Robert J. Young Company v. Nashville Hockey Club Limited Partnership

CourtCourt of Appeals of Tennessee
DecidedMarch 26, 2008
DocketM2006-2511-COA-R3-CV
StatusPublished

This text of Robert J. Young Company v. Nashville Hockey Club Limited Partnership (Robert J. Young Company v. Nashville Hockey Club Limited Partnership) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Robert J. Young Company v. Nashville Hockey Club Limited Partnership, (Tenn. Ct. App. 2008).

Opinion

IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE September 11, 2007 Session

ROBERT J. YOUNG COMPANY v. NASHVILLE HOCKEY CLUB LIMITED PARTNERSHIP

A Direct Appeal from the Chancery Court for Davidson County No. 05-1271 II The Honorable Carol McCoy, Chancellor

No. M2006-2511-COA-R3-CV - Filed March 26, 2008

This case arises from a contract dispute between the parties. The Appellant herein, Nashville Hockey Club, entered into a “Sponsorship Agreement” with the Appellee herein, Robert J. Young Company. Subsequently, the parties agreed to change their agreement. As a result, the parties entered into a subsequent “Letter of Agreement.” When a players’ strike occurred, Appellee wished to cancel the contract. Appellant claimed that the “Sponsorship Agreement,” and particularly the force majeure clause contained therein, were not superseded by the “Letter of Agreement.” The trial court granted summary judgment against Appellee and, following a hearing on Appellant’s counter- claim, granted judgment in favor of Appellant but did not award damages based upon its finding that Appellant had mitigated all of its damages. Appellant appeals on the issue of damages. Appellee appeals on the issue of what, if any, agreement exists between the parties. Finding that the plain language of the “Letter of Agreement” supports a finding that same supersedes the “Sponsorship Agreement,” we reverse and remand.

Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Reversed and Remanded

W. FRANK CRAWFORD , J. delivered the opinion of the court, in which ALAN E. HIGHERS, P.J., W.S. and JEFFREY STEWART , SP.J., not participating.

Robert J. Walker and John L. Farringer IV of Nashville, Tennessee for appellant, Nashville Hockey Club Limited Partnership

Ralph W. Mello of Nashville, Tennessee for Appellee, Robert J. Young Company

OPINION

The material facts of this case are undisputed. Robert J. Young Company (“RJY,” or “Appellee”) and the Nashville Hockey Club Limited Partnership (“NHC,” or “Appellant”) first discussed entering into a sponsorship agreement in 1997. On February 20, 1998, the parties entered into a “Letter of Intent.” Thereafter, on September 1, 1998, the parties entered into a “Sponsorship Agreement.” By its own terms, the “Sponsorship Agreement” was to run from July 1, 1998 until June 30, 2001. Under the “Sponsorship Agreement,” RJY agreed to purchase fourteen season tickets to Predator hockey games and to pay an annual sponsorship fee (paid in six equal installments) for two dasher-board panels. The NHC, in turn, agreed to pay for certain office equipment and related services from RJY. Section Eleven of the “Sponsorship Agreement” contains a force majeure clause, which reads as follows:

11. FORCE MAJEURE.

In the event compliance with any of the parties’ obligations under this Agreement is impractical or impossible due to any emergency, including, but not limited to, player strikes, management lockouts, labor disputes, embargoes, flood, earthquake, storm, lightning, fire, epidemic, acts of God, war, national emergency, civil disturbance or disobedience, riot, sabotage, terrorism, threats of sabotage or terrorism, restraint by court order or order of public authority, failure of machinery or equipment or any other occurrence beyond the parties’ reasonable control (each such occurrence being an “Event of Force Majeure”), then the time for performance of such obligations shall be extended for a period equal to the duration of the event of Force Majeure.

The parties also agreed, in Section Thirteen of the “Sponsorship Agreement,” to arbitrate any disputes arising out of the agreement, and for payment of reasonable attorneys’ fees and other expenses for the prevailing party.

Within a short period of entering into the “Sponsorship Agreement,” RJY approached the NHC to consider changing the terms of the “Sponsorship Agreement.” Specifically, RJY wanted to trade in its season tickets for one of the luxury suites at the Gaylord Entertainment Center (the “Arena”). RJY also proposed the creation of a business center for use by the luxury suite owners at the Arena that would be named the “Robert J. Young Business Center.” In addition, RJY asked to be named the official sponsor of the Predators for a ten-year-term–a title it could advertise on its trucks, website, and marketing materials.

Following negotiations, in late October 1998, the parties entered into a “Letter of Agreement.” The “Letter of Agreement” reads, in pertinent part, as follows:

The suite is listed at $100,000 per year. We agreed to the following compensation structure:

• Term: 10 years, 1998-2008 • Annual Escalation: 3% increase commencing in year four. • Compensation: $75,000 in year one.

-2- • Trade In: R.J. Young will return four club seats and 10 upper level season tickets ($25 seats). • Barter Agreement: R.J. Young to provide the following equipment over the term of the agreement 1. Copier fax for the business center, 2. A high speed copier, 3. A high speed digital copier/printer.

* * *

I. Sponsor Agrees to Provide Club:

Suite Licensing Fee Sponsorship Fee

Year 1, 1998-99 $ 75,000.00 $ 125,000.00 Year 2, 1999-2000 75,000.00 128,750.00 Year 3, 2000-2001 75,000.00 132,812.50 Year 4, 2001-2002 77,250.00 136,591.00 Year 5, 2002-2003 79,568.00 140,689.00 Year 6, 2003-2004 81,955.00 144,910.00 Year 7, 2004-2005 84,414.00 149,257.00 Year 8, 2005-2006 86,949.00 153,735.00 Year 9, 2006-2007 89,554.00 158,347.00 Year 10, 2007-2008 92,241.00 163,097.00

In exchange, the NHC agreed to pay RJY for certain office equipment, leasing, and service for ten years.

The parties performed consistent with the terms of the above “Letter of Agreement” from 1998 until 2004. RJY was provided Suite C-15, the business center on the main suite level at the Arena was named the “Robert J. Young Business Center,” and the NHC paid for the agreed-upon copy equipment and services from RJY.

The Predators’ 2004-2005 season was delayed and eventually canceled as a result of work stoppage arising from the expiration of the collective bargaining agreement between NHL players and NHL owners. In response to the work stoppage, by letter of December 7, 2004, RJY informed the NHC that it was “canceling” the contract. By letters dated January 11, 2005 and January 26, 2005, the NHC informed RJY that the NHC believed that RJY had no legal basis to terminate the contract. Specifically, the NHC raised the force majeure clause of the “Sponsorship Agreement.” In response, RJY took the position that the October 1998 “Letter of Agreement,” supra, superseded the “Sponsorship Agreement,” and that this “Letter of Agreement” contained no force majeure

-3- clause. Consequently, RJY contends that, because the players strike had frustrated the purpose of the contract, it was justified in ceasing performance.

On May 18, 2005, RJY filed suit against the NHC.1 In its Complaint, RJY seeks rescission of the October 1998 “Letter of Agreement” due to alleged “frustration of commercial purpose.”2 On July 8, 2005, the NHC filed its Answer and Counterclaim.3 In its Answer, the NHC denies the material allegations of the Complaint. In its Counterclaim, the NHC alleges breach of contract on the part of RJY, and cite to the force majeure clause of the original “Sponsorship Agreement.”

Following entry of RJY’s “Second Amended Complaint,” see fn. 2, the NHC filed a Motion for Summary Judgment on July 14, 2006, seeking judgment on all of RJY’s claims. The NHC’s motion was granted by Order of September 13, 2006, thereby leaving only the counterclaims asserted by the NHC. These issues were tried by the court, sitting without a jury, on September 11 and 12, 2006.

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