Korfanty vs. USFA (May 2008)

[Mr Epee]

Greetings,

There has been a great deal of recent discussion regarding the USFA's failure to fulfill it's previously agreed upon obligations. This case represents the consequences of what has become a now familiar pattern of behavior.

Summary (full case available in pdf format 2.81mb)

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I changed the file hosting srvc so hopfuly the dl works better - thank you Allen
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1. In January, 2007, the USFA entered into a contract with Ed Korfanty to retain his services as National Coach for the USFA's Women's Saber Program. The length of the contract was 2 years, and he was to receive $30k/year for his services.

2. In March, 2008, claiming to have never received any of the agreed upon payments, David Hosenpud, on behalf of Ed Korfanty, filed a case against the USFA to pursue the previously agreed upon sums. Damages claimed - $60k + 9% interest + costs. The case was filed in THE CIRCUIT COURT OF THE STATE OF OREGON FOR THE COUNTY OF MULTNOMAH

3. On April 3rd, 2008, Michael Massik, Executive Director of the USFA, was notified of the case and given 30 days to respond.

4. On May 8th, David Hosenpud, attorney for Ed Korfanty, filed a motion for order of default.

5. On May 9th, the court granted the motion of default based on the fact that the USFA had been properly notified of the case, and failed to respond.

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Commentary.

The USFA is currently an organization with many outstanding debts. Some of the people owed money will sit passively and allow themselves to be exploited for the "good of the organization." Others cannot, or will not, be so charitable.

I wonder to what extent a document like the Athlete's Handbook is considered a contract with the athletes. There are most certainly unpaid sums for training grants, and performance payments. Is the path to satisfaction as simple as filing a case with the USFA and waiting for the organization to ignore the filing?

I also wonder how this specific judgment will be recovered. Will the USFA now respond by saying "Oh, sorry about that we'll send out a check immediately"? What assets are at risk to this and presumably future lawsuits?

[Philistine]

Originally Posted by Mr Epee

{snip}
I also wonder how this specific judgment will be recovered. Will the USFA now respond by saying "Oh, sorry about that we'll send out a check immediately"? What assets are at risk to this and presumably future lawsuits?

Ultimately it's like any business with serious cash-flow problems.

To the extent you cannot either pay your creditors or convince them to take later payments, Chapter 11 reorganization is often an attractive option if there is no ready source of a cash infusion, buyout or some such.

The USFA is in the position that many of its creditors are also volunteers or otherwise favorably disposed to it, so that they are willing to wait to be paid in order to help it get back on its feet financially. So, you pay the outsiders first. Then you pay the squeaky wheels--and hope you don't get a run-on-the-bank situation where people suspect if they don't get paid now, they never will.

Short of getting more money in quickly, there's not a lot else to be done in the short term.

--Philistine

[bjacobs]

Promises in the Athlete's Handbook could very well be considered contracts, if athletes reasonably relied on these promises to their detriment. I would expect athletes who follow in Mr. Korfanty's example to be successful.

I suppose it's possible that the USFA thought they were so obviously in the wrong that this lawsuit wasn't even worth defending...but I can't help but think that someone dropped the ball here.

[Purple Fencer]

What bothers me is USFA let the case go to default...they could've at least filed an answer to the complaint to buy some time...where was the legal counsel at this time???

[Philistine]

There are definitely situations where it makes sense to allow a default to be taken.

Here, it probalby would have cost a couple thousand at least just to file a quick response, and if there is no real defense, it makes much more sense to work out a deal on payment (secured by the judgment).

Now, if this wasn't planned, I agree the ball was dropped--but that wouldn't be my first guess.

--Philistine

[KD5MDK]

We'd have to know if the Counsel was notified by the Executive Director first.

[Capt. Slo-mo]

Originally Posted by Philistine

There are definitely situations where it makes sense to allow a default to be taken.

Here, it probably would have cost a couple thousand at least just to file a quick response, and if there is no real defense, it makes much more sense to work out a deal on payment (secured by the judgment).

Philistine: Just with the judgement issue--does this then allow Korfanty to take the summary judgement and attach any bank account used by the USFA? Would that garnishment then leap to the top of the "Creditor's List" so that he gets first sip of any money arriving in Colorado Springs?

Not sure this is covered in the by-laws.

[Philistine]

Originally Posted by Capt. Slo-mo

Philistine: Just with the judgement issue--does this then allow Korfanty to take the summary judgement and attach any bank account used by the USFA?

Yes. Though, he would likely have to take the additional step of transferring the judgment to Colorado. He could then take steps to execute it under Colorado law--which presumably include attaching bank accounts, or forcing a sale on real or personal property.

Would that garnishment then leap to the top of the "Creditor's List" so that he gets first sip of any money arriving in Colorado Springs?

If he jumps through the hoops, he gets whatever is there that is attached until he is paid off.

Normally, the way this works in a situation like this, is everybody enters into an agreement to pay over some period of time (usually with an up-front bump), which is secured by the judgment.

--Philistine

[swordsen]

sigh......

This kind of stuff does not bode well for the organization.

