DG Sports Agency, LLC v. First Round Mgmt., LLC

• Decision Date: 26 August 2015
• Docket Number: No. 4D14–862.,4D14–862.
• Parties: DG SPORTS AGENCY, LLC, Appellant, v. FIRST ROUND MANAGEMENT, LLC, Thiago Alves, and Malki Kawa, Appellees.
• Court: Florida District Court of Appeals

174 So.3d 541

DG SPORTS AGENCY, LLC, Appellant

v.FIRST ROUND MANAGEMENT, LLC, Thiago Alves, and Malki Kawa, Appellees.

No. 4D14–862.

District Court of Appeal of Florida, Fourth District.

Aug. 26, 2015.

Vincent E. Schindeler of Vincent E. Schindeler, P.A., Fort Lauderdale, for appellant.

Darren A. Heitner of Heitner Legal, P.L.L.C., Bay Harbor Islands, for appellee First Round Management, LLC.

Opinion

LEVINE, J.

We are asked to answer the following question: whether the trial court erred in entering a directed verdict in favor of appellee First Round Management, LLC, regarding liability, where the only issue before the trial court was damages, since a default had already been entered in this case. We find that the trial court erred by entering a directed verdict for appellee, since a default had already been entered against appellee. Appellant had a right to rely on the default entered against appellee, and the trial court should have made a factual determination of the amount of damages, if any, due to the liability already determined by the default. We, thus, reverse and remand.

In June 2008, appellant DG Sports Agency, LLC (“DG”), and Thiago Alves, a mixed martial artist who competes in Ultimate Fighting Championships, entered into an athlete representation agreement. Pursuant to that agreement, DG would “provide advisement, counseling and assistance for Athlete in negotiation, procurement and execution of any marketing contract, endorsement agreement, personal appearance, speaking engagement, sponsorship contract, licensing agreement, charitable pursuit, memorabilia agreement, and public relation matter.” DG would “retain 30% of the gross contract price of any marketing contract, endorsement agreement or sponsorship contract.” DG would also receive “30% of any monies acquired by athlete on any Television commercial, advertising contract, modeling contract or any other services agent acquires for athlete.” Finally, DG was “responsible for collecting all fees for contracts negotiated by Agent on behalf of Athlete and for payment of said fees to Athlete and his representatives.”

The agreement would remain in effect for one year and could be terminated by the parties only in writing. Alves would be obligated to pay DG for any contract entered into during the one-year term of the contract. A contract would be deemed “entered into” if Alves entered into the contract during the term of the one-year contract and if “the essential terms of the contract were procured by the Agent.” The agreement also required Alves to warrant and represent that he had “not signed a contract with another agent for the services that are the subject matter of this agreement.” The agreement also required DG to warrant that it “is licensed properly and registered to carry out the obligations and perform the services set forth in this agreement.”

In August 2010, DG filed a complaint alleging breach of contract against Alves and tortious interference against appellees First Round Management, LLC (“First Round”), and Malki Kawa, an agent for First Round. The complaint alleged that one month after Alves signed the agreement with DG, Alves then signed another representation agreement with First Round and its agent, Kawa. DG claimed that, as a result, it was not paid commissions owed to it.

A clerk's default was entered against First Round. First Round moved to set aside the default, but the trial court denied the motion. First Round attempted to file an answer and affirmative defenses, but it was stricken.

Before trial, the parties filed a joint stipulation in which they agreed that the following issues would be tried: “Liability of the Defendant, ALVES, for Breach of Contract, if any. Plaintiff's damages arising out of ALVES' Breach of Contract, if any. Plaintiff's damages arising out of Defendant's, FIRST ROUND'S, Tortious Interference with Plaintiff's advantageous business relationship with ALVES, if any.” However, before trial, the claims against Alves were dismissed pursuant to a settlement with Alves. Thus, the only remaining issue to be considered was damages, if any, arising out of First Round's “Tortious Interference with [DG's] advantageous business relationship” with Alves.

During the trial, it was undisputed that Alves never sent DG written notice terminating the athlete representation agreement. Rather, Alves only verbally terminated the agreement. DG elicited testimony from Alves about his various sponsorships and the fees paid by those sponsorships. According to Alves, Kawa negotiated these deals. DG's sole agent, David Gottesmann, testified that he negotiated a deal with Tap Out. Gottesmann admitted that he did not attempt to negotiate any more deals after Alves verbally terminated the agreement. Gottesmann is an attorney, but was not admitted to the Florida Bar until two years after the parties entered into the athlete representation agreement.

After DG rested, First Round moved for a directed verdict, which the trial court granted, determining the following:

Okay. A couple of things the Court notes, we only have one contract here for which there is any evidence of a potential breach but that contract appears to have been breached by the Plaintiff. This contract which says clearly that the agent will be responsible for collecting all the fees negotiated. The agent did not do that, that is a breach of this agreement.

Furthermore, another breach of the agreement, it said it can only be terminated in writing since it was never terminated he said I stopped working because I got an oral notice to quit working. That's not grounds to stop working. That again is the agent breaching the agreement.

Let's talked [sic] about what this agreement may or may not be. It may be a talent

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