2021 into 2022 OFFSEASON News and Notes

[thecampster]

About time I chimed in.  The player has the right to fire his agent at any time. An agent is first and foremost legal counsel for the client. People sue all the time and rely on the lawyers advice for the value of the case. But they have no recourse against the attorney if they find out later they could have received more. In the end, it is the person suing or playing that has the final decision on accepting or rejecting. IMHO his case has no merit. He may settle to save legal fees but I doubt it. Settling will open the door to this happening again.  Rejecting any contract is betting on yourself. He should have hired an agent more in the know.

I'm not a fan of lawyers or agents but I'm also not a fan of a grown man making a choice and then trying to blame that choice on the advice he got from someone else.

[hawkman]

1 hour ago, thecampster said:

About time I chimed in.  The player has the right to fire his agent at any time. An agent is first and foremost legal counsel for the client. People sue all the time and rely on the lawyers advice for the value of the case. But they have no recourse against the attorney if they find out later they could have received more. In the end, it is the person suing or playing that has the final decision on accepting or rejecting. IMHO his case has no merit. He may settle to save legal fees but I doubt it. Settling will open the door to this happening again.  Rejecting any contract is betting on yourself. He should have hired an agent more in the know.

I'm not a fan of lawyers or agents but I'm also not a fan of a grown man making a choice and then trying to blame that choice on the advice he got from someone else.

^This.

[Spud2nique]

6 hours ago, thecampster said:

About time I chimed in. 

@kg01 did you cue him? 

[AHF]

15 hours ago, thecampster said:

About time I chimed in.  The player has the right to fire his agent at any time. An agent is first and foremost legal counsel for the client. People sue all the time and rely on the lawyers advice for the value of the case. But they have no recourse against the attorney if they find out later they could have received more. In the end, it is the person suing or playing that has the final decision on accepting or rejecting. IMHO his case has no merit. He may settle to save legal fees but I doubt it. Settling will open the door to this happening again.  Rejecting any contract is betting on yourself. He should have hired an agent more in the know.

I'm not a fan of lawyers or agents but I'm also not a fan of a grown man making a choice and then trying to blame that choice on the advice he got from someone else.

If a lawyer fails to pass along offers to his client and the client ends up with less than they could have had, the attorney is absolutely at risk of being sued for malpractice.  

The allegation is that Paul and his team didn't even return calls from interested teams like Philly and Houston.  If that is proven, that is real exposure for the agents.  

It does stand out like a sore thumb how bad the contract offers were that Noel got with and without Paul:

Without Paul:

$17.5M/year for 4 years

With Paul:

$1.75M for 1 year

$2M for 1 year

$5M for 1 year

Without Paul:

$10.7M for 3 years

 

Noel owns turning down that $70M even though it was clearly terrible, terrible advice from Paul.  (A good agent looks out for their client, not themselves.)

But was $1.75M, $2M and $5M really the work of a good agent?  Noel didn't change that dramatically once he returned from injury.

Noel wasn't suddenly less productive under Paul.  After his first year in OKC, he was coming off a season with a per 36 of 13 points, 11 rebounds and 3 blocks and for an age 24 UFA the best you could do was $2M?!?

After the next year, he was a 25 year old UFA coming off a per 36 of 14 points, 10 rebounds and 3 blocks and the best you could do was $5M?!?

Then coming off of a per 36 of 8 points, 10 rebounds, and 3 blocks a new agent can go out and immediately get a $32M deal?

 

This should settle because even if Paul has great legal defenses against the claims such as that giving bad advice isn't enough to amount to a breach of contract (and he very well may if his team wasn't grossly negligent by failing to return calls, etc. as alleged and there isn't email traffic saying something like "there is no way Noel is ever getting what he thinks he can get but promise him that to keep him around"), it is indisputable that he and his team were ineffective garbage from day 1 (turn down that $70M guy with a history of injury problems who averaged 15/10/2 per 36!) and until his last day (sorry I couldn't get you a total of $10M over the last 3 contracts but I'm sure the next one will be great!).

