What's This Crud About No Movie Tonight?

As was said by Ensign Pulver (Jack Lemmon) to Captain Morton (James Cagney) in the great 1955 movie, Mr. Roberts,"What's this crud about no movie tonight?" ... for those of you who've never heard of this excellent movie, it's one I'd recommend you rent ... a great flick staring Henry Fonda and the others just mentioned) ...

... that line might be rephrased in the context of the SuperSonics litigation to read, "What's the no-hyperbole skinny about the Seattle Franchise possibly not moving to Oklahoma City?"

This post begins to explore the two federal court lawsuits pending in Seattle which are attempts to tell Oklahoma City, "No movie tonight!" By no means definitive, this article attempts to discuss, in a rational manner, some of the issues involved, suggest some possible answers, and provide real documents which may bear upon them which you can assess for yourself. I'm not including the class-action season ticket holder lawsuit here since it is not deserving of further mention. I'm taking the Schultz lawsuit first and will then get to Seattle's case.

To track the City of Seattle lawsuit at the Federal Court website, click here.
To track the Schultz lawsuit at the Federal Court website, click here.

First, a few documents, in html code for easy reading and loading. I'll be adding others ...

• Howard Schultz's Federal Court Complaint. This is a verbatim copy of the complaint filed by The Basketball Club of Seattle, LLC v. Professional Basketball Club, LLC.


• Litigation Documents. This consists of various documents which have been filed as Exhibits in one or the other of the two lawsuits. Here, you will find relevant excerpts from the "Schultz/Bennett" contract and other documents.


• The July 18, 2006, "Side Letter". This is the letter which Schultz's Complaint relies on to maintain that PBC promised to keep the team(s) in the Seattle area though the term of the leases, if not beyond.

THE SCHULTZ LITIGATION. This section explores questions regarding the most recently filed lawsuit by The Basketball Club of Seattle, aka Howard Schultz. To go to a particular issue, click a link below.

• Standing to litigate
• Applicable substantive law
• Elements of fraud & burden of proof
• What's A Constructive Trust?
• Retention of benefits
• Is the Contract enough for Schultz to win?
• What about the Side Letter?
• What about damages?

Issue 1: Does Schultz have legal "standing" to sue and in the manner that he has? A threshold question in any litigation is whether the party who commences it, usually called the "Plaintiff," has authority to bring it in the first place. Howard Schultz is not, per se, the plaintiff in this litigation — The Basketball Club of Seattle, LLC, is identified as the "nominal plaintiff," while Canarsie Holdings LLC is identified as the "derivative plaintiff." Paragraph 3 of the Complaint alleges that, "Derivative plaintiff Canarsie Holdings LLC is a limited liability company organized under the law of the State of Washington and is a member of BCOS. Howard Schultz is the sole member of Canarsie Holdings LLC." Paragraph 6 of the Complaint says, "Plaintiff is bringing this action because BCOS is not able to do so, and an effort to cause BCOS to bring this action is not likely to succeed. BCOS has not been in operating mode since the sale of the Sonics to defendant was approved on August 21, 2006; BCOS is not able to reconstruct a decision-making process in a timely manner, given the need to file this lawsuit at this time; and BCOS currently does not have the financial resources to finance this litigation." And, in paragraph 2 of "Requests for Relief," the Complaint asks for "equitable relief, including but not limited to the imposition of a constructive trust from which defendant can be ordered to convey the Sonics to an honest buyer who desires to keep the Sonics in Seattle."

These allegations prompt these questions: (a) Why is it that the "nominal plaintiff" is merely "nominal"; and (b) If the litigation succeeds, is a 3rd party, that being "an honest buyer who desires to keep the Sonics in Seattle," not the real and intended beneficiary of the Schultz litigation?

Discussion

(a) When the SuperSonics sale was consummated on July 14, 2006, which sale was approved by the NBA on October 31 or November 1 of the same year, The Basketball Club of Seattle, LLC, owned the team. Ordinarily, in a legal action, an actual party to the transaction, or its assignee, or some 3rd party if a 3rd party beneficiary contract is involved, would have "legal standing" to commence litigation. The Complaint identifies Howard Schultz as the sole member of "Canarsie Holdings LLC," the "derivative plaintiff," and says that the company is a member of BCOS. The Complaint does not identify Canarsie Holdings LLC as being either the owner of or an assignee of BCOS, it merely says that, "BCOS is not able to do so, and an effort to cause BCOS to bring this action is not likely to succeed."

Why is/was BCOS "not able" and why would "an effort to cause BCOS to bring this action" likely not succeed? These are threshold questions which need to be addressed in order for Schultz to be deemed to have "legal standing" ... for him to be deemed to be a "real party in interest" ... to commence any litigation on behalf of BCOS.

(b) Since the BCOS/PBC contract specifically excludes an interpretation that it was a 3rd party beneficiary contract (see ¶9.2 of the contract), but since the Complaint effectively contemplates that an unnamed 3rd party become the beneficiary of the litigation should it succeed, is the relief requested not an attempt under the contract to do indirectly that which is prohibited directly in the contract ... effectively converting the contract into a 3rd party beneficiary contract, regardless of provisions in the agreement which would prevent any such interpretation? This query may have more to do with "contract interpretation" than it does with "legal standing," but perhaps not — Schultz is quite evidently suing upon behalf of some unnamed interest which would commit to keeping the Sonics in the Seattle area and it's difficult to see the litigation in any other way since he is not wanting to undo the contract so that he would be obligated the $350 Million he already received (and he makes no offer/tender to do so) – so, if Schultz wins, he keeps the $350 Million and someone else becomes the owner of the team. Would that 3rd party have any obligation to return the $350 Million (and other moneys expended by PBC since the contract was executed)? What would Schultz gain? What could he lose? Who would pay PBC for the purchase price and costs expended?

