Kelly Sports Properties Sues School District over Unpaid Commissions

Feb 26, 2018

A Boone County marketing company is accusing Columbia Public Schools of being cheap.

Kelly Sports Properties is suing the district for $411,625.77 for alleged breach of contract and unpaid and delinquent commissions. Between 2011 and 2016, the company operated as the sole marketing agent for the district’s sports programs under the Missouri State High School Activities Association, according to a copy of the contract obtained by the Missourian.

The contract allotted Kelly the exclusive rights to manage marketing and corporate partnerships for the district’s athletic events, such as selling scoreboard and radio advertising, and to negotiate agreements with vendors to sell concessions at games.

  

But according to the lawsuit, originally filed Sept. 19, the school district violated that contract when it began negotiating beverage pouring rights with Pepsi Cola before the contract with Kelly was up.

Under Kelly’s contract, Coca-Cola held exclusive beverage pouring rights at all MSHSAA athletic events.

The lawsuit alleges that Columbia Public Schools owes Kelly at least $254,910 from that violation and other improperly negotiated partnerships over the duration of the contract.

The lawsuit also claims the school district owes Kelly for a number of delinquent or unpaid commissions, totaling more than $150,000, and for an unpaid tab on T-shirts to the tune of $2,550.

Money owed to the school district from several corporate partnership agreements negotiated by Kelly remain delinquent or entirely unpaid, the lawsuit says.

“There’s 14 businesses here in Columbia that owe the school district over $140,000,” said Tom Mingus, the attorney representing Kelly Sports Properties. “And the school district has done nothing to pursue collection. So, it’s been frustrating to my client.”

Michelle Baumstark, community relations director for Columbia Public Schools, said the district couldn’t comment on the particulars of the case since it was still in litigation. But she did deny the lawsuit’s allegations.

“The claims brought by Kelly Sports against the school district are false and the school district adamantly denies them,” Baumstark wrote in an email. "Kelly Sports was paid all amounts owed under its contract. We have attempted to resolve this dispute amicably prior to Kelly Sports filing its lawsuit but were unsuccessful.”

The district filed a motion to dismiss the lawsuit on Oct. 30, citing case law that states school districts aren’t liable for the types of claims Kelly is seeking.

“School districts cannot be held liable on implied contracts,” the motion stated.

The motion goes on to say that any contracts that are implied but not explicitly written — a term known legally as quantum meruit — do not need to be honored by the school district because of past case law that exempts them.

In response to that filing, Mingus filed an amended petition on Nov. 9 that restated the original five counts but removed the quantum meruit claim.

Mingus said that doesn’t alter anything about the school district owing unpaid commissions, which make up the bulk of the suit.

“It doesn’t change the essence of the lawsuit and what my clients are contending the school district owes them,” Mingus said.

Mingus said he hopes Kelly can settle the case outside court. Wednesday, Mingus filed for a written discovery period to help iron out some of the legal questions surrounding the case, but he hopes they can reach an agreement soon.

“There’s always the hope in litigation that you can settle a case,” Mingus said. “But we’re prepared to move forward, to try the case if necessary.”