Yesterday, legendary New Orleans Saints' coach Sean Payton and his wife, Skylene Montgomery, were sued in the United States District Court for the Northern District of Florida. The plaintiffs, Hanford Farrell III and Brett Finkelstein, allege Payton and Montgomery agreed to sell them their Alys Beach, FL property for $7,200,000 in June of 2021. Payton had received the property, on which he built a three-story, 3200 square foot vacation home, earlier in 2013 as part of a divorce settlement.
The closing date for the sale of the property was set to be August 13, 2021. According to the complaint, however, Payton changed his mind and refused to proceed with the closing. On August 4, 2021, Payton sent plaintiffs a notice purporting to terminate the contract. Plaintiffs say Payton reasoned that he was unable to complete a 1031 exchange with a property he planned to buy in Idaho, and thus was no longer looking to sell his Florida home. The plaintiffs are not satisfied with that reasoning. They say the parties' purchase and sale agreement contained no contingency on completing the Idaho deal.
Plaintiffs filed a demand for arbitration against Payton, as required by the purchase and sale agreement. A final hearing was scheduled for February 28, 2022; however, on January 12, 2022, Defendant Payton’s counsel moved to continue the Final Hearing on the grounds that he was having an elective medical procedure that would require physical therapy.
Thus, on January 15, 2022, the arbitrator stayed the case until at least March 31, 2022. Shortly thereafter, on January 25, 2022, Sean Payton announced his retirement as the head coach of the Saints. Plaintiffs claim that this was all orchestrated to change the status quo of the Florida property to a homestead. To qualify for homestead exemption, homeowners must occupy their property as their permanent residence. Plaintiffs claim such change in the status of the property from non-homestead to homestead would impact and create a significant obstacle to their ability to obtain specific performance of the sale agreement with Payton.
Did Sean Payton retire as head coach of the New Orleans Saints in order to keep his property??
In the complaint, plaintiffs say, "upon information and belief, Defendants Payton and Montgomery have actively taken steps to establish the Property as their new homestead by, inter alia, moving in, directing their mail to, and other setting up a permanent residence at the Property, with the intent to hinder, delay and avoid Plaintiffs’ legal rights and interests therein." Payton's primary residence was previously located in New Orleans, Louisiana, where he coached the Saints. In order the achieve the homestead status, Payton would need to show occupation of the Florida property as his permanent residence. Thus, coaching the Saints wouldn't be feasible.
Would Payton really step away from a city and team that he inspired and loved for 15 years just for a house?
Plaintiffs seek declaratory relief for specific performance of the sale of the property and injunctive relief to thwart defendants from changing the status quo of the property or re-deeding the property into their names.
Jason Morrin is a third-year law student at Hofstra Law School in New York. He is the President of Hofstra’s Sports and Entertainment Law Society. Additionally, he is a Law Clerk at Geragos & Geragos. He can be found on Twitter @Jason_Morrin.
