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Analyzing the Billy Clyde Lawsuit

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Its been a great weekend in the Bluegrass. Many folks found themselves in Louisville for the Kenny Chesney concert, we had a photo contest (with winners later today), I had my annual rite of passage of watching an MTV award show and feeling old and (insert reporter name here) wrote something bad about the Cats. The latest news of the day is the report that Xavier Henry may be unhappy at Kansas and looking elsewhere. This story was first suggested at another site, and has taken on a life of its own in the last few hours. As of this point, nothing official has happened with Henry and the only school that has been mentioned as a potential visit if Henry changes his mind on Kansas, is UCLA. Nevertheless folks are talking and we will let you know if anything comes of the rumor mill.

My interest however has been consumed with the train wreck on the horizon in the form of the Billy Clyde lawsuit. For those of you that were on vacation in the Caribbean, Clyde ran off last week and filed a lawsuit in Texas, alleging all kinds of bad deeds by the University of Kentucky and asking for 6 million dollars and a piece of Mitch Barnhart’s scalp. UK then quickly followed up the next day with a countersuit in state court in Frankfort, asking for a court to announce officially that Billy Clyde is crazy and to attempt to “pull a Ted Haggard” and ban him from all establishments within the Commonwealth. Due to my primary gig as a lawyer (with Jones and Bruce, home for all your legal needs), I thought it might be good to take a look at the suits and what the likely outcome could be in the coming months.

BILLY CLYDE’s LAWSUIT:

When Billy Clyde hired his Greek dreamboat attorney and filed a case in federal court in Dallas it signaled one thing to me, mainly that after two months of negotiations of a mutually beneficial settlement, Clyde went with the nuclear option. Even though a lawsuit will end up costing him a large amount of money and could lead to the release of information that might make it difficult for him to find a coaching job in the future, Clyde decided it was time to bring the legal thunder. His lawsuit is linked here and is definitely worth your time on a rainy day. While the majority of the Complaint is filled up with beautiful paragraphs describing what a wonderful coach Gillispie has been and how he is an inspiration to young Dr. Pepper lovers everywhere, the meat of it from a legal standpoint is articulated via his claims against the UK Athletics Association. Put simply, he argues three things:

1. Breach of Contract, essentially claiming that he was not paid the 6 million dollars owed to him by the Memorandum of Understanding for an early termination.

2. Fraud, by arguing that UK never really intended to pay him his money and fraudulently got him to agree to a contract it wouldnt pay.

3. Tortious Interference of Contract, which is a fancy way of saying that UK made him terminate his contract with Texas A&M and “lured” him to Kentucky, causing him to ruin the great time he was having in College Station.

As one looks at these three claims, it is clear that two are completely bogus and one is the heart of the issue. Billy’s claim for fraud would be almost impossible to prove, as he would have to show that not only is UK not going to pay him, but it never intended to pay him, a set of facts that only exists in a McCarthy’s induced reality. His tortious interference claim is actually quite clever, but has no real chance of success. While it was likely inserted so as to get the case in Texas (more on that later), it amounts to a claim that by hiring him away from Aggieville, UK interfered with his contract with Texas A&M. While this is undoubtedly true, that in and of itself is not a tortious claim. In order for it to be a claim, you must show that the University did some wrong to interfere and simply offering a job does not qualify. It it were otherwise, EVERY TIME a person took a new job when they were under contract elsewhere, the new employer would be guilty of a tortious interference claim. That simply isnt the case.

Ultimately, the breach of contract claim is where the action is to be found. The question simply is, did the University and Billy Clyde have a working employment contract, and if it did, was it violated by either party? We will examine the arguments in a bit, but suffice to say Billy Clyde has a strong argument here and it is this claim that is the core of the case.

UK’s COUNTERSUIT:

UK’s countersuit (linked here) boils down to the University saying, “hey elected judge in Kentucky with UK fans as your constituents….rule that Clyde didnt have a contract before those fools in Texas can go screwing things up.” This was not the language in the suit verbatum of course, but it is close enough. UK is trying to get a Declaratory Judgment from the court saying no contract existed quickly…but is likely to have little success. They were beaten to the courthouse by Gillispie and it is likely the case that their action was a bit too little, too late. In addition, UK also however makes the point that Clyde sued the wrong entity and should have sued UK instead of the UK Athletics Association. The problem is that UK took the exact opposite position in its lawsuit with Claude Bassett, claiming that UKAA was who should be sued because it pays the checks and that UK was not the primary employer. Either way, it is likely irrelevant, since Clyde would be able to amend his Complaint to name the proper party if the court agreed with UK.

