Originally published May 21, 2008 at 12:00 AM | Page modified May 21, 2008 at 2:55 AM

Breach of contract alleged in Sonics suit

Starbucks CEO Howard Schultz added a "breach of contract" claim Tuesday to his lawsuit against Sonics owner Clay Bennett — arguing...

By Jim Brunner

Seattle Times staff reporter

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Starbucks CEO Howard Schultz added a "breach of contract" claim Tuesday to his lawsuit against Sonics owner Clay Bennett — arguing Bennett failed to honor the terms of his purchase agreement when he proposed a $500 million arena plan he knew was doomed to fail.

In an amended complaint filed in federal court, Schultz's attorneys argued that Bennett's Oklahoma City-based partnership breached its contract with Schultz by failing to use "good faith best efforts" for a full 12 months to get an arena deal in the Seattle area.

That requirement was set out in the purchase and sale agreement when Bennett's group bought the Sonics and Storm in 2006 for $350 million.

Instead of proposing a reasonable arena plan, Schultz's latest filing claims Bennett pushed a $500 million Renton arena that would have required "unprecedented amounts in public subsidies" with lease terms Bennett "knew would be unacceptable" to state lawmakers.

After the Legislature rejected that plan in April 2007, Bennett "ceased meaningful efforts" to land a deal instead of continuing through last October, as required by his contract with Schultz, the new lawsuit filing claims.

The latest Schultz filing contained no new revelation or internal Sonics e-mails. But it does add the "breach of contract" argument to the "negligent misrepresentation" and "fraudulent inducement" claims previously asserted in the lawsuit — giving a judge or jury another possible reason to rule against the team.

Schultz filed the lawsuit, citing e-mails uncovered in the city of Seattle's separate lawsuit against Bennett's group which showed Sonics owners enthusiastically chatting about moving the team to Oklahoma.

The lawsuit, filed last month seeks to have the Sonics placed into a "constructive trust" by the court, which could then transfer the team back to local owners. No trial date has been set.

A spokesman for Bennett could not be reached for comment Tuesday evening. In the past, Bennett has defended his efforts on the $500 million Renton arena, noting that he spent millions of dollars on the proposal.

Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com.

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