News Court Report
posted by April 17 at 13:54 PMon
The Sonics story is all over the basketball blogs. (Even my favorite Washington Wizards blog is on about Save Our Sonics.)
Today, True Hoop, theee basketball blog, has a roundup.
The most interesting link, however, is to a straight-up legal blog, Above the Law, which pans Howard Schultz’s plan to sue Clay Bennett. Schultz is accusing Bennett of bad faith for saying he intended to keep the team here. As The Seattle Times recently reported with a trove of emails, Bennett was BSing about that.
Here’s Above the Law’s (above my head) take:
Although certain emails seem to indicate that the Sonics’ new ownership group may have been privately planning to move the team to Oklahoma City from the very beginning of negotiations, this behavior alone does not likely provide grounds for complete rescission of a sale-of-franchise contract for lack of a “good faith effort.” Not only is the issue of what constitutes “good faith” under this sort of clause vague, but, even more importantly, the doctrine of “substantial performance” states that performance is considered complete once the essential and material obligation is accomplished, and any shortfall from full performance thereafter is compensable only by monetary damages. The essential obligation of the new Sonics ownership group was simply to pay Schultz the full purchase price for the team, and the new ownership did that, paying a premium to boot. Under Washington state law, “if more than one promise is made [in a contract], each promise does not have to be substantially performed. Overall, substantial performance is sufficient.” Mortimer v. Dirks, 57 Wash. 402, 107 P. 184 (1910). In other words, breach of a secondary promise not vital to the core of the contract itself is insufficient to rescind the contract in full.
Although one way potentially around the doctrine of substantial performance may involve bringing a separate claim based on fraudulent inducement, a fraud claim under Washington law similarly is a nonstarter. Under Washington law, Schultz would have to show convincing evidence of “(1) a representation of existing fact, (2) that is material, (3) and false, (4) the speaker knows of its falsity, (5) intent to induce another to act, (6) ignorance of its falsity by the listener, (7) the latter’s reliance on the truth of the representation, (8) his right to rely on it, and (9) consequent damage.” Pedersen v. Bibioff, 64 Wash. App. 710, 723 n. 10 (1992). Even without knowing all of the facts, proving element nos. 2, 3, 4, 6, and 7 each would likely present some difficulty for Schultz.
Meanwhile, The Seattle Times has a new story up: Bennett is now accusing Mayor Nickels of bad faith, saying he has proof that the city was dealing with Microsoft CEO Steve Ballmer all along in a plot to buy the Sonics back.