The relief requested by one who may be ostracized-in-Seattle would be what some might call, "A bird's nest on the ground!" He gets to keep his over-priced sale proceeds, loses nothing, someone else gets to purchase the team (making it a double-sale) and Schultz regains local respect as a local hero!

Think about it and answer the question for yourself: Do you think that Schultz (by any other name) has standing to maintain this litigation?

Issue 2: Assuming that Schultz's litigation survives any preliminary dismissal motions, what "substantive" law applies? Federal questions are not involved here — "diversity" jurisdiction where parties are located in different states is involved, and, in that context and doubtless, the law of the state of Washington provides the applicable "substantive" law (i.e., what it takes to make a case in fraud, as opposed to "procedural" law which would be governed by federal court) about which Schultz's claim must be measured. About this, there should be no "issue" at all.

Issue 3: What are the general elements of an action based upon fraud, and what is the "burden of proof" under Washington state law in that regard, i.e., what does the plaintiff have to prove, and what level of evidence is required for the elements to be deemed proven?

Discussion

It must be said from the outset that this writer is an Oklahoma lawyer, and, in fact, one who has no expertise whatsoever when it comes to litigating civil actions based upon fraud, even in Oklahoma. That's not what I do, professionally. That said, it's not difficult to research Oklahoma case and statutory law through the Oklahoma State Court Network where all Oklahoma statutes and all published decisions are "on-line" to the general public and are fully searchable. Doing just a bit of that, it is readily ascertainable that in Oklahoma that a plaintiff's claim for fraud must minimally prove the following, as stated in Gay v. Akin:

¶7 * * * The elements of common law fraud are: 1) a false material misrepresentation; 2) made as a positive assertion which is either known to be false, or made recklessly without knowledge of the truth; 3) with the intention that it be acted upon; and 4) which is relied upon by a party to one's detriment.

In an earlier case, Miller v. Long, the Oklahoma Supreme Court said, quoting Hembree v. Douglas,

2. To constitute actionable fraud, it must be made to appear that (1) defendant made a material representation; (2) that it was false; (3) that when he made it he knew it was false or made it recklessly without knowledge of its truth, and as a positive assertion; (4) that he made it with intention that it would be acted upon by the plaintiff; (5) that plaintiff acted in reliance upon it; (6) that he thereby suffered injury; and (7) all of these facts must be proved with a reasonable degree of certainty. The absence of any of them would be fatal to recovery.

3. In this jurisdiction, where fraud is alleged in the procuring of a written instrument, the proof must sustain the allegations by a preponderance of the evidence so great as to overcome all opposing evidence and repeal all opposing presumptions of good faith.

Under contemporary Oklahoma law, a "clear and convincing" and not a "preponderance of evidence" standard of proof applies. See Rogers v. Meiser, as follows:

¶17 The elements of common law fraud are: 1) a false material misrepresentation, 2) made as a positive assertion which is either known to be false, or made recklessly without knowledge of the truth, 3) with the intention that it be acted upon, and 4) which is relied on by the other party to his/her own detriment. Gay v. Akin, 1988 OK 150, 766 P.2d 985, 989; D & H Co., Inc. v. Shultz, 1978 OK 71, 579 P.2d 821, 824; Ramsey v. Fowler, 1957 OK 61, 308 P.2d 654 Syllabus by the Court. Fraud is never presumed and it must be proved by clear and convincing evidence. [Emphasis supplied]

How does Oklahoma's law compare with Washington's? It is apparently much the same. Although an Oklahoma lawyer (or non-lawyer) is at a serious disadvantage in "knowing" what Washington law might be (since, unlike in Oklahoma, all published decisions made by the Washington appellate courts are not on-line and publicly accessible as they are here), I'm left to quote from this on-line lawyer web page for some information. There it is stated,

In Oregon and Washington, the term "fraud" has come to have a definite meaning through case law. Oregon law provides 9 elements that must be proved by "clear and convincing" evidence, a standard that is higher than the normal civil case standard of "preponderance of the evidence" and lower that the criminal standard of "beyond a reasonable doubt."
* * *
Washington also has identified 9 almost identical elements of the cause of action for fraud. As the court in Pedersen v. Bibioff, 64 Wn. App. 710, 828 P.2d 1113 (1992) wrote at page 723,

To sustain a finding of common law fraud, the trial court in most cases must make findings of fact as to each of the nine elements of fraud. Howell v. Kraft, 10 Wash. App. 266, 517 P.2d 203 (1973). Those elements generally are: (1) a representation of an existing fact, (2) its materiality, (3) its falsity, (4) the speaker's knowledge of its falsity or ignorance of its truth, (5) his intent that it should be acted on by the person to whom it is made, (6) ignorance of its falsity on the part of the person to whom it is made, (7) the latter's reliance on the truth of the representation, (8) his right to rely upon it, and (9) his consequent damage. See Turner v. Enders, 15 Wash .App. 875, 878, 552 P.2d 694 (1976).

In this Washington case, the court held,

There are two basic rules to be applied in all cases of fraud:

First: "Fraud is never presumed, but must be proved." obbin v. Pacific Coast Coal Co., 25 Wn. (2d) 190.

Second: "Fraud must be proved by clear, satisfactory, and convincing evidence." Hopper v. Williams, 27 Wn. (2d) 579. See also Harrington v. Richeson, 40 Wn. (2d) 557; Cheesman v. Sathre, 145 Wn. Dec. 176.

In their decision of this case, the Appeal Tribunal has made reference to an earlier Review Case (Docket No. A-25670, Review No. 3400 [Good, CD 120]) and quotes therefrom as follows:

"But fraud is applicable only when it can be proved by clear, cogent, and convincing evidence. This constitutes the highest degree of proof. Perhaps the record in this case would suffice to establish a ‘preponderance of the evidence,’ but, as stated above, somewhat more is here required. Having so concluded, Section 75 of the law is not applicable."

The foregoing quotation correctly states the rule as regards the sufficiency of proof necessary to establish a case of fraud. (See Hopper v. Williams, 27 Wn. (2d) 579, supra.) The second sentence of the above quotation could perhaps be amended to include the words "in civil cases of fraud."

