Baltimore Ravens former majority owner Art Modell defeats claim for

Daily Record, The (Baltimore), Jul 26, 2005 by Ann Parks

Baltimore Ravens former majority owner Art Modell has successfully deflected a lawsuit by the family of a former business advisor who sought to collect an estimated $30 million finder's fee upon Modell's sale of the team to Stephen Bisciotti.

A trust created by the sons of Vincent Andrews has no interest in the agreement their father signed with Modell in 1963, U.S. District Judge Catherine C. Blake ruled Friday.

The claim wasn't the trust's to hold and pursue, said Steven F. Barley, a Baltimore lawyer on Modell's legal team. If they don't have standing, they don't have a case.

Modell sold the bulk of his interest in the Ravens to Bisciotti in two installments between 2000 and 2004 but retained a 1 percent interest for himself.

Under the 1963 agreement, Andrews was to receive a 5 percent cut when, as, and if Modell decided to divest himself of his stock interest in the Cleveland Browns, which became the Baltimore Ravens in 1996. The finder's fee was intended to compensate Andrews for his role in arranging Modell's 1961 purchase of the Browns.

When Modell arranged for the sale of the team to Bisciotti for approximately $600 million in 1999, Andrews' sons purchased the 1963 letter agreement from the advisor's widow, Phyllis, and set up the Andrews Family Trust.

The trust brought suit against Modell in 2003 to enforce the agreement.

The judge concluded, however, that the trust had no right to bring the suit - because there was no evidence to show that Phyllis Andrews herself had ever taken ownership of the agreement, either as executrix or residuary legatee of her husband's estate.

Mrs. Andrews, who is now in her 90s, testified in her June 2004 deposition that she did not remember ever being told the letter agreement was an asset of her husband's estate and that she did not know if there came a time after her husband's death when the letter became her property, Blake wrote.

There is no evidence in the probate file, or anywhere else that has been proffered to the court, establishing that Mrs. Andrews ever transferred the letter agreement from the estate to herself, the judge added.

Modell's lawyer said yesterday the parties had very different views of what the case was worth, had it been allowed to go forward. The trust's figure of $30 million, Barley said, was not even within shouting distance.

Andrew J. Graham of Kramon and Graham - the firm representing the trust - declined to comment on the matter; New York attorney Andrew Hayes, who also represented the trust, said only that the case was being reviewed.

Disputes?

Although the standing issue was dispositive, the court also considered and rejected other motions for summary judgment filed by Modell.

There was a material dispute of fact over whether the agreement was unenforceable for lack of consideration or whether it was voidable due to an attorney conflict of interest in 1963.

Blake also found a material dispute as to whether the clause was ever triggered. Though the fee was to kick in when, as and if Modell sold his entire stock interest - and Modell hung on to his 1 percent ostensibly to prevent this - a jury could have questioned whether the nature of the interest retained qualified as the kind of stock interest Modell had in 1963, the court noted.

The court rejected, however, the trust's argument that Modell retained the 1 percent interest in bad faith. In spring 2003, after Bisciotti purchased 49 percent of the Baltimore Ravens Limited Partnership, he asked Modell to retain as much as a 20 percent minority interest in the team.

Modell declined, but after Bisciotti elected to buy the remaining 51 percent - and after the plaintiffs had filed their lawsuit - Modell amended his agreement with Bisciotti to retain the 1 percent interest, according to the opinion.

The 1963 agreement imposes no obligation on Modell to sell his interest at any time, Blake wrote. Accordingly, while Modell's motives may be- primarily aimed at defeating the fee rather than retaining the right to go to league meetings, the Trust cannot rely on [this] for its claim to succeed.

WHAT THE COURT HELD

Case:

Thomas E. Minogue, co-trustee of the Phyllis Andrews Family Trust et al. v. Arthur B. Modell, USDMD No. 03-3391. Published. Opinion by Blake, J. Filed July 22, 2005.

Issue:

Did a family trust have standing to sue a football team owner, based on an agreement between the owner and his deceased business advisor stating that the latter would be entitled to a percentage if the owner ever sold the team?

Holding:

No; summary judgment granted. There was no evidence that the advisor's widow ever owned the agreement in order for her to validly sell it to her sons, who formed the trust.

Counsel:

Andrew J. Graham and George E. Brown for plaintiffs; Steven F. Barley, Michael D. Colglazier, Mark D. Gately and Douglas R. M. Nazarian for defendant.