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Case 3:17-cv-00722-DJH Document 4 Filed 12/13/17 Page 1 of 26 PageID #: 124

IN THE UNITED STATES DISTRICT COURT


FOR THE WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION

)
RICHARD A. PITINO, )
)
PLAINTIFF, ) CAUSE NO. 3:17-cv-00722-DJH
)
v. )
) DEFENDANTS ANSWER TO
UNIVERSITY OF LOUISVILLE ) PLAINTIFFS VERIFIED
ATHLETIC ASSOCIATION, INC., ) COMPLAINT AND
) COUNTERCLAIM
DEFENDANT. )
)

***** ***** *****

For its Answer to Plaintiff Richard A. Pitinos (Pitino) Verified Complaint

(Complaint), Defendant, University of Louisville Athletic Association, Inc. (ULAA), by

counsel, states as follows:

1. ULAA denies the averments in Paragraph 1 of the Complaint as legal

conclusions. To the extent a response is required, ULAA admits that Plaintiff purports to bring

this lawsuit for breach of contract pursuant to state law. ULAA specifically denies it has

committed any such breach or that Plaintiff is entitled to any relief against ULAA.

2. ULAA admits the averments of Paragraph 2 of the Complaint to the extent that

this Court has original subject matter jurisdiction over this matter.

3. ULAA admits that venue is proper in this federal judicial district.

4. ULAA is without sufficient knowledge or information to admit or deny the

averments of Paragraph 4 of the Complaint, and therefore, denies same.

5. ULAA admits the averments of Paragraph 5 of the Complaint.


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6. ULAA admits the averments of Paragraph 6 of the Complaint.

7. ULAA admits the averments of Paragraph 7 of the Complaint.

8. ULAA admits the averments of Paragraph 8 of the Complaint that ULAA could

terminate the Contract for Just Cause or impose other appropriate discipline consistent with

the terms of the Contract which speaks for itself. ULAA denies any averments inconsistent with

foregoing.

9. ULAA admits the averments of Paragraph 9 of the Complaint to the extent that

Plaintiff had certain rights under the Contract under section 6.5 which speak for themselves.

ULAA denies any averments inconsistent with the foregoing.

10. ULAA affirmatively states that the unsealed complaint referenced in Paragraph 10

speaks for itself. ULAA is otherwise without sufficient knowledge or information to admit or

deny the averments of Paragraph 10 of the Complaint, and therefore, denies same.

11. ULAA denies the averments of Paragraph 11 of the Complaint.

12. ULAA denies the averments of Paragraph 12 of the Complaint.

13. In response to Paragraph 13 of the Complaint, ULAA admits that it placed

Plaintiff on administrative leave in response to a pending FBI investigation. ULAA denies the

remaining averments of Paragraph 13 of the Complaint.

14. ULAA admits the averments of Paragraph 14 of the Complaint to the extent that

Plaintiffs counsel sent ULAA a letter dated September 29, 2017. ULAA denies all remaining

averments or implications of Paragraph 14 of the Complaint.

15. ULAA denies the averments of the first two sentences of Paragraph 15 of the

Complaint. ULAA admits the averments of the final sentence of Paragraph 15 only to the extent

that, by letter dated October 3, 2017, ULAA provided Pitino with Notice of the charges against

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him which constituted Just Cause for termination. ULAA denies any averment not specially

admitted.

16. ULAA admits the averments of Paragraph 16 of the Complaint to the extent they

are consistent with the documents that speak for themselves. ULAA denies any characterizations

of Paragraph 16 of the Complaint.

17. ULAA admits the averments of Paragraph 17 of the Complaint to the extent that

they are consistent with the documents that speak for themselves. ULAA admits in documents it

informed Pitino that based on his above-listed conduct, he was charged with violating multiple

provisions of his Contract. ULAA denies any averment inconsistent with the foregoing.

18. ULAA admits the allegations of Paragraph 18 of the Complaint in that it provided

Pitino with an opportunity to be heard at a ULAA Board of Directors October 16, 2017 meeting.

ULAA denies all remaining averments or implications of Paragraph 18 of the Complaint.

19. ULAA denies all averments or implications of Paragraph 19 of the Complaint as

legal arguments and in violation of Fed. R. Civ. P. 8 in failing to be a short and plain statement.

ULAA affirmatively states that Mr. Pitino made arguments through counsel at the October 16,

2017 meeting. Those statements speak for themselves and ULAA denies that the statements and

documents have been fully and accurately summarized.

20. ULAA denies all averments or implications of Paragraph 20 of the Complaint as

legal arguments and in violation of Fed. R. Civ. P. 8 in failing to be a short and plain statement.

ULAA affirmatively states that Mr. Pitino made arguments through counsel at the October 16,

2017 meeting. Those statements speak for themselves and ULAA denies that the statements and

documents have been fully and accurately summarized.

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21. ULAA denies all averments or implications of Paragraph 21 of the Complaint as

legal arguments and in violation of Fed. R. Civ. P. 8 in failing to be a short and plain statement.