Mind you, the above is not taken from a Washington Supreme Court decision, even if it cites to such cases. But, again, the State of Washington has not acted to make its published decisions "on line" to anyone who wants to read them, unlike Oklahoma which has done that for many years. Nonetheless, and taking the above as being representative of Washington law, it appears that in either jurisdiction (Oklahoma or Washington) it is necessary that (1) basically the same elements need to be established, (2) those elements must all be established by "clear and convincing evidence," and (3) among other requirements, it must be plead and proved that damage occurred to the plaintiff who relied upon the false representations.

OK, OK! Too many words and "lawyer words," at that! If you just want "sound bites" from internet web "experts" who are getting paid on ESPN or wherever for saying them and presume to know a heck of a lot of law even without perhaps having read and/or studied the relevant litigation documents and/or perhaps applicable law, that's not a problem ... read and believe whatever you will. But, maybe you want to actually think and reach your own conclusions. I'm taking this slow path, giving you real documents and real case law and, quite possibly, bore you to death in the process. But, if you stay with this, you will be better able to reasonably reach your own conclusions and have less need to rely upon the sound-bite approaches that are readily available elsewhere on-line. That's your call.

Issue 4: What's a "constructive trust" all about? Generally, a "constructive trust" is or can arise when the "legal" owner of property (the person whose name is on the title) holds or is deemed to hold title for another, that other being the "equitable" or "real" owner of the property. For example, in a transaction Buyer contracts with Seller to acquire property which, upon the happening of an event in the future, is to then be conveyed to a Third Party, Buyer would hold title as a constructive trustee for the benefit of the Third Party. An action to impose a constructive trust is an "equitable" proceeding, governed by principles of "equity." Oklahoma case law has said that, "The holder of the legal title to lands will, in equity, be charged as trustee where it was acquired by fraud or under such circumstances as to render it inequitable for him to retain." To establish a constructive trust, Oklahoma cases hold that the evidence must be "clear, unequivocal, and convincing" — for example, see this case as well as the one linked, above. Presumably, though I've not researched it, Washington law is not terribly dissimilar.

Discussion: One problem with a "constructive trust" theory, though, is that the contract between BCOS and PBC expressly disavows that it is a "3rd party beneficiary contract — one that creates actionable rights in favor of any 3rd person. Paragraph ¶9.2 of the purchase contract is named, "No Third-Party Beneficiaries," and it reads, "This Agreement shall not confer any rights or remedies upon any Person other than the Parties, and their respective successors and permitted assigns, other than as specifically set forth herein." As relates to the Schultz litigation, "others specifically set forth herein," do not exist – there aren't any.

Try looking at the situation differently — instead of Schultz suing to create a constructive trust the object of which was to vest Sonics' ownership in some local group, instead, some 3rd party, e.g., Ballmer and his group, brought suit under the same theory. Could such a group succeed? Of course not, since the contract explicitly excludes such a construction. See this Oklahoma case, for example. If 3rd parties could not succeed in such a litigation attempt, it seems extremely remote that Schultz could effectively do indirectly what 3rd parties could not do directly.

Issue 5: Retention of Benefits -- can Schultz have his cake and eat it too? Although some internet articles label Schultz's litigation an attempt to "rescind" the BCOS/PBC agreement, strictly speaking, it is not. "Rescission," as a cause of action, is an attempt to undo a contract, it does not involve an attempt to enforce one. When attempting "rescission," a seller must ordinarily offer back the "consideration" to the buyer, e.g., $350 Million at the least in this case, as part of the litigation. In plain speech, if Schultz's case was for rescission, he would need to pony up $350 Million, and, quite possibly, PBC's expenses associated with its attempt to secure arena funding through the Legislature, and, maybe, operating losses incurred during the season just had. As an example, this Oklahoma case says, "Again, it is well settled that, if the complaining party has allowed a change to take place so as to modify the situation with reference to the property involved, or, if he retains benefits under the original or new contract, then rescission will not be declared." In another case, the Oklahoma Supreme Court said, "But the contract may be so drawn as to make time the essence of it and provide for the termination of the contract upon the default complained of. In such case the court will rescind on certain conditions, one of which is that the party seeking rescission must restore or offer to restore all benefits he has received. Nelson v. Golden, 84 Okla. 29, 202 P. 308; Nicholson v. Roberts, 144 Okla. 116, 289 P. 331, and the offer must be unconditional."

But, no, that's not what Schultz wants to do. He wants to keep the $350 Million and be obligated for none of the legislative expense and/or operating losses. The heart of Schultz's request for relief is this: "For equitable relief, including but not limited to the imposition of a constructive trust from which defendant can be ordered to convey the Sonics to an honest buyer who desires to keep the Sonics in Seattle." The constructive trust he wants the court to establish would make an unnamed 3rd party the beneficiary of such a trust. In non-legal parlance, Schultz wants to have his cake and eat it, too.

Discussion. Aside from problems associated with 3rd party beneficiary provisions, already discussed, can Schultz actually do this — keep the money and force a sale to some third party? I've already identified my lack of expertise in this type of litigation, certainly Washington state law, but, that said, such an approach strikes me as "reaching" to the nth degree, so much so that it may well provide the fodder for a dismissal motion for "failure to state a claim upon which relief can be granted." Certainly, one would reasonably suppose that Schultz's attorneys will need to have some precedential cases which would authorize such a request under Washington law. We shall be waiting to see them.

