A federal judge from the District of Kansas has delivered a mixed ruling to a professional sports team, which sought to recover the salary and the workers compensation award from a player, who allegedly hid the fact that he had had a history of concussions, and then suffered a debilitating one while being employed by the team.
While the court granted two-thirds of the summary judgment motion to the player, thus preventing the team’s bid to recover the workers compensation award or attorneys’ fees, the court did allow the team’s effort to recover damages for the alleged fraud since the defendant and plaintiff had entered into a contract.
By way of background, the plaintiff in the case was WIHO, L.L.C., the former owner of the professional ice hockey club known as the “Wichita Thunder.” The Thunder is a member of the Central Hockey League. The defendant was its former employee, Matt Hubbauer, a Canadian citizen.
In 2005, prior to his employment with the plaintiff, the defendant suffered a concussion while playing professional hockey for the Columbia Inferno. The report of one of the defendant’s treating physicians, Dr. Evan Ekman, states that he was doubtful the defendant would return to playing hockey. The defendant was also treated for his concussion by Dr. Anthony Kaufmann, who stated in his report that it would be “potentially dangerous” for the defendant to return to competitive hockey play.
On or about October 3, 2010, just before his employment with the plaintiff, Hubbauer underwent an orthopedic and medical physical examination performed by the Wichita Thunder’s team physician, Dr. Kenneth Jansson, and his staff. The team alleged that during the physical, Hubbauer represented to Dr. Jansson and his staff that he had not had any prior serious head injuries. After the physical, the doctor medically cleared Hubbauer to play hockey for the 2010-2011 hockey season.
On October 13, 2010, Hubbauer entered into a Standard Player Agreement (SPA) to play hockey for the team during the 2010-2011 season. Under the SPA, Hubbauer was obligated to play one hockey season, beginning October 15, 2010, and the team was obligated to pay him $700 per week. The SPA provides:
“Player understands and recognizes that he is competing with other players for a position on the TEAM’s roster. If at any time, in the sole judgment of the TEAM, PLAYER’s skill and performance under this Agreement has not been satisfactory as compared to that of the other players competing for positions in the CHL, then the TEAM may release PLAYER and immediately terminate this Agreement thereby ending the payments provided herein.”
The SPA also states: “Player agrees to report at the time and place fixed by the TEAM and/or CHL in excellent physical and mental condition and to maintain this level of conditioning throughout the term of this Agreement.”
With regard to player injury, the SPA states:
“If PLAYER is injured in the performance of his services under this Agreement and promptly reports such injury to the TEAM’s physician or trainer, then (1) PLAYER will receive such medical and hospital care during the term of this Agreement as the TEAM’s physicians may deem necessary; and (b) PLAYER will continue to receive his weekly salary for the season of injury only and for no subsequent period covered by this Agreement, as PLAYER is physically unable to perform all services required of him under this Agreement because of such injury.”
Before signing the SPA, Hubbauer did not disclose to the team or Dr. Jansson the opinions of Drs. Ekman or Kaufmann.
The SPA incorporates by reference the Collective Bargaining Agreement (CBA) for the Central Hockey League. Under the CBA, Plaintiff is obligated to provide all players on the active roster and injured reserve with lodging during the season. The CBA also required the team to obtain workers’ compensation coverage or provide an equivalent benefit to its players.
On October 15, 2010, Defendant suffered a concussion while playing in a Thunder hockey game in Tulsa, Oklahoma. As a result of the concussion, the team placed him on injured reserve, and Hubbauer did not play the rest of the season. On October 20, 2010, Hubbauer met with team physician Dr. Richard Leu. Dr. Leu’s dictated report from that appointment noted that Hubbauer reported three to four previously diagnosed concussions with the last one being several years prior. On November 10, 2010, Hubbauer met with team physician Dr. Jansson. Dr. Jansson’s dictated report from that appointment states: “The patient states that he has had a history of concussions. He has played hockey all of his life. He has had about four concussions from the year 1999 to the year 2004. He had done well until recently.”
