United States District Court, D. Kansas
Steven M. Violetta, Plaintiff,
Steven Bros. Sports Mgmt, LLC., et al., Defendants.
MEMORANDUM AND ORDER
THOMAS MARTEN, JUDGE.
Steven Violetta was hired in 2015 to turn around the
performance of three minor league hockey teams. Some six
months later, he was terminated for poor performance, and
brought suit against his employer, its owners, and other
related companies, raising claims of breach of contract,
violation of COBRA and ERISA obligations, violation of the
Kansas Wage Protection Act (KWPA), and age discrimination.
The matter is now before the court on the parties'
cross-motions for summary judgment.
judgment is proper where the pleadings, depositions, answers
to interrogatories, and admissions on file, together with
affidavits, if any, show there is no genuine issue as to any
material fact, and that the moving party is entitled to
judgment as a matter of law. Fed.R.Civ.P. 56(c). In
considering a motion for summary judgment, the court must
examine all evidence in a light most favorable to the
opposing party. McKenzie v. Mercy Hospital, 854 F.2d
365, 367 (10th Cir. 1988). The party moving for summary
judgment must demonstrate its entitlement to summary judgment
beyond a reasonable doubt. Ellis v. El Paso Natural Gas
Co., 754 F.2d 884, 885 (10th Cir. 1985). The moving
party need not disprove plaintiff's claim; it need only
establish that the factual allegations have no legal
significance. Dayton Hudson Corp. v. Macerich Real Estate
Co., 812 F.2d 1319, 1323 (10th Cir. 1987).
resisting a motion for summary judgment, the opposing party
may not rely upon mere allegations or denials contained in
its pleadings or briefs. Rather, the nonmoving party must
come forward with specific facts showing the presence of a
genuine issue of material fact for trial and significant
probative evidence supporting the allegation. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). Once the
moving party has carried its burden under Rule 56(c), the
party opposing summary judgment must do more than simply show
there is some metaphysical doubt as to the material facts.
“In the language of the Rule, the nonmoving party must
come forward with ‘specific facts showing that there is
a genuine issue for trial.'”
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P.
56(e)) (emphasis in Matsushita). One of the
principal purposes of the summary judgment rule is to isolate
and dispose of factually unsupported claims or defenses, and
the rule should be interpreted in a way that allows it to
accomplish this purpose. Celotex Corp. v. Catrett,
477 U.S. 317 (1986).
in addition to the competing motions for summary judgment,
defendants have moved to strike the declaration (Exhibit K)
of the plaintiff which is attached to his reply (Dkt. 145). A
centerpiece of the defendants' arguments in their earlier
pleadings was that the initial versions of the Violetta
affidavits (Exhibits A and B) were unsworn. They argue that
attaching the sworn statement is “in effect”
making new arguments in his reply. (Dkt. 147, at 3). Further,
they argue that the sworn statement is still insufficient and
“worthless, ” and “the Court must utilize
its discretion [to] strike Plaintiff's
motion to strike is denied. As defendants acknowledge,
whether to strike a declaration rests within the discretion
of the court. The circumstances of the case do not warrant
striking the new declaration. First, the court notes that
defendants fail to make any demonstration that Exhibit K
differs in any meaningful way as to the underlying facts
asserted. Accordingly, Exhibit K does not raise new
arguments, it simply provides evidentiary support for
court also rejects defendants' arguments plaintiff failed
to support his factual contentions. In Exhibit K, Violetta
“declare[s] under penalty of perjury” that the
statements in Exhibits A and B “are incorporated [into
Exhibit K], are based on my own personal knowledge, and are
true and correct.” The court finds that the declaration
is sufficient to support plaintiff's factual contentions.