With only $200k upside for Paul, he should make this go away to avoid the bad publicity.

[thecampster]

4 minutes ago, AHF said:

If a lawyer fails to pass along offers to his client and the client ends up with less than they could have had, the attorney is absolutely at risk of being sued for malpractice.  

The allegation is that Paul and his team didn't even return calls from interested teams like Philly and Houston.  If that is proven, that is real exposure for the agents.  

It does stand out like a sore thumb how bad the contract offers were that Noel got with and without Paul:

Without Paul:

$17.5M/year for 4 years

With Paul:

$1.75M for 1 year

$2M for 1 year

$5M for 1 year

Without Paul:

$10.7M for 3 years

 

Noel owns turning down that $70M even though it was clearly terrible, terrible advice from Paul.  (A good agent looks out for their client, not themselves.)

But was $1.75M, $2M and $5M really the work of a good agent?  Noel didn't change that dramatically once he returned from injury.

Noel wasn't suddenly less productive under Paul.  After his first year in OKC, he was coming off a season with a per 36 of 13 points, 11 rebounds and 3 blocks and for an age 24 UFA the best you could do was $2M?!?

After the next year, he was a 25 year old UFA coming off a per 36 of 14 points, 10 rebounds and 3 blocks and the best you could do was $5M?!?

Then coming off of a per 36 of 8 points, 10 rebounds, and 3 blocks a new agent can go out and immediately get a $32M deal?

 

This should settle because even if Paul has great legal defenses against the claims such as that giving bad advice isn't enough to amount to a breach of contract (and he very well may if his team wasn't grossly negligent by failing to return calls, etc. as alleged and there isn't email traffic saying something like "there is no way Noel is ever getting what he thinks he can get but promise him that to keep him around"), it is indisputable that he and his team were ineffective garbage from day 1 (turn down that $70M guy with a history of injury problems who averaged 15/10/2 per 36!) and until his last day (sorry I couldn't get you a total of $10M over the last 3 contracts but I'm sure the next one will be great!).

With only $200k upside for Paul, he should make this go away to avoid the bad publicity.

Malpractice sure, failure to perform sure. But advising improperly, no.

 

My point is the settling might be more bad publicity than winning in court would be. There are few high stakes agents out there. Allowing this would open a flood gate of suits. Even settling would allow every client he ever had to (forgive the pun) follow suit.

[AHF]

19 minutes ago, thecampster said:

Malpractice sure, failure to perform sure. But advising improperly, no.

 

My point is the settling might be more bad publicity than winning in court would be. There are few high stakes agents out there. Allowing this would open a flood gate of suits. Even settling would allow every client he ever had to (forgive the pun) follow suit.

Advising improperly can be malpractice and is on the table if he wasn't being honest with his client.  For example, Noel alleges that he told them he was leaving before the $5M contract but was convinced to stay when he was advised there was a $30-36M offer coming and that he should stay because they were the firm that was going to land it for him.  If there was no good faith basis for telling Noel that (i.e., if that was a pure lie to get him to stay and earn another commission off of him), then advising him to stay in that context is absolutely a potential liability for Paul and his team.

I agree that any good faith advice is not going to get Noel anywhere and that while objectively terrible given the specific facts facing Noel at the time, IMO, the idea that a 22 year old Noel should turn down $70M and bet on himself isn't going to go anywhere.  It is the other allegations that have more potential.  And if half of those are true (they didn't return calls, etc.), that combined with the actual results that Paul's team 'achieved' for Noel is going to look really bad.  

[thecampster]

31 minutes ago, AHF said:

Advising improperly can be malpractice and is on the table if he wasn't being honest with his client.  For example, Noel alleges that he told them he was leaving before the $5M contract but was convinced to stay when he was advised there was a $30-36M offer coming and that he should stay because they were the firm that was going to land it for him.  If there was no good faith basis for telling Noel that (i.e., if that was a pure lie to get him to stay and earn another commission off of him), then advising him to stay in that context is absolutely a potential liability for Paul and his team.

