Brown v. Woolf

Professional hockey player Andy Brown (plaintiff) was offered a National Hockey League contract playing for the Pittsburgh Penguins for the 1973–1974 season. Brown hired Bob Woolf (defendant) as his agent to negotiate the contract. The next season, the Penguins offered Woolf a two-year contract at $80,000 per year. Woolf assured Brown that he could get Brown a better offer from the Indianapolis Racers, a new team in the newly formed World Hockey League. Relying on Woolf’s assertions, Brown rejected the Penguins’ offer and signed a five-year contract with the Racers for $800,000 total. Woolf’s agent fee was 5 percent of the contract amount, or $40,000. Soon after, the Racers began having financial difficulties. Woolf renegotiated Brown’s salary downward on multiple occasions. Ultimately, the Racers went out of business and defaulted on Brown’s contract. Brown ended up collecting only $185,000, while Woolf received his full $40,000 fee. Brown sued Woolf in federal court for constructive fraud and breach of fiduciary duty. Brown alleged that Woolf had (1) failed to investigate the Racers’ financial condition, (2) made material misrepresentations regarding the Racers’ contract that Brown relied on, and (3) breached Brown’s confidence by negotiating cuts to Brown’s compensation while negotiating to keep his own entire fee. Woolf moved for summary judgment, presenting evidence that Woolf claimed eliminated Brown’s claims. Brown argued that summary judgment was inappropriate for a fact-intensive claim like constructive fraud. The district court considered the motion.