Turner Broadcasting System, Inc. v. McDavid

Brief Fact Summary.

McDavid sued Turner Broadcasting System, Inc. (Turner) for breach of oral agreement when Turner rescinded a contract in order to enforce an agreement with a party that was entered into at the same time as the contract entered into with McDavid.

Synopsis of Rule of Law.

Damages for a breach of contract to sell assets is calculated by the difference between the contract price and the fair market value of the assets at the time of the breach.

Facts.

Turner Broadcasting System, Inc. (Turner) owned the Atlanta Hawks, Atlanta Thrashers, and the Philips Arena. When Turner announced that he was ready to sell those assets, McDavid and Turner entered into a letter of intent. When it came to memorialize the transaction, Turner sought to restructure the deal and assured McDavid that the restructuring ould not change the primary terms of the transaction. McDavid agreed. A few days later, Atlanta Spirit LLC (Spirit) approached Turner about purchasing the assets. Turner signed an agreement for the sale of assets to Spirit on the same day Turner met with McDavid to sign the agreement. McDavid sued Turner for breach of the oral agreement. McDavid was granted judgment.

Issue.

Whether damages for a breach of contract to sell assets is calculated by the difference between the contract price and the fair market value of the assets at the time of the breach?

Held.

Yes. The judgment of the trial court is affirmed. The jury’s award was supported by the evidence provided at trial.

Discussion.

Damages for a breach of contract to sell assets is calculated by the difference between the contract price and the fair market value of the assets at the time of the breach. A jury’s award for damages will only be reversed if the award will only be excessive or inadequate to create bias or mistake on the part of the jurors.