McConnell v. Hunt Sports Enterprises
Ohio Court of Appeals
725 N.E.2d 1193 (Ohio App. 1999)
John McConnell (plaintiff) and Lamar Hunt (defendant) were part of a group that formed Columbus Hockey Limited, LLC (CHL) in order to try to obtain a National Hockey League franchise in Columbus. CHL began negotiations with Nationwide Insurance Enterprise (Nationwide) about building an arena, which CHL would then lease. Hunt, purporting to act for CHL, but without consulting other CHL members, repeatedly rejected Nationwide’s lease offers. Nationwide then approached McConnell individually, and McConnell said that if Hunt would not agree to the lease on behalf of CHL, McConnell would individually. Subsequently, McConnell and his individual group signed a lease independently of CHL and Hunt. There was a clause in CHL’s operating agreement which stated that members of CHL had a right to engage in business ventures that may compete with CHL. McConnell then filed suit, seeking a declaratory judgment to establish his right to operate the NHL franchise without CHL or Hunt. Hunt filed a counterclaim, alleging that McConnell violated a fiduciary duty to CHL. The district court directed a verdict in favor of McConnell. Hunt appealed.
Rule of Law
Holding and Reasoning (Tyack, J.)