Jackie Robinson Foundation Cleared Over Memorabilia Agreement

The Jackie Robinson Foundation should be cleared of claims that it breached an agreement to support the promotion and sale of two 1940s-era Robinson contracts brought by a company accused by the SEC of falsely claiming it owned the contracts and exaggerating their value, a federal magistrate in Manhattan said.

In the underlying case, the Securities and Exchange Commission alleges that the representations of Mykalai Kontilai and his company, Collector’s Coffee Inc., doing business as Collectors Cafe, were false and misleading because CCI didn’t own a 100% interest in the contracts, and there was “substantial doubt about the $36 million valuation.”

JRF’s promise to “support the marketing and sale of the contracts” is “insufficiently definite” to enforce, US Magistrate Judge Gabriel W. Gorenstein said in a report and recommendation filed Tuesday in the US District Court for the Southern District of New York.

CCI’s tortious interference claims against JRF should also be dismissed because they are either untimely or failed to allege JRF used “wrongful means,” Gorenstein said. The allegation that JRF acted out of economic self-interest “is inadequate” to establish its actions were wrongful under New York law, he said.

After the SEC filed the suit, a group of CCI’s secured creditors, identified as “the holders,” intervened, seeking an order that they hold a “first position perfected secured interest” in the contracts entitling them to receive the first proceeds from their sale. The intervenors brought claims against CCI, Kontilai, and JRF.

JRF filed a crossclaim against CCI, “to affirm and protect its ownership rights in the contracts,” asserting that the Los Angeles Dodgers owned the contracts until the organization “transferred any and all of their rights, title and interests” in them to JRF on Nov. 14, 2019.

CCI responded with counterclaims of breach of contract and tortious interference, citing its agreement with JRF to promote the sale of the contracts in exchange for 10% of the net sale proceeds from the sale.

After the Dodgers sent a cease-and-desist letter, claiming to be the true owner of the contracts, JRF “conspired with the Dodgers” and intentionally “interfered with” the agreement to purchase, CCI alleged.

JRF, acting “out of greed,” accepted the Dodgers’ offer to be assigned the Dodgers’ purported interest in the contracts, and thus obtained the “potential” to receive 100% of the sale proceeds rather than the 10%, CCI alleged.

The SEC alleges Kontilai told investors that the Dodgers agreed to buy the contracts signed by Robinson—the first Black player to break Major League Baseball’s color barrier when he signed with the Brooklyn Dodgers in 1947—while neglecting to mention that the Dodgers were contesting CCI’s claim to them.

Kontilai misappropriated more than 25% of the investors’ money and put “extravagant charges” on CCI’s credit card while telling investors he wouldn’t take a salary, the SEC says.

The court in May 2019 ordered that the US Marshals Service in the District of Nevada take custody of the contracts signed by Robinson—one with the Brooklyn Dodgers in 1947, and the other with the Brooklyn Dodgers’ minor league affiliate, the Montreal Royals, in 1945—and store them in a secure facility pending further order.

Judge Victor Marrero is assigned to the case.

Winston & Strawn LLP represents JRF.

Chesnoff & Schonfeld PC represents the intervenor plaintiffs.

Protass Law PLLC, Ryerson & Associates PC, and Jimmy Ardoin & Associates PLLC represent Collector’s Coffee Inc., dba Collectors Cafe.

Hansel Law PC, Tarter Krinsky & Drogin LLP, Peter A. Joseph in New York, and George A. Lambert in Washington, DC represent Kontilai.

The case is SEC v. Collector’s Coffee Inc., S.D.N.Y., No. 19-cv-04355, 9/13/22.