A federal judge on Tuesday rejected a request to sanction attorneys for the Razorback Foundation Inc. who were accused of making frivolous allegations of fraud and conspiracy against former Arkansas Razorback coach Bret Bielema.
“The allegations and inferences here are not so frivolous as to be unreasonable, and sanctions are not warranted,” U.S. District Judge P. K. Holmes III wrote in his opinion and order issued Tuesday.
In November, Bielema’s attorneys made a rare and aggressive motion for sanctions against lawyers for the Razorback Foundation, alleging the nonprofit that raises money for the university’s athletics department had no evidence to support its allegations of fraud and conspiracy against Bielema and his agent, Neil Cornrich.
In June, Bielema sued the Razorback Foundation in U.S. District Court in Fayetteville seeking at least $7 million for not being paid the remaining portion of a 2018 buyout deal that he signed after being fired at the end of the 2017 season.
In its response, the foundation denied it owed Bielema the money and countersued him to recover $4.5 million it had paid him under the buyout. The foundation also accused Bielema of violating the terms of the buyout agreement that required him to look for a job that maximized his earning potential, “not just to take a job that built his resume while the Foundation footed the bill.”
The foundation said in its counterclaim that Cornrich worked with Patriots coach Bill Belichick, who was also his client, to help keep Bielema’s pay for the Patriots “far below market price for a former Division 1 head football coach.”
The allegations prompted Bielema’s attorneys to ask for sanctions, saying the foundation’s attorneys didn’t make “a reasonable inquiry” into the “quintessentially frivolous” claims of a conspiracy involving Bielema’s pay.
Bielema’s attorneys are Thomas Mars of the Mars Law Firm of Rogers; R. Craig Wood and Benjamin P. Abel of the McGuire Woods law firm in Charlottesville, Virginia; John C. Everett of Farmington; John E. Tull III of the Quattlebaum Grooms & Tull law firm in Little Rock; and Ryan K. Culpepper of Hot Springs.
Representing the foundation are attorneys Marshall S. Ney, Robert W. George, Katherine Church Campbell and Blake Brizzolara, all of the Rogers office of Friday Eldredge & Clark.
Holmes said Tuesday that at this stage in the lawsuit there is flexibility in allowing pleadings based on evidence reasonably anticipated after further investigation or discovery.
“Just as the Court must, the Foundation may draw reasonable factual inferences in its favor when pleading claims against an opposing party,” Holmes said. “The Foundation is not required to accept Bielema and Cornrich’s explanations as true.”
Still, the duty of reasonable investigation continues through discovery, he said.
“Should the Foundation ultimately determine its accused factual allegations have no evidentiary support, it will be expected to withdraw those allegations, to amend them to conform to the evidence, or to abandon them in response to dispositive motions practice,” Holmes said.
“Conversely, should evidentiary support be produced during discovery, the Foundation may persist in its claims.”
Holmes said he won’t award fees or costs in connection with the motion.
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