Gomez v. New Champion Promotions, LLC

Background

Cruz alleged that New Champion Promotions, LLC (NCP) and NCP President Jesse Rodriguez withheld portions of his boxing earnings in violation of the Ali Act and California and New York law. He sought summary judgment on all nine causes of action in his Third Amended Complaint and on all three causes of action in the defendants’ First Amended Cross-Complaint.

Cruz had entered into a promotional agreement with NCP under which NCP would act as his exclusive promoter. Cruz, NCP, and Matchroom Boxing USA, LLC later signed a Boxing Promotional Agreement allowing Matchroom to act as Cruz’s co-promoter. The agreement specified purses and a signing bonus for Cruz but did not clearly state how NCP or Matchroom would be compensated. Cruz alleged that defendants withheld $124,465 from his signing bonus and earnings from two bouts. The opinion also states that claims against Matchroom were stayed.

Evidentiary objections and contract interpretation

The court overruled Cruz’s objections to the declaration of defendants’ boxing-industry expert, concluding that the expert described typical industry relationships and did not offer an improper legal conclusion. The court also overruled Cruz’s objections based on the rule limiting outside evidence when a contract is clear. It found that the agreements contained ambiguities, including whether the Boxing Promotional Agreement superseded the earlier Cruz-NCP Agreement and what compensation NCP was entitled to receive. The court therefore held that outside evidence was relevant to the parties’ intent and compensation rights.

Cruz’s claims

The court denied summary judgment on Cruz’s claim under the Ali Act provision separating promoters and managers. The court concluded that the parties’ rights to the purse were unclear and that a factual dispute remained about whether prohibited cooperation between Cruz’s managers and defendants existed. The court also stated that the evidence did not definitively show that defendants had the type of financial interest in management prohibited by that provision.

The court granted summary judgment for Cruz on his Ali Act disclosure claim. The court found that the undisputed facts showed that NCP and Rodriguez acted as promoters, failed to provide the required disclosures, and received compensation directly or indirectly connected to Cruz’s boxing matches. The court left unresolved whether Matchroom was jointly responsible and whether Cruz suffered damages from the failure to disclose.

The court denied summary judgment on Cruz’s claim under California Business and Professions Code sections 18628 and following. Although defendants were not licensed as boxing managers in California, factual disputes remained about the parties’ compensation rights, the meaning of the bout agreements, and whether defendants’ compensation came from Cruz’s gross purse.

The court denied summary judgment on Cruz’s New York-law claims for breach of contract, breach of the duty of good faith and fair dealing, breach of fiduciary duty, and conversion. It found that the parties’ intent and their rights concerning compensation could not be conclusively determined from the written agreements alone. The court also denied summary judgment on Cruz’s California Penal Code section 496 claim because Cruz had not adequately shown the required criminal intent. Finally, it denied summary judgment on Cruz’s claim for declaratory relief.

Defendants’ cross-complaint

The court denied Cruz’s motion for summary judgment on all three claims in the First Amended Cross-Complaint: breach of the covenant of good faith and fair dealing, unjust enrichment, and declaratory relief. The court stated that these claims depended on the same unresolved dispute about the parties’ intent and compensation rights.

Disposition

The court concluded that Cruz’s motion for summary judgment was granted in part as to defendants’ violation of the Ali Act disclosure provision and denied for all other causes of action.