ULAA affirmatively states that Mr. Pitino made arguments through counsel at the October 16,

2017 meeting. Those statements speak for themselves and ULAA denies that the statements and

documents have been fully and accurately summarized.

22. ULAA denies all averments or implications of Paragraph 22 of the Complaint.

23. ULAA denies all averments or implications of Paragraph 23 of the Complaint as

legal arguments and in violation of Fed. R. Civ. P. 8 in failing to be a short and plain statement.

ULAA affirmatively states that Mr. Pitino made arguments through counsel at the October 16,

2017 meeting. Those statements speak for themselves and ULAA denies that the statements and

documents have been fully and accurately summarized

24. ULAA denies all averments or implications of Paragraph 24 of the Complaint as

legal arguments and in violation of Fed. R. Civ. P. 8 in failing to be a short and plain statement.

ULAA affirmatively states that Mr. Pitino made arguments through counsel at the October 16,

2017 meeting. Those statements speak for themselves and ULAA denies that the statements and

documents have been fully and accurately summarized

25. ULAA denies all averments or implications of Paragraph 25 of the Complaint.

26. ULAA admits the allegations of the first sentence of Paragraph 26 of the

Complaint. ULAA denies all remaining averments or implications of Paragraph 26 of the

Complaint as legal arguments and in violation of Fed. R. Civ. P. 8 in failing to be a short and

plain statement. ULAA affirmatively states that Mr. Pitino made arguments through counsel at

the October 16, 2017 meeting. Those statements speak for themselves and ULAA denies that the

statements and documents have been fully and accurately summarized.

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27. ULAA admits the allegations of the first sentence of Paragraph 27 of the

Complaint. ULAA denies all remaining averments or implications of Paragraph 27 of the

Complaint as legal arguments and in violation of Fed. R. Civ. P. 8 in failing to be a short and

plain statement. ULAA affirmatively states that Mr. Pitino made arguments through counsel at

the October 16, 2017 meeting. Those statements speak for themselves and ULAA denies that the

statements and documents have been fully and accurately summarized.

28. ULAA admits the allegations of the first sentence of Paragraph 28 of the

Complaint. ULAA denies all remaining averments or implications of Paragraph 28 of the

Complaint as legal arguments and in violation of Fed. R. Civ. P. 8 in failing to be a short and

plain statement. ULAA affirmatively states that Mr. Pitino made arguments through counsel at

the October 16, 2017 meeting. Those statements speak for themselves and ULAA denies that the

statements and documents have been fully and accurately summarized.

29. ULAA admits the allegations of the first sentence of Paragraph 29 of the

Complaint. ULAA denies all remaining averments or implications of Paragraph 29 of the

Complaint as legal arguments and in violation of Fed. R. Civ. P. 8 in failing to be a short and

plain statement. ULAA affirmatively states that Mr. Pitino made arguments through counsel at

the October 16, 2017 meeting. Those statements speak for themselves and ULAA denies that the

statements and documents have been fully and accurately summarized

30. ULAA admits the allegations of the first sentence of Paragraph 30 of the

Complaint. ULAA denies all remaining averments or implications of Paragraph 30 of the

Complaint as legal arguments and in violation of Fed. R. Civ. P. 8 in failing to be a short and

plain statement. ULAA affirmatively states that Mr. Pitino made arguments through counsel at

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the October 16, 2017 meeting. Those statements speak for themselves and ULAA denies that the

statements and documents have been fully and accurately summarized

31. ULAA admits the averments of the first sentence of Paragraph 31 of the

Complaint. ULAA denies all remaining averments or implications of Paragraph 31 of the

Complaint as legal arguments and in violation of Fed. R. Civ. P. 8 in failing to be a short and

plain statement. ULAA affirmatively states that Mr. Pitino made arguments through counsel at

the October 16, 2017 meeting. Those statements speak for themselves and ULAA denies that the

statements and documents have been fully and accurately summarized.

32. ULAA denies the averments of Paragraph 32 of the Complaint.

33. ULAA admits the averments of Paragraph 33 of the Complaint to the extent they

are consistent with documents which speak for themselves.

34. ULAA admits that Plaintiffs counsel sent a letter to ULAA dated October 25,

2017, in which he claimed that ULAA was in material breach of the Contract, and further that he

would terminate the Contract unless ULAA remedied its alleged material breach. ULAA denies

all remaining averments or implications of Paragraph 34 of the Complaint.

35. ULAA denies all averments or implications of Paragraph 35 of the Complaint.

36. ULAA admits the averments of Paragraph 36 to the extent that Pitino, by letter

dated November 27, 2017, purported to notify ULAA of his intent to terminate the Contract for

failure to remedy. ULAA denies all remaining averments or implications of Paragraph 36 of the

Complaint.