On April 22, 2011, Hubbauer initiated a claim for workers’ compensation benefits in the Workers’ Compensation Court of the State of Oklahoma. On January 4, 2013, the court awarded him workers’ compensation benefits, which included $23,912 in compensation for temporary total disability from June 1, 2011, to May 6, 2012, and $17,732.70 for permanent partial disability. The court also ordered the team to pay all reasonable and necessary medical expenses incurred as a result of the injury, along with miscellaneous travel expenses and court costs. The team appealed the award, and on appeal, the appellate court affirmed the award in part and modified the award in part, reducing the total award for wage compensation to $39,292.70.
On September 4, 2012, the team sued in the District Court of Sedgwick County, Kansas. Hubbauer removed the case to federal court on October 15, 2012. The team claimed that Hubbauer misrepresented his prior medical history when he applied to be one of team’s hockey players, that the team relied on Hubbauer’s misrepresentations when entering into the SPA that Hubbauer’s misrepresentations were false and fraudulent, and that Hubbauer’s conduct was to the team’s detriment. The team claims that had it known about Hubbauer’s true medical history before entering into the SPA, the team would not have employed him and Hubbauer would not have suffered another head injury. The team sought damages of $2,500 for housing for Defendant, $16,100 in salary, $41,368.61 in workers’ compensation benefits paid for Hubbauer, $2,500 for his medical expenses, and attorneys’ fees of $15,000 incurred in defending the Oklahoma workers’ compensation litigation.
Hubbauer moved for summary judgment, making three arguments — that the team’s claim is governed by the terms of the SPA, that the team is precluded from recovering the workers’ compensation benefits paid to him under the doctrines of collateral estoppel and res judicata, and that the team cannot recover the attorney’s fees it expended in defending Hubbauer’s workers’ compensation claim.
The court agreed with the team on the first argument.
“Under Kansas law, a party fraudulently induced to enter into a contract has the right to (1) rescind the contract or (2) affirm the contract, retain the property the party received, and recover damages for the difference in value between what he received and what he should have received,” it wrote.
“Here, it’s not clear from the parties’ briefs whether the team discovered Hubbauer’s prior concussive history during the term of the SPA or after it was completed. Regardless, Kansas law allows the team to affirm the SPA and sue for the damages it sustained as a result of Hubbauer’s alleged fraud. The defendant has not presented any argument to the contrary. Indeed, Hubbauer’s arguments focus solely on whether the team has the right to rescind the SPA after it was already completed. Because the team is not seeking to rescind the contract, the court denies summary judgment on this issue.”
However, the court was less charitable to the team on the second argument because the award had already been “reviewed” and “decided” by an Oklahoma Workers’ Compensation Court.
“The court finds that collateral estoppel bars the team’s recovery of Hubbauer ‘s workers’ compensation benefits,” it wrote. The Oklahoma Workers’ Compensation Court reviewed the facts of Hubbauer’s claim for workers’ compensation and decided, under Oklahoma law, that Hubbauer was entitled to benefits. By seeking to recover such award in this action, the team is essentially asking the court to reach the opposite conclusion. The court declines to do so.”
Finally, the court was unmoved by the last argument, finding that the team “has not pointed to any contractual or statutory provisions that would allow it to recover its attorneys’ fees from the Oklahoma workers’ compensation case.”
WIHO, L.L.C. v. Matt Hubbauer; D. Kan.; Case No. 12-CV-1386-EFM-GLR, 2014 U.S. Dist. LEXIS 120777; 8/29/14
Attorneys of Record: (for plaintiff) Alexander B. Mitchell, II, LEAD ATTORNEY, Alexander Mitchell Law Office, Wichita, KS. (for defendant) Brian L. White, Gregory S. Young, LEAD ATTORNEYS, Hinkle Law Firm LLC – Epic Center, Wichita, KS.
