Gillispie goes to court over UK pay

Former University of Kentucky basketball coach Billy Gillispie is seeking more than $6 million from the UK Athletics Association in a federal lawsuit alleging breach of contract and fraud.

The 24-page lawsuit, filed Wednesday in U.S. District Court for the Northern District of Texas in Dallas, argues that the athletics department should pay the coach an untold amount in damages and attorney fees in addition to the $6 million Gillispie says he's owed for being fired two years into a seven-year term.

Gillispie never agreed to a formal contract, but he did sign a memorandum of understanding with the athletics association.

Whether the buyout clause in that memorandum of understanding is binding has emerged as the central sticking point between the athletics department and Gillispie, whom the suit repeatedly describes as one of the country's "premier men's head basketball coaches."

"Since the date of termination, defendant has refused to honor the very signed, written agreement with Coach Gillispie which the general counsel for the University of Kentucky described in November of 2007 as 'contain(ing) all the basic terms needed for an employment agreement, and can itself serve as the employment contract for the coach,'" the lawsuit says.

The suit requests a jury trial in Dallas, which Gillispie's attorney argues is the proper venue because, among other things, Gillispie was on a recruiting trip there for Texas A&M University when he first agreed to take the UK coaching position during a phone conversation.

UK issued a statement Wednesday expressing surprise at the lawsuit and saying its lawyers had been trying to work out a settlement with Gillispie's representatives.

"The University of Kentucky learned of the lawsuit filed in Texas by Mr. Gillispie late this afternoon, which is surprising as the university was continuing to negotiate a separation in good faith and his counsel had asked for more time," said the statement from UK spokesman Jimmy Stanton. "Since this now involves pending litigation, the university will not be able to discuss any further details of the case."

UK is represented in the matter by Steve Barker of Sturgill, Turner, Barker & Moloney in Lexington, Stanton confirmed.

Gillispie's attorney, Demetrios Anaipakos, declined to comment late Wednesday about any attempts at a settlement.

"Coach Gillispie, for the time being, prefers to let the lawsuit speak for itself, and we look forward to our day in court," Anaipakos said.

Stuart Campbell, Gillispie's agent, also declined to describe any negotiations between the two sides.

When asked whether the two sides were close to an agreement, he laughed. "We'll see what happens," he said.

Campbell also declined to say whether he supported or opposed the idea of a lawsuit.

"We are still certainly hopeful that the matter will be resolved in the immediate future," he said.

Much of Gillispie's lawsuit hinges on the argument that UK considered a memorandum of understanding between the athletics association and Gillispie as a binding contract.

The memorandum of understanding said that Gillispie, if fired, would be paid $1.5 million a year for up to four remaining years on the agreement.

Gillispie and UK Athletics Director Mitch Barnhart negotiated terms of the seven-year employment agreement during an April 5, 2007, phone call while Gillispie was in Dallas, according to the lawsuit. Both men signed the document after Gillispie arrived in Lexington about 2:30 a.m. April 6.

However, the two sides never signed a formal contract because they couldn't agree on Gillispie's deferred compensation plan or how to define a termination "with cause," according to the lawsuit.

The suit lays out a series of instances when UK's attorneys referred to the memorandum of understanding as the equivalent of a legally binding contract.

For instance, a memo from UK general counsel Barbara Jones to Gillispie's agent cited the agreement as she sought to quash an endorsement deal the coach was considering with a Houston firm. The memo said that doing so "would place Billy in violation of the terms of the April 7, 2007 Memorandum of Understanding," the lawsuit says.

The suit also notes that the university provided the Herald-Leader with a copy of the memorandum of understanding in response to a November 2007 open records request for UK's contract with Gillispie.

"But when Defendant decided to terminate Coach Gillispie in March of 2009, it did a startling about-face that has continued ever since," the lawsuit said.

UK President Lee T. Todd Jr. said for the first time at the March 27 press conference announcing Gillispie's firing that he considered Gillispie to be working under a "year-to-year contract." He said UK had taken that stance because the beginning of the memorandum states that a full seven-year contract will be negotiated "at the earliest possible date," which never happened.

Also, a March 27 letter Barnhart gave Gillispie after the firing said it became clear that the coach and UK were "not a good fit."

"The inability to come to an agreement on critical terms of an employment contract after two years of negotiation is just one indication of this incompatibility," that memo said.

Gillispie's suit claims the athletics association's "abrupt about-face is motivated, apparently, by defendant's bad-faith desire no longer to honor" the seven-year term of employment.

UK announced it had hired John Calipari away from the University of Memphis five days after Gillispie's firing.

The lawsuit alleges that the UK Athletics Association defrauded Gillispie because it either had no intention of fulfilling the terms of the agreement or acted "recklessly" when it first made the offer.

"When he signed and accepted defendant's written agreement to act as the head coach of the University of Kentucky's men's basketball team, Coach Gillispie was at the pinnacle of a meteoric rise through the collegiate coaching ranks," the lawsuit says.

Around that time — March 2007 — Gillispie was negotiating a lucrative contract extension with Texas A&M. The university offered him a deal through 2015 that would pay him $1.75 million annually, according to the lawsuit.

Gillispie had been at Texas A&M for three years and had just guided the team to the NCAA Tournament's Sweet Sixteen when UK approached him about replacing Tubby Smith.

Gillispie's lawsuit says UK's athletics association "intentionally interfered with Coach Gillispie's contract negotiations with Texas A&M through its fraud."

It also alleges that during the negotiations with Gillispie in Dallas, Barnhart defrauded Gillispie when he pledged that a "further contract would include a standard termination for cause provision mutually agreed upon by the parties when, in fact, defendant had no intention to propose, much less agree to, such a provision."

UK officials had suggested vague wording for what constituted a justifiable firing while Gillispie's representatives pushed for detailed language.

This story was originally published May 28, 2009 at 12:00 AM with the headline "Gillispie goes to court over UK pay."