Issue 6: Does the contract itself impose obligations on PBC to keep the team in Washington after October 31, 2007? Very clearly, the answer to this question is, "No." The July 14, 2006, contract contain but one related promise, stated in ¶5.3 Puget Sound Area Lease, which creates an obligation on PBC as follows: "For a period of 12 months after the Closing Date, Buyer shall use good faith best efforts to negotiate an arena purchase, use or similar arrangement in the King, Pierce or Snohomish counties of Washington as a venue for the Teams' games, to be used as a successor venue to KeyArena; provided, however, that the process described in this Section 5.3 and the entering into of any such arena lease, purchase, use or similar arrangement shall be at Buyer's sole discretion." The contract also states, under Article III, Representations and Warranties of Buyer, that, "Except for the representations and warranties contained in this Article III, Buyer makes no other representations or warranties, written or oral, statutory, express or implied. Seller acknowledges that except as expressly provided in this agreement, Buyer has not made, and Buyer hereby expressly disclaims and negates, and Seller hereby expressly waives, any representation or warranty, express or implied, at common law, by statute, or otherwise relating to, and Seller hereby expressly waives and relinquishes any and all rights, claims and causes of action against Buyer and its representatives in connection with the accuracy, completeness or materiality of, any information, data or other materials (written or oral) heretofore or simultaneously outside of this agreement furnished to Seller and its representatives by or on behalf of Buyer." And, ¶9.3 Entire Agreements and Modification, states, " This Agreement (including the exhibits hereto) constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes any prior understandings, agreements, or representations by or between the Parties, written or oral, to the extent they relate in any way to the subject matter hereof. This Agreement may not be amended except by a written agreement executed by both Parties.

Discussion. A general rule of contract litigation is that oral and/or written statements which explain the meaning and/or intent of a contract are inadmissible to interpret a contract's meaning if the contract, on its face, is clear and not ambiguous. Aside from the possibility that the phrase, "good faith efforts to negotiate," etc., is not particularly defined, a fair reading of the contract does not disclose any other possible ambiguity. If an obligation is not contained in a contract, it is quite simply, not an obligation of the contract. Consider a simple real estate purchase contract which contains the obligations of a buyer and a seller. Perhaps the seller has some obligations to make various repairs or improvements. The Buyer would be hard-pressed to insist that the Seller perform repairs or improvements which were not specifically identified in the contract. That Schultz's litigation involves so much more than a simple house sale and is receiving lots of local and national attention does not change these basic principles.

Assuming for the purpose of argument that oral or written statements were made by PBC before July 14, 2006, which obligated it to keep the Sonics in the 3-county area after October 31, 2007, any such statements would have been merged into the July 14 written contract, according to its ¶9.3 terms. Without more than the Contract, Schultz's lawsuit would clearly fail.

Issue 7: Of what legal effect is the "Side Letter?" Given that the Contract contains no requirement that PBC that it keep the Sonics in Seattle after the initial 12 month period during which time PBC was obligated to "use good faith efforts to negotiate an arena purchase, use or similar arrangement" in a 3-county area "as a successor venue" to the Key (although the same provision also gives the discretion of entering into any such lease, etc., to PBC), any such additional requirement must come from somewhere other than the Contract itself. Hence, Schultz's Complaint attempts to create such additional obligations via the July 18, 2006, "Side Letter." In this, I'll assume that the "Side Letter" contains clear and unambiguous statements such as, "PBC agrees that the Sonics will play all home games in an arena located in King, Pierce and/or Snohomish County, Washington" (even though, of course no such statements are in the actual letter).

Discussion. First, it is necessary to determine Schultz's purpose in raising the "Side Letter" — is it an attempt to say that the Contract was "modified" by the letter's terms, or is it an attempt to "explain" the Contract, itself? If the purpose is to modify the original Contract, ¶9.3 Entire Agreements and Modification must be complied with. A part of that paragraph reads, "This Agreement may not be amended except by a written agreement executed by both Parties." Since the "Side Letter" was not signed by a representative of BCOS, it fails to "modify" the original Contract.

As for the latter purpose and as has already said, unless a contract is ambiguous, a general rule of contract litigation is that other evidence, written and/or oral, is not admissible to explain its meaning. Since the Contract is not ambiguous (at least, not to me), the "Side Letter" should be ineffective and not admissible for ascertaining the provisions of the Contract.

Issue 8: WHAT IF the Side Letter really does matter? Ok, assume that everything I've opined about in Issues 6 and 7 is completely wrong, what then? Does the "Side Letter" actually do what Schultz's Complaint maintain that it does?

Discussion. Let's compare statements made in Schultz's Complaint with the actual text of the Side Letter:

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Schultz's Complaint

Side Letter

13. To ensure that defendant's representations—which were critical to BCOS — were memorialized, Howard Schultz, who was Chairman of the BCOS Board of Directors, insisted that Clay Bennett, his counterpart in the Oklahoma City group, execute a side letter confirming the Oklahoma City group's statements. The Oklahoma City group agreed, and in a letter dated July 18, 2006, on the stationary of defendant The Professional Basketball Club, LLC, Mr. Bennett wrote to Mr. Schultz that "it is our desire to have the Sonics and the Storm continue their existence in the Greater Seattle Area," and specifically denied any "intention to move or relocate" the Sonics if the group could negotiate a lease arrangement. In fact, the Oklahoma City group did not desire to continue ownership of the Sonics in Seattle under any circumstances, even if it could negotiate a favorable lease.

We wish to confirm to you personally some of the key elements of the conversation we had with you yesterday. As discussed, we do not believe that KeyArena is designed to support the requirements of a viable NBA franchise, and thus achieving a modern successor venue and lease arrangement will be critical to the future success of the teams. In this regard, we would assume the mantle of the current ownership group in seeking to achieve this important next step. Moreover, it is our desire to have the Sonics and the Storm continue their existence in the Greater Seattle Area, and it is not our intention to move or relocate the teams so long, of course, as we are able to negotiate an attractive successor venue and lease arrangement. Our commitment to you to use our good faith best efforts over the coming year to negotiate such a venue and lease arrangement in the greater Seattle Area provides further concrete evidence of this intention. In addition, we will obviously assume all of BCOS' obligations regarding the Key Arena Use Agreement at closing and intend to honor those obligations just as the current ownership group has done. ¶We are thrilled to have this opportunity, and would like to thank the entire Sonics and Storm organizations for making it a possibility.

