Andy Geiger, OSU's athletic director, offered O'Brien a new contract at the end of the 98-99 season despite the fact that three years remained on the coach's contract. Geiger later stated to an Ohio trial court that he wanted a new contract with O'Brien because he was "anxious to have him feel good about Ohio State." O'Brien and OSU reached agreement on a new contract on October 1, 1999. Under the terms of the new contract, O'Brien was to receive a base salary of approximately $800,000 per year plus incentives for meeting certain benchmarks, such as winning a Big Ten championship and/or making an NCAA Tournament appearance.
The contract provided that OSU could fire O'Brien for "cause." "Cause" was defined in the contract as being a "material breach" of the agreement which included, among other things, a violation by O'Brien of any
applicable law, policy, rule or regulation of the NCAA or Big Ten
Conference which leads to a 'major' infraction investigation by the NCAA
or Big Ten Conference and which results in a finding by the NCAA or Big
Ten Conference of lack of institutional control over the men's basketball
program or which results in Ohio State University being sanctioned by the
NCAA or Big Ten Conference.
The contract stated that if O'Brien were fired for cause, he was entitled only to the compensation he had earned at the time of termination, but if he were terminated without cause, he would be entitled to 3.5 times his then current base salary times the number of years remaining on his contract, plus loss of expected income from such sources as camps and apparel contract during the time he would have been at OSU.
Shortly after the end of the 1997-1998 basketball season, Alex Radojevic made an unofficial recruiting visit to the OSU campus. Radojevic, a native of Serbia, was interested in transferring to OSU from a community college in Kansas. He was being recruited by a number of premiere Division I basketball programs.
O'Brien and several of his staff visited Radojevic in Kansas in September 1998 while on an official recruiting trip. Radojevic told O'Brien that his father had recently died and that he desperately wanted to visit his mother and family, but he could not do so because he feared that the Serbian government would press him into military service. O'Brien had actually become familiar with Radojevic's plight prior to the trip through one of his players, Boban Savovic, who was from the same geographic area of Serbia as Radojevic.
Shortly after the recruiting trip, O'Brien became aware that Radojevic had played briefly for a professional team in Yugoslavia in 1996 and that this made him ineligible to play for any collegiate program in the United States. O'Brien continued to try to recruit Radojevic in the hopes that OSU could petition the NCAA and have his eligibility reinstated. Radojevic signed a letter of intent to play for the Buckeyes on November 11, 1998 and paid an official recruiting visit to the school the following month. Shortly after this recruiting visit, O'Brien came to the conclusion that Radojevic would not be able to have his eligibility reinstated. At approximately the same time, O'Brien's staff was contacted by a friend of the Radojevic family who asked for financial assistance for Radojevic so that he could visit his mother and family in Serbia. An Ohio trial court found that O'Brien had "resolved" that Radojevic would not regain his NCAA eligibility and that it would, therefore, be permissible to give his family a loan on a purely humanitarian basis. O'Brien sent one of his assistant coaches, Paul Biancardi, to New York City with an envelope containing $6,000 in cash to a waiter known as "Semi" Patrovic. It was not known at the time what relationship Patrovic had to the Radojevic family, but Patrovic ultimately became Radojevic's sports agent. No one other than O'Brien and Biancardi were aware of the transaction.
Radojevic never enrolled at OSU. On May 24, 1999, the NCAA held that Radojevic had lost his eligibility by playing for the professional team in Yugoslavia. He declared himself eligible for the 1999 NBA draft and he was selected by the Toronto Raptors in the first round as the twelfth overall pick.
In April 2003, O'Brien became aware of a lawsuit involving an OSU booster, Kathy Salyers, and former player Savovic. O'Brien believed that the fact that he had loaned money to Radojevic's family would come out in the trial, so he informed Geiger about the loan, stated that he believed the fact of the loan would come out during the Salyers/Savovic litigation, and that he had not reported the loan to anyone at OSU because he believed that his loan did not constitute a violation of NCAA or Big Ten rules since Radojevic was ineligible to play college basketball at the time of the transaction.
