'Gentlemen's agreement' at issue in Tribune case

DENVER — An attorney for the former owners of the Salt Lake Tribune told a 10th Circuit Court of Appeals panel that his clients are trying to regain their "family jewel," referring to the paper.

In oral arguments held Wednesday, three appellate judges struggled with whether an oral agreement stands on its own apart from a written contract inked later.

At issue is if that promise made by former Kearns-Tribune board members and publisher Jack Gallivan to the McCarthey family to guarantee them control over the paper after a corporate merger constitutes a binding legal contract.

The McCarthey family is arguing that a gentleman's agreement, sealed with a "clinking of the glasses," entitles them to regain control of the paper. At the time in 1995, the McCarthey family owned about a 45 percent share in the paper.

Salt Lake Tribune Publishing Co. attorney Sean Connelly told the appellate judges that Gallivan promised the McCarthey family he would do whatever was in his power to ensure the family would remain in control of the paper. However, a drafted purchase agreement led current Tribune owner, MediaNews, to buy the paper from under the McCartheys during a corporate takeover of TCI by AT&T in 2001.

Connelly told judges Robert