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Only the most biased reader could conclude that Side Letter created an obligation on PBC to actually remain in the Seattle area beyond the express provisions of Contract ¶5.3. The letter's expression is that "it is not our intention to move" ... "so long, of course, as we are able to negotiate an attractive successor venue and lease arrangement." To the extent that the Complaint interprets the letter's provisions to create obligations beyond the initial year, it is difficult to find such statements in the letter -- they don't exist. In fact, the Side Letter may easily be construed to be more helpful to PBC's side of the case than it is for PBOS's since, implicit if not explicit in the letter is that the "non-intention" to move is conditioned upon obtaining an attractive successor venue to KeyArena and lease arrangement -- i.e., that not happening, such an intention would no longer remain.

Issue 8: What about the damages? In each "Claim For Relief" section, the two respective Complaint sections conclude with a similar allegation: As to "Fraudulent Inducement:" "28. BCOS has been harmed by defendant's intentional misrepresentations, omissions, and concealment"; as to "Negligent Representation:" "32. BCOS has been harmed by defendant's negligent misrepresentations and omissions." Apparently, "harmed" is another way of saying, "damaged." The Complaint does not otherwise identify the alleged "harm" or "damage" to BCOS.

Discussion: Although this writer has no personal knowledge of Washington state law, if it is true, as Marc Edelman has written in this article that, among other things, damages must be alleged and proven as an essential element of the litigation, then proof of damage is an essential element of Schultz's case. Presumably, the Complaint's language about "harm to BCOS" was intended to fulfill that pleading requirement.

But, what about "proof" of damages – and that's damage to BCOS, the real Plaintiff, and not to Howard Schultz who is acting through his solely owned LLC (Canarsie Holdings LLC) to maintain this action? By all accounts, PBC paid a premium to BCOS for the 2006 purchase of the Sonics & Storm — well above fair market value. It's hard to see any damage to BCOS there.

But, what about damage to "reputation" — is that enough, and if so whose reputation must be damaged — BCOS, or is damage to Howard Schultz's personal reputation sufficient, he being a part owner of BCOS?

In this April 20, 2008, Seattle Times article, the results of an unofficial survey did show the following:


But, if this case is fundamentally tied to damage to Howard Schultz's reputation ... oh, come on ... it was Howard Schultz who tried to rattle Washington's chains about the Sonics moving well before the teams were sold to PBC! For example, see this February 1, 2006, article, a part of which reads,

SEATTLE (AP) - Seattle SuperSonics principal owner Howard Schultz said Wednesday he will look at all options - including moving or selling the team - if the state Legislature fails to earmark $200 million for the Sonics to refurbish KeyArena or build a new home.

Schultz, who talked to reporters before the Sonics' game against the Golden State Warriors, said he's told team president Wally Walker to look at all the alternatives.

One would be moving the Sonics to a market known to be interested in acquiring an NBA franchise, such as Las Vegas; Norfolk, Va., or Oklahoma City, or to one of three cities - Anaheim, Calif.; Kansas City, Mo., and San Jose, Calif. - that have made overtures to Sonics officials, the team said in a statement.

Schultz didn't answer when asked whether he would still be involved in owning the team should it move to another city.

Also, see this April 14, 2006,Seattle Times article which, in part, reads,

By The Associated Press

NEW YORK — David Stern gave another warning that the Sonics could eventually leave Seattle, saying Thursday in a conference call that the city is "not interested in having the NBA there."

Stern has said the Sonics' lease with the city is the worst in the NBA, and he went to Seattle in February to ask Washington state lawmakers for tax money to renovate Key Arena.

Sonics owner Howard Schultz, the chairman of Starbucks Corp., has threatened to move or sell the team if state lawmakers don't approve a sales-tax package to pay for a new or renovated arena. But state lawmakers last month said there would be no deal this year.

Also, see here and here. Enough, already!

This "damage" or "harm" part is just pure silliness, as best as I can tell.

Well, unless the spirit moves me, I think that I've said all I care to in this long article. Maybe I'm wrong 90% of the time — the Federal District Court sitting in Seattle will have the say about that — but, the problem for Schultz is, if only 10% of what I've said is "spot on," that will probably be enough for the Schultz litigation to result in an unfavorable result, for him.

See you in the funny papers!

Related links:

• Marc Edelman's observations
• A "legal" report from KING5.com
• Lester Munson of ESPN's commentary
• Seattle P-I Article

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Arts Festival 2008

Sponsored and hosted by the Oklahoma City Arts Council, the 2008 Oklahoma City Arts Festival (commonly called, but the "formal" name is the Oklahoma City "Festival of the Arts") was on display from April 22 - April 27 in downtown Oklahoma City for its 42nd annual downtown session. My wife and I and didn't have too much of an opportunity to be there this year, but we did make the last 2 1/2 hours or so, and this post gives you a cursory idea of what the Arts Festival was like this year.

For several years, the location of the Arts Festival has been in the area shown below for this years' ... from Walker to Robinson west to east, and from Sheridan to Reno north to south ... even though most may associate the festival with the artist booths which are in the street on Hudson from Sheridan to Reno, per this year's map, shown below ...

For all images, click the image for a larger view


Read the Arts Council's rendition of the festival's history, but this excellent April 22, 2008, article by the Oklahoman's Steve Lackmeyer, presently located here, tells the story from a more significant historical point of view ...

Arts Festival helped keep downtown alive
By Steve Lackmeyer
Business Writer

Oklahoma City's 1993 Metropolitan Area Projects — MAPS — has become a story of mythic proportions as the tale of downtown's revival is told over and over again to visitors worldwide.

But lost in all this hoopla of the lead-up to Oklahoma City becoming a major league city is the annual spring Festival of the Arts.

Here's a little secret between me and all of you readers: without the arts festival, I doubt there would have been much of a downtown left to save when 1993 finally rolled around.

