DG Sports Agency, LLC v. First Round Management, LLC, Thiago Alves and Malki Kawa , 2015 Fla. App. LEXIS 12768 ( 2015 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
DG SPORTS AGENCY, LLC,
Appellant,
v.
FIRST ROUND MANAGEMENT, LLC, THIAGO ALVES, and MALKI
KAWA,
Appellees.
No. 4D14-862
[August 26, 2015]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; John B. Bowman, Judge; L.T. Case No. 10-31641 (02).
Vincent E. Schindeler of Vincent E. Schindeler, P.A., Fort Lauderdale,
for appellant.
Darren A. Heitner of Heitner Legal, P.L.L.C., Bay Harbor Islands, for
appellee First Round Management, LLC.
LEVINE, J.
We are asked to answer the following question: whether the trial court
erred in entering a directed verdict in favor of appellee First Round
Management, LLC, regarding liability, where the only issue before the trial
court was damages, since a default had already been entered in this case.
We find that the trial court erred by entering a directed verdict for appellee,
since a default had already been entered against appellee. Appellant had
a right to rely on the default entered against appellee, and the trial court
should have made a factual determination of the amount of damages, if
any, due to the liability already determined by the default. We, thus,
reverse and remand.
In June 2008, appellant DG Sports Agency, LLC (“DG”), and Thiago
Alves, a mixed martial artist who competes in Ultimate Fighting
Championships, entered into an athlete representation agreement.
Pursuant to that agreement, DG would “provide advisement, counseling
and assistance for Athlete in negotiation, procurement and execution of
any marketing contract, endorsement agreement, personal appearance,
speaking engagement, sponsorship contract, licensing agreement,
charitable pursuit, memorabilia agreement, and public relation matter.”
DG would “retain 30% of the gross contract price of any marketing
contract, endorsement agreement or sponsorship contract.” DG would
also receive “30% of any monies acquired by athlete on any Television
commercial, advertising contract, modeling contract or any other services
agent acquires for athlete.” Finally, DG was “responsible for collecting all
fees for contracts negotiated by Agent on behalf of Athlete and for payment
of said fees to Athlete and his representatives.”
The agreement would remain in effect for one year and could be
terminated by the parties only in writing. Alves would be obligated to pay
DG for any contract entered into during the one-year term of the contract.
A contract would be deemed “entered into” if Alves entered into the
contract during the term of the one-year contract and if “the essential
terms of the contract were procured by the Agent.” The agreement also
required Alves to warrant and represent that he had “not signed a contract
with another agent for the services that are the subject matter of this
agreement.” The agreement also required DG to warrant that it “is licensed
properly and registered to carry out the obligations and perform the
services set forth in this agreement.”
In August 2010, DG filed a complaint alleging breach of contract
against Alves and tortious interference against appellees First Round
Management, LLC (“First Round”), and Malki Kawa, an agent for First
Round. The complaint alleged that one month after Alves signed the
agreement with DG, Alves then signed another representation agreement
with First Round and its agent, Kawa. DG claimed that, as a result, it was
not paid commissions owed to it.
A clerk’s default was entered against First Round. First Round moved
to set aside the default, but the trial court denied the motion. First Round
attempted to file an answer and affirmative defenses, but it was stricken.
Before trial, the parties filed a joint stipulation in which they agreed
that the following issues would be tried: “Liability of the Defendant,
ALVES, for Breach of Contract, if any. Plaintiff’s damages arising out of
ALVES’ Breach of Contract, if any. Plaintiff’s damages arising out of
Defendant’s, FIRST ROUND’S, Tortious Interference with Plaintiff’s
advantageous business relationship with ALVES, if any.” However, before
trial, the claims against Alves were dismissed pursuant to a settlement
with Alves. Thus, the only remaining issue to be considered was damages,
if any, arising out of First Round’s “Tortious Interference with [DG’s]
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advantageous business relationship” with Alves.
During the trial, it was undisputed that Alves never sent DG written
notice terminating the athlete representation agreement. Rather, Alves
only verbally terminated the agreement. DG elicited testimony from Alves
about his various sponsorships and the fees paid by those sponsorships.
According to Alves, Kawa negotiated these deals. DG’s sole agent, David
Gottesmann, testified that he negotiated a deal with Tap Out. Gottesmann
admitted that he did not attempt to negotiate any more deals after Alves
verbally terminated the agreement. Gottesmann is an attorney, but was
not admitted to the Florida Bar until two years after the parties entered
into the athlete representation agreement.
