This was a writing prompt assigned to me in my Legal Reasoning and Writing course. The prompt and materials for this assignment can be found here.
MEMORANDUM
To: Aliyah Abrams, Supervising Attorney
From: Jackson Lanier, Intern
Date: December 8, 2021
Re: Angelo Olajuwon’s potential lawsuit for breach of contract
QUESTIONS PRESENTED
Under North Carolina law for breach of contract, was there a breach of terms between Angelo Olajuwon (Mr. Olajuwon) and the University of Carrboro (UC), causing injury, when: (1) Mr. Olajuwon decided not to participate in the upcoming basketball game against Ole Missouri University (Ole Missouri); (2) the terms of the scholarship agreement required Mr. Olajuwon to participate in all scheduled athletic contests; (3) UC suspended Mr. Olajuwon from the basketball team indefinitely and cancelled his athletic scholarship when he refused to play at the request of his endorser, AfriCare; (4) UC stated that the scholarship would “not be reduced . . . on the basis of any contractual relationship in which [Mr. Olajuwon] earn[s] profits from [his] name, image, and likeness” (5) Mr. Olajuwon’s scholarship, which covered the full cost of UC’s out-of-state tuition, room and board, and textbooks, was withdrawn and forced Mr. Olajuwon to cover those expenses out-of-pocket; and (6) Mr. Olajuwon has asserted that his NBA draft standing and potential future income have decreased?
BRIEF ANSWER
No. It is unlikely that a court will find that the University of Carrboro breached its contract with Mr. Olajuwon. By refusing to compete in the game against Ole Missouri, Mr. Olajuwon was not fulfilling his contractual obligation to participate in scheduled athletic contests. Mr. Olajuwon likely does have standing regarding his claim seeking damages for losing his scholarship, but a court is likely to find that his claim of damages to recover lost potential income is too speculative and irrecoverable.
STATEMENT OF FACTS
Mr. Olajuwon was a student-athlete at the University of Carrboro. After his freshman season, Mr. Olajuwon was a rising star on the UC basketball team and was projected to be a first-round draft pick in the 2022 National Basketball Association (NBA) Draft by ESPN.
Mr. Olajuwon’s financial aid agreement stated that his “financial aid will further not be reduced . . . on the basis of any contractual relationship in which [he] earn[s] profits from [his] name, image, and likeness.” [Cite.] However, it did state that it may be withdrawn if he “[f]ails to attend . . . scheduled contests . . .” or when he “[d]oes not comply with expected personal conduct . . . when such violations bring discredit to the athletic program or are not in alignment with the values of the University.” [Cite.] Mr. Olajuwon agreed to the terms of the financial aid agreement and to “the responsibility of representing the University’s diverse principles and values during the time of the Agreement.” [Cite.]
Following the renewal of his scholarship and the National Collegiate Athletic Association’s (NCAA) new policy allowing student-athletes to profit from their name, image, and likeness, Mr. Olajuwon signed a $450,000 endorsement deal with AfriCare Hair Products (AfriCare) on July 5, 2021. A week later, on July 12, AfriCare requested that Mr. Olajuwon boycott UC’s future game against Ole Missouri on December 14, 2021 in protest of Ole Missouri’s handling of a controversial internal affair.
On July 13, Mr. Olajuwon informed UC Head Basketball Coach Michael Kuzenski, that he would not be participating in the game against Ole Missouri. In response, on August 1, the University of Carrboro suspended Mr. Olajuwon indefinitely from the basketball team and withdrew his athletic scholarship. In its withdrawal letter, UC cited Mr. Olajuwon’s refusal to “participate in . . . scheduled contests…” as reason for the withdrawal and that his “explanation for missing the scheduled contest [was] inconsistent with ‘representing the University’s diverse principles and values’” and because UC “does not entangle itself in the internal governance and administration of other academic institutions.” [Cite.]
As a result, Mr. Olajuwon is seeking damages against UC. He alleges that he was operating within the terms of the athletic scholarship agreement and that UC breached the terms by indefinitely suspending him from the team and by canceling his athletic scholarship. Mr. Olajuwon alleges that UC’s actions caused him injury by forcing him to not participate in his upcoming sophomore season and subsequently reducing his NBA draft stock.