In 1985, downtown was well on its way to the now notorious moment a few years later when it was declared dead by the Oklahoma City Council. Sure, it was hurting when the death certificate was being readied — but it wasn't dead.

No matter how gloomy things appeared downtown, every April the city reunited downtown for one of the best showcases of the community's creative class. North, south, east and west all showed up.

It was in 1985, the Arts Council of Oklahoma City made the jump from the tiny Civic Center Bicentennial Park to the Myriad Gardens. It was a risky move — and the arts community could have easily decided to move elsewhere — attractive suburban locations like Stars and Stripes Park.

The gardens were not exactly the lush green point of pride it is today. The Crystal Bridge was still an unfulfilled dream of Dean A. McGee. Downtown itself was desolate — Main Street was gone, the old grand theaters were gone, and Bricktown was bankrupt.

Yet the artists staked their dreams and recommitted themselves to downtown when few others did. The Arts Council also spent more than $750,000 renovating the old fire training station adjoining the gardens into the group's new home.

By staying downtown and embracing the gardens, the festival reminded residents from all across the city that downtown still mattered — it was still the heart of the community. The festival showed residents what downtown could be — and maybe, just maybe, that vision resonated at the polls when MAPS became a reality in 1993.

Clearly, this investment by the arts community already was paying off for downtown when a terrorist attack hit the nearby Alfred P. Murrah Federal Building on the eve of the 1995 festival. The festival that year was canceled and the annual celebration could have ended up going broke if not for a redoubling of support.

So today is not just the start of another downtown festival. Take a good look at the arts festival volunteers in some of those tents — folks who I've seen toughing it in scorching hot temperatures and in disaster-movie epic rainstorms.

They are the pioneers. They are visionaries who kept downtown alive just long enough for a few people with names like Ron Norick and Ray Ackerman to come around in 1993 and hatch a really crazy dream.

Now, that's history at its finest!

Monday morning's Oklahoman carried a post-festival report by Michael Kimball that about 750,000 attended the six-day festival this year, but it could well be that many more than that enjoyed the glorious downtown celebration of the arts! The Oklahoma City Arts Council gets a great big "tip o' the hat" from Doug Dawgz Blog!

Enjoy the photos which I took on Sunday afternoon, April 27, 2008 ...

Sheridan Entrance on Hudson



Walking South on Hudson







Where Dogs Meet Martinis
(By the way, unlike the Paseo Arts Festival, for
this one, the rule is, "No real Dogs [or other pets] allowed.")



OK, OK, so maybe I like dogs. OK?









Time For Food, West of Hudson
Even if one doesn't care that much for art, great food booths
are a long-standing attraction of the Arts Festival.
1/3 of our time on this day was spent there!





While eating, we listened to several fine tunes being
performed on the "Deck Stage" area ... sorry that I don't have
the black guy's name that we listened to, but he was fantastic!









Entering Myriad Gardens from Hudson

After eating and buying Birthday Girl a green amber ring
from a vendor (yes, green amber), we entered Myriad
Gardens to be present for one of the main reasons we
were there ... to watch her daughter's band perform in
the Myriad Gardens' "Water Stage" performance area ...



On arrival, Dime A Dozen, a local rock band
was performing, and I took a few shots of the area















Suspicious Contra Band
Birthday girl's daughter is a member of the
Suspicious Contra Band, a local band that
performs Celtic, "contra dance," Welsh & Irish tunes









Birthday Girl, Watching Her Daughter



That done, we walked north to exit,
and passed by these things ...







Is there really any art more beautiful than this,
right here in downtown Oklahoma City?


Certainly, there was much more to see and do, but that's all we could cram in to 2 1/2 hours. I need to spend more time there, next year!

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And, Now, A Special Thanks To ...

It was on a Good Friday, April 18, 2008, that the NBA Board of Governors voted 28-2 to approve the Professional Basketball Club's (PBC) petition to move its NBA franchise from Seattle to Oklahoma City, the fine event to occur no later than the 2010-2011 season – sooner if either litigation or negotiations result in a quicker exit. Only Dallas Mavericks owner Mark Cuban and Portland Trailblazer's owner Paul Allen (who also owns the Seattle Seahawks and the Seattle Sounders FC franchise in Major League Soccer that will begin playing in the 2009 season) voted no. For an unofficial transcript of David Stern's portion of the conference, click here. It is annotated to identify each Q & A during the 37:33 portion of the press conference and is fully printable.

I've ripped the audio from the April 18 press conference to a pair of MP3 files, and you can listen and/or download to your heart's content ... click an image for either David Stern or Clay Bennett's portion of the long press conference ...

37 minutes, 30 seconds

20 minutes, 33 seconds

But, while Doug Dawg has been busy passing out kudos to Mayor Mick, the voters of Oklahoma City, Roy Williams and all of the Greater Oklahoma City Chamber of Commerce, Governor Brad Henry and lots of others, he has been remiss in not thanking those without whose help the move from Seattle to Oklahoma City would not have been possible.

It is high time to correct that glaring error.

So, not necessarily in the order of importance, Oklahoma City owes a special thanks to the following people for making this dream of Oklahoma City come true ...

Chris Van Dyk
Mr. Van Dyk when campaigning for Proposition I-91


Damn straight! Without his "Citizens for More Important Things" successful campaign (75% of Seattle voters voting, "Yes"), Seattle might have possessed some means of seriously providing a tax-based proposal which, in turn, would provide a vehicle for negotiating with the PBC for a new arena with a combination of public and private financing. Soooo ... a shout must go out to Chris Van Dyk!

Greg Nichols, Mayor of Seattle


What Mayor Nichols has consistently done is say, "Hell, no, they won't go," over and over and in various manifestations, lead his troops into the caves and never came out to see the sun shine ... as in ... leading the charge for a sales tax or some other means to find a constructive solution to Seattle's arena problem.

