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Middendorf Sports v. Top Rank, Inc.

United States District Court, D. Nebraska

March 31, 2019

MIDDENDORF SPORTS, a Maryland Sole Proprietorship, Plaintiff,
v.
TOP RANK, INC., a Nevada corporation, and TERENCE CRAWFORD, an individual, Defendants.

          FINDINGS OF FACT AND CONCLUSIONS OF LAW

          JOHN M. GERRARD CHIEF UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on a bench trial on two discrete contractual issues. The issue primarily contested between the parties-the term of the relevant contract-has already been decided by the Court on the parties' motions for summary judgment. Filing 123; filing 140. Remaining to be decided is how to interpret the provisions of the agreement that establish when the plaintiff should be paid, and how much.

         As explained below, the Court agrees with the plaintiff regarding the relevant contractual language. Accordingly, the Court finds for the plaintiff, and will enter judgment against defendant Top Rank, Inc., in the amount of $520, 296.87.

         STATEMENT OF FACTS

         Most of the relevant facts are undisputed, and many have been recited by the Court before, but the Court will restate those relevant to the issues presented here. The defendants in this case are successful boxer Terence "Bud" Crawford and his promoter, Top Rank, Incorporated. The plaintiff is Middendorf Sports, a sole proprietorship of Chris Middendorf (collectively, Middendorf).

         In 2010, Crawford entered into a promotional rights agreement with TKO Boxing Productions, a Nevada boxing promoter. Filing 153-1 at 2. At some point in late 2010, Top Rank-among the top boxing promoters in the country-became interested in signing one of TKO's other fighters. Filing 143-1 at 23. TKO was in some financial distress, and TKO assigned that fighter and several others to Middendorf, who held a 35 or 40 percent share of TKO. Filing 145-11 at 5; filing 143-1 at 22-24. Middendorf then released or reassigned the rights to those fighters to Top Rank or another promoter. Filing 143-1 at 24, 26.

         On June 30, 2011, TKO and Top Rank entered into the contract that is primarily at issue in this case: the "Agreement and Release." Filing 145-1. In the Agreement and Release, TKO agreed to release Crawford from the 2010 TKO promotional rights agreement. Filing 145-1 at 1. The Agreement and Release specifically provided that

For each Title Defense (for either the WBC, WBO, WBA, or IBF, and as defined in the Promotional Rights Agreement) of [Crawford]'s promoted by Top Rank pursuant to the Promotional Rights Agreement, TKO shall be paid a fee equal to eight percent (8%) of the purse payable to [Crawford] for such Title Defense, which amount shall be paid to TKO within five (5) business days of each bout.

         Filing 145-1 at 1-2. TKO assigned its rights under the Agreement and Release to Middendorf. Filing 145-4.

         On the same day the Agreement and Release was executed, Crawford and Top Rank entered into a new promotional rights agreement. Filing 145-3. Crawford went on to win several bouts from 2011 to 2013, and on March 1, 2014 defeated Ricky Burns to win the WBO World Lightweight Title. Filing 145-17 at 2. He successfully defended that title against Yuriorkis Gamboa in June 2014. Filing 145-17 at 2. For that bout, Top Rank paid Crawford a purse of $500, 000 and gate participation in the amount of $21, 931.60.[1] Filing 141 at 3. Pursuant to the Agreement and Release, Top Rank paid Middendorf $40, 000. Filing 141 at 3.

         After the Gamboa bout, Crawford and Top Rank entered into a new "Exclusive Restated Promotional Rights Agreement." Filing 145-5. The Exclusive Restated Promotional Rights Agreement guaranteed Crawford substantially larger purses per bout, including additional compensation based on the gate participation for bouts occurring in Omaha. Filing 145-5 at 4-5.

         Crawford defended his WBO World Lightweight Title against Ray Beltrán in November 2014-Top Rank paid Crawford a purse of $800, 000, and Middendorf $40, 000. Filing 145-17 at 2; Filing 141 at 3. Crawford then moved up a weight class and defeated Thomas Dulorme for the vacant WBO World Super Lightweight (or junior welterweight) Title. Filing 145-17 at 2. That wasn't a "title defense," so Top Rank didn't pay Middendorf pursuant to the Agreement and Release. Filing 143-2 at 43. But after Crawford successfully defended his new title against Dierry Jean in October 2015, Top Rank paid Crawford a purse of $1, 200, 000 and gate participation of $26, 824.31, and paid Middendorf $96, 000. Filing 145-17 at 2; filing 141 at 3. After Crawford defended his title against Hank Lundy in February 2016, Top Rank paid Crawford a purse of $1, 210, 000 and Middendorf $96, 800. Filing 145-17 at 2; filing 141 at 3.

         In July 2016, Crawford put his WBO title on the line in a "unification bout" against Viktor Postol, who held the WBC World Super Lightweight Title. Filing 145-17 at 2. Top Rank paid Crawford a purse of $1, 300, 000, but did not pay Middendorf after that bout. Crawford won both titles, and defended them against John Molina Jr. in December 2016 and Félix Díaz in May 2017. Filing 145-17 at 2. Top Rank paid Crawford a purse of $1, 475, 000 and gate participation of $29, 955 for the Molina bout, and a purse of $1, 650, 000 for the Díaz bout. Filing 141 at 4. But Top Rank did not pay Middendorf after the Molina or Díaz bouts. Filing 141 at 4. Finally, Crawford defeated Julius Indongo in another unification bout in August 2017, capturing the IBF, WBA, WBC, and WBO titles. Filing 145-17 at 2. Top Rank paid Crawford a purse of $2, 000, 000, but did not pay Middendorf after the Indongo bout either. Filing 141 at 4 and n.2. This litigation ensued. See filing 52.

         CONCLUSIONS OF LAW

         The Court's most significant conclusion of law was reached in an earlier decision, but to establish context, the Court will restate it here: the Court found that under the unambiguous language of the Agreement and Release, Top Rank is obliged to pay Middendorf eight percent of Crawford's "purse" for any Crawford "title defense" that Top Rank promotes pursuant to a promotional rights agreement. Filing 123 at 15. In other words, the Court found that the Agreement and Release did not effectively terminate with the 2011 Crawford-Top Rank promotional rights agreement-instead, it carried over to the 2014 Exclusive Restated Promotional Rights Agreement. See filing 123. But as the quotation marks above imply, there are still two terms the parties disagree about: "purse" and "title defense." Filing 141 at 5. Those matters are before the Court now.

         In deciding those issues, the Court is guided by familiar principles of contract interpretation. The objective of interpreting contracts is to discern the intent of the contracting parties, and traditional rules of contract interpretation are employed to accomplish that result. Am. First Fed. Credit Union v. Soro, 359 P.3d 105, 106 (Nev. 2015). Contract interpretation is a question of law, and if the language of the contract is clear and unambiguous, it will be enforced as written. Id. And the Court ...


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