course, the court does not encourage such belated
documentation, and counsel for plaintiff is admonished to
comply with proper procedure in the future. Nonetheless,
while defendants have indeed attacked the original affidavits
as unsworn, they have not articulated any particular
prejudice from that failure, nor otherwise sought leave to
supplement their evidentiary responses to plaintiff's
factual claims. Under all the circumstances of the case, the
court finds no reason to strike plaintiff's declaration,
or to defer a determination as to the uncontroverted facts in
has worked in professional sports management and marketing
since 1993. During his 25-year career he has held a number of
positions with National Hockey League teams, including the
Pittsburg Penguins (Vice President of Marketing and Sales),
the Ottawa Senators (Executive V.P. and Chief Marketing
Officer), the Nashville Predators (Executive V.P of Business
Affairs), and the Detroit Red Wings (Senior V.P. of Business
Affairs). He has also worked for baseball's San Diego
Padres (Executive V.P. for Business Affairs) and the minor
league Staten Island Yankees (CEO).
months after his termination by SBSM, Violetta was hired as
Vice President of Corporate Partnerships, Sales, and Service
for the Edmonton Oilers of the NHL. He remains in that
Brothers Sports Management, LLC (“SBSM”) is a
Kansas limited liability corporation with its principal place
of business in Kansas. Steven Brothers Sports Management of
Allen, LLC (“SBSM-A”) was a Texas limited
liability corporation with its principal places of business
in Kansas and Texas.
Steven, Rodney Steven, and Johnny Steven, individuals
residing in Kansas, own SBSM and SBSM-A. Brandon owns 45%,
Rodney owns 45%, and Johnny owns 10%. Rodney Steven is the
president and secretary of SBSM, and Brandon Steven is the
vice-president. Rodney Steven makes the decisions as to the
hiring, firing, and other personnel decisions regarding the
Health Clubs Management, Inc. is a Kansas corporation with
its principal places of business in Kansas. Genesis Health
Clubs Management, LLC is a Kansas limited liability
corporation, with its principal place of business in Kansas.
August 2015, SBSM hired Violetta to serve as CEO of its minor
league East Coast Hockey League franchises, the Wichita
Thunder, the Tulsa Oilers, and the Allen Americans.
Specifically, Rodney Steven made the decision to hire
August 19, 2015, SBSM and Violetta entered into a written
two-year Employment Agreement. SBSM and Violetta entered into
the Employment Agreement in Kansas, and Violetta performed at
least some of his duties in the state. Rodney Steven
negotiated and signed the Agreement on behalf of SBSM, and
signed on behalf of the company.
Employment Agreement does not identify SBSM-A, Brandon
Steven, or Johnny Steven as parties to the contract.
his many years in business, Rodney Steven has negotiated and
entered into hundreds of business contracts, as well as three
to five employment contracts.
Contract provides for the payment of compensation to
Violetta, including a base salary, potential bonuses, group
medical and dental benefits, a car with insurance, vacations,
a cell phone and cell phone service, and reimbursement of
relocation expenses of up to $20, 000 and housing until he
could locate and purchase a house.
two-year term of the Agreement was subject to termination by
either party upon 180 days written notice. Further, the
Agreement provided that SBSM could terminate Violetta
immediately for cause, which was defined as
i) any act of personal dishonesty by Violetta in connection
with his responsibilities as an employee;
ii) Violetta's refusal or repeated failure in any
material respect to perform his duties as CEO, after written
notice to Violetta and a reasonable opportunity to cure;
iii) Any willful act by Violetta which constitutes gross
misconduct and which in injurious to the Company.
was to receive a base salary of $150, 000 in the first year
of the Agreement, and $160, 000 in the second, and was
further authorized to draw $25, 000 against his bonuses in
the first year, and $20, 000 in the second.
Employment Agreement offered a series of bonuses for Violetta
based on franchise performance. He would receive a $5, 625
bonus if the combined corporate sponsorship revenues exceeded
$2.25 million in a season, which ran from June to May. In
addition, Violetta would also receive a $3, 250 bonus if
season ticket revenues exceeded $1.3 million, an additional
bonus if group ticket sales exceeded specific monthly
targets, and if the individual franchises met specified
minimum net profits.
