Assignment Question
1. Fiduciary Duty – Case Summary 10.3: Toms v. Links Sports Management Group, L.P., U.S. Dist. LEXIS 114677 (W.D. La. Aug. 14, 2006) Parker, a sports agent, represented David Toms, a professional golfer. Parker also represented Shaun Micheel and other professional golfers. Parker received a 20 percent commission on any endorsement contracts signed by Toms and a 25 percent commission on endorsement contracts signed by Micheel. In 2003, Parker was in the middle of negotiations with Cleveland Golf on Toms’s behalf. After Micheel was the surprise winner at the PGA Championship, Parker convinced Toms that he should hold out for a more lucrative endorsement deal than was being offered by Cleveland, and he subsequently signed Micheel, instead of Toms, to the Cleveland Golf deal. What agency relationship exists between Toms and Parker? If an agency relationship exists, when was a fiduciary duty created and what sub-duties apply to this case? Explain. Is Parker’s employer also liable for the actions of Parker? Why or why not?
2. Legal Strategy 101 – LeBron James’s Agent Let us now consider the case of NBA All-Star LeBron James and Dan Gilbert, the owner of the Cleveland Cavaliers pro-basketball franchise. LeBron began his pro-basketball career with the Cavs, but when he became a free agent in July 2010, he decided on live TV to “take my talents to South Beach” by joining the Miami Heat. “The Decision”, as it became known, upset many Cleveland fans, who felt betrayed by their hometown hero. The owner of the Cavs, Dan Gilbert, even wrote an open letter publicly criticizing James’s decision to leave Cleveland. Among other things, Gilbert described the decision as a “shameful display of selfishness and betrayal by one of our very own” and a “shocking act of disloyalty from our home grown ‘chosen one’”. Now, fast forward to the summer of 2014. LeBron James’s contract with the Miami Heat is about to expire. At this state in his career, LeBron James is seriously considering the possibility of returning to Cleveland, and Dan Gilbert would probably like to have his franchise player back in order to win a championship – but in real life, how will James and Gilbert be able to put aside their past personal differences in order to make a new deal? Agency law, that’s how! Simply put, instead of negotiating directly with the owner of the Cavs, LeBron could ask his sports agent Rich Paul to negotiate a new deal with Dan Gilbert on his (LeBron’s) behalf. After all, an agent has the authority to enter into legally binding contracts on behalf of a principal. As a result, the Cavs’s owner has the legal assurance that whatever agreement he is able to negotiate with Rich Paul will be binding on LeBron James himself. The rest, as they say is history. In real life, LeBron James’s agent Rich Paul negotiated a new deal on LeBron’s behalf with the owner of the Cavs in July 2014. But what if a day later Lebron had a change of heart and decided to retire instead of honoring his new contract with the Cavaliers? Given the scenario described in Question 1, what legal remedies would Dan Gilbert have against LeBron James? Would Rich Paul (LeBron’s agent) also be legally liable on the contract?
