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LEWIS v. RAHMAN

June 27, 2001

LENNOX LEWIS, PLAINTIFF,
V.
HASIM RAHMAN, DON KING PRODUCTIONS, INC., KINGVISION PAY PER VIEW, LTD., DON KING, ROBERT MITTLEMAN, STANLEY HOFFMAN AND STEVE NELSON, DEFENDANTS. CEDRIC KUSHNER PROMOTIONS, LTD., PLAINTIFF, V. HASIM RAHMAN, DON KING PRODUCTIONS, INC., KINGVISION PAY PER VIEW, LTD., AND DON KING, DEFENDANTS.



The opinion of the court was delivered by: Cedarbaum, District Judge.

  OPINION AND ORDER

These two related suits arise out of contract disputes between Lennox Lewis, the former heavyweight champion of the world, and Hasim Rahman, the current heavyweight champion of the world, and between Rahman and his former promoter, Cedric Kushner Promotions, Ltd. ("CKP"). Plaintiffs Lewis and CKP sue Rahman for breach of contract and sue Don King Productions, Inc. ("DKP"), Rahman's current promoter, Kingvision Pay Per View, Ltd., and Don King (collectively the "King defendants") for tortious interference with contract. Lewis also sues Rahman's managers Stanley Hoffman and Steve Nelson, and Robert Mittleman for tortious interference with contract. Lewis claims a contractual right to fight a rematch against Rahman within 150 days of the April 21 bout in which Rahman defeated him. CKP claims that it has a continuing contractual right to promote Rahman in the rematch and for a period of two years from April 12, 2001.

With the consent of the parties, pursuant to Fed.R.Civ.P. 65(a)(2), and after the parties waived jury trial on all claims, the applications for preliminary and final injunctive relief were consolidated, and a bench trial was held on the merits of the equitable claims in both cases in accordance with Fed.R.Civ.P. 42(a) and 42(b). The damage claims in the two related cases will be tried on a date to be scheduled in October.

THE FACTS

After examining all of the evidence, observing the demeanor of the witnesses who testified in the courtroom, and considering the credibility and plausibility of all the testimony, I make the following findings of fact.

Since April 21, 2001, Hasim Rahman has held the heavyweight championship title of three of the four major sanctioning organizations that govern professional boxing: the World Boxing Council ("WBC"), the International Boxing Federation ("IBF") and the International Boxing Organization ("IBO"). Another boxer, John Ruiz, holds the heavyweight title of the World Boxing Association ("WBA"). Rahman is also the "linear" champion, a term used in the industry to describe the boxer whose championship can be traced back in a straight line to a single, undisputed champion. Rahman won these titles by defeating Lennox Lewis in a bout which took place in Johannesburg, South Africa.

CKP had been the exclusive promoter of Rahman since 1995. In June of 1998, CKP and Rahman entered into an Exclusive Promotional Agreement (the "Promotional Agreement"), for a two-year term commencing on October 12, 1998, pursuant to which Rahman granted to CKP "the exclusive worldwide rights to each of the bouts" promoted during the course of the agreement. The Promotional Agreement grants CKP an irrevocable option to extend the term of the agreement for another two years upon payment of $75,000 and provides for other automatic extensions of the term. Paragraph 1(C) (the "championship provision") states:

[i]n the event that FIGHTER is declared the Heavyweight World Champion of any or all of the WBA, WBC, or IBF, then the term of this agreement shall be extended, if necessary, to include FIGHTER's next four fights following his being declared Heavyweight World Champion.

Paragraph 16(b) (the "injury provision") states:

[s]hould any bout scheduled to be promoted hereunder be postponed for any reason, or should FIGHTER be under temporary physical disability which results in the postponement of bouts scheduled, or to be scheduled, for FIGHTER by CKP pursuant to this Agreement, or should FIGHTER for any other reason be mentally or otherwise unable to engage in bouts (i.e., contractual disputes, legal problems or other matters). . . . the term of this Agreement and its extensions shall be extended for a period equal to the period of such postponement(s) or disability(s).

In addition, paragraph 19 provides, in relevant part, that CKP shall have a right of first refusal, a right to match any offer for Rahman's services, for a period of one year following the "termination" of the Promotional Agreement.