Steven drafted the bonus schedule attached to the Agreement,
and also drafted and inserted the “for cause”
defendants do not have employee handbooks, personnel manuals,
or any other personnel policies. They also do not have any
policies or procedures, formal or informal, related to
employee health benefits or COBRA. They did not keep a
personnel file for Violetta, and do not have any documents
reflecting communications to plaintiff regarding his
eligibility or potential eligibility for any fringe benefit
or to participate in any employee fringe benefit. The
defendants did not keep copies of expense reimbursement
records relating to Violetta, and do not have any documents
related to their obligation to provide COBRA notice.
defendant corporate entities (SBSM, SBSM-A, Genesis Health
Clubs Management, Inc., and Genesis Health Clubs Management,
LLC) do not keep minutes of their corporate meetings.
an email by Rodney Steven, defendants contend that SBSM has
an established policy of not paying for unused vacation days.
However, the plaintiff counters that other evidence shows
that SBSM had no established personnel policies. More
importantly, plaintiff points out that the email was sent
after this termination, and that no one ever told him of any
Steven has testified that Violetta's duties included
implementing procedures for issuing ERISA and COBRA notices.
Plaintiff disputes the contention, noting that the Employment
Agreement makes no mention of such duties. Rather, his only
duty was to notify Genesis whenever an employee left, so that
Genesis could take care of any required notices.
his employment by SBSM, plaintiff took $11, 667.00 in payment
as a draw against his bonuses.
Violetta was hired, all of the SBSM teams consistently lost
money (except for the Thunder, which had made a small profit
in 2012-2013). By August 2015, an officer for the Allen
Americans wrote of the team's “desperate”
situation. The team had numerous outstanding bills due, and
Blue Cross had cancelled its health insurance for
non-payment. To help the teams, Rodney Steven had transferred
$1 million from Genesis.
reported to the SBSM corporate office in Wichita, Kansas, and
was a satellite employee stationed in Allen, Texas, although
he performed his duties under the contract in part in Kansas.
worked 80 hours a week, spending time in Allen, Tulsa, and
Wichita. He devised strategies and worked to increase
revenue, keeping Rodney Steven informed of what he was doing
and getting his approval.
December 23, 2015, Violetta emailed Rodney Steven an overview
of his recommendations for making changes on staffing,
compensation, and culture for the three teams, which he
wanted to provide in more detail during an in-person meeting.
These changes including replacing Matt Canavan in Allen and
posting two new job descriptions he had prepared. Steven did
not respond, so Violetta re-sent it on December 28.
finances improved under Violetta. Season ticket and corporate
sponsorship revenue for the 2015-2016 were up about $739,
000, or 44%, compared to the prior season. By December 2015,
all three franchises had significant increases in all major
revenue streams, including corporate sponsorships, season
tickets, and group sales. At the same time, the teams still
had substantial prior debts. Rodney Steven wrote: “We
have made some positive turns: Improved lease by $400k;
Corporate sponsorship sales up $250k; Season ticket sales up;
Group sales up.”
the 2015-2016 season, combined revenue for the three
franchises was projected to be up almost $1.5 million, nearly
a 50% increase, compared to the prior year.
January 11, 2016, Rodney Steven stated, “[O]ur first
year in Allen [2014-15] was ugly. This year looks tons
better. … We are on a cash basis, so a lot of the
bills we are paying this year are from last season. …
[W]e are confident that next season we will show a
Steven had originally wanted to hire Shawn Kuzmin as the CEO,
and in March 2015, he had signed an Employment Agreement and
sent it to Kuzmin with the statement, “I have signed my
man.” But Kuzmin was unable to accept the offer for
May and early June 2015, while Steven was contemplating
hiring Violetta, he continued to communicate with Kuzmin.
Kuzmin said he was “aching” to take the job
“but timing blows.”
responded, “Just move the family to Dallas and lets get
it on.” Kuzmin replied, “June 2015 can't.
June 2016 different story. Wish it were different. You
June 2015, Steven sent an email to Kuzmin saying,
“Brandon and I still want you to come run our sports
responded, “Not saying no, but timing is my issue right
December 6, 2015, Kuzmin emailed Brandon and Rodney Steven,
asking, “Should we start negotiating the 2016 contract
yet?” Rodney responded the same day, “Yes, we are
January 10, 2016, Rodney Steven told Kuzmin that he and
Brandon “are ready to go forward” with hiring
Kuzmin. He sent Kuzmin the employment contract he had given
him in 2015, and Kuzmin responded on February 2 that he was