U sues Haskins to recover $1.5 million

by Todd Milbourn

The University filed a lawsuit against former men’s basketball coach Clem Haskins on Monday, seeking to reclaim the $1.5 million paid to buy out his contract in June 1999.
The suit, filed by the Board of Regents against Haskins in Hennepin County District Court, includes six counts and centers on the University’s claim that Haskins entered into the buyout agreement fraudulently — voiding the contract and giving the University a legal foundation to reclaim the money.
“Each count is derived from one single fact: Clem Haskins was dishonest,” said Lorie Gildea, associate general counsel, at a press conference Monday afternoon.
“We got ripped off, and we want our money back,” she added.
Haskins has retained the legal counsel of well-known Minneapolis attorney Ron Meshbesher of Meshbesher and Spence, Ltd.
In a statement, Meshbesher said the allegations are false and that the University violated a provision in the buyout agreement by filing a complaint against Haskins before exhausting other means to resolve the suit.
University officials entered into the June 1999 agreement saying there was not sufficient direct evidence to fire Haskins with just cause at that time, despite suspicions of misconduct.
Evidence confirming those suspicions, however, came in July when Haskins admitted to paying former tutor Jan Gangelhoff $3,000 to write papers for players after repeatedly denying the accusation to University and NCAA investigators, both before and after the buyout agreement.
The revelation, Gildea said, is the “smoking gun” in the case and will likely be the centerpiece of the University’s claim.
University officials argue the admission is “just one of many examples of fraud that Haskins committed” and is evidence that Haskins entered the agreement under false pretenses.
Under Minnesota contract law, fraud by one party in a contractual agreement is a basis to void that contract.
“The (University) is asking for a judge to declare that the contract was voidable,” said Gary K. Bergquist, a Minneapolis contract attorney. The University is also asking for Haskins to pay for the damages it allegedly suffered.
Meshbesher challenged the complaint, saying that, under the language of the agreement, written or oral statements made by either side before the buyout are legally nonexistent.
And since the University’s suit is partially based on communications that occurred prior to June 1999, namely the Haskins denial, Meshbesher said the complaint violates the agreement.
“If it was relying on anything said by coach Haskins, it should have explicitly stated so in the buyout agreement, rather than specifically providing that it was not considering prior communications or representations,” Meshbesher said.
The six counts included in the suit are fraud, recision, fraudulent inducement, breach of fiduciary duty (violating the University’s trust), breach of employment agreement and unjust enrichment.
University officials said they have been in consultation with Haskins’ counsel and have discussed possible out-of-court settlements but have so far been unable to resolve the dispute.
The Haskins camp has 20 days to formally respond to the complaint, unless granted an extension by the judge, Bergquist said.
Critics of the buyout have said the University had enough knowledge of wrongdoing at the time of the agreement and shouldn’t have offered Haskins a golden parachute.
In defense of Yudof’s decision, Gildea said, “He made the best decision with the information he had available at the time.”
Gildea added that the University was a “victim of fraud” and that Haskins’ misstatements gave the University no other choice but to buy out his contract so they could begin rebuilding the basketball program.
Gildea, along with Thomas Schumacher, associate general counsel, is handling the case since general counsel Mark Rotenberg is likely to be a fact witness.
University President Mark Yudof and Vice President Tonya Moten Brown are also expected to testify and, subsequently, will not comment on the case until its conclusion.
The University waited for the completion of the NCAA investigation and hearing before deciding to pursue legal recourse, Gildea said.
“We wanted to ensure we didn’t do anything to interrupt the NCAA process.”
The NCAA is expected to rule on further men’s basketball sanctions by mid-October.
Gildea also said the decision was made independent of the ongoing federal grand jury investigation into wire and mail fraud.
In the civil suit, the University is using in-house legal representation to cut the costs of a legal proceeding that will likely take more than a year.
Gildea did not say whether the University would consider suing Gangelhoff or others involved in the case.
Gangelhoff’s admission in March 1999 that she wrote more than 400 papers for at least 18 players over six years sparked the initial investigation.

Todd Milbourn welcomes comments at mmilbour[email protected]. He can also be reached at (612) 627-4070 x3234.