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Baseball Club of Tacoma v. SDL Baseball Partners, LLC

Court of Appeals of Washington, Division 1

May 4, 2015

The Baseball Club of Tacoma, Respondent
v.
SDL Baseball Partners, LLC, et al., Appellants Mikal Thomsen et al., Respondents

Superior Court County: King. Superior Court Cause No: 12-2-25136-3 SEA. Superior Court Judge Signing: Barbara Linde. Date filed in Superior Court: March 14, 2014.

Daniel P. Larsen ; Michael B. King (of Carney Badley Spellman PS ); and Brenda S. Molner (of Molner Law PLLC ), for appellants.

Angela R. Jones and Carrie M. Hobbs (of Perkins Coie LLP ), for respondents.

Written by: Lau, J. Concurred by: Verellen, A.C.J., Appelwick, J.

OPINION

Page 1284

 Lau, J.

[187 Wn.App. 522] [¶1] After purchasing the Tacoma Rainiers minor league baseball team from SDL Baseball

Page 1285

Partners LLC,[1] The Baseball Club of Tacoma (TBCOT) filed a complaint alleging, among other things, breach of contract and fraud. SDL filed several counterclaims and third party [187 Wn.App. 523] claims. TBCOT responded with a special motion to strike these claims under Washington's anti-SLAPP statute.[2] The trial court granted the motion, concluding that the counterclaims and third party claims " tread" on TBCOT's complaint. But because the thrust or gravamen of SDL's counterclaims and third party claims relies primarily on alleged prelitigation conduct--rather than TBCOT's complaint--we conclude that TBCOT failed to establish that SDL's counterclaims were " based on" protected activity and reverse and remand with instructions to reinstate SDL's counterclaims and third party claims.

FACTS

[¶2] This case involves a contract dispute. In 2010, SDL Baseball Partners LLC, Robert J. Schlegel, and Robert K. Schlegel decided to sell the Tacoma Rainiers[3] and assets related to the team and stadium. The Baseball Club of Tacoma, led by Mikal Thomsen (third party defendant below), offered to buy the team, and the parties signed a purchase and sale agreement on January 31, 2011. Under the agreement, the purchase price included a $16,500,000 payment to be made at closing and a percentage of the Rainiers' earnings before interest, taxes, depreciation, and amortization in the first four fiscal years with the option to extend for an additional fifth year. These additional payments are known as " earn-out" payments.

[¶3] The agreement also stated that TBCOT " shall rely" on SDL's financial statements, " which need not be audited." Clerk's Papers (CP) at 511. SDL represented the truth and accuracy of those statements and warranted that they had been prepared in conformity with generally accepted accounting principles (GAAP). The agreement required that [187 Wn.App. 524] SDL reimburse TBCOT for any damages resulting from " any breach of any representation or warranty made in ... this Agreement." CP at 396.

[¶4] After acquiring the Rainiers, TBCOT discovered alleged accounting errors and errors in SDL's financial statements. For instance, TBCOT claimed that SDL failed to prepare their financials in conformity with GAAP, as represented in the purchase agreement, and financial statements misrepresented the financial performance of the business.

[¶5] TBCOT filed suit against SDL in July 2012, alleging breach of contract, breach of implied duty of good faith and fair dealing, fraud, and negligent misrepresentation. SDL filed their initial answer and counterclaims in August 2012. The counterclaims requested a declaratory judgment limiting TBCOT's remedy to the terms of the agreement and alleging that TBCOT's fraud claim was frivolous and advanced without reasonable cause under RCW 4.84.185. In September 2013, SDL filed an amended answer and asserted affirmative defenses and counterclaims. SDL also alleged third party claims against TBCOT officers Mikal Thomsen and Aaron Artman. SDL asserted five new counterclaims in addition to the two previously alleged--breach of duty of good faith and fair dealing, fraud (fraud in the inducement, fraud by omission), negligent misrepresentation, civil conspiracy, and conversion.

[¶6] In February 2014, TBCOT and third party defendants filed a special motion to strike SDL's counterclaims[4] pursuant to RCW 4.24.525, Washington's anti-SLAPP statute. TBCOT argued that SDL's " claims are based entirely on TBCOT's filing of this lawsuit ... ," and because defendants could not show a probability of prevailing on their claims, those claims should be dismissed. The trial court granted the ...


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