The National League of Professional Baseball Teams (the “League”) hired the law firm Gozdecki, Del Giudice, Americus & Farkas, LLP (“GDAF”) to draft its operating agreement (the “Agreement”). The League asserts that the Agreement was supposed to contain a $1 million liquidated damages provision to be imposed on teams that voluntarily withdrew from the League. However, no such provision was included. Rather, the final version of Agreement contained a provision for involuntary expulsion of a team, which included a $1 million liquidated damages penalty. When four of the League’s eight teams chose to join a rival organization, the League suffered “devastating financial losses and eventually, the league ceased operations.” Id. at ¶5. The League sued GDAF for malpractice, seeking the $4 million dollars it should have been able to collect from the departing teams, but for GDAF’s alleged malpractice in drafting the Agreement.
At trial, the parties vigorously contested the type of exit fee provision the owners intended. The owners of two departing teams testified that they “would not have signed an agreement containing an exit fee provision.” Id. at ¶32. The League objected to the testimony, but was overruled. After the jury returned a verdict in favor of GDAF, the League appealed. Among other things, the League argued that the trial court erred in allowing the speculative testimony from two departing team owners as to what they would have done concerning an agreement that did not yet exist: an alleged violation of Illinois Rules of Evidence 602 and 701. Id. at ¶36. The Appellate Court disagreed, explaining that “to determine whether defendants committed malpractice by failing to include an automatic exit fee provision in the agreement, the jury had to consider the parties’ intent regarding exit fees.” Id. at ¶38. It added that the League “has not cited any authority stating that evidence of such intent cannot be relevant or admissible just because the parties did not have an actual agreement containing the disputed provision.” Id.
N. League of Prof’l Baseball Teams v. Gozdecki, Del Giudice, Americus & Farkas, LLP