After DG rested, First Round moved for a directed verdict, which the
trial court granted, determining the following:
Okay. A couple of things the Court notes, we only have one
contract here for which there is any evidence of a potential
breach but that contract appears to have been breached by
the Plaintiff. This contract which says clearly that the agent
will be responsible for collecting all the fees negotiated. The
agent did not do that, that is a breach of this agreement.
Furthermore, another breach of the agreement, it said it
can only be terminated in writing since it was never
terminated he said I stopped working because I got an oral
notice to quit working. That’s not grounds to stop working.
That again is the agent breaching the agreement.
Let’s talked [sic] about what this agreement may or may
not be. It may be a talent agency contract in which case
there’s no testimony as to whether or not he was licensed as
a talent agent. It may also be an agreement to provide legal
services as the Court reads it counseling and assistance for
the athlete and negotiation, procurement, execution of any
marketing contract, sponsorship contract, licensing
agreements, last time I looked it seemed like that’s practicing
law. By definition of the testimony here today when I went to
law school you were not licensed as a member of the Florida
Bar at the time this agreement was entered. That may or may
not be practicing law without a license in the State of Florida.
It would however be grounds to violate and this Court is not
to recognize the agreement.
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So first I find that it simply has not been shown that it was
breached by the Defendants it was breached by the Plaintiff.
And secondly the Court has a serious question as to whether
or not it’s a valid contract in the first place. Verdict for the
defense.
Appellant appeals the trial court’s granting of a directed verdict.
“A finding of fact by the trial court in a non-jury case will not be set
aside on review unless there is no substantial evidence to sustain it, unless
it is clearly against the weight of the evidence, or unless it was induced by
an erroneous view of the law.” Holland v. Gross, 89 So. 2d 255, 258 (Fla.
1956). Further, “[w]hen a default is entered, the defaulting party admits
all well-pled factual allegations of the complaint” and is precluded “from
contesting the existence of the plaintiff’s claim and liability thereon.”
Donohue v. Brightman, 939 So. 2d 1162, 1164-65 (Fla. 4th DCA 2006)
(citation omitted). “A default terminates the defending party’s right to
further defend, except to contest the amount of unliquidated damages.”
Id. at 1164. “[A] court must consider testimony or evidence ‘to ascertain
facts upon which to base a value judgment’” when the damages are
unliquidated. Bodygear Activewear, Inc. v. Counter Intelligence Servs., 946
So. 2d 1148, 1150 (Fla. 4th DCA 2006) (citation omitted).
In the present case, First Round had previously defaulted during the
proceedings. In fact, the trial court had denied First Round’s motion to
set aside the default and struck First Round’s answer and affirmative
defenses. Thus, DG could rely on the default as acting to preclude any
contesting of its claim, and First Round was not entitled to contest DG’s
claim.
Based on the default and the parties’ joint stipulation, the only issue
remaining at trial was the question of damages, if any, due to First Round’s
tortious interference. However, rather than considering damages, the trial
court ruled only on liability. Despite the default entered against First
Round, the trial court found that DG breached the contract because DG’s
agent did not collect fees and stopped working after being told orally of his
termination, despite the fact there was no written termination given. The
trial court questioned the validity of the contract because, among several
reasons, there was no evidence that DG’s agent was a licensed talent
agent, nor was he a member of the Florida Bar at the time of execution of
the agreement. Thus, the trial court improperly considered and ruled on
issues of liability, when liability had already been determined due to the
default, and this same trial court had denied a motion to set aside the
default.
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American Fidelity Fire Insurance Co. v. Woody’s Electric Service, Inc.,
407 So. 2d 947, 948 (Fla. 3d DCA 1981), is instructive. In American
Fidelity, the plaintiff sought to recover damages from an electrical
company due to a delay in a construction project allegedly caused by that
electrical company. The trial court entered a default against the electrical
company and subsequently conducted a non-jury trial. The trial court, as
a result of the non-jury trial, found that the electrical company did not
cause the delay in the construction project. The appellate court reversed
the trial court, holding that the default established liability and that
liability established that the electrical company breached the contract.
Lawson v. Latham, 564 So. 2d 1216 (Fla. 3d DCA 1990), is also
instructive. In Lawson, although the trial court entered a default against
a defendant, at trial it entered a directed verdict for the defendant. The
Third District reversed, finding that the default established the defendant’s
liability, and all the plaintiffs had to prove at trial was the amount of
damages to which they were entitled.
In the present case, the trial court erred in finding that First Round did
not cause the breach of contract between DG and Alves. Like in American
Fidelity and Lawson, the default established the liability of First Round
and the fact that First Round caused the breach of contract.
In summary, we find the trial court erred and we reverse and remand
for the trial court to make a factual determination of damages, if any, due
to the liability already determined by default.
Reversed and remanded.
STEVENSON and FORST, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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