I agree that any good faith advice is not going to get Noel anywhere and that while objectively terrible given the specific facts facing Noel at the time, IMO, the idea that a 22 year old Noel should turn down $70M and bet on himself isn't going to go anywhere.  It is the other allegations that have more potential.  And if half of those are true (they didn't return calls, etc.), that combined with the actual results that Paul's team 'achieved' for Noel is going to look really bad.  

I'd kind of like this to go to court so we can get on the record statements. At this point we're only getting he said/she said media needle push statements.

 

[kg01]

9 hours ago, Spud2nique said:

@kg01 did you cue him? 

I thought we gave campst the 'go-ahead' to tag himself in at any time?

Isn't that why he walks around with tights and no shirt on?

[AHF]

14 minutes ago, thecampster said:

I'd kind of like this to go to court so we can get on the record statements. At this point we're only getting he said/she said media needle push statements.

 

If I were in Paul's position, I wouldn't let it go to court if Noel was willing to settle for me dropping my claim for $200k unless I had just the best story for why I could only get Noel $2.9M per year over 3 one-year contracts when the agents before and after me got him >$10M per year on much longer deals with very similar per minute productivity.

From a "fan" standpoint, I totally agree that getting some of this under oath (particular either at deposition or at trial) would be really interesting.  

[Spud2nique]

29 minutes ago, kg01 said:

Isn't that why he walks around with tights and no shirt on?

I thought that was just his new yogi look? No? 

[thecampster]

45 minutes ago, AHF said:

If I were in Paul's position, I wouldn't let it go to court if Noel was willing to settle for me dropping my claim for $200k unless I had just the best story for why I could only get Noel $2.9M per year over 3 one-year contracts when the agents before and after me got him >$10M per year on much longer deals with very similar per minute productivity.

From a "fan" standpoint, I totally agree that getting some of this under oath (particular either at deposition or at trial) would be really interesting.  

I would think instances of other players with more skills getting worse deals (Cousins comes to mind) because of injuries would strengthen the idea that injuries played a part.

Edited August 30, 2021 by thecampster

[thecampster]

The problem here is a paper trail. An offer is just hearsay unless it was in writing. Discussions between client and agent are just hearsay unless there was a non incentivized witness to the conversation. On the subject of what was offered and what not/did he present it to his client. Its possible Noel said "I won't sign for less than $X.YZ" and that was interpreted to reject any offer that was not at least that.

I think its really hard to believe a judge or jury is going to be sympathetic to anyone who turned down $70 million (a fact that would be repeated ad nauseum at the hearing). I think any discussion on this will always begin with that.  He can as an agent say "I had this offer on the table for him and he rejected it." That's a very strong opening position to come from.

[thecampster]

Which brings me to a few questions you are better suited to answer.

1.) Could they be ordered into arbitration?

2.) Would this be settled by a judge, a judicial panel or a jury?

3.) What are the levels of evidence required? (reasonable person, undeniable, etc).

[AHF]

1 minute ago, thecampster said:

I would think instances of other players with more skills getting worse deals (Cousins comes to mind) because of injuries would strengthen the idea that injuries played a part.

Injuries undoubtedly played a huge role  in that first minimum deal that Noel signed with OKC but since he got hurt.  Noel has played 77 of 82 games, 61 of 72 games and 64 of 72 games.  That is not remotely comparable to Cousins who  played 30 of 82 games, 0 of 82 games, and 41 of 72 games after leaving NO but still made like 30% more than Noel got after Noel left Dallas.

 

2 minutes ago, thecampster said:

The problem here is a paper trail. An offer is just hearsay unless it was in writing. Discussions between client and agent are just hearsay unless there was a non incentivized witness to the conversation. On the subject of what was offered and what not/did he present it to his client. Its possible Noel said "I won't sign for less than $X.YZ" and that was interpreted to reject any offer that was not at least that.