[Mr Epee]

Apparently, folks attempting to download the pdf file are having some difficulty.

I'm searching for an alt hosting location. It's too big for f.net's user hosting, so if anyone has another idea... feel free to pm me...

If you are desperately wanting the pdf and just can't wait, pm me an e-mail address and I'll fwd it to you... that's fine, too.

[Allen Evans]

Mr. E: look at http://drop.io/

I've never used it, but it might be what you're looking for.
AE

[edew]

I'm sure if Korfanty can't get some reparations from USFA, he can offer his services elsewhere. Sounds like USFA should suck up and pay the guy.

[fencerwallet]

Originally Posted by Capt. Slo-mo

Philistine: Just with the judgement issue--does this then allow Korfanty to take the summary judgement and attach any bank account used by the USFA? Would that garnishment then leap to the top of the "Creditor's List" so that he gets first sip of any money arriving in Colorado Springs?

Not sure this is covered in the by-laws.

Well, your use of the term "summary judgment" is incorrect. This was a default judgment. It still has full force and effect and could serve as the basis for any post-judgment collection procedures (ie., attachments and writs). However, at least here in California, public policy prefers that cases be decided on their merits and that a party have a chance to be heard. Thus, a default judgment can pretty readily be set aside so long as it is done within the statutorily proscribed time period.

Regardless, allowing the default judgment to be entered has little tactical advantage and really just makes the USFA look bad (of course, we don't know if there are service or other jurisdictional issues that were not properly considered by the Oregon court in granting the default over an out of state defendant, but that would still need to be adjudicated by way of an appearance by the good ol' USFA).

[Gav]

I am quite curious about this thread. It appears that, by not paying Mr Kofanty, the USFA has cost it's members more than they would have otherwise. A bit shortsighted in my opinion. However I am naive about USFA politics so I can only hope that this story is more complex than it seems.

Why with hold pay from Korfanty? Is he not the US sabre coach? (I might have this bit wrong...)

I thought your fencers were doing well so I can't see any reason not to pay the coach.

[Mr.MightyMouse]

Usually every coin has 2 sides, yet here all the arrows point to the type that a certain Macedonian gentleman used to flip before every battle, the one that had his likeness on both.
If that is true - the issue at hand is beyond surreal.
Could the outgoing leadership care so little about it's legacy?

[occasionalfencer]

Originally Posted by Gav

I am quite curious about this thread. It appears that, by not paying Mr Kofanty, the USFA has cost it's members more than they would have otherwise. A bit shortsighted in my opinion. However I am naive about USFA politics so I can only hope that this story is more complex than it seems.

Why with hold pay from Korfanty? Is he not the US sabre coach? (I might have this bit wrong...)

I thought your fencers were doing well so I can't see any reason not to pay the coach.

Ed Korfanty's fencers are doing well. The reason for not paying him is that the USFA does not have the money. Look at other threads about that, especially the one about Michael Massik announcing that he would be leaving his current position as E.D. Look at the timing on that. I wonder what kind of reference he will be getting from the USFA for his next job?

[Wingate85]

What a disgrace. Korfanty is probably the best coach this country ever had. In retrospect it sure looks like the recall movement had a fairly ligitimate leg to stand on.

[KD5MDK]

I don't know that the recall would have fixed much. The proposed replacement for the President was already on the Executive Committee, and seemed highly involved and active there. The recall didn't propose replacing the Executive Director, which seems to be a critical element. The recall didn't appear to fix any of the other problems with the Executive Committee.

[Mr Epee]

I've had a little more time to reflect on this situation and have the following thoughts.

I think we can all agree that Ed K. is a world class saber coach. I certainly hope that the USFA would have the foresight to prioritize efforts to retain his skills, however, this situation raises some very legitimate questions. The fact that the USFA failed to respond only clouds the waters.

Among the fundamental questions that the USFA's method of response leaves unanswered.

1. Was there actually a valid contract?
2. Is it true that no payments were made?
3. Why would the USFA enter into a contract and immediately fail to meet their obligations?

The situation described in the case is the scenario claimed by one party, but remains unproven.

The true facts in this case are not a part of the public record.
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Now, there are a few other key questions.

I was under the assumption that the USFA has several other National Coaches who are entitled to receive regular payment. Are any of these other coaches receiving the payments to which they are entitled? If so, why would they be getting paid when our world class WS coach is not being paid.

Are they suffering in silence?
Should we be taking up a collection to save our starving National Coaches?

Are two year contracts the norm for our national coaches?

[Capt. Slo-mo]

Originally Posted by Mr Epee

[color=#0000bf]
1. Was there actually a valid contract?

This should be easy enough to ascertain. Who in the HP committee--which oversees the National Coaches--has a copy of the signed 2007-2008 year contract? Let's have them produce it, should the paperwork indeed exist.

The candidates have been preaching open and transparent government. Here's a chance to see it in action. The plaintiff has already revealed the alleged amount and scope of the contract, so no secrecy worries there.

I think it would be instructive for the rank and file to see if the Association indeed dropped the ball here, or whether there is a USFA side to the story other than what is in the lawsuit.