Turner Brd. System Inc v. Mcdavid

• Decision Date: 26 March 2010
• Docket Number: No. A09A2314.,A09A2314.
• Citation: 693 S.E.2d 873,303 Ga.App. 593
• Parties: TURNER BROADCASTING SYSTEM, INC.v.McDAVID et al.
• Court: Georgia Court of Appeals

303 Ga.App. 593

693 S.E.2d 873

TURNER BROADCASTING SYSTEM, INC.v.McDAVID et al.

No. A09A2314.

Court of Appeals of Georgia.

March 26, 2010.

COPYRIGHT MATERIAL OMITTED

Troutman Sanders, James A. Lamberth, Atlanta, for appellant.

Bondurant, Mixson & Elmore, Steven J. Rosenwasser, Joshua F. Thorpe, Jill Pryor, Atlanta, for appellee.

McNatt, Greene & Peterson, Hugh B. McNatt, Balch & Bingham, Michael J. Bowers, T. Joshua R. Archer, Brinson, Askew, Berry, Seigler, Richardson & Davis, Robert M. Brinson, Norman S. Fletcher, Alston & Bird, John E. Stephenson, Jr., Jeffrey J. Swart, Andrew J. Tuck, amici curiae.

BERNES, Judge.

This case involves Turner Broadcasting System, Inc.'s (“Turner”) alleged breach of an oral agreement to sell the Atlanta Hawks and Atlanta Thrashers sports teams and the operating rights to Philips Arena to appellee David McDavid. Following a jury trial, a $281 million verdict was entered in favor of McDavid on his breach of contract claim. Turner filed a motion for judgment notwithstanding the verdict (“j.n.o.v.”), or in the alternative, for a new trial, which the trial court denied. Turner appeals, contending that (1) the evidence failed to show (a) that the parties intended to be bound in the absence of an executed written agreement or (b) that the parties reached agreement on all material terms of the sale; (2) the evidence failed to show that the basketball and hockey leagues would have approved the sale; (3) the trial court erred in failing to give its requested jury charge on league approval; and (4) the damages were speculative, excessive, and decidedly against the weight of the evidence. ¹ We discern no error and affirm.

If a jury has returned a verdict, which has been approved by the trial judge, then the same must be affirmed on appeal if there is any evidence to support it as the jurors are the sole and exclusive judges of the weight and credit given the evidence. The appellate court must construe the evidence with every inference and presumption in favor of upholding the verdict, and after judgment, the evidence must be construed to uphold the verdict even where the evidence is in conflict. As long as there is some evidence to support the verdict, the verdict will be upheld on appeal.

(Citation and punctuation omitted.) City of Atlanta v. WH Smith Airport Svcs., 290 Ga.App. 206, 659 S.E.2d 426 (2008). See also Rental Equip. Group v. MACI, LLC, 263 Ga.App. 155, 157(1)(a), 587 S.E.2d 364 (2003).

So viewed, the evidence at trial showed that Turner is the former owner of the Hawks and the Thrashers, with operating rights to Philips Arena (the “assets”). In October 2002, Turner publicly announced its interest in selling the assets as part of a “deleveraging program” to reduce its mounting debts. In November 2002, McDavid expressed an interest in buying the assets and entered into negotiations with Turner.²

On April 30, 2003, the parties executed a “Letter of Intent,” outlining the proposed sale terms and establishing a 45-day exclusive negotiating period. On June 14, 2003, the Letter of Intent expired with no agreement, but the parties continued to negotiate. When McDavid inquired about extending the Letter of Intent, Turner's principal negotiator told him, “Don't worry about it. We're very, very close to a deal. You're our guy.”

The parties scheduled a meeting for mid-July 2003, expecting that they would be able to resolve all of the outstanding issues and finalize their agreement. At the meeting, Turner raised a tax loss allocation issue, which the parties failed to resolve. Frustrated with the lack of progress being made during the negotiations, McDavid walked out of the meeting, while his advisors continued their efforts to resolve the tax issue.

On July 30, 2003, the parties engaged in a conference call. During the conference call, McDavid's advisors stated that McDavid would agree to Turner's proposed resolution of the tax issue on the condition that it would resolve all the issues and finalize the deal. Turner's CEO, Phil Kent, agreed and announced, “we have a deal.”

The parties subsequently exchanged multiple drafts of the purchase agreement and its exhibits. During the legal drafting process, the parties' counsel identified additional “open issues” for the written agreements.

On or about August 1, 2003, Turner drafted an internal memo to its employees and planned for a press conference to publicly announce the deal with McDavid. In August 2003, Turner consulted with McDavid and his advisor on team management decisions, including the hiring of a general manager and a head coach for the Hawks. Turner also obtained McDavid's approval before hiring a trainer, assistants, and scouts.

