Detroit Lions and Billy Sims v. Jerry Argovitz

United States District Court for the Eastern District of Michigan

580 F.Supp. 542 (E. D. Mich. 1984)

When an agent violates his fiduciary duty to a principal by placing himself in an adverse position to the principal, the contract between them is voidable by the principal.

Relevant Facts

Billy Sims played for the NFL’s Detroit Lions as a running back (the plaintiffs). Jerry Argovitz (the defendant), was Sims’ agent. While negotiating a new contract for Sims and the Lions, the defendant became president and part owner of the Houston Gamblers. The Gamblers were part of the United States Football League, a competing football league to the NFL. The plaintiffs were unaware of the defendant’s new role. The defendant asked one of his partners in the Gamblers to negotiate a contract with Sims. Meanwhile, the Lions offered Sims a five-year contract worth $3.5 million, an interest free loan, an injury guarantee, and $400,000 to purchase an annuity. Thereafter, Sims and his wife traveled to Houston to negotiate with the Gamblers, believing that the Lions were not negotiating in good faith. The Gamblers offered Sims a five-year contract worth $3.5 million, three years of skill and injury guarantees, and a $500,000 loan at an interest rate of one percent over prime. Additionally, the defendant planned to receive a $100,000 fee for acting as agent. Subsequently, Sims accepted the Gamblers’ offer, and the defendant asked Sims to sign papers that were part of his contract. The papers contained a provision that there was a waiver of any claim Sims may have against the defendant for his breach of fiduciary duty. Accordingly, the plaintiffs (Sims and the Lions) sued the defendant to have his contract rescinded.

Issue

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Holding & Reasoning

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Concurrence

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Dissent

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Last updated:

December 3, 2020

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Procedural History

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Citations

580 F.Supp. 542 (E. D. Mich. 1984)