Eckles v. Sharman

In 1968, Sharman (defendant) entered into a seven-year contract to coach the Los Angeles Stars basketball team. The contract was governed by California law and provided, in relevant part, that Sharman would be given an option to purchase an ownership interest in the team, at a price to be agreed upon in the future, and that he would participate in a pension plan that was otherwise undefined. The contract contained a severability clause, which stated that the invalidity of a provision in the agreement would not render the entire agreement invalid. In 1970, the Los Angeles Stars was sold to a Colorado company, Mountain States Sports, Inc. (Mountain States) (plaintiff), whose maintenance of this case on appeal was transferred to R.T. Eckles, trustee in bankruptcy, after Mountain States became bankrupt. The contract for sale of the Los Angeles team provided that Mountain States need not assume Sharman’s contract unless it had confirmed Sharman’s willingness to relocate to the team’s new city. The team was moved to Salt Lake City and Sharman went with it without any written documentation as to his deal and the move. While the team was in Los Angeles, no negotiations were ever conducted regarding the option and pension provisions of Sharman’s agreement. Once the team was acquired by Mountain States, its president and Sharman began discussing these provisions, but after months of negotiations they failed to reach agreement. In June 1971, Sharman resigned from the Utah team and signed a contract with California Sports (defendant) to coach the Los Angeles Lakers (Lakers). Mountain States sued Sharman in a Utah court for breach of contract, and also sued California Sports and two individuals (defendants) for tortiously inducing Sharman’s breach. After Mountain States presented its case at a jury trial, the court directed a verdict against Sharman on the issue of his liability. The jury found in favor of the individuals who had been sued for inducement but rendered verdicts against Sharman and California Sports for breach and inducement of breach, respectively.