37. With respect to Paragraph 37 of the Complaint, ULAA states that the Contract

speaks for itself. ULAA denies that it committed a material breach or that Plaintiff is entitled to

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liquidated damages under this provision, or any damages whatsoever. ULAA denies all

remaining averments or implications of Paragraph 37 of the Complaint.

38. ULAA is without sufficient knowledge or information to admit or deny the

allegations of Paragraph 38 of the Complaint, and therefore, denies same. ULAA affirmatively

states that Plaintiff, under the Contract, is not entitled to the damages sought, or any relief

whatsoever.

39. ULAA denies the averments of Paragraph 39 of the Complaint.

40. ULAA denies the averments of Paragraph 40 of the Complaint.

41. ULAA denies the averments of Paragraph 41 of the Complaint.

42. ULAA admits the averments of Paragraph 42 to the extent that the Employment

Contract authorized ULAA to terminate Plaintiff for cause. ULAA denies all remaining

averments or implications of Paragraph 42 of the Complaint.

43. ULAA denies the averments of Paragraph 43 of the Complaint.

44. ULAA denies the averments of Paragraph 44 of the Complaint.

45. ULAA denies the averments of Paragraph 45 of the Complaint.

46. ULAA denies the averments of Paragraph 46 of the Complaint. ULAA further

denies that Plaintiff is entitled to the damages he seeks, or any relief whatsoever.

47. ULAA denies all averments of the Complaint not expressly admitted herein.

48. ULAA denies that Plaintiff is entitled to the relief he seeks and denies that he is

entitled to any relief whatsoever.

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DEFENSES

FIRST DEFENSE

The Complaint violates Fed. R. Civ. P. 8 as it contains legal argument and does not

provide a short and plain statement of the claims.

SECOND DEFENSE

Plaintiffs claims are barred, in whole or in part, by the doctrine of unclean hands.

THIRD DEFENSE

The Complaint and/or the relief requested therein is barred, in whole or in part, under the

principles of estoppel.

FOURTH DEFENSE

Plaintiffs claims are barred, in whole or in part, under the after acquired evidence

doctrine.

FIFTH DEFENSE

ULAA complied with all of its obligations under the Contract. All or part of the

averments raise issues that are immaterial and resulted in no limitation of any contractual rights

of Plaintiff.

SIXTH DEFENSE

The liquidated damages clause of the contract is unenforceable as a penalty.

SEVENTH DEFENSE

The Second Cause of Action related to purported damages from Plaintiffs alleged loss of

the Adidas endorsement contract is barred, in whole or in part, by paragraph 6.4 of the Contract.

EIGHTH DEFENSE

Plaintiff, in whole or in part, fails to state a claim upon which relief may be granted.

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NINTH DEFENSE

ULAA is entitled to an offset for any damages caused by Plaintiff for his violations of the

Contract or otherwise. ULAA is entitled to an offset for any contractual sums previously paid to

Plaintiff for any titles, honors, or records that are vacated by the NCAA or any other body.

TENTH DEFENSE

Plaintiffs own acts or omissions proximately and directly caused any damages he claims

to have suffered, and therefore, Plaintiff is not entitled to any recovery.

ELEVENTH DEFENSE

Plaintiffs alleged damages, if any, were caused by the actions of third parties under the

direction and supervision of Plaintiff and not by any act or omission attributable to ULAA.

TWELFTH DEFENSE

Plaintiffs claims are barred, in whole or in part, because the relief sought in the

Complaint would result in Plaintiffs unjust enrichment.

THIRTEENTH DEFENSE

ULAAs actions were at all times fair, reasonable, in good faith, and in the best interests

of ULAA as well as the University of Louisville.

FOURTEENTH DEFENSE

Plaintiffs claims are barred, in whole or in part, because he was responsible for the

actions of his subordinates under intercollegiate athletic rules and the Contract.

FIFTEENTH DEFENSE

Plaintiff has failed to mitigate, reduce, or otherwise avoid his damages.

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SIXTEENTH DEFENSE

The actions giving rise to the Level I violations against ULAA were not known until after

the July 1, 2015 term of the Contract between Plaintiff and ULAA; that certain underlying

actions hidden from ULAA occurred before the current Contract does not insulate Plaintiff from

the consequences of those actions.

SEVENTEENTH DEFENSE

Plaintiff was paid bonuses on the condition precedent that the NCAA would not vacate

the records set and titles and honors bestowed. In the event that the NCAA vacates such records,

titles, and honors, any bonuses paid to Plaintiff as a result of these vacated records, titles, and

honors were improperly paid and subject to recoupment by ULAA.

EIGHTEENTH DEFENSE

Consistent with standard human resource practice, Plaintiff was placed on administrative

leave pending further investigation in connection with the FBI investigation. Plaintiff was given

actual notice of the leave and paid throughout the entirety of his leave. He was further offered an

opportunity to be heard in with connection with the leave. Neither he nor his counsel took the

opportunity to be heard in connection with the leave.

