Coach Loses Breach of Contract Claim for Lack of ‘Detrimental Reliance’

Jun 5, 2009

A Hawaii state appeals court has affirmed a lower court’s finding that a school district and several individual defendants did not breach an oral contract with a prospective coach when it rescinded its job offer to the coach.
Central to the court’s finding was its conclusion that the coach did not “rely” on the “conditional offer” in making his decision not to pursue other jobs.
The dispute surfaced when Kelli Morgado, a head football coach on Kauai, was fired in the spring of 2007. Shortly thereafter, the school reconsidered, asking him back to be re-interviewed for the position. Morgado was then offered the job on March 20 and given two weeks to consider. But the next day, the administration rescinded the offer and gave the job to a former assistant, who had not applied for the job.
Morgado sued, and the defendants successfully moved for summary judgment.
On appeal, Morgado argued that “the circuit court erred by (1) denying his motion for preliminary injunction and (2) granting ‘the defendants’ motion for summary judgment, where genuine issues of material fact existed as to whether the defendants breached an oral contract to keep the defendants’ conditional offer open for a period of time (breach of contract claim) and violated Morgados free speech and due process interests (free speech/due process claim).”
In evaluating the arguments, the appeals court noted that the defendants made a conditional offer of the position to Morgado, subject to seven conditions. Further, “the defendants offered to give Morgado a period of at least one week to decide whether to accept the conditional offer,” wrote the appeals court. “Morgado did not accept or reject the conditional offer; and on or about the next day, the defendants rescinded the conditional offer. At issue is whether an oral contract, providing Morgado a certain time period within which to make his decision, was actually created.”
The court added that even if “the parties in fact agreed upon a certain time period, the defendants could nevertheless have rescinded their offer before the end of that period, unless Morgado gave them consideration or a consideration substitute (e.g., detrimental reliance). See Ravelo v. County of Hawaii, 66 Haw. 194, 199-200, 658 P.2d 883, 887 (1983)”
It then turned to Morgado’s use of the doctrine of promissory estoppel and his argument that the defendants’ offer of a time period “became a binding ‘option contract’ when he detrimentally relied upon it by, inter alia, turning down offers for similar positions at two other high schools. Nothing in the record, however, indicates that Morgado actually committed these acts of reliance during the brief period (one day) between the defendants’ offer of a time frame and the defendants’ rescinder of their conditional offer.”
Similarly, the appeals court agreed with the lower court on the due process claim.
“The Fourteenth Amendment due process clause does not guarantee a football or baseball coach a job at a public high school even if his teams always win and his players idolize him. The ultimate decision who is the best man to coach a state high school athletic team rests with state school officials, not with the federal courts. In Smith v. Board of Education of Urbana School District No. 116 of Champaign County, Illinois, 708 F.2d 258 (7th Cir. 1983)”
The appeals court went on to write that “it might be somewhat easier for plaintiffs to find new coaching positions at other schools if potential employers did not know that the school board no longer wants plaintiffs as coaches. But the Constitution did not require that the school board act secretly when it replaced plaintiffs so that they might have an easier time finding new employment. Board of Regents v. Roth, 408 U.S. 564, 578 n.16, 92 S. Ct. 2701, 2710 n.16, 33 L. Ed. 2d 548. It required only that members of the school board not make public statements so critical of plaintiffs’ coaching abilities that it would be virtually impossible for them to find new employment in similar coaching positions or so critical of their persons that people in their community would no longer want to associate with them. The statements plaintiffs allege are not of these types. Id. at 265
“Similarly, in Lagos v. Modesto City Schools District, 843 F.2d 347 (9th Cir. 1988), Lagos, a head coach of a public high school baseball team, alleged that a principal, vice principal, and athletic director violated his property and liberty interests when they conspired to deny him renewal of his year-to-year coaching position. Id. at 348.”
In the above case, the 9th Circuit held:
“Lagos also has no constitutionally recognized liberty interest infringed by the defendants. He has not been stigmatized by his non-renewal; he has not been so burdened that he cannot take advantage of other employment opportunities. Who is a good coach is apt to be the subject of debate. It is no shame to lose one’s job in such an argument. We were assured in oral argument that [Lagos’s] coaching record was ‘excellent.’ We can understand his pain at not being renewed, at not having the continued opportunity to do what he loves to do. But his disappointment is not a loss of that liberty which the Constitution guarantees.
“We agree with the courts’ holdings in Smith and Lagos that the Fourteenth Amendment due process clause does not guarantee a coach a job at a public high school. As the Smith court stated, ‘[t]he ultimate decision [of] who is the best man to coach a state high school athletic team rests with state school officials, not with the . . . courts.’ Smith, 708 F.2d at 261. Where the defendants’ decision and comments, which Morgado alleges violated his liberty and property interest, were not ‘so critical’ that his standing and association in his community would be seriously damaged, people in his community would no longer want to associate with him, a stigma or disability foreclosing his freedom to take advantage of other employment opportunities would be imposed on him, or finding employment in similar positions would otherwise be ‘virtually impossible,’ the circuit court was not wrong in concluding that no genuine issues of material fact existed as to Morgado’s due process claim.”
Christian Kelii Morgado v. Daniel Hamada et al. Inter Ct. App. Haw.; NO. 29026, 2009 Haw. App. LEXIS 170; 4/22/09
Attorneys of Record: (for plaintiff) Eric A. Seitz, Lawrence I. Kawasaki, Della A. Belatti, (Eric A. Seitz, Attorney at Law, A Law Corporation). (for defendants) James E. Halvorson, Jeffrey A. Keating, Deputy Attorneys General. Daniel Hamada; Linda L.T., Smith; Deron Doi; Penny Vess; Ross Shimabukuro; and Cynthia Matsuoka; Michael L. Lam, Margaret E. Parks, Michael G. Kozak, (Case Lombardi & Pettit), for Defendant-Appellant Linda L.T. Smith, in her individual capacity.


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