ANALYSIS
The court is unlikely to find that UC breached the terms of the athletic scholarship agreement it had with Mr. Olajuwon. It is also likely that court would find that Mr. Olajuwon’s loss of potential income claim lacks standing because his alleged injury is too speculative, even if UC breached the contract. For there to be a breach of contract claim, North Carolina law requires that “. . . there must be (1) a valid contract; and (2) breach of the terms of that contract.” Giuliani v. Duke Univ., No. 1:08CV502, 2009 WL 1408869, at *2 (M.D.N.C. May 19, 2009). To establish if the terms of the contract were breached, the court will “look to the construction of the contractual agreement between [the parties]” Taylor v. Wake Forest Univ., 16 N.C. App. 117, 121, 191 S.E.2d 379, 382 (1972). Moreover, “a plaintiff must allege injury to a contractual interest to have standing to maintain a contract-based claim.” McAdoo v. Univ. of N.C. at Chapel Hill, 225 N.C. App. 50, 50, 736 S.E.2d 811, 814 (2013). The injury must be “based upon a standard that will allow the finder of fact to calculate the amount of damages with reasonable certainty.” Id. “Therefore, speculative damages that cannot be calculated with reasonable certainty are not recoverable.” Id.
In Taylor v. Wake Forest University, the court examined whether there was a breach of the terms of the contract. In 1967, Gregg Taylor, the plaintiff, was a student athlete on scholarship at Wake Forest University. After falling below the required minimum grade point average for fall freshman semester at Wake Forest University, Gregg Taylor suspended his involvement in spring athletic activities until he got his grade point average above the minimum requirement. Even after raising his grade point average above the minimum requirement, Gregg Taylor continued to not participate in athletic activities throughout his fall and spring semester of his sophomore year. Taylor’s scholarship was terminated because of his refusal to participate in athletic events after raising his grade point average above the required minimum. Taylor, 16 N.C. App. at 121, 191 S.E.2d at 382. Gregg Taylor sued Wake Forest University contending that his refusal to participate in athletic events was to increase his academic achievement and in line with the agreement. At issue was a provision in the previously oral agreement and now newly codified 1969 Wake Forest Grant-in-Aid Policy which stated that “In the event of any conflict between educational achievement and athletic involvement, participation in athletic activities could be limited or eliminated to the extent necessary to assure reasonable academic progress.” Id. The Forsyth County Superior Court granted summary judgement in favor of Wake Forest University. On appeal by Taylor, the North Carolina Court of Appeals ruled the contractual agreement was constructed as a scholarship awarded for academic and athletic achievement and by not participating in athletic activities, he was not satisfying the athletic achievement portion of his contractual obligation. The Court held that Taylor did violate the 1969 Wake Forest Grant-in-Aid Policy and that Wake Forest’s actions were justified. Taylor, 16 N.C. App. at 122, 191 S.E.2d at 382
Taylor and Mr. Olajuwon’s cases are analogous because both athletic scholarships require satisfaction of athletic participation. Taylor’s scholarship agreement stated that financial aid could be terminated for not maintaining eligibility and or “refusal to attend practice sessions or scheduled work-out that are a part of the athletic program.” Taylor, 16 N.C. App. at 121, 191 S.E.2d at 382. This is similar to Mr. Olajuwon’s Athletic Financial Aid Agreement where he agreed that his scholarship may be withdrawn if he fails to participate in scheduled athletic contests. [Cite.]
Although, the circumstances under which both student-athletes declined to participate in their scheduled athletic contests is different. Taylor did not participate in any practices or games for three academic semesters before he lost his athletic scholarship. Id. It was after this fact that Taylor had his scholarship withdrawn. Id. In contrast, Mr. Olajuwon merely informed his coach that he would not be participating in a single future game. [Cite.]
Further, there is another area of similarity between Taylor and Mr. Olajuwon. Both student-athletes believed that they were exercising a provision in their athletic scholarship agreements which allowed them to determine the definition of vague language. Taylor believed that an oral agreement between him and Wake Forest University that gave him the power to decline participation “to the extent necessary to assure reasonable academic progress” enabled him to determine what reasonable academic progress meant. Taylor, 16 N.C. App. at 121, 191 S.E.2d at 382. Likewise, Mr. Olajuwon believed that the provision in his athletic scholarship agreement which stated that his financial aid would “not be reduced during the period of its award on the basis of any contractual relationship in which I earn profits from my name, image, and likeness” [Cite] enabled him to violate other provisions of his athletic scholarship agreement if the decision originated from his contract with AfriCare.
However, the Taylor court ruled that athletic scholarships create a contractual obligation on student athletes to satisfy academic and athletic participation requirements. It is likely that the Court will find that the University of Carrboro was within its authority to terminate Mr. Olajuwon’s scholarship since he refused to participate in a scheduled athletic contest and failed to meet his contractual obligation.
In McAdoo v. University of North Carolina at Chapel Hill, the Court looked at whether there was injury and standing for breach of a scholarship agreement. In the case, Michael McAdoo, the plaintiff, was a student-athlete at the University of North Carolina at Chapel Hill (UNC-CH.) McAdoo was suspended from the UNC-CH football team and had his student-athlete scholarship terminated due to student honor code violations, but did not withdraw his scholarship. In his lawsuit, McAdoo sought damages to recover the loss of income he would have potentially received as player in the National Football League (NFL) instead of his current role as a free agent. The court ruled that McAdoo’s claims were irrecoverable because he did not lose his scholarship and that his claims of lost income were too speculative and hypothetical to be recoverable because they lacked reasonable certainty. McAdoo, 225 N.C. App. at 65, 736 S.E.2d at 822.
Both McAdoo and Mr. Olajuwon are making similar claims seeking damages against their respective universities. Mr. McAdoo and Mr. Olajuwon were both college student-athletes and both received athletic scholarships that covered the full cost of their academic expenses. McAdoo was claiming that UNC-CH’s actions against him negatively impacted his career prospects with the NFL by making him ineligible for the draft. Id. Mr. Olajuwon, similarly, alleges that by indefinitely suspending him from the basketball team, UC has indirectly lowered his NBA draft stock and thus reduced his potential earnings. [Cite.]
However, Mr. Olajuwon lost his scholarship, whereas Mr. McAdoo did not. At the time he filed his lawsuit, McAdoo had already graduated from UNC-CH and was a free agent for the Baltimore Ravens. McAdoo, 225 N.C. App. at 67, 736 S.E.2d at 823. Currently, Mr. Olajuwon is a rising sophomore still in enrolled at UC. The McAdoo court found that McAdoo’s claims for damages were speculative because he was currently playing for the NFL, and it was impossible to ascertain whether he would have been drafted or still found his way into his current role. McAdoo, 225 N.C. App. at 68, 736 S.E.2d at 823. Mr. McAdoo, the court found, did not suffer real damages because UNC-CH did not revoke his athletic scholarship. McAdoo, 225 N.C. App. at 64, 736 S.E.2d at 811. However, Mr. Olajuwon did lose his scholarship.
In seeking damages, Mr. Olajuwon has standing to seek damages for the loss of the scholarship, but not for the loss of potential income. It is likely that a court will follow McAdoo and find Mr. Olajuwon’s claims for lost income will be too speculative and irrecoverable.
It is unlikely that a court will find that UC breached its contract with Mr. Olajuwon. By refusing to participate in the basketball game against Ole Missouri, Mr. Olajuwon was not meeting his contractual obligations, and, as per the terms of the contract, UC was able to withdraw his scholarship. A court is also likely to find that Mr. Olajuwon’s claim of lost potential income from a reduction in his draft stock to be too speculative and irrecoverable.
CONCLUSION
It is unlikely that a court will find that UC breached the scholarship agreement with Mr. Olajuwon. The athletic scholarship agreement required Mr. Olajuwon to participate in scheduled athletic contests. By electing to not participate in the Ole Missouri game, Mr. Olajuwon was not meeting his contractual obligation to participate in scheduled contests; therefore, UC was within its power to withdraw the scholarship. While Mr. Olajuwon can allege injury for the scholarship’s withdrawal, he cannot allege injury for the speculative reduction of his NBA draft stock and the loss of potential income.