NINETEENTH DEFENSE

The placement of Plaintiff on administrative leave pending further investigation was not

an adverse employment action.

TWENTIETH DEFENSE

Any alleged technical errors in the form or delivery of the notice of administrative leave

to Plaintiff were not material.

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TWENTY-FIRST DEFENSE

Any statements of support for Plaintiff by ULAA and/or its officers, employees, or

agents, were not a waiver of its right to terminate him for cause.

TWENTY-SECOND DEFENSE

ULAA had a right to consider the entire employment history of Plaintiff in making its

decision to terminate him for cause. This employment history included, but was not limited to,

public scandals in his personal life, multiple NCAA Level 1 violations, and an FBI investigation.

TWENTY-THIRD DEFENSE

ULAA reserves the right to raise all applicable defenses, statutory or otherwise, that arise

out of or may be asserted in response to Plaintiffs claims.

COUNTERCLAIM

Defendant/Counterclaim Plaintiff, University of Louisville Athletic Association, Inc.

(ULAA), by counsel, brings this Counterclaim:

I. PARTIES

1. ULAA is a Kentucky nonprofit corporation organized under Kentucky law with

its principal place of business in Louisville, Kentucky.

2. Upon information and belief, Mr. Pitino is an adult citizen of the state of Florida.

II. JURISDICTION AND VENUE

3. This Court has subject-matter jurisdiction under 28 U.S.C. 1332 because the

amount in controversy exceeds $75,000, exclusive of interest and costs, and there is complete

diversity of citizenship between ULAA and Mr. Pitino.

4. For purposes of this Courts jurisdictional analysis, ULAA is a citizen of

Kentucky and, upon information and belief, Mr. Pitino is a citizen of Florida.

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5. The amount in controversy exceeds $75,000, exclusive of interest and costs.

6. This Court has personal jurisdiction over Mr. Pitino because he performed the

acts and omissions giving rise to these claims in Jefferson County, Kentucky.

7. This Court is the proper venue pursuant to 28 U.S.C. 1391(b) because a

substantial part of the events or omissions giving rise to this action occurred in the Western

District of Kentucky.

8. This Court has supplemental jurisdiction under 28 U.S.C. 1367 over the

remaining claims asserted herein because such claims are so related to the claims arising under

28 U.S.C. 1332 and 28 U.S.C. 2201 that they form part of the same case or controversy.

III. FACTUAL BACKGROUND

A. The Employment Contract

9. At times relevant to this Complaint, Mr. Pitino was the Head Coach of the

University of Louisvilles Mens Basketball Team.

10. Mr. Pitinos employment relationship with his employer, ULAA, is governed by

an Employment Contract (the Contract), effective July 1, 2015. A copy of the Contract is

attached hereto as Exhibit A.

11. The Contract sets forth, in part, Mr. Pitinos duties as follows:

12. Section 4.1.3 of the Contract provides, in relevant part, that Mr. Pitino shall

diligently supervise compliance of assistant coaches and any other employees for which

Employee is administratively responsible with the aforesaid policies, rules, and regulations, and

[shall] immediately advise the Athletic Director if Employee has cause to believe violations by

such subordinates have occurred or will occur[.] See Exhibit A.

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13. Section 4.3 of the Contract provides, in part, Employee is presumed to be

responsible for the actions of all assistant coaches and administrators who report, directly or

indirectly, to him. See Exhibit A.

14. Section 4.3.5 of the Contract provides, Employee shall ensure that he and his

staff immediately notify the compliance staff when concerns or red flags occur related to

potential NCAA, conference, and/or University rules violations. See Exhibit A.

15. Section 4.3.6 of the Contract provides, Employee shall ensure that he and his

staff cooperate fully with any University, conference, and/or NCAA investigations and accept

responsibility for maintaining the integrity of the investigation and enforcement process. See

Exhibit A.

16. Section 4.3.7 of the Contract provides, Employee shall ensure that he and his

staff provide complete and truthful information in all compliance matters and investigations, be

forthcoming at all times, and take responsibility for their involvement in, or knowledge of,

violations. See Exhibit A.

17. Section 4.3.8 of the Contract provides, in part, Employee shall demonstrate a

commitment to compliance through actively monitoring his staffs activities. See Exhibit A.

18. Section 6 of the Contract, Termination for Just Cause, provides in pertinent

part:

6.1 Employer has the right to terminate this Employment Contract for Just Cause or
impose other appropriate discipline, in which case prior to such action, Employee shall be
given ten (10) days prior written notice and an opportunity to be heard. The term Just
Cause with respect to Employers right to terminate this Employment Contract shall be
understood to include all of the following:

6.1.1 A material violation of this Employment Contract or refusal or


unwillingness to perform this Contract in good faith and to the best of Employees
abilities;

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6.1.2 Disparaging media publicity of a material nature that damages the good
name and reputation of Employer or the University, if such publicity is caused by
Employees willful misconduct that could objectively be anticipated to bring
Employee into public disrepute or scandal, or which tends to greatly offend the
public, or any class thereof on the basis of invidious distinction;

6.1.3 Major violation of any rule, or bylaw of Employer, the athletic conference
with which the University is then affiliated or the NCAA, including Level I and/or
Level II NCAA violations, which violation damages Employer or the University
in a material fashion[.]

