Monday, February 19, 2018

Square Ring Survives Motion to Dismiss in Breach of Contract Suit vs. Eduard Troyanovsky

Interesting issues in a breach of contract case filed by Square Ring, Inc., Roy Jones, Jr.'s promotional entity, against former IBF Junior Welterweight Champion Eduard Troyanovsky in U.S. Federal Court, Northern District of Florida.

The complaint itself is pretty straight forward (see Complaint below).  It alleges, in essence, that Troyanovsky signed a promotional agreement with Square Ring and Salita Promotions, Dmitiry Salita's promotional entity, as co-promoters.  Salita was subsequently bought out by Vlad Hrunov.  Square Ring and Hrunov co-promoted Troyanovsky's bouts until such time as Troyanovsky started participating in bouts promoted by another entity (unnamed in the complaint but initially - Aleksey Stashkov's World Boxing).

In response, Troyanovsky's counsel filed a motion to dismiss the complaint for failure to state a claim and lack of personal jurisdiction, quash service, and, alternatively, to disqualify counsel (Square Ring CEO John Wirt).  Plaintiff then filed a motion in opposition (see MTD and Opp briefs below). 

There are some interesting issues regarding forum selection clauses, prior material breach and minimum contacts in the briefs.   But what really caught my eye was an issue Troyanovsky's counsel raised for the first time in a Joint Statement of the parties regarding the need for an evidentiary hearing to decide the validity of the forum selection clause (see Joint Statement below).  Counsel raised the argument that Florida's long arm statute regarding personal jurisdiction did not apply because the promotional contract constituted a labor or employment contract - both of which were excluded under the statute.  A finding by the Court that promotional contracts are labor or employment contracts would be interesting precedent.

Judge Rodgers, however, rejected Troyanovsky's argument.  After initially rejecting the argument because it was not raised in the Motion to Dismiss brief and was therefore waived, the Court further stated that even "[i]n the absence of waiver, the Court would find that the Agreement is not a contract '[f]or labor or employment' under Fla. Stat. § 685.101." 

Because the terms "labor" and "employment" were not defined in the statute, the Court looked to how the terms were defined by the common law and the dictionary.  The Court found "Laborer" was defined in Webster's as "a person who does unskilled physical work for wages."  The Court further found that under the common law, "an 'employee' is a person who performs services under the substantial control or direction of an employer."

The Court held that the promotional agreement at issue was "for the promotion of Troyanovsky's skills as a world-class professional boxer, not unskilled work."  The Court further found that Square Ring did not exert sufficient control over Troyanovsky such that he was an employee.  Thus, the promotional agreement was not a contract for labor or employment that would exempt it from the effect of the forum selection clause. 

Ultimately, the Court denied the motion to dismiss, quash service and disqualify counsel, finding for Square Ring on all counts (see the Court's Order below). 

See Complaint below:

See MTD below:

See Opp to MTD below:

See Joint Statement below:

See Order below:

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