Lewis is promoted by Shogun Securities, Ltd. d/b/a Lion Promotions, Inc. ("Lion"), which he owns. Lewis' business manager, Adrian Ogun, runs the company on Lewis' behalf. Lion has an agreement with another company, Main Events, to co-promote certain of Lewis' bouts.

On January 31, 2001, Rahman signed a Bout Agreement with CKP to fight Lennox Lewis on April 21, 2001. The Bout Agreement requires CKP to provide $150,000 in training expenses in advance of the bout, including $25,000 already advanced, and a purse of $1,050,000.*fn1 One hundred thousand dollars of the training expenses were to be paid to Rahman upon execution of the Bout Agreement, but Rahman did not receive that money until after he signed the Addendum to the Bout Agreement, discussed below, two weeks later. Before signing the Bout Agreement, Rahman read it very slowly and discussed its terms with his manager, Hoffman.*fn2 Rahman was unhappy about the $25,000 deduction from the training expenses for funds already advanced, and wanted additional benefits for the bout, such as a larger number of hotel rooms and plane tickets. Hoffman communicated these objections to Kushner, and the issues were resolved favorably to Rahman, although the terms of the Bout Agreement were not changed in writing.

Shortly thereafter, Kushner, on behalf of CKP, signed a Provision of Services Agreement ("PSA"), pursuant to which CKP agreed to provide Rahman's services to Lion for the bout with Lewis, which Lion would promote. In the PSA, Lion agreed to pay CKP a total of $1,575,000 — a $275,000 advance, with the remaining $1.3 million to follow after the bout — out of which CKP was to pay Rahman's purse and expenses.

Paragraph 7 of the PSA (the "rematch provision"), entitled "Exclusive Option for Rematch," states the following:

(a) As additional consideration for this agreement, CKP and CKP on behalf of Rahman covenant and agree that if Rahman is declared the winner of the Bout by the Boxing Commission having jurisdiction, [Lion] shall have the exclusive right and option, exercisable by written notice not later than thirty (30) days after the date of the Bout, to promote a rematch bout between Rahman and Lewis (the "Rematch"). . . . within 150 days after the date of the Bout, upon the same terms and conditions as provided in this Agreement except that:
(i) in place of the fee payable pursuant to paragraph 1(c) hereof, [Lion] shall pay a fee to CKP of $3,150,000 (or such higher amount as may be mutually agreed upon) promptly after the conclusion of the Bout. . . .
(b) From the sum set forth in paragraph 7(a)(i), CKP shall be responsible for payment of, and shall pay, Rahman's purse, training expense allowance, all applicable sanction fees and any and all payments to or on behalf of Rahman for the Rematch.
(c) In the event that CKP or Rahman contemplates engaging in an interim bout prior to the Rematch with Lewis, then neither CKP nor Rahman shall enter into any contract for such bout unless that contract shall bind his challenger, in the event that challenger wins, to the same terms for a bout against Lewis as set forth in paragraphs 7(a) and 7(b) herein and, provided further, that such interim bout may not be held within 90 days of the date scheduled for the Rematch. The contract for the interim bout must contain an addendum which shall be a direct contract between Promoter and the challenger and which must contain the terms required in this paragraph 7.

The PSA further provided in paragraph 1(c) that Lion's payment of the $275,000 advance to CKP was conditioned on CKP's delivery of a binding agreement from Rahman in which he agrees to participate in the Lewis-Rahman bout upon the terms and conditions provided in the PSA and to grant Lion, its associates, partners or assignees a direct cause of action against Rahman for any breach of his obligations under the Addendum. Lion did not sign the PSA until after this additional agreement was executed by Rahman.

On February 13, 2001, Kushner gave an Addendum to Bout Agreement ("Addendum"), drafted by Lion's counsel, to Hoffman for Rahman to sign. At the time, Rahman was training for the Lewis bout in upstate New York. Rahman signed the Addendum on February 14, 2001. The Addendum provides that Lion, Lewis and their designees are third party beneficiaries of the Bout Agreement and have a right to proceed against Rahman for a breach of the Bout Agreement or the Addendum. Paragraph 5 states that "Fighter hereby acknowledges that Promoter has all rights necessary to comply with the agreement which it is about to enter with Lion Promotions or its designee(s) which will provide for the promotion of the bout and certain future rights." Paragraph 7 states that "[i]f Fighter is declared the ...


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