Tuesday, August 3, 2010

Roy Nelson Could be Liable for Zuffa's Expenses and Damages in Connection with Roy Jones Jr.'s Square Ring Lawsuit

Robert Joyner over at MMAFA described a lawsuit filed in March 2010 by Roy Jones Jr.'s Square Ring, Inc. against MMA fighter Roy "Big Country" Nelson and Zuffa, LLC, parent company of the UFC.

Courtesy of Joyner, I have now had a chance to review the complaint, which is nicely described over at MMAFA. 

According to the allegations in the complaint, under the terms of an agreement between Nelson and SRI, SRI allegedly agreed to promote Nelson in a MMA bout against Jeff Monson scheduled for March 21, 2009 in Pensacola, Florida.  The bout was allegedly televised as an undercard featuring as the main event a boxing match between Roy Jones, Jr. and Omar Sheika.  SRI alleges that the agreement with Nelson provided in Paragraph 11 that:

SRI would have certain exclusive first negotiation rights with respect to Nelson's future bouts and thereafter under certain conditions a right to match any offers Nelson received for such future bouts. Under the terms of the Agreement, Nelson agreed that he would not engage in any "Future Bouts" (as defined in the Agreement) except in accordance with the provisions of Paragraph 11 thereof.
According to the complaint, SRI "engaged Nelson to assist Plaintiffs [sic] licensed matchmaker [] with respect to a mixed boxing and MMA event (the "Primm Event") that Plaintiff was promoting on May 24, 2009 in Primm, Nevada."

Note, I am not sure what this really means, i.e. how exactly Nelson was allegedly assisting SRI's matchmaker, and whether this was something set forth in the contract -- the complaint doesn't really spell it out.

Nonetheless, the complaint alleges that on or around the time of the Primm Event:
[Zuffa's] Vice President of Government and Regulatory Affairs, Mr. Marc Ratner, attended the Primm Event. Plaintiff s Chief Executive Officer, Mr. John Wirt, spoke with Mr. Ratner at the Primm Event and told Mr. Ratner that Mr. Nelson was not only assisting SRI's matchmaker for the MMA bouts on the Primm Event, but also that Mr. Nelson was under contract with SRI as a fighter. Mr. Ratner also spoke separately with Mr. Nelson while at the Primm Event.
The crux of the complaint is that after the Primm Event, Nelson allegedly:
breached the Agreement by negotiating first with Zuffa, by not providing SRI with a right to match Zuffa's offer and by signing an exclusive promotional agreement [] with Zuffa.  Nelson further breached the Agreement by participating in the Ultimate Fighter Season 10 series of MMA bouts, including but not limited to, an MMA bout against Kimbo Slice on June 10, 2009 []. 
SRI asserts claims for:  (1) breach of contract (against Nelson); (2) breach of the implied covenant of good faith and fair dealing (against Nelson); (3) conspiracy (against Zuffa and Nelson); (4) intentional interference with contractual relations (against Zuffa); (5) interference with prospective economic advantage (against Zuffa); (6) unjust enrichment (against Zuffa); and (7) declaratory relief.

I checked the docket and it appears that Zuffa asserted a cross-claim against Nelson on May 3, 2010 and that Nelson asserted a counterclaim against SRI on June 17, 2010.

I have not seen either of these documents, but my guess is that Zuffa's counterclaim against Nelson is for contractual indemnification -- especially given the amount of time and money Zuffa asserts is involved in drafting its contracts.  

That is, my guess is that under Zuffa's agreements with Nelson, Nelson has agreed to indemnify Zuffa for any losses Zuffa incurs (including attorney's fees, costs, judgments, etc.) arising from or relating to Nelson's breach of any agreements with any other promoter, which would include all of these claims that undoubtedly arise from Nelson's alleged breach of his agreement with SRI.

So, although people may assume that this litigation is causing Zuffa some pain (and litigation is always a hassle), I predict that Zuffa is likely to be covered for any of its expenses relating to this lawsuit and those expenses are likely to come from Nelson's pocket -- or perhaps will be offset from Nelson's purse, as Joyner notes, he is fighting Junior Dos Santos later this week.

Fight Lawyer