I think its really hard to believe a judge or jury is going to be sympathetic to anyone who turned down $70 million (a fact that would be repeated ad nauseum at the hearing). I think any discussion on this will always begin with that.  He can as an agent say "I had this offer on the table for him and he rejected it." That's a very strong opening position to come from.

We agree on the $70M.  That is a lost cause.  You seem to be missing the point on the rest of this as he is alleging that his agents didn't return calls and actively lied to him to keep him in the fold during the time when he earned $1.7M, $2M and $5M.

[thecampster]

Just now, AHF said:

Injuries undoubtedly played a huge role  in that first minimum deal that Noel signed with OKC but since he got hurt.  Noel has played 77 of 82 games, 61 of 72 games and 64 of 72 games.  That is not remotely comparable to Cousins who  played 30 of 82 games, 0 of 82 games, and 41 of 72 games after leaving NO but still made like 30% more than Noel got after Noel left Dallas.

 

We agree on the $70M.  That is a lost cause.  You seem to be missing the point on the rest of this as he is alleging that his agents didn't return calls and actively lied to him to keep him in the fold during the time when he earned $1.7M, $2M and $5M.

Not missing it necessarily but I'm hung up on the hard to be sympathetic part and I need more that his word on the didn't return calls, lying part. We can't just let someone's word speak to truth. There is a difference between speaking "the" truth and speaking "your" truth. At this point, its Noel's truth. There is also an onus on Noel to prove he could have earned more and that's where it gets really sticky for me.

The agent gets a percentage of the contract. Using the above 3 years at 8.7 million and assuming 10% to the agent (I honestly don't know), that's an $870,000 payment to the agent over 3 years. If he could have received $36 million instead, Noel's argument is the agent purposely screwed himself out of $2.73 million more by not getting Noel the $36 million.  Can you see how that's a suspect statement when presented that way? Noel is going to have to A) provide proof a real $36 million offer was on the table, B) the agent rejected it and C) Noel had no part in the rejection.  That's a heavy burden (IMHO). 

Unless the offer was submitted in writing, its hear say. If it was submitted in writing, that would involve teams providing proof (not sure on their document retention requirements...probably 7 years) and their right to redact on the documents. If he can get that, he's in good standing but until then, we have a he said, they said (unless I'm missing something material).

 

[AHF]

1 minute ago, thecampster said:

Which brings me to a few questions you are better suited to answer.

1.) Could they be ordered into arbitration?

2.) Would this be settled by a judge, a judicial panel or a jury?

3.) What are the levels of evidence required? (reasonable person, undeniable, etc).

1) It appears that the contract does require this to be handled in arbitration by incorporating the general NBA standards for player contracts.  Noel's attorneys are seeking a declaration that this does not apply but I would guess there is a good chance it could end up in arbitration.

2) Either a judge or jury.  From the complaint, it looks like it may be tried before a judge but I'm not up on Texas civil procedure.  If it goes to arbitration, it would be very much like a trial before a judge but with the arbitrator having fewer restrictions/more control about what evidence could be considered, etc.

3) Whether in court or arbitration, the trier of fact rules in favor of the party that it believes proves that it's case is more likely true than not.  To think about it mathematically, a criminal case is thought of as needing to establish a 95% level of certainty to convict whereas a civil claim like this only needs >50%.

 

The claims in the complaint are listed below with some key allegation:

Breach of Fiduciary Duty / Breach of Contract

1. Paul/Klutch promised him a max contract.  (This seems like a loser to me.)
2. Paul/Klutch lied about offers it was discussing with other teams to induce him to stay with Klutch.  (This depends on what evidence is there to support it but seems one of the more concrete allegations.)
3. Paul/Klutch failed to do any meaningful work on his behalf to secure new deals or endorsements.  (Unless they did nothing this is going to be tough to establish).
4. Paul/Klutch failed to return calls from other teams that were interested in signing Noel.  (This should be easy to prove or disprove.)
5. Paul/Klutch ignored Noel to focus on their more high profile clients.  (Probably entirely dependent on whether Noel can establish the other allegations above).