See Exhibit A.

19. Section 6.3 of the Contract provides, in pertinent part, termination of this

Employment Contract by Employer may occur only by decision of the Board of Directors of

Employer or a duly authorized and constituted subcommittee of the Board after ten (10) days

prior written notice of the charges against Employee and an opportunity for Employee to present

evidence. Employee may obtain the assistance of an attorney at Employees sole expense to aid

in the proceeding. See Exhibit A.

20. Section 14 of the Contract, Waiver, provides, [t]he failure of either Employee

or Employer to insist upon the strict enforcement of any of the terms, conditions or covenants of

this Employment Contract or to exercise any right or remedy consequent upon a breach thereof

shall not be construed to be a waiver to affect their respective rights thereunder to enforce each

and every provision or right. The waiver of any default and breach of this Employment Contract

shall not be held to be a waiver of any other default and breach. See Exhibit A.

B. Scandals Involving the Universitys Mens Basketball Program

21. On June 15, 2017, the NCAA Committee on Infractions issued its Public

Infractions Decision (the Decision) involving the University of Louisvilles mens basketball

program. See Decision, attached as Exhibit B.

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22. The NCAAs Decision found, in part, [f]or approximately four years, the head

coach [Mr. Pitino] failed in his responsibility to monitor the activities of former operations

director who reported to him. . . .The panel concludes that the violation occurred and is Level 1.

See Exhibit B.

23. According to the Decision, Level 1 violations are severe breaches of conduct that

undermine or threaten the integrity of the NCAA Collegiate Model. See Exhibit B.

24. The Decision further found:

From January 2010, the time the head coach hired the former operations director,
through April 2014, when the former operations director left the University, the
head coach failed to monitor his activities in Minardi Hall with prospects visiting
campus. Specifically, the head coach failed to monitor the former operations
director when the head coach: (1) created the residential environment in which the
violations eventually occurred and trusted the former operations director to
behave in a manner consistent with NCAA rules; and (2) delegated monitoring of
the former operations director to his assistant coaches without appropriate
oversight. The head coachs failure to monitor the former operations director
violated Bylaw 11 head coach responsibility legislation.

Bylaw 11.1.1.1 and its predecessor, Bylaw 11.1.2.1, create a presumption that
head coaches are responsible for the actions of their subordinates. . . . The
monitoring responsibility applies to all assistant coaches and program staff
members who report, either directly or indirectly, to the head coach. That
presumption is rebuttable.

Here, the head coach failed to rebut the presumption. He essentially placed a peer
of the student-athletes in a position of authority over them and visiting prospects
and assumed that all would behave appropriately in an environment that was, for
all practical purposes, a basketball dormitory. Further, he delegated responsibility
for monitoring to his assistant coaches, who later stated they were unaware it was
their job.

See Exhibit B.

25. As a result of the NCAAs Decision, the Committee instituted severe penalties

against the University. See Exhibit B.

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26. As penalty for the multiple violations found by the NCAA, including Mr. Pitinos

Level I violation, the University was ordered to return to the NCAA all of the monies it had

received to date through conference revenue sharing for its appearances in the 2012, 2013, 2014,

and 2015 NCAA Mens Basketball Tournaments. (Exhibit B at 23).

27. The University did not appeal any of the NCAAs determination of violations.

Instead, the University appealed only the NCAAs imposition of penalties.

28. Upon information and belief, Mr. Pitino initiated an appeal of the NCAAs

finding of his Level I violation; however, Mr. Pitino subsequently withdrew his appeal

voluntarily from NCAA consideration before his scheduled hearing.

29. On September 26, 2017, the University of Louisville was informed by the U.S.

Attorneys Office for the Southern District of New York that it intended to publicly announce a

criminal investigation implicating certain unnamed members of the mens basketball program at

the University of Louisville in a scheme of fraud and malfeasance in the recruitment of student

athletes in violation of federal law and NCAA Division I Bylaws. A copy of the Sealed

Complaint (later unsealed), styled United States of America v. James Gatto, is attached hereto as

Exhibit C.

C. Termination for Cause

30. On September 27, 2017, in the wake of the FBI investigation, Mr. Pitino was

placed on a leave of absence. Pursuant to Section 6.1 of the Contract, Mr. Pitino was provided

pay during the leave and offered an opportunity to be heard. See Notice of Leave at Exhibit D.

31. Mr. Pitino did not elect to be heard concerning his leave of absence.

32. On October 2, 2017, the ULAA Board authorized its Chairman, Dr. Greg Postel,

to start the termination for cause process.

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33. On October 3, 2017, Dr. Postel provided Mr. Pitino and his legal counsel with

Notice under the Contract. See Notice at Exhibit E.

