(Houston, TX) When Tom and Delma Tullos agreed to endow a $20,000 scholarship in December 1994 to the Texas A&M 12th Man Foundation, they thought they would happily enjoy the benefits for 30 years. Those included the same, home football game seat location, which they were promised would not change, and would require no additional payments. They never imagined that the Foundation, governed by Aggies, would fail to honor its commitments. But, they never imagined Texas A&M would one day compete in the SEC.
Striking while the iron is hot, the Foundation recently announced the $450 million Redevelopment of Kyle Field. It also unveiled its Reseating Process, under which the Tulloses would have to pay an additional $30,000 plus an indeterminate additional amount, just to keep their same (since 1995) seat location for the last ten years of their endowment.
The Tulloses protested. The Foundation refused to acknowledge its contractual obligations, as it had done with other benefit denials that, after attempts to resolve the matter had failed, had earlier prompted the Tulloses to file suit. The Houston firm Abraham, Watkins, Nichols, Sorrels, Agosto and Friend, assisted by attorney Claude M. McQuarrie III, represents the Tulloses.
Tom Tullos (’79) said, “A deal is a deal. I just want the Foundation to do the right thing, which would be to honor the agreements they made in 1994 that prompted us to endow the scholarship. We tried to get them to do so, but they refused. As much as I regret having to sue, they left me no alternative.”
What the Foundation might not have expected, however, is that other Aggies would decide that they, too, had had enough and would be willing to sue to enforce their contract rights.
On July 12, 2013 unnamed Aggies, represented by Houston attorney William V. Wade (’73), longtime Foundation member and former President of the Houston A&M Club, joined the Tullos lawsuit. Citing fear of retribution by the Foundation, they requested anonymity.
The plaintiffs allege breach of contract and misrepresentation. They also ask a Houston court to issue a temporary injunction that would preserve the status quo for their seat locations amidst the ongoing reseating process while the lawsuit goes forward.
Meanwhile, the family of Chester Young, of Hays County, Texas, who also endowed a scholarship, has expanded their pending lawsuit against the Foundation. They seek damages alleging breach of contract and breach of duty of good faith and fair dealing. They also ask for a temporary injunction. Family member Craig Young (’85) said, “My father (Chester '59) and grandfather (Charles '32) would be troubled that their heirs have to litigate the Foundation’s breach of the endowment agreement. Why would anyone want to give the 12th Man Foundation any more money after the Foundation intentionally broke their promises that led to the endowment and then shamelessly denies having done so?"
On July 17, 2013, the Foundation began sending instructions to endowed donors regarding the Reseating Process. The package instructs endowed donors to return the completed form by July 31, 2013 if they wish to designate a section in the new Kyle Field before others designate. It also specifies pricing and Capital Campaign commitments . What the instructions don’t say is how the Foundation might use endowed donors’ responses when and if endowed donors attempt to assert their remaining contract rights.
Attorney William Wade noted his concern, saying “In the Tullos lawsuit, the Foundation on May 3, 2013 filed pleadings expressly asserting such defenses as waiver, ratification, substituted performance, novation, accord and satisfaction, and others. The assertion of these defenses implies an intent to use any conduct by the Tulloses as endowed donors that allegedly acquiesced to the Foundation’s unilateral reductions in endowed benefits as a basis upon which to argue that endowment contract rights are no longer enforceable.” Mr. Wade continued, “The Foundation’s recent assertion of these defenses against the Tulloses could easily be repeated in the case of any endowed donor who returns the reseating process documents and who thereafter attempts to contest a unilateral denial or reduction of benefits that were previously purchased. Every endowed donor would be well-advised to seek the advice of competent legal counsel before returning the Foundation reseating documents and before the July 31 reply deadline.”