The University of Kentucky has asked a Franklin Circuit judge to decide whether the initial agreement between the university and former basketball coach Billy Gillispie constitutes a formal contract, which would determine whether UK must pay Gillispie $6 million.
UK's six-page lawsuit comes a day after Gillispie's attorneys sued the UK Athletics Association in federal district court in Dallas, alleging breach of contract and fraud.
Gillispie is seeking the $6 million that he contends he is owed under the terms of a memorandum of understanding that the coach signed when he was hired on April 6, 2007. Gillispie, who was fired in March after two years of a seven-year deal, is also requesting that UK pay damages and attorneys' fees.
UK, meanwhile, argues that the two-page letter, known as the memorandum of understanding, was meant as a "letter of intent or agreement to agree" until the two sides could finalize the language of a more detailed, formal contract. But that never happened — even after half a dozen proposals and counterproposals for a contract.
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"UK contends that the (memorandum of understanding) is not an enforceable long-term contract of employment, and that it owes no damages to Gillispie," UK's filing says.
UK: Gillispie sued the wrong entity
Attorneys for the university will seek to have Gillispie's lawsuit dismissed from U.S. District Court for the Northern District of Texas in Dallas because, among other things, they contend Gillispie filed suit against the wrong entity.
"It is unfortunate that Mr. Gillispie has sued the UK Athletics Association, a non-profit supporting foundation that was not his employer, in federal court in Texas," UK said in a statement accompanying the suit. "The decision to terminate Mr. Gillispie's employment was a university decision."
Gillispie's Dallas-based lawyer, Demetrios Anaipakos, didn't return several calls from the Herald-Leader.
Gillispie's lawsuit said a Texas court was appropriate because the coach accepted UK's offer on April 5, 2007, over the phone in Dallas, where he was on a recruiting trip for his then-employer, Texas A&M University. He signed the memorandum when he arrived in Lexington on April 6.
The dueling lawsuits in different states are the latest twist in a messy divorce between the coach and the UK basketball program. Gillispie says UK owes him $6 million; UK says it doesn't.
UK fired Gillispie on March 27 after a record of 40-27 over two seasons. Less than a week later, the university hired John Calipari away from the University of Memphis to take Gillispie's place.
In a letter summarizing the reasons for firing Gillispie, UK Athletics Director Mitch Barnhart told Gillispie the union was "not a good fit." He cited the inability to agree on a formal employment contract as an example.
Negotiations of possible contracts detailed
University officials proposed six versions of a contract to Gillispie during his tenure, according to the suit filed Thursday by UK's lawyer, Steve Barker of Sturgill, Turner, Barker & Moloney in Lexington.
"Each time, counsel for Gillispie deleted or changed material terms contained in UK's latest offer, and added new and different terms not contained in the (memorandum of understanding) or UK's last offer," the suit says.
Specifically, Gillispie's lawyers and the university hit an impasse over what it meant for the university to terminate the coach "with cause."
UK included in the court filing one draft of a proposed contract edited by Gillispie's attorney on Feb. 17, 2009, the last of five such counteroffers Gillispie's camp made over a 21-month period.
The word "No" was scrawled next to the firing with cause provision.
Gillispie's attorney also had crossed out six lines that said the coach could be fired for "failure to follow written Athletics Department or other University policies and procedures" or for "acts of misconduct including but not limited to conviction of a felony or a conviction for any alcohol or drug-related offense."
The university also contends that Gillispie balked at suggested language saying that if he were fired without cause but got another college or professional coaching job, his earnings could be subtracted from the amount UK owed him in a buyout.
In Gillispie's federal lawsuit, he argues that UK defrauded the coach by luring him away from Texas A&M while Gillispie was renegotiating a lucrative contract there.
The suit alleges that UK had no intention of fulfilling its end of the deal as spelled out in the initial memorandum of understanding. It says UK has breached its contract by not living up to the memo's provision that called for the university to pay $1.5 million a year for up to four remaining years of the seven-year term.
Gillispie's lawyers laid out examples of UK statements that seemed to treat that memorandum of understanding as a contract, such as when the Herald-Leader requested a copy of Gillispie's contract and was provided with the initial letter.
Could this end up in the state Supreme Court?
The case may turn on how a court, whether in Frankfort or Dallas, interprets the significance of those statements, said William Johnson, a Frankfort attorney who represents other universities in contract disputes.
"The university will argue ... 'no matter what he did or what we did, we both understood there needed to be a formal written contact. And we, as the university, acted reasonably because we offered him chances to sign the written contract,'" Johnson said.
He said the contest could prove to be a long and costly battle.
The issue could move all the way to the Kentucky Supreme Court unless the two sides reach a settlement out of court, he said.
This month UK approved a budget setting aside $100,000 for legal fees for negotiating a settlement in the case. A court case could cost much more than that.
UK's suit has been assigned to Judge Phillip Shepherd in Franklin Circuit Court, where contract disputes involving state agencies, including public universities, are handled regularly.
Shepherd told the Herald-Leader he wasn't aware of UK's filing. He said he does not regularly attend UK basketball games.