34. The October 3 Notice provided Mr. Pitino with notice of the charges against him

and advised him of his right to present evidence before the ULAA Board, as provided by Section

6.3 of the Contract. See Notice at Exhibit E.

35. The Notice arose out of Mr. Pitinos conduct over a period of years, including

without limitation, his involvement in multiple recent and highly publicized scandals involving

himself, personally, and the University of Louisvilles mens basketball team. See Notice at

Exhibit E.

36. More specifically, the Notice identified the following conduct by Mr. Pitino in

violation of his Contract: (1) the NCAAs finding that Mr. Pitinos failure to monitor and

exercise sufficient oversight of the former director of mens basketball operations constituted a

Level I violation of NCAA rules; (2) the announcement by the U.S. Attorneys Office for the

Southern District of New York of a criminal investigation implicating certain members of the

University of Louisvilles mens basketball program, including several coaches; and (3) failure

to notify Athletics Compliance of Christian Dawkins presence on campus in May 2017. See

Notice at Exhibit E.

37. On October 11, 2017, ULAAs legal counsel sent a letter to Mr. Pitinos counsel

addressing his opportunity to present evidence before the Board pursuant to the terms of his

Contract. The letter advised that Mr. Pitino could appear before the Board in person or via video

conference. See Letter at Exhibit F.

38. On October 16, 2017, the ULAA Board of Directors held a special meeting

concerning the Pitino matter.

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39. Mr. Pitino did not appear before the ULAA Board in person or by video

conference. Instead, Mr. Pitino appeared through his legal counsel, who tendered to the Board

written information and the statements of a private investigator. See Mr. Pitino written materials

at Exhibit G.

40. At the special meeting, while the Board was in closed session, Mr. Pitinos legal

team was granted the ability to present all of the information they sought to present on behalf of

Mr. Pitino, without interruption.

41. After consideration of the presentation and information provided, the Board

unanimously elected to terminate Mr. Pitinos Contract for cause. The Board further instructed

its Chairman to provide Mr. Pitino with formal notice of the decision.

42. Before the Board finalized its decision to terminate for cause, Mr. Pitino was

offered the opportunity to resign. He declined.

43. On October 17, 2017, the Chairman of the ULAA Board, Dr. Postel, provided Mr.

Pitino with formal notice of the Boards decision to terminate him for cause, pursuant to Sections

6.1.1, 6.1.2, and 6.1.3 of his Contract. See Termination Letter at Exhibit H.

D. Mr. Pitino Claims Material Breach

44. On or about October 18, 2017, shortly after Mr. Pitino was advised of the Boards

decision to terminate him for cause, Mr. Pitino participated in a televised interview with ESPNs

Jay Bilas.

45. During this interview, Mr. Pitino stated that he took full responsibility for his

hiring decisions.

46. Thereafter, on October 25, 2017, counsel for Mr. Pitino sent a letter to Vince

Tyra, Acting Athletic Director. See Letter to Vince Tyra at Exhibit I.

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47. The letter purported to serve as Notice of ULAAs alleged material breach of the

Contract under Section 6.5.

48. The letter claims, in relevant part, that the ULAA Board materially breached the

Contract when it voted to terminate Mr. Pitino for just cause, because [s]o far as we know,

ULAA has conducted no independent investigation and has obtained no contrary proof to

overcome the information presented on Mr. Pitinos behalf at the October 16 meeting. The letter

further claims that ULAA therefore lacked any lawful basis for concluding that it had just cause

to fire Coach Mr. Pitino, and had no right to terminate the [Contract]. See Exhibit I.

49. This claim is inconsistent with Mr. Pitinos statement in his October 18th

interview that he took full responsibility for his hiring decisions.

50. The letter further advises that unless ULAA remedies its purported material

breach by, at a minimum, restoring Mr. Pitino to his full, active employment position until the

conclusion of the investigation currently underway by the U.S. Attorneys Office in collaboration

with the FBI[,] Mr. Pitino will be entitled to liquidated damages in the amount equal to the

compensation due to him under the Contract for the balance of the contractual termthrough

and including June 30, 2026. See Exhibit I.

COUNT IBREACH OF CONTRACTNCAA VIOLATIONS

51. Pursuant to Federal Rule of Civil Procedure 10(c), ULAA adopts and incorporates

by reference each of the preceding paragraphs as if fully set forth herein.

52. Mr. Pitino contends that the ULAA Board lacked cause to terminate him under his

Contract, and as a result he is entitled to liquidated damages pursuant to Section 6.4 of the

Contract. See October 25, 2017 letter to Vince Tyra at Exhibit I.

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53. Under the Contract, Mr. Pitino may be terminated for cause for [a] material

violation of the Contract; [d]isparaging media publicity of a material nature that damages the

good name and reputation of Employer or University[;] and [m]ajor violation of any rule, or

bylaw of Employer . . . or the NCAA, including Level 1 . . . violations, which violation damages

Employer or the University in a material fashion[.] See Exhibit A.

