A federal judge from the Eastern District of Virginia has confirmed an arbitration award that requires Baltimore Ravens linebacker Terrell Suggs to pay a quarter of million dollars to the family of his former agent.
In so ruling, the court affirmed that Suggs owed the money, $234,800 plus interest, to the family even though the agent, Gary Wichard, had died and Suggs had signed on with a new agent.
On January 3, 2003, Wichard entered into a Standard Representation Agreement (SRA) with Suggs. On or about July 15, 2009, Suggs executed a five-year contract with the Baltimore Ravens, which Wichard negotiated on his behalf. The 2009 contract included an option for the 2014 season at a salary of $7.8 million. The team exercised this option in March 2010, which extended the 2009 contract term until the end of the 2014 season. Pursuant to Section 4 of the Wichard SRA, Wichard was entitled to receive three percent of the compensation received by Suggs for his services rendered in negotiating the 2009 contract.
After Wichard’s death on March 11, 2011, Suggs signed a new SRA with Joel Segal on November 15, 2011. On February 17, 2014, Segal renegotiated and executed a new five-year contract on Suggs’ behalf. The 2014 contract provided for Suggs to receive $12 million for the 2014 NFL Season, exceeding the $7.8 million previously negotiated by Wichard for the same season under the 2009 contract.
Paragraph 12 of both the Wichard and the Segal SRA provides that when someone other than the original contract advisor renegotiates a contract, which the original contract advisor had previously negotiated, and the renegotiated compensation exceeds the original compensation, the player still owes the original contract advisor commissions on the compensation amount negotiated by the original contract advisor.
Suggs voluntarily paid the commissions due on amounts received by him under the 2009 contract for the 2009 through 2012 NFL seasons. Suggs then failed to pay the amount owed by him to the Wichard Estate on account of the compensation earned by him during the 2013 NFL season (2013 Commission). Both the Estate and Suggs filed grievances with the National Football League Players Association (NFLPA), pursuant to Section 5 of the NFLPA Regulations Governing Contract Advisors, as the SRA required all disputes thereunder to be resolved exclusively through the NFLPA’s arbitration procedures. The NFLPA’s regulations provide that its arbitration procedure shall be the exclusive method for resolving all disputes concerning “the meaning, interpretation, or enforcement of a fee agreement.”
An arbitration hearing was held in the fall of 2014 before arbitrator Roger P. Kaplan. On December 4, 2014, Kaplan found that Suggs was obligated to pay commissions in the amount of $172,800 to the Wichard Estate as a result of compensation Suggs received for the 2013 NFL season. The court confirmed the first award on March 25, 2015, and entered a money judgment against Suggs, upon which the Wichard Estate collected in full. In confirming that award, the court found that the first award drew its essence from the SRA, that the SRA did not violate public policy, and that Kaplan did not act in manifest disregard of the law. Wichard v. Suggs, 95 F.Supp.3d 935, 945-47 (E.D. Va. 2015).
Suggs then failed to pay the amount owed to the Wichard Estate as a result of the compensation he received for the 2014 NFL season. The Wichard Estate filed a grievance against Suggs on April 24, 2015, and on August 5, 2015, Suggs answered the grievance and asserted defenses identical to those previously rejected in the first award and this court’s subsequent confirmation of that award.
On October 26, 2015, arbitrator Kaplan held an arbitration hearing (the second arbitration), wherein both petitioner and Suggs had the opportunity to present evidence in support of their respective positions. Because the issues raised in the second arbitration were “extremely similar to those raised in first arbitration,” according to the court, Arbitrator Kaplan admitted the transcript of the first arbitration hearing into evidence without objection. On December 16, 2015, Arbitrator Kaplan issued his opinion and award, wherein he found, inter alia, that Suggs owes the Estate $234,800 in commissions on account of compensation received by Suggs during the 2014 NFL season.
However, Suggs did not pay the award, prompting the estate to file a petition to confirm the award.
The court noted from the outset that “Federal courts favor arbitration agreements and awards stemming from such agreements. Arrowhead Global Solutions, Inc. v. Datapath, Inc., 166 F. App’x 39, 43 (4th Cir. Feb. 3, 2006).” Further, “federal courts must confirm an arbitration award absent ‘a showing of one of the grounds listed in the Federal Arbitration Act, or if the arbitrator acted in manifest disregard of law.’ Apex Plumbing Supply, Inc. v. U.S. Supply Co., Inc., 142 F.3d 188, 193 (4th Cir. 1998).”
The court went on to write that arbitrator Kaplan “based his findings in the second award on his previous interpretation of the SRA made in the first award,” which was that Suggs’ obligation “was established by Wichard’s successful negotiation of the NFL player contract on Suggs’ behalf that ran through the 2014 NFL Season.”
The court also awarded prejudgment interest from December 16, 2015 to the date of this opinion and accompanying order, pursuant to California state law.
Maire Wichard, In Her Capacity as Executor of The Estate of Gary Wichard v. Terrell Suggs; E.D. Va.; 1:15cv1722 (JCC/TCB), 2016 U.S. Dist. LEXIS 46156; 4/5/16
