Klein & Wilson

Youth baseball camp business dispute resolved in federal court

Little league baseball is big business. This is what the U.S. District Court in Washington found out in a lawsuit between former co-owners of Headfirst Baseball, a multimillion dollar youth baseball and summer camp company.

This four-year legal battle between Brendan Sullivan and Robert Elwood reached settlement during the damages phase of the federal court trial. Elwood, who was accused by Sullivan of stealing more than $700,000 from their company, agreed to pay back $498,000 as well as $100,000 more in punitive damages.

An agreement was reached in this lawsuit during the second day of damage proceedings, following a five-week jury trial this winter. 

"The prospect of continued litigation, including the possibility of appeal by both parties, was not in anyone’s best interest," said J. Douglas Baldridge, Elwood’s lead attorney. "This is a sensible result for all concerned." 

Sullivan originally accused Elwood of being "a thief" after discovering he had spent thousands of dollars of company money on personal expenses, including hardwood floors for his home, vacations and appliances. Elwood didn't dispute the spending, but claimed that, although he may have gone too far, he and Sullivan agreed it was okay to use company money for personal expenses.

Although the jury ruled that there was a de facto partnership between these two men, it illustrates the importance of getting agreements in writing. Through a well-crafted partnership agreement, Sullivan and Elwood could have addressed not only how they would run Headfirst Baseball, but also if company profits could be allocated for personal use.

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