54. In the NCAAs June 2017 Decision, the NCAA found that Mr. Pitino failed in

his responsibility to monitor the activities of former operations director who reported to him.

The Decision concluded that Mr. Pitinos failure to monitor constituted a Level 1 violation. See

Exhibit B.

55. Mr. Pitino breached his contractual obligations when he failed in his

responsibility to monitor the activities of the former operations director, Andre McGee, who

reported to him. This failure to monitor lasted for approximately four years. (See NCAA

Decision at 18).

56. Mr. Pitinos Level 1 violation has damaged and continues to damage ULAA and

the University in a material fashion, including, but not limited to, its reputation, ability to

contract, ability to recruit, ability to meet certain financial responsibilities associated with mens

basketball, and ability to generate ticket sales and donations.

57. Mr. Pitinos Level 1 violation also constitutes a material violation of Section 4.3

the Contract, Employee is presumed to be responsible for the actions of all assistant coaches

and administrators who report, directly or indirectly, to him. See Exhibit A.

58. ULAAs failure to immediately terminate Mr. Pitino for cause under Section 6.1.3

of his Contract upon receiving the NCAAs June 15, 2017 Decision was not a waiver of its rights

under Section 14.

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59. As a result of Mr. Pitinos breach of contract, ULAA has suffered and will

continue to suffer substantial damages.

60. In addition, ULAA is entitled to recoup any bonuses and other compensation

wrongly paid for items vacated by the NCAA.

COUNT IIBREACH OF CONTRACTFBI INVESTIGATION

61. Pursuant to Federal Rule of Civil Procedure 10(c), ULAA adopts and incorporates

by reference each of the preceding paragraphs as if fully set forth herein.

62. Mr. Pitino entered into an Employment Contract with ULAA whereby Mr. Pitino

expressly agreed that he would be presumed to be responsible for the actions of all assistant

coaches . . . who report, directly or indirectly, to him[,] and further promote an atmosphere of

compliance, academic integrity, and ethical conduct within his program and shall monitor the

activities of all assistant coaches and administrators involved with the program. (Exhibit A).

63. Mr. Pitino further agreed to ensure that he and his staff immediately notify the

compliance staff when concerns or red flags occur related to potential NCAA, conference, and/or

University rules violations. (Exhibit A at 11).

64. Mr. Pitino further agreed to ensure that he and his staff cooperate fully with any

University, conference, and/or NCAA investigations and accept responsibility for maintaining

the integrity of the investigation and enforcement process. (Exhibit A at 11).

65. Mr. Pitino further agreed to ensure that he and his staff provide complete and

truthful information in all compliance matters and investigations, be forthcoming at all times,

and take responsibility for their involvement in, or knowledge of, violations. (Exhibit A at 11).

66. Mr. Pitino further agreed to demonstrate a commitment to compliance through

actively monitoring his staffs activities. (Exhibit A at 11).

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67. ULAA performed its obligations under the Contract.

68. The FBIs criminal investigation of certain members of the Universitys mens

basketball program, which was announced on the heels of Mr. Pitinos Level 1 violation for

failure to monitor staff, evidences an ongoing failure to adequately monitor and supervise his

assistant coaches as required by the material terms of his Contract. See Exhibit A.

69. Although Mr. Pitinos legal counsel argued to the ULAA Board that Mr. Pitino

was unaware of the actions of his assistant coaches relating to the FBIs investigation, Mr.

Pitinos legal counsel did not deny that the mens basketball program and his assistant coaches

were entangled in the FBI investigation. Under his Contract, Mr. Pitino is presumed to be

responsible for the actions of all assistant coaches who report to him. See Exhibit A.

70. Mr. Pitinos legal counsel presented evidence that Mr. Pitino was concerned when

he learned that a student athletes mother was living in the Galt House, and instructed his

Assistant Coach, Kenny Johnson, to look into the matter and find out how she could afford to

live in the Galt House. See Mr. Pitino Written Materials at Exhibit G. However, Mr. Pitinos

legal counsel did not present any evidence or even suggest that Mr. Pitino notified the

Universitys compliance staff of the potential red flag, as required by Section 4.3.5 of his

Contract.

71. Mr. Pitino further failed in his contractual obligations resulting in ULAA and the

University being subject to the pending investigation by the FBI.

72. As a result of Mr. Pitinos breach of contract, ULAA has suffered and will

continue to suffer substantial damages.

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COUNT IIICOMMON LAW INDEMNITY

73. Pursuant to Federal Rule of Civil Procedure 10(c), ULAA adopts and incorporates

by reference each of the preceding paragraphs as if fully set forth herein.

74. As set forth above, ULAA entered into an Employment Contract with Mr. Pitino

for his continued services as head coach of the University of Louisville varsity mens basketball

team.