FIGHT ONE: WHERE WILL THE SUIT BE HEARD

Because Billy Clyde began the process in federal court in Texas, that is likely where it will start. UK however hopes it can move the suit to Kentucky. Clyde has to somehow argue that Texas is the appropriate place to determine a lawsuit between the UK basketball coach and the University of Kentucky. To get there, he added the “tortious interference claim”, arguing that he was just minding his poor little business in Texas when evil Kentucky came down there and manipulated his naive self. That claim, which has virtually no likelihood of success, is likely only in the complaint to try and give the Texas court jurisdiction, and will be the basis for his hope to keep the case in Texas.

From what I am told, the day before he filed the case, Billy Clyde changed all his Kentucky addresses to Texas and put his house on the market, all in the hope to establish residency in Texas. I suspect it will not work however. While Billy Clyde doesnt want to see this case in federal court in Lexington, that is where it is likely to end up, with either Judge Jennifer Coffmann or Judge Karen Caldwell (my former boss) as the presiding judge. This agreement was entered into in Kentucky, with Kentucky law governing for a position within Kentucky. UK will argue that the proper venue is thus in Kentucky and thus Clyde’s lawsuit should end up here. The venue fight might be the most important one of the case, and I suspect will be quite extensive.

To the merits:

BILLY CLYDE’s ARGUMENT:

Clyde’s argument is simple: (1) the Memorandum of Understanding operated as a contract and guaranteed him 6 million dollars if terminated and (2) If for some reason there wasnt a contract, both parties acted as if there was a contract for two years, so this “course of performance” should lead the court to enfore the agreement as if it was a contract. There are a couple of problems for Billy however:

1. The MOU says explicitly that it is time limited and that a full agreement must be reached.

2. The Complaint acknowledges that such an agreement was not reached and that the “for cause” provisions were the main reason.

3. Billy Clyde made NUMEROUS personal statements while at UK that there was no contract, often joking (in his annoying smug manner), that it was “in his briefcase” and he would sign it later.

UK’s ARGUMENT:

UK will argue two things. First, it will claim that there never existed a contract between the two parties and that the MOU is not sufficient to require the 6 million dollar payment. Second, it will claim that EVEN IF a contract exists, the University was justified in firing Clyde “for cause”, thus putting into play everything that Billy did while at Kentucky…both good and bad. There are however problems for UK’s argument as well, mainly:

1. If the MOU was not a contract, UK sure acted like it was, enforcing its provisions for two years, including paying Clyde the amount owed to him under the MOU throughout. This gives strong support to the “course of performance” argument.

2. Mitch Barnhart made NUMEROUS public statements when asked about the lack of a contract between Clyde and UK that suggested there was a contract. He even specifically used the word “contract” on a couple of occasions about the MOU saying, “there is a contract” when pressed on why a deal hadnt been reached. This is sure to be used against UK.

3. If the MOU is a contract, it isnt exactly clear that it contains a “for cause” provision, since both sides agree that was what was being negotiated after the hiring. Thus if the court finds a contract, it may be difficult for UK to argue that it was entitled to let Clyde go for cause.

BOTTOM LINE:

So that was long and extensive and dorky, so what does it all mean? Bottom line: on the issue of whether a contract exists, it is a close call and it isnt clear which party will prevail. I think Clyde probably has the better argument, because he can correctly claim that for two years UK acted like a contract existed and paid him as if it existed. That argument is not rock solid (for the reasons showed above), but it is strong enough to likely give him the edge. UK however does have the reasonable argument to make that the mere fact that it explicitly states in the MOU that it is temporary and because Clyde acknowledges that there were still issues to be settled, no agreement exists. This could really go either way, and showcases why this will be an ugly fight.

The problem for Clyde is that by bringing this suit, UK now has free reign to release all of the information about what happened during his tenure. I cant imagine why he would want this. I have called this case a “career kamikaze mission” for just this reason. He may win the suit and then never be able to coach again. If one suspects (as I do) that he was offered about half of his 6 million in settlement, he should have taken it. Now he has a fight with an expensive lawyer, that likely will take place on the University’s home turf and that could release information he wishes would stay secret. How is that a win?

So there you go…one man’s opinion on where we are in the Clyde lawsuit. As we learn more and see how it develops, we will keep you posted. Today watch for the winner of the picture contest, more on the KSR Kids campaign and other stuff….so stay tuned.

Article written by Matt Jones