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Detroit Lions, Inc. v. Argovitz
United States District Court for the Eastern District of Michigan
580 F. Supp. 542 (1984)
Billy Sims (plaintiff) was a star running back who played for the NFL’s Detroit Lions (plaintiff). As Sims’ agent, Jerry Argovitz (defendant), was negotiating a new contract for Sims and the Lions, Argovitz became part owner and president of the Houston Gamblers, a team in the United States Football League (USFL). Sims was not aware of Argovitz’s new role. During Argovitz’s negotiations with the Lions, Argovitz asked one of his partners in the Gamblers, Bernard Lerner, to negotiate a contract with Sims and the Houston team. Lerner admittedly did not know much about football. In the Gamblers’ organization, only Argovitz knew the value of Sims’ services. The Lions had offered a five-year contract worth $3.5 million, an interest free loan, an injury guarantee, and $400,000 to purchase an annuity. Thereafter, Sims and his wife traveled to Houston to negotiate with Lerner and the Gamblers believing that the Lions were not negotiating in good faith. Lerner offered Sims a five-year contract worth $3.5 million, three years of skill and injury guarantees, and a $500,000 loan at an interest rate of one percent over prime. It was from the loan that Argovitz planned to receive the $100,000 balance of his fee for acting as an agent in negotiating a contract with the Gamblers, his own team. Argovitz and his associate took Sims and his wife into another room to discuss the offer. Although Argovitz asked Sims whether he wanted to see if the Lions would match the offer, Sims, whose ego was bruised by the Lions, did not believe they would. During the negotiations, Argovitz received a call from a Lions representative, but declined to speak with him. Sims accepted Lerner’s offer. Subsequently, Argovitz asked Sims to sign certain papers which Argovitz said were a part of Sims’ contract. Among the papers was a waiver of any claim that Sims might have against Argovitz for his breach of fiduciary duty. Sims and the Lions sued Argovitz to have his contract with the Gamblers declared unenforceable.
Rule of Law
Holding and Reasoning (DeMascio, J.)
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