Negligence

1. Paul/Klutch failed to exercise the degree of skill, care and diligence that an ordinary agent would possess and exercise on behalf of their client to Noel's detriment.  (This is basically the legal standard for professional malpractice).
2. See above allegations plus the statement that Paul/Klutch provided poor business advice.

Breach of Good Faith and Fair Dealing

1. No real independent allegations here - more the argument that above allegations would give rise to this claim.  Any allegations about lies to Noel that are proven would be pretty powerful here (lies about what they were doing, offers they were negotiating, bad faith predictions about what Klutch could get for Noel if there is documented evidence they didn't really believe that, etc.).

[AHF]

23 minutes ago, thecampster said:

Not missing it necessarily but I'm hung up on the hard to be sympathetic part and I need more that his word on the didn't return calls, lying part. We can't just let someone's word speak to truth. There is a difference between speaking "the" truth and speaking "your" truth. At this point, its Noel's truth. There is also an onus on Noel to prove he could have earned more and that's where it gets really sticky for me.

The agent gets a percentage of the contract. Using the above 3 years at 8.7 million and assuming 10% to the agent (I honestly don't know), that's an $870,000 payment to the agent over 3 years. If he could have received $36 million instead, Noel's argument is the agent purposely screwed himself out of $2.73 million more by not getting Noel the $36 million.  Can you see how that's a suspect statement when presented that way? Noel is going to have to A) provide proof a real $36 million offer was on the table, B) the agent rejected it and C) Noel had no part in the rejection.  That's a heavy burden (IMHO). 

Unless the offer was submitted in writing, its hear say. If it was submitted in writing, that would involve teams providing proof (not sure on their document retention requirements...probably 7 years) and their right to redact on the documents. If he can get that, he's in good standing but until then, we have a he said, they said (unless I'm missing something material).

 

• It will all be about what can be proven.  I'm saying that if Noel can prove what he has alleged, I don't think he has a good claim regarding the $70M but has a strong one on other claims and then would have to prove damages due to lost earning over his $8.7M in earnings over 3 years.
• Since Klutch filed a claim for $200K in unpaid commissions for the $5M contract, it might be reasonable to assume that it was a 4% payout at these low levels of contract earnings so probably ~$350k in total earnings for Klutch for the $8.7M.  The idea that an agent might earn a higher % on higher dollar deals and therefore lose interest in a client when they fall out of the range of those deals is pretty logical even though it is correct that if they maximized every contract for every player they represent it would earn them more money.  But this is why there are requirements in the contract, via professional/malpractice standards, and for good faith/fair dealing in agency relationships because it does happen sometimes in real life that agents don't put in good faith effort on behalf of a client.
• Offers are definitely going to be in writing but a lot of this is around things that would not have been documented offers such as calls they didn't return.  At that point, it would go to the testimony of the third party teams about what they were willing to offer if they hadn't been ignored by Klutch.  Teams would have no right to redact anything from discovery so I don't think that is an issue (but they could pursue a protective order that would allow them to avoid any of it being filed publicly so it might be something only the finder of fact/judge would see).  So if Philly called ready to make a 2 year, $20M offer and Klutch didn't return the call and Noel ended up signing for $2M that is absolutely going to come out in discovery and be pretty compelling for a damages claim.
• Also, hearsay is not something that is not in writing.  By way of example, if Philly GM was deposed and testified that the team was ready to offer a $10M contract for one year then that is someone with first hand knowledge of events and is not hearsay.  Hearsay would be if you deposed Atlanta's GM and he said he was told that Philly was ready to offer a $10M contract - you would be offering a second hand statement which would amount to hearsay.  It is more complex than that and there are a host of hearsay exceptions, but a simple way to think about it would be "first hand knowledge" (not hearsay) versus "second hand knowledge" (hearsay).  Doesn't have anything to do with whether it is in writing or oral.