After the 4/18 press conference, the Mayor reportedly said, when asked if he was expecting a new, richer offer from Bennett, "I don't really care. We're going to go into court in June." The Mayor doesn't propose anything other than playing Hardball? New or improved arena proposal? Nothing said. That's cool (for OKC) - and I'm sooo glad that our mayor, Mick Cornett lives in our town ... he seems more than proficient in getting things done ... e.g., in the span of time between December 2007 and March 2008, (1) the Ford Center expansion/upgrade proposal was put to and then passed by City Council, (2) got on a March 2008 ballot, and (3) with the Mayor's leadership we, the voters, had the opportunity, to give our "say" ... and, when given this fast-moving opportunity, 62% of us said, "HELL YES!" ... can you begin to imagine that, were Mayoral roles reversed, that Seattle Mayor Mick Cornett would have not done the same for Seattle that he did for Oklahoma City! Whew -- the luck of the draw on city karma and/or mayoral residence broke OKC's way on this one, big time!

Keep on firing those feisty mortars, Mr. Man!



Thank you, thank you, thank you, Mr. Tough Guy! We owe you!
Frank Chopp, Washington Legislature's Speaker of the House


What can one say? Mr. Chopp held the power of leadership when the PBC made its pitch to the Seattle Legislature in January 2007. The proposal, championed by Renton State Senator Margarita Prentice never even got out of committee and the voters were denied the opportunity of voting up or down on what had been proposed. Without Mr. Chopp's leadership, who can say what the voters of Washington State might have done, or what else may have evolved in that process? Mr. Chopp, perhaps the state's chief doorman or gate keeper, kept that door tightly shut on any and all public financing initiatives at the state level!

Christine Gregoire, Governor of Washington


Ahh ... the Governor who talks the talk but doesn't walk the walk – the state's paramount leader who doesn't bust her butt to find a solution which match her publicly spoken words! Even after the PBC legislative initiative failed, it was apparently within her power to call a Special Session of the Legislature to address the situation. Nope. Didn't happen, despite her public remarks that keeping the team in Seattle was one of her high priorities. Oklahoma City was blessed because of her ineffective, perhaps insincere, leadership in the time of great crisis for the Seattle franchise.

Representatives of Washington's Media
Others could be mentioned, but Doug Dawgz honorable mention goes to ...

Steve Kelley, Seattle Times

With journalists like this waiving their flags of war but doing little to prod local, county, and state government to do a damn thing in getting Seattle's arena problem fixed a long long time ago, even before PBC bought the team, Seattle if not Washington state hunkered down to a bunker mentality which did nothing constructive and only provided reams of useless and counterproductive rhetoric ... in a time when action, not reaction, was needed big time.

In his April 20, 2008, Seattle Times article, he presents a graph showing poll results of how 5,366 responders placed the blame for what has now transpired ...


Oddly, a place for Chris Van Dyk or the Governor's, certainly not the media's role in this debacle, are not included as poll options.

One must give Mr. Kelley high marks for name-calling skills, whether his object be Clay Bennett, or Oklahoma City, or Oklahoma, and he must even gets superior marks for his arrogance which, by all appearances, is without boundaries or limits, but (and though it was doubtless unintended), his constant negativism formed a part of the Washington milieu that proved to be helpful to Oklahoma City. He was not alone in this, but he deserves special mention, just the same.

Chris Daniels, KING5 TV

Also deserving of honorable mention is Chris Daniels, above, reporter for KING5, Seattle's NBC TV outlet.

In a combative mood during the April 18 press conference, he asked David Stern what his thoughts were on the "$300 million proposal out there," he perhaps having missed earlier press reports that the "Ballmer" initiative failed to gain support in the Legislature, that Seattle had failed to become creative and come up with a means of funding the $75 million shortfall on the public sector side, and that Ballmer's offer had been automatically withdrawn when the April 10 offer's deadline was not met. All the proposal got in the Legislature was that, "we'll talk about it next session." While Seattle did find it possible to commit to $75 million of the $150 million public share, none could or would pony up the remainder, and the proposal was dead, and, when the question was posed to Commissioner Stern, no "$300 million proposal" was "out there," unless "out there" was in the reporter's wishfully-thinking mind. So, when reporters make utterly dumb false comments and pose questions like Chris Daniels did, it must be said that such things are and have been helpful to Oklahoma City, too.

And, finally, thanks must be given to the good citizens of Seattle who first gave their favor to seemingly sweet-sounding tunes of piper Chris Van Dyk, and, later, didn't do a damn thing to change the course that he set them upon. And, so, to all of the above, all of whom have collectively made it possible for Oklahoma City to be the home of an NBA franchise for at least fifteen years, beginning whenever the team's moving vans are allowed by the federal court or a negotiated settlement or April 2010 (whichever comes sooner) to pack up and head 1,987 miles this-a-way, this Okie guy, roundly ridiculed in the Seattle Times Sonics forum (and in which place I've never registered or participated) simply says, "Thanks, guys, for all that you have done in helping to make my city's dream come true!"


So, in a one-vote poll of myself, Doug Dawg would cut up that above pie chart quite differently ...


Seattle held all the cards to keep the franchise. Play them wisely and the team would stay. Incredibly, every move that Seattle chose to make worsened its position beginning with Chris Van Dyk leading his city followers into the Puget Sound as he piped his "more important things" tune. Initially, Oklahoma City wasn't even in the game, but now franchise will soon be heading down to the upstart and proactive city of Oklahoma City. While Washington state had a share of the blame, largely, the blame falls on Seattle since, first and foremost, it was Seattle's responsibility to take care of its own business.

Almost two years have gone by since writing my March 2006 article, Sleeping In Seattle? Turns out they were, and did, and, just now, after the deed is done, may be opening their eyes to what their public and private leadership has not done for them. Many, many, thanks to each of the above, one and all!

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The Gladish Building -- What?

