated approach [which we will not share for interest of space] and did not want to award pl more than the price of the pool. The ruling is like the in-between opinion – 21,600 NIS.

P'ninat Mishpat