Kent State University v. Ford

26 N.E.3d 868 (2015)

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Nature of the Case

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Facts

D and P executed an Employment Contract, employing D as the head men's basketball coach for a period of four years, with an option for a fifth year. The Contract included his salary, supplemental salary, and various incentives based on performance. In the contract, D recognized that his promise to work for P for the entire term of this four (4) year Contract is of the essence of the Contract and that D was making a highly valuable investment in his continued employment by entering into this Contract and its investment would be lost were he to resign or otherwise terminate his employment prior to the expiration of this Contract. As liquidated damages D was to pay an amount equal to his base and supplemental salary, multiplied by the number of years remaining on the Contract. If D terminated his employment prior to the contract's expiration and is employed or performing services for a person or institution other than P, D was to pay an amount equal to the balance of the then-current total annual salary due for the remaining amount of the term of this Contract. In April 2010, they renegotiated and executed a new Employment Contract, lasting for a term of five years, which increased his salary and supplemental salary by a total of $100,000, for a total salary of $300,000. The same liquidated damages provision was retained. In 2011, D made P aware of his conversations with Bradley University and expressed his possible interest in taking a coaching position there. D reminded P of the liquidated damages provision. D accepted the position at Bradley University, at an annual salary of $700,000. P hired Coach Robert Senderoff in early April 2011 to replace D. P sued D. P testified that the liquidated damages clause was included to provide coaching continuity, which aids in recruiting players. P did not know of any players who left the program or of any specific recruits that may have decided not to attend P because of D's departure. Regarding potential damages resulting from D's departure, season ticket sales, and advance ticket sales were 'behind.' It is also noted that there are often large 'staff transitional costs' when a head coach leaves. D testified that liquidated damages 'make up some of the differences' from the loss in ticket sales, advertising, recruiting and 'having to start all over again' when a coach leaves prematurely. D filed a Motion for Summary Judgment arguing that no damages were suffered as a result of his departure. He asserted that the liquidated damages clause was a 'punitive deterrence of breach,' and the amount was disproportionate to any anticipated or actual damages. P filed a motion for summary judgment. The court found for P in that D breached his employment contract and that the liquidated damages provision was enforceable and D owed P $1.2 million. D appealed.