Following up on an earlier post, Rich Rodriguez, now the coach at University of Michigan, has come to a settlement with West Virginia University.    Rodriguez left WVU to become UM’s head coach after last season and a $4 million buyout clause in his contract became the center of a lawsuit.  Coach Rodriguez thought that verbal promises were made that made the clause invalid.  WVU thought otherwise and sued for the full value.

The settlement was that Rodriguez will pay his alma mater $1.5 million in 3 installments starting in 2010 and U of M will chip in $2.5 million as well as pay for Rodriguez’s legal costs.

So why did this settle?  Only the parties know, but here’s some speculation:

  • Mediation elicited some facts to one or more parties and laid the ground work for the settlement.  Mediation allows parties to re-assess their upside and downside (risks) in a lawsuit.
  • Rodriguez really was looking for a payment plan (which is what he ended up with).  The settlement was for full value, not a discounted value, which is typically the case (parties hedge their litigation risks).
  • Several Wolverine officials were scheduled to be deposed shortly after the settlement was announced.  It is possible they did not want some information to come out.
  • Michigan was afraid of some sort of tortious interference or conspiracy suit in parallel to the suit filed against Rodriguez.
  • Perhaps it is at face value to what the Wolverine Athletic Director had to say: “To help Rich focus on the challenges ahead, we have worked with him to resolve the dispute between him and West Virginia University over the terms of his buyout.  Although he continues to disagree with the validity of the terms, Rich and the rest of us at Michigan felt that it would be best to get this distracting issue behind us.”
  • Or it could be something totally different motivating the settlement.

WVU hired Rodriguez assistant Bill Stewart who will essentially cost the Mountaineers nothing, as his contract will be funded for the next 5 years by the Rodriguez settlement.

Less than 5% of cases actually go to trial.  Mediation almost always helps pave the ground work for the settlement.  If you have a dispute you want settled, please contact me.