NBA

George Karl Was Once Sued for Not Paying His Agent – and Won

George Karl’s professional basketball career as a player only lasted five seasons, but his coaching career has had much more longevity than that. Karl spent 27 seasons in the NBA as a head coach, with his most recent tenure ending with the 2015-16 season.

He made a lot of money as an NBA coach, but his agent alleges that Karl didn’t pay him everything that he was due for his services. Karl’s agent sued the longtime bench leader for a monthly stipend that he felt he was owed — but Karl prevailed in the court of law as he often did on the basketball court.

George Karl’s informal agreement with his agent

Forbes reports on the falling out between Karl and attorney Bret Adams, and the ensuing lawsuit. Adams claims that he had an oral agreement with Karl through which the coach would pay him a $10,000 stipend in exchange for providing services.

Adams was to help Karl with financial responsibilities, paying bills, and legal matters. The stipend began at $5,000 per month before going up to $7,500, and ultimately $10,000 monthly.

Karl never disputed the existence of such an informal agreement in which he agreed to pay Adams a monthly stipend — but he disputed the details of the attorney’s claims.

The lawsuit against George Karl

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Adams filed a lawsuit against Karl in September 2013, alleging a breach of contract. During the trial, Karl admitted to paying Adams a monthly stipend because he felt it would be easier for him, with Adams helping with legal problems and other issues, including negotiating a bank loan and helping Karl get through his divorce.

Adams insists that the stipend was tied to his services as Karl’s agent, and the coach was to pay him every month for as long as he was coaching an NBA team.

Both men agreed Adams helped Karl land a contract extension with the Nuggets in 2011, which was scheduled to run through June 2014. Adams had full control of Karl’s finances while working for him, and paid himself the $10,000 monthly until August 2012, when Karl revoked his power of attorney.

The Nuggets ended Karl’s contract a year early, but Karl was still drawing a salary from the team; with deferred payments, his payments from the Nuggets were scheduled to run through June 2017. Adams believed he should receive his stipend from Karl throughout the period that the Nuggets were paying Karl. 

The court rules for the coach

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The judge in the case determined that Adams had the burden of proving four things:

  • The existence of a contract
  • His performance of services
  • A breach of contract by Karl
  • Damages

The first part of the court’s analysis was whether the oral agreement constituted a valid contract. The lawsuit was filed in Ohio, which has a higher burden to prove that an oral contract is in effect, compared to a written contract, because the state disfavors oral agreements.

The court ultimately ruled that Adams failed to meet the burden of proving there was a contract agreed to by the two parties that had definite and certain terms. While George Karl never denied there was an agreement, there was a question about whether the agreement was as Adams explained it.

According to Forbes, in its ruling the court stated that common sense would indicate Adams would be compensated for managing most aspects of Karl’s life, but “no evidence was presented that the payments to Plaintiff were solely related to Plaintiff’s involvement in the negotiation of the Denver Nuggets contract.”

Without a clear articulation about what the contract was for, the ruling continued that “Plaintiff fails to prove a meeting of the minds on the essential terms.” In the end, even though Karl admitted to pretty much everything, the law worked in his favor.