Since writing this article in my regular website in September 2005 until tonight, April 9, 2008, I've had some unfinished business in knowing what in the heck was located at the southeast corner of Hudson & NW 1st Street (Park Avenue), immediately west of the 1932 YWCA Building before it was destroyed during the 1960s-1970s Urban Renewal days.

Various photographs showed that something was there ... these images from the Oklahoma County Assessor's Photo Album clearly show a skeletal structure at the location:




What got me started in the first place was the "Famous Kiltie Band" postcard which showed a rather nice looking building to the rear (east) and right (south) of the band.

Click on the postcard for a larger view


The venerable but presently missing in action Downtown Guy opined that the building was illusory, nothing more than the postcard maker taking artistic license with what would look good behind the band and that a parking garage, perhaps unfinished, was once at the location. By the early 1950s, the building was gone ...


Though still puzzled, I accepted the Downtown Guy's wisdom and put it down.

But, doing the OKC Postcards article, which includes the above Kiltie Band postcard made in the late 1930s or early 1940s, got me started on the unsolved mystery, once again. What the heck was that skeletal structure? So, while it's doubtless of little historical importance, I jumped in once again.

When I wrote the September 2005 website article, I didn't know that the Oklahoman's archives, dating back to 1901, are freely available on-line through the Oklahoma City Metropolitan Library System by use of your library card number, whether you're at the library or not – what a great service that has proven to be in researching one thing or another. Take that as a hint that you might enjoy doing the same!

Doing some digging in the Oklahoman's archives tonight, the mystery building is finally unmasked! The building was real.

An April 7, 1940, Oklahoman article was the first thing I ran across. It reported on a petition that was being circulated which asked the City Council ...

... to condemn the old six-story Gladish building at Northwest First street and Hudson avenue or to force its completion.* * *
* * *
Entitled a "Petition for Removal of an Old Skeleton," the document was being circulated by a group identified as owners of downtown property who contend the structure is a detriment to the civic center and adjoining property.

"This towering skeleton has stood uncompleted too long," said the petition. "It is not a symbol of progress nor is it in keeping with the character of the buildings surrounding the civic center."
* * *
Until 10 years ago, the building was a warehouse. A man who purchased it then had it stripped of its walls and outer structures planning to convert it to a business building. The depression hit and the project was abandoned.

A huge, concrete skeleton, it has remained unfinished since with a flower shop on the first floor and other parts used for a parking garage.

The petition got nowhere, but at least some clues were dropped ... a name, Gladish Building, and an early use, warehouse building. The clues were good enough.

Additional articles reported that the six-story building was originally built in or about 1910 as the O.K. Transfer & Storage Building and people stored their stuff there. James S. Gladish purchased the building in 1930, planned to make it into 14 story 2-winged hotel, and started stripping it down. That's as far as he got when the Great Depression stopped his plans in their tracks, and, aside from making a space for a flower shop on the first floor, the building sat there in its naked state until 1946.

Then, the property was purchased by G.A. Nichols. The May 12, 1946, Oklahoman reported as follows:

Civic Center's Skeleton Sold, To Be Finished

Transformation of Oklahoma City's skeleton building on the southeast corner of NW 1 and Hudson into a modern and larger office structure, possibly to be used for the new Veterans Administration office here, was revealed Saturday. The announcement would erase the landmark which has been considered a public eyesore for the past 15 years.

G.A. Nichols, president of the Nichols enterprises and new purchaser of the building said his companies plan to spend a half million dollars in completing the structure. Besides filling in the present six stories, two more floors will be added and the length of the building increased 20 feet to the south. Construction will be slanted toward filling the requirements of the regional VA office, Nichols said.

"The veterans administration is trying to get the building and we will submit them plans immediately," he explained. * * * John W. Coyle, vice-president of the Nichols companies said part of the building would be used for the firm's offices now located at 115 N. Harvey. Construction on the completion will begin as soon as materials are available."

This picture accompanied the article (click pic for larger)


A December 23, 1946, article reports,

Approval to complete the six-story structure and add two more floors was given here this week by the Civilian Production administration because of the city's critical need of office space.

John W. Coyle, vice-president of the G.A. Nichols enterprises, owners of the building, said construction would begin immediately with a hope of completion in nine months.
* * *
The plans, he explained, have been drawn to blend the building into architecture of civic center, by using horizontal lines along the sides of the structure with vertical lines at the corner. * * * The face of the building will be done in a pink and buff Indiana limestone. Long white metal strips will run down the length of the building at its corner. The first floor and balcony will be in black and white marble.

Although immediate construction did not occur, a June 6, 1947, Oklahoman article reported that construction had begun and that completion of its expansion to eight floors was expected within a year. In the two articles just stated, no mention was made of the Veterans Administration, so that deal must have fallen through ... now it was to be a general office building. But, something happened to that plan, too, because it never materialized.

Instead, an October 9, 1947, article reported that the Halliburton Department Store, located immediately south of the Gladish Building, had been sold to Federated Department Stores, and that, in a separate transaction, an option to purchase the Gladish building had been acquired from G.A. Nichols, and speculation then turned to using the property as an expansion of Halliburton's. The photograph below shows the relative location of the two properties (click pic for larger view):


The option was exercised and Halliburton's new owner acquired the property. But, the potential development didn't happen. The next topic to be discussed in the Oklahoman about this property was its demise. A November 20, 1952, article reported that the building would be razed and become, at least initially, a street level parking lot. Sitting exposed to the elements since 1930 had taken its toll on the structure's viability. The City Building Superintendent's inspection of the building revealed that concrete columns and beams had suffered badly, crumbling and separating from the steel in several places. The east wall of the building which abutted the YWCA would be all that would remain, probably for structural integrity of the Y. And, that's why and how the YWCA's west side came to have its rather unfinished appearance.

And, there you have it ... mystery building solved ... and, of course, the Ronald J. Norick Downtown Library and Learning Center now sits on the site of both the former YWCA and Gladish Buildings, both of which have fallen into the lore of Oklahoma City history.

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