75. In his role as head coach, Mr. Pitino was responsible to manage and supervise the

mens basketball team, and was presumed to be responsible for the actions of all assistant

coaches and administrators who report, directly or indirectly to him. (Exhibit A at 10).

76. On June 15, 2017, the NCAA issued its Public Infractions Decision against the

University of Louisville in which it found, in relevant part, that [f]or approximately four years,

[Mr. Pitino] failed in his responsibility to monitor the activities of the former operations director,

who reported to him. (Ex. B at 18).

77. As penalty for the multiple violations found by the NCAA, including Mr. Pitinos

Level I violation, the University was ordered by the Committee on Infractions to return to the

NCAA all of the monies it had received to date through conference revenue sharing for its

appearances in the 2012, 2013, 2014, and 2015 NCAA Mens Basketball Tournaments. (Ex. B at

23). Mr. Pitino, and not the University, was the active wrongdoer. His actions resulted in the

NCAAs Decision. To the extent the University is obligated to pay financial penalties to the

NCAA, the University is entitled to indemnity from Mr. Pitino for the total amount of the

penalties, if any, and any other resultant consequential damages, including the costs and

attorneys fees associated with the compliance investigation and defense of this action.

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COUNT IVNEGLIGENCE

78. Pursuant to Federal Rule of Civil Procedure 10(c), ULAA adopts and incorporates

by reference each of the preceding paragraphs as if fully set forth herein.

79. Mr. Pitino owed a duty of care to ULAA and the University because of his

relationship to ULAA and the University and its relationship with the public.

80. Mr. Pitino breached his duty of care with ULAA by failing to supervise his

Assistant Coaches and staff and by failing to maintain an adequate level of supervision of the

overall basketball program.

81. But for this breach of duty, ULAA would not be facing Level 1 violations from

the NCAA or subject to the ongoing FBI investigation.

82. Mr. Pitino knew, or should have known, that his breach of these duties would

result in harm to ULAA and to UofL.

83. Mr. Pitinos negligent behavior and failure to exercise reasonable care has

resulted in actual damages to ULAA.

COUNT VNEGLIGENT INTERFERENCE WITH PROSPECTIVE ECONOMIC


ADVANTAGE

84. Pursuant to Federal Rule of Civil Procedure 10(c), ULAA adopts and incorporates

by reference each of the preceding paragraphs as if fully set forth herein.

85. ULAA has business relationships with various business entities and media outlets

including sponsorship agreements, endorsement agreements, media contracts and lease

agreements. These include but are not limited to, the NCAA, ACC, ACC Network and other TV

networks.

86. Mr. Pitino had knowledge of these relationships.

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87. Mr. Pitino knew or should have known that ULAAs business relationships would

be disrupted if he failed to act with reasonable care in his supervision of the mens basketball

program at UofL.

88. Mr. Pitino failed to act with reasonable care by failing to supervise his Assistant

Coaches and staff and by failing to maintain an adequate level of supervision of the overall

basketball program.

89. Mr. Pitinos wrongful conduct resulted in his breach of his Employment Contract

with ULAA.

90. As a result of Mr. Pitinos conduct, ULAAs business relationships have been

disrupted, damaged, and are in danger of being lost.

91. ULAA has been materially harmed as a result of these disrupted or damaged

business relationships.

REQUEST FOR RELIEF

WHEREFORE, ULAA respectfully requests the following:

1. An award of all available damages on Counts I-V in an amount in excess of the

jurisdictional minimum of this Court and in an amount to be proved at trial;

2. An indemnification award of restitution for any monies paid as damages for

vacated games, championships, records, and honors.

3. An award of pre-judgment and post-judgment interest;

4. An award of ULAAs attorneys fees and costs expended herein;

5. A trial by jury on all issues so triable; and

6. Any and all other relief to which ULAA may be entitled.

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Respectfully submitted,

/s/ Thomas M. Williams


Thomas M. Williams
Craig C. Dilger
Amy L. Miles
Stoll Keenon Ogden PLLC
2000 PNC Plaza
500 West Jefferson Street
Phone: (502) 333-6000
tom.williams@skofirm.com
craig.dilger@skofirm.com
amy.miles@skofirm.com

Counsel for Defendant,


University of Louisville
Athletic Association, Inc.

CERTIFICATE OF SERVICE

I hereby certify that, on this 13th day of December, 2017, I electronically filed the
foregoing with the Clerk of Court using the electronic filing system, which will send email
notification to the following:
Stephen B. Pence
Pence & Whetzell, PLLC
9300 Shelbyville Road, Suite 1205
Phone: 502-736-6200
steve@pencelegal.com

-and-

Kurt A. Scharfenberger, Esq.


239 South Fifth Street, Suite 800
Louisville, Kentucky 40202
Phone: 502-561-0777
kurt@scharfenberger-law.com

Counsel for Plaintiff,


Richard A. Pitino
/s/ Thomas M. Williams
Counsel for Defendant,
University of Louisville
Athletic Association, Inc.
113333.158432/1535897.5

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