Phoenix Suns forward Clifford Robinson must pay a partnership the $517,000 he owes on a home loan, a federal appeals court ruled Monday, saying Robinson waited too long to claim fraud.
In a 2-1 ruling, the 9th U.S. Circuit Court of Appeals said the basketball player was bound by a 1993 contract with 389 Orange Street Partners, one of the lenders for his $1.5 million home in Newtown, Conn.
Robinson, a former star at the University of Connecticut, paid interest on the loan for three years but failed to pay the $468,000 principal, which was due in a balloon payment in May 1996. The damage award also includes late fees and interest.
Robinson, now in his second year with Phoenix, recently signed a new contract. Terms were not publicly disclosed, but broadcast reports said he would earn $30 million for five years.
In defense of his non-payment, Robinson filed claims in August 1996 against the lenders and others involved in the transaction, saying he had been defrauded.
According to a judge who summarized his claims, Robinson said his agent, Larry Gillman, who arranged the loan, took $77,000 of the proceeds for his own use, and two of the partners in 389 Orange Street Partners took $97,000 as purported brokerage fees. Robinson said the payments were concealed from him.
He settled a separate suit against Gillman for $457,000 in 1997. That suit alleged Gillman took kickbacks from contractors who were building Robinson's home and used some of the money to remodel his own home and build a swimming pool.
The appeals court, however, refused to consider the fraud claims in the lender's suit against Robinson. The court said Robinson made the claims more than three years after the alleged fraud, the deadline for filing such claims under Connecticut law.
Dissenting Judge John Noonan said the claims should have been considered under a portion of state law that allows certain late claims to be heard "if justice so requires."
"It is difficult to know what justice does require if the facts and the inferences from the facts of this case do not require that Robinson be given the opportunity to show at trial that he was swindled by his agent ... and by his lenders," Noonan said.
But the court majority said Robinson failed to invoke the "justice" exception until after his claims had been dismissed by U.S. District Judge Malcolm Marsh.
"Justice is not served by permitting a litigant to drop the ball in his lawsuit and seek to have it resurrected at the expense of the other parties and the taxpaying public by alleging egregious facts which invoke sympathy for the litigant's plight," wrote Judge Stephen Trott, joined by Judge David Thompson.
John Geil, Robinson's lawyer, said he would recommend that Robinson appeal to the Supreme Court. If a lender commits fraud, he said, "I think it's fair that it should be treated as a defense to any collection" n the loan.
Attorney Richard Senders, whose firm represented the lenders, declined comment, saying he had not seen the ruling.
The case is 389 Orange Street Partners vs. Arnold, 97-35877.
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