On or about August 16, 2003, as the drafting process continued, Turner's executive and principal negotiator, James McCaffrey, approached McDavid about a simplified restructure for the transaction, assuring him that the restructure would “not change the deal,” that the “deal was done,” and that “they were ready to close on the deal that [they] made on July 30th.” McDavid agreed to the simplified restructure, and the attorneys circulated revised draft agreements that reflected the restructured terms.

On August 19, 2003, the corporate board of directors of Time Warner, Turner's parent company, approved the sale of the assets to McDavid based upon the restructured terms. However, two of the board members, Ted Turner and Steve Case, opposed the deal concerned that the assets had been undervalued and had resulted in a “fire sale.”

On the day after the Turner board of directors meeting, Ted Turner's son-in-law, Rutherford Seydel, and the son of a member of the Hawks' board of directors, Michael Gearon, Jr., approached Turner about purchasing the assets on behalf of their corporation, Atlanta Spirit, LLC. While Turner continued to exchange drafts of the purchase agreement with appellees, it also began negotiations with Atlanta Spirit.

On or about September 12, 2003, McDavid and Turner verbally reached a final agreement on each of the alleged open items for the written agreement and Turner's principal negotiator announced, “[t]he deal is done. Let's get documents we can sign and we'll meet in Atlanta for a press conference and a closing [early next week].” But later that same day, Turner's principal negotiator and its in-house counsel signed an agreement for the sale of the assets to Atlanta Spirit.

On September 15, 2003, as McDavid was preparing to travel to Atlanta for the closing and a press conference to announce the sale, he received a phone call informing him that Turner was “going in another direction” and had sold the assets to Atlanta Spirit. McDavid and his advisors, who had spent months finalizing the McDavid deal, were “stunned,” “shocked,” “disappointed,” and felt “completely broadsided.”

McDavid filed suit against Turner, alleging claims of breach of an oral contract to sell the assets, promissory estoppel, fraud, and breach of a confidentiality agreement. Turner denied the existence of any binding agreement, arguing that the parties had not executed a final written purchase agreement and had continued to negotiate the material terms of the transaction. Following an eight-week trial, the jury returned a verdict in favor of McDavid on the breach of oral contract claim and awarded $281 million in damages.³ Judgment was entered accordingly.

1. Turner first argues that the trial court erred in denying its motion for j.n.o.v. or for a new trial on the breach of oral contract claim. Turner contends that the uncontroverted evidence established that the parties manifested an intent to be bound only in writing, and that the parties never reached agreement on all material terms of the sale. We disagree. The evidence on the issue of contract formation was highly controverted and presented genuine issues of fact for the jury's resolution. Because there was evidence supporting the jury's verdict, we must affirm. See City of Atlanta, 290 Ga.App. at 206, 659 S.E.2d 426; Rental Equip. Group, 263 Ga.App. at 157(1)(a), 587 S.E.2d 364; Northern Assurance Co., etc. v. Roll, 176 Ga.App. 893(1)(a), 338 S.E.2d 870 (1985).

“To constitute a valid contract, there must be parties able to contract, a consideration moving to the contract, the assent of the parties to the terms of the contract, and a subject matter upon which the contract can operate.” OCGA § 13-3-1. See Cline v. Lee, 260 Ga.App. 164, 168(1), 581 S.E.2d 558 (2003). Turner's contentions relate only to the assent element.

As an initial matter, Georgia law recognizes that oral contracts falling outside the purview of the Statute of Frauds ⁴ may be binding and enforceable. See Cochran v. Eason, 227 Ga. 316, 318(1), 180 S.E.2d 702 (1971) (holding that “[a]ssent to the terms of a contract may be given other than by signatures”); Taylor v. Taylor, 217 Ga. 20, 22-23(2), 120 S.E.2d 874 (1961) (recognizing the validity of an oral agreement, despite the written agreement having been unsigned); Rushin v. Ussery, 298 Ga.App. 830, 832-833(1), (2), 681 S.E.2d 263 (2009) (breach of contract claim based upon oral contract to make a will where claim fell outside Statute of Frauds); McKenna v. Capital Resource Partners, IV, L.P., 286 Ga.App. 828, 832-833(1), 650 S.E.2d 580 (2007) (concluding that questions of fact existed as to whether the parties had reached a verbal settlement agreement, notwithstanding their failure to sign a written document); Cline, 260 Ga.App. at 167-168(1), 581 S.E.2d 558 (affirming jury's verdict in favor of plaintiff on a breach of an oral contract claim relating to a subdivision development); Pacrim Assocs. v. Turner Home Entertainment, 235 Ga.App. 761, 764-766(1), 510 S.E.2d 52 (1998) (breach of contract claim based upon evidence of a binding oral agreement); Danfair Properties v. Bowen, 222 Ga.App. 425, 474 S.E.2d 295 (1996) (affirming jury verdict awarding plaintiff commissions based upon an oral employment agreement); Gen. Hosps. of Humana v....