Geiger fired O'Brien approximately two weeks after their initial conversation. OSU stated that its attorneys had determined that the loan had, in fact, constituted a violation of NCAA rules and that O'Brien was being terminated for cause. The NCAA eventually determined that OSU had committed several violations of its rules involving Radojevic and Savovic and imposed sanctions on men's basketball team. Among other things the NCAA vacated the Buckeyes' record for 34 games in 1998-1999, 16 games in 1999-2000, and the entire 2000-2001 and 2001-2002 seasons.
O’Brien sued OSU for breach of contract, claiming that the university stilled owed to him compensation based on his termination. OSU rejected O’Brien’s claim, arguing that the compensation paid to him pursuant to termination, under the terms of the contract, was “unreasonable” and, therefore, unenforceable. Furthermore, OSU claimed that because it had already paid O’Brien compensation under certain incentive clauses in the contract for winning two Big Ten Championships which were subsequently having those championships vacated, O’Brien owed OSU a refund of the incentives paid for those championships.
The Ohio appellate court disagreed with the university on whether the damages paid to O’Brien for termination were unreasonable. The court noted that the university itself had proposed the compensation to be paid to O’Brien in the event of termination and its attorneys had drafted the contract itself. The court found that under Ohio law:
…when two parties agreed to do a particular thing, and the parties
precisely and deliberately contract for every foreseeable circumstance that
could arise in the performance thereunder, a court must honor the parties’ agreement absent unconscionability. See Westfield Ins. Co. v. HULS Am., Inc., 128 Ohio App.3d 270, 714 N.E.2d 934 (1998).
Furthermore, the court noted that in Ohio a contract between two parties is unconscionable when there is an “absence of one party’s ‘meaningful choice’ or opportunity to negotiate a contract, which invariably results in terms substantially favoring the other party.” See Eva v. Midwest Natl. Mortgage Bank, Inc., 143 F. Supp.2d 862 (N.D. Ohio 2001).
The court found that no such circumstances existed in the contract negotiations between O’Brien and OSU. The court held:
There is no evidence to suggest OSU lacked a meaningful choice or opportunity
to negotiate the contract with O’Brien; moreover, OSU was the drafting party.
OSU is not lacking in sophistication, and has only been prejudiced a result of
its own bargain. OSU entered into this agreement with O’Brien having more
than adequate knowledge and awareness of the risks and liabilities
appurtenant to competing in NCAA Division I collegiate sports.
Therefore, the court concluded that the contract, although highly favorable to O’Brien, was enforceable and not, as OSU argued, unreasonable.
The court then addressed the issue of whether O’Brien was entitled to compensation based on incentives which were based on triggering events later nullified by the NCAA.
O’Brien argued that the NCAA had merely vacated certain OSU victories and its records in the NCAA post-season tournament and had not specifically vacated its two Big Ten Championships. O’Brien claimed that since the NCAA had not specifically vacated OSU’s two conference championships, he was entitled to the incentives for winning those championships. As the court stated, O’Brien was essentially arguing that “…what the Big Ten giveth, the NCAA cannot taketh away.”
OSU counter-argued that the men’s basketball teams in the 2000-2001 and 2001-2002 seasons cannot, after the fact, be regarded as conference champions since the conference and non-conference victories achieved by the Buckeyes which lead to those championships had been vacated by the NCAA itself. In support of its argument, OSU submitted to the court the official 2006-2007 Big Ten Records Book, noting that OSU’s record for the 2000-2001 and 2001-2002 seasons were specially denoted with a footnote reading:
Due to NCAA sanctions, Ohio State has vacated the men’s basketball
records of 34 games in 1998-1999, 16 games in ’99-00 and the entire
’00-01 and ’01-02 seasons including two shared Big Ten Men’s Basketball
Championships (2000 and 2002 titles).
Accordingly, the court found that OSU had lost the two conference championships that it had won under O’Brien and, therefore, he was not entitled to compensation for those lost championships.
The court found that the contract between OSU and O’Brien was valid and that he was entitled to compensation for his termination as provided for by the contract. However, the court ordered that such compensation be reduced by the amount of compensation that he had been wrongly awarded for the two vacated Big Ten championships.
The case is O’Brien v. The Ohio State University, 2007 Ohio 4833, 2007 Ohio App. LEXIS 4316 (Ohio App. 2007).