[thecampster]

1 hour ago, AHF said:

1) It appears that the contract does require this to be handled in arbitration by incorporating the general NBA standards for player contracts.  Noel's attorneys are seeking a declaration that this does not apply but I would guess there is a good chance it could end up in arbitration.

2) Either a judge or jury.  From the complaint, it looks like it may be tried before a judge but I'm not up on Texas civil procedure.  If it goes to arbitration, it would be very much like a trial before a judge but with the arbitrator having fewer restrictions/more control about what evidence could be considered, etc.

3) Whether in court or arbitration, the trier of fact rules in favor of the party that it believes proves that it's case is more likely true than not.  To think about it mathematically, a criminal case is thought of as needing to establish a 95% level of certainty to convict whereas a civil claim like this only needs >50%.

 

All very helpful to the discussion, especially section 3.

[thecampster]

56 minutes ago, AHF said:

• It will all be about what can be proven.  I'm saying that if Noel can prove what he has alleged, I don't think he has a good claim regarding the $70M but has a strong one on other claims and then would have to prove damages due to lost earning over his $8.7M in earnings over 3 years.
• Since Klutch filed a claim for $200K in unpaid commissions for the $5M contract, it might be reasonable to assume that it was a 4% payout at these low levels of contract earnings so probably ~$350k in total earnings for Klutch for the $8.7M.  The idea that an agent might earn a higher % on higher dollar deals and therefore lose interest in a client when they fall out of the range of those deals is pretty logical even though it is correct that if they maximized every contract for every player they represent it would earn them more money.  But this is why there are requirements in the contract, via professional/malpractice standards, and for good faith/fair dealing in agency relationships because it does happen sometimes in real life that agents don't put in good faith effort on behalf of a client.
• Offers are definitely going to be in writing but a lot of this is around things that would not have been documented offers such as calls they didn't return.  At that point, it would go to the testimony of the third party teams about what they were willing to offer if they hadn't been ignored by Klutch.  Teams would have no right to redact anything from discovery so I don't think that is an issue (but they could pursue a protective order that would allow them to avoid any of it being filed publicly so it might be something only the finder of fact/judge would see).  So if Philly called ready to make a 2 year, $20M offer and Klutch didn't return the call and Noel ended up signing for $2M that is absolutely going to come out in discovery and be pretty compelling for a damages claim.
• Also, hearsay is not something that is not in writing.  By way of example, if Philly GM was deposed and testified that the team was ready to offer a $10M contract for one year then that is someone with first hand knowledge of events and is not hearsay.  Hearsay would be if you deposed Atlanta's GM and he said he was told that Philly was ready to offer a $10M contract - you would be offering a second hand statement which would amount to hearsay.  It is more complex than that and there are a host of hearsay exceptions, but a simple way to think about it would be "first hand knowledge" (not hearsay) versus "second hand knowledge" (hearsay).  Doesn't have anything to do with whether it is in writing or oral.

Point 1 - This is a really interesting angle and one I'll have to consider. You make a valid point here.

Point 2 - I'm calling it hearsay at this point because at this point we mostly have Noel's word vs the agent. Of course once deposed and made material it wouldn't be hearsay but Noel is in effect saying "I found out I could have gotten this and was told by (insert name here)" Until we depose "insert name" and corroborate how they came to that knowledge and its legit, we can't hold it as so. Being an attorney, you know the game of positioning and public opinion as well as anyone and until its accepted as evidence or not, its just talk at this point. I am and always have been a wait and see person. If they have evidence from a GM saying we tried to make a call to offer and they wouldn't pick up or rejected us out of hand, at this point its just hearsay.

 

I think if anything what might come out of it is a lesson learned between agent and client. Its okay for either to drop either. If you don't like the relationship you're in, find a new relationship. 

[terrell]

@ShamsCharania

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