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11th District: KSU basketball coach breached his contract
TRACEY BLAIR
Legal News Reporter
Published: February 3, 2015
The former head coach of the men’s basketball team at Kent State University did breach his contract by taking another position at Bradley University, the 11th District Court of Appeals affirmed recently.
Kent State sued Gene A. Ford and Bradley University in 2011 on the grounds that his contract with KSU would not expire for four years.
On a partial motion for summary judgment for breach of contract, a Portage County trial court awarded damages against Ford of $1.2 million.
According to case summary, Ford was hired for four years with an option for a fifth year in April 2008.
The contract included his salary, supplemental salary and performance-based incentives.
Two years later, Ford and KSU renegotiated for a five-year contract, increasing his salary by $100,000 for a total salary of $300,000. Both the original and renegotiated contract had a liquidated damages provision if he were to resign prior to the end of his contract.
The liquidated damages provision stated that Ford would have to pay KSU an amount equal to his base and supplemental salary, multiplied by the number of years remaining on his contract.
In early 2011, Ford accepted a position at Bradley at an annual salary of $700,000.
In 2012, Ford argued in his motion for summary judgment that Kent State suffered no damages due to his leaving. He also claimed the liquidated damages clause was defective and that the amount was arbitrary.
Eleventh District Court of Appeals Judge Diane V. Grendell disagreed that the damages were unreasonable in a 2-1 majority opinion.
“Even if the damages to Kent State were based solely on hiring a replacement coach,” she wrote, “finding a coach of a similar skill and experience level as Ford, which was gained based partially on the investment of Kent State in his development, would have an increased cost. This is evident from the fact that Ford was able to more than double his yearly salary when hired by Bradley University.
“The salary Ford earned at Bradley shows the loss of market value in coaching experienced by Kent State, $400,000 per year, for four years. Although this may not have been known at the time the contract was executed, it could have been anticipated, and was presumably why Kent State wanted to renegotiate the contract and establish a new five-year coaching term … There was also an asserted decrease in ticket sales, costs associated with the trip for the coaching search, and additional potential sums that may be expended.”
The panel also found the liquidated damages clause was not a penalty for breaking his promise, and that actual damages need not be proven.
Appellate Judge Cynthia Westcott Rice concurred.
Eleventh District Judge Timothy P. Cannon dissented.
Cannon noted that KSU only proved less than $2,000 in damages as a result of Ford breaching the contract.
“There is significant evidence that Kent State did not make an effort, prior to or at the time of contracting, to identify either the types of damages or the amount of damages it would incur following a breach,” Cannon wrote in his dissenting opinion. “There is evidence, however, that the damages sustained by Kent State as a result of a breach would be the same if a breach occurred in the last year of the Contract or in the second year of the Contract. As the evidence must be construed in a light most favorable to the non-moving party, the escalation clause contained in the Contract could be considered a penalty.”
The case is cited Kent State Univ. v. Ford, 2015-Ohio-41.