Shameless in Seattle

A breach-of-contract lawsuit dogs A.H. Belo's bid to join the media big leagues

Dunbar: "Well, this is my feeling. After he had signed a letter of agreement with the Mormons and he knew the deal was solid, he then renegotiated, from his side, and reduced the fee from one percent to a half of one percent."

Decherd's proposal to half the brokerage commission made Dunbar nervous, so he asked Decherd for a promissory note for all or part of the fee. "I asked him for a promissory note because I said I was concerned about the fact that I'm of the age that I am and that at my age you just never know what's going to happen. And I wanted to have something that my wife could have," Dunbar recalled in a deposition.

In a phone conversation regarding the note, Dunbar testified in depositions, the question of the $800,000 arose. "[Decherd] told me that this amounted to a half of one percent and he's right, it was a half of one percent, and as far as I'm concerned it was a partial payment."

Ultimately, Dunbar testified, Decherd did provide a promissory note for half the fee. Dunbar says he hoped that Decherd "would keep his word and pay me the full one percent."

The two documents--the 50-yard-line fax and the promissory note--are key to both sides of the case. Lawyers on both sides say the question of breach of contract turns on what was revealed in the documents, and how both men responded to them.

In his pleadings, Belo attorney Watler argues that by failing to refuse Decherd's new offer, either in writing or verbally, Dunbar implicitly agreed to accept the lower commission. Watler argues his client's case is even stronger considering that after Belo wired $800,000 to Dunbar's bank, Dunbar did not refuse the money.

Watler also claims that Belo fulfilled its contractual obligation because the original agreement was built on the notion that Dunbar would broker the sale of two TV stations. Even though Belo learned early in the negotiations with Bonneville that KSL would not be sold, its appraised value, combined with KIRO's worth, would have vaulted the stations' sale price to more than $200 million. The logic is that the higher price would have brought the lower commission for Dunbar.

Tillotson, Dunbar's attorney, says his client never agreed to any change in the original commission agreement, so the first contract still stands. And Decherd's account of the promissory note incident differs markedly from Dunbar's. Decherd testified that it was Dunbar--not him--who drew up the promissory note, and that Decherd then forwarded the document for "modifications" to Belo's legal department.

"We like to do things simply," Decherd said at the time.

And what of the $800,000 Belo check that Decherd's office wired to Dunbar's bank?

"He didn't ask for the money to be wired," Tillotson says. "He didn't cash the check. This was a unilateral decision on Belo's part." And a unilateral change of heart, Tillotson argues, does not a new contract make.

Mike Lynn, Tillotson's partner in the Dallas law firm Lynn, Stodghill, Melsheimer & Tillotson, was the original attorney on Dunbar's case when it was filed in 1995. In a motion for summary judgment 10 months ago, Lynn did not take kindly to Decherd's efforts to coax a fundamentally different agreement out of Dunbar.

"Belo has never wanted to pay plaintiff the full amount and has continually tried to pressure plaintiff into agreeing to cut its commission in half," Lynn wrote. "Plaintiff has steadfastly refused to do so and so now Belo has taken a new approach: Belo now contends that a promissory note--in which Belo agreed to pay to Charles Dunbar $800,000--somehow extinguished or otherwise modified the obligations of the parties under their written agency agreement."

Both parties have asked that state District Judge David Godbey issue summary judgment in the case. Both motions were denied. In the 15 months since Dunbar filed his case, two file jackets at the courthouse have grown fat with more than 1,200 pages of legal papers. At one point, Watler filed a motion asking that the case be thrown out, arguing that the suit is frivolous--a waste of time and court resources. That motion was also denied.

So far, neither side appears in the mood to settle the case.
By the time a jury hears the facts of Dunbar's lawsuit, ownership of KIRO-TV in Seattle will be a fading memory for the A.H. Belo Corporation. Because Belo will acquire a KIRO competitor--KING-TV--in its Providence Journal purchase, Federal Communications Commission rules require Belo to sell either KIRO or KING.

For Belo, choosing which station to unload wasn't exactly nuclear physics. According to May 1996 Nielsen ratings, NBC affiliate KING ranks first among the city's eight television stations and holds 19 percent of the local viewing market. By contrast, KIRO ties with another station for third place in the ratings, and has only 10 percent of the market.

Considering Belo's Midas touch image, the short history of its KIRO ownership may be the only real blight on the company's storied reputation for pushing its TV stations to the top of almost every market. Of the seven stations currently owned by Belo (not counting the new stations from the Providence Journal deal), five--including WFAA in Dallas--consistently rank first in their respective markets. KXTV in Sacramento ranks No. 2 among nine area stations.

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