A Pennsylvania appeals court has affirmed a trial court’s grant of a preliminary injunction in a case where a professional basketball player sought to stop his former agent from sending letters to companies that were negotiating with the basketball player to endorse their products.
Darko Milicic of Serbia was 16 years old when he signed a contract with The Basketball Marketing Company Inc., which was expected to deliver compensation and products in exchange for his endorsement.
While the plaintiff was “virtually unknown in the United States at the time the agreement was executed,” his status changed dramatically to where he was projected in the spring of 2003 to be an N.B.A. lottery pick. As that realization settled in, the plaintiff proposed a buyout of the agreement.
The parties sought to determine the market value of a proposed buyout by speaking to other companies to determine their interest. After a figure was reached, the plaintiff made a buyout offer to the defendant, which declined to accept the offer.
In fact, the defendant began writing letters to Adidas America (Adidas) and Reebok International Ltd. (Reebok), both of which were believed to have offered endorsement contracts to plaintiff. Specifically, it claimed that it was “involved in a contractual dispute” with the plaintiff and that the “agreement is valid and enforceable and will remain in force for several more years.”
After a pending agreement with Adidas was allegedly spoiled, the plaintiff filed a complaint seeking a Temporary Restraining Order, a Preliminary Injunction and Declaratory Relief. The trial court granted the TRO and after a hearing, and consideration of briefs filed by both parties, granted the Preliminary Injunction. That ruling spawned the current appeal.
“The crux” of defendant’s appeal was that the trial court erred by concluding that the plaintiff had proven the four essential prerequisites necessary for injunctive relief. However, the appeals court sided with the plaintiff.
(1) Did the plaintiff’s claim have a strong likelihood of success on the merits?
“Pennsylvania law recognizes, except as to necessities, the contract of a minor is voidable if the minor disaffirms it at any reasonable time after the minor attains majority. Pankas v. Bell, 413 Pa. 494, 498, 198 A.2d 312, 313 (1964), Aetna Cas. & Sur. Co. v. Duncan, 972 F. 2d 523, 526 (3d Cir. 1992).” Further, the plaintiff sent a letter “just 11 days after his 18th birthday, … a reasonable time” after the plaintiff reached an age of majority.
(2)Was Injunctive relief necessary to prevent immediate and irreparable harm that could not be adequately compensated by the awarding of monetary damages?
The “business opportunity and market advantage losses may aptly be characterized as irreparable injury for purposes of equitable relief. See West Penn Specialty MSO, Inc. v. Nolan, 1999 PA Super 218, 737 A2d. 295, 299 (Pa. Super. 1999).”
3) Would greater injury have occurred from denying the injunction than from granting the injunction?
“It confounds the Court that Appellant, a corporation of great magnitude, whose business may be said to be based in contract law, not only failed to have a guardian appointed for [Appellee] but as they have failed to produce any evidence that [Appellee] was represented by an attorney, the Court finds [Appellee] entered into this agreement without being advised of his rights,” wrote the court.
“Not only is harm to the petitioner considered, but harm to the public is an additional consideration in the issuance or denial of a preliminary injunction. Valley Forge Historical Society v. Washington Memorial Chapel, 493 Pa. 491, 426 A.2d 1123 (1981). The public policy consideration underlying the rule which allows a child to disaffirm a contract within a reasonable time after reaching the age of majority is that ‘minors should not be bound by mistakes resulting from their immaturity or the overbearance of unscrupulous adults.’ Simmons, 670 F. Supp. 140 at 144.”
4) The preliminary injunction restored the parties to the status quo that existed prior to the wrongful conduct?
“Enjoining Appellant from further interfering with [Appellee’s] ability to contract will place the parties where they were prior to Appellant’s wrongful conduct. The sought-after relief in an injunctive action is to be returned to one’s position prior to the improper actions of the opposing party. Anchel v. Shea, 2000 PA Super 289, 762 A.2d 346, 351 (Pa. Super. 2000).”
Turning to the second issue raised on appeal, that “the trial court erred by finding that the conduct which (the defendant) engaged in was actionable for purposes of the issuance of a preliminary injunction,” the appeal court found that the “conduct constituted intentional interference with prospective contractual relations … with the express purpose of halting such negotiations.
“Therefore, the trial court certainly had ‘apparently reasonable grounds’ upon which to issue a preliminary injunction. See Allegheny Anesthesiology Associates, 826 A.2d at 891.” Milicic v. The Basketball Marketing Co., Inc. d/b/a AND 1; Superior Ct. Pa.; 2885 EDA 2003, 8/25/04