Rory’s plan to return to golf at the Master’s with a clear mind is very unlikely.
His legal battle against his former management company Horizon Sports Management is going to take a while with yet another setback in the discovery process. According to an IrishTimes report, Horizon’s attorneys are alleging that Rory McIlroy and his father Gerry violated a court order when they intentionally wiped the memory of a reported eight or more cell phones and electronic devices that may have contained relevant information concerning the case. Believing that they can still access the information, Horizon’s legal team is seeking the court’s permission to “forensically inspect” the phones used by both Rory and his father going back three years.
This case is reportedly scheduled to begin in January, since months of pre-trial negotiations have failed. If it does go to court, a resolution by April before the Masters allowing Rory to sleep easy while he attempts to complete the Grand Slam is just not going to happen. The amount of money at stake is enormous and regardless of what decision is initially made, it will be argued to death in appeals court. Any trial lawyer can tell you that the appeals process takes longer than Kevin Na’s pre-shot routine.
The facts of the case are light but here is what we know so far. Rory was unhappy with the advice he was receiving from his then manager Andrew “Chubby” Chander in 2011. Rory, needing to make a change, reached out to Horizon Sports Management for new representation, since his good friend Graeme McDowell was also represented by them. According to the allegations stated by Rory’s team, Horizon’s founder Conor Ridge apparently told Rory that his deal with Horizon would be the same as their deal with McDowell. Rory signed with Horizon in December of 2011 when he was 22 years old. Horizon and Rory entered into another deal two years later right around the time he signed a $100+ million deal with Nike. Horizon is undoubtedly entitled to a piece of that.
Apparently in 2013, Rory somehow learned that his Horizon deal was not the same as McDowell’s and that Rory had paid Horizon close to $7 million more in fees than what McDowell’s contract required. Rory then split with Horizon and almost immediately started his own company, Rory McIlory Inc., before filing this lawsuit.
The purpose of this court battle is to get Rory out of the remainder of his two contracts, claiming that because he was 22, “inexperienced” and did not consult his own lawyer, the contracts with “markedly inferior terms” should be void due to Horizon’s undue influence over Rory.
According to the Irish Times, Horizon’s legal team stated that Rory’s claims are baseless and that Rory was never told that he would get “the same deal” as McDowell. Horizon is countersuing Rory for millions in unpaid fees for off-course endorsements, as well as damages for the continued breach of the two contracts.
Lets take a look at both side’s argument based on what we know. Keep in mind that I have not been able to read the complaints filed in the Dublin court.
Rory’s attempt to get out of his contract with Horizon is based on the legal doctrine of undue influence in contract law. Unfortunately, there is no statutory basis giving us a clear-cut definition of what amounts to undue influence. Also, Rory’s case was filed in a Dublin court, which may have a slightly different process than a U.S. court. However, Ireland follows many of the same legal doctrines as the U.S. and their contract laws appear to be pretty similar.
Undue influence basically states that a contract is voidable because one party took advantage of another party in order to convince that party to sign an unfair contract. Unlike certain circumstances where a contract is automatically deemed void regardless if brought to court (i.e. one party is under the age of 18), a voidable contract means that a contract CAN BE deemed void only where the circumstances require.
There are two types of undue influence. Actual undue influence, or duress, where an agreement is made only after one party actually uses some sort of influence over the other party to make he/she agree against their will. This is typically done by force or threat of force or some type of bullying like badgering the person to sign. It’s pretty unlikely that Rory could be taunted or threatened into signing, and there are no facts leaning to anything of the sort so far, so we can probably rule that out.
The second type is the strongest argument Rory can make because it puts almost all of the burden of proof on the defense. Wrongdoing is assumed based on the relationship between the parties. These relationships are those where one party is in a position of power and is being trusted to act in the other’s best interest, i.e.: parent/child, doctor/patient, attorney/client.
Rory will most likely argued that he believed that Horizon would be representing him the same way they are representing McDowell and because he was only 22 and did not think to get himself a lawyer because he was “inexperienced,” and that Horizon knew that Rory was trusting Horizon to act in his best interest.
The court will first look to see if the relationship creates the presumption that undue influence occurred. It is hard to determine if a judge is likely to find this. Those relationships typically involve a pre-existing relationship where trust has already been established through a long-time, working relationship. Rory never worked with Horizon before, thus had no history of a trusting relationship to point to. This may lead the court against the presumption, and Rory will be required to show evidence that Horizon acted in bad faith.
If the court does find that such relationship existed, however, Rory’s job is done and it will be presumed that Horizon did use their position over Rory to get him to sign a much more expensive contract. The burden of proof will switch to Horizon to rebut the presumption and show that that it did not use any position over Rory to make him agree to something without his knowledge. Horizon will most likely argue that that it did not pressure him to sign anything, did not lie or mislead him about the terms of the contract and did not prevent Rory from allowing a lawyer to review the terms of the contract. This can be difficult to show, especially if correspondences between the Horizon and Rory were deleted.
It will essentially be a he said/they said — which will most likely cause issues in determining the credibility of witnesses and cause a judge/jury confusion in making a decision.
Regardless of the law and how a Dublin court decides, a few things do not sit well. Unless more facts come out that show behavior in bad faith by Horizon, Rory is basically saying that he shouldn’t have to pay his management company, who helped him land Nike, because he thought he was only going to have to pay what McDowell was going to have to pay. And he should not have to pay Horizon only because he thought Ridge told him he would get the same contract as McDowell, but did not exercise any type of due diligence to assure that it would be reflected in the contract because he was an inexperienced 22-year-old.
My opinion would change, of course, if facts surface that Rory was actually shown a copy of McDowell’s contract and promised the same thing, if McDowell (a Horizon shareholder) personally played any part in getting Rory to agree to a different arrangement, or if Horizon did deplorable things to try to take advantage of an inexperienced kid. The truth remains to be seen, but with the facts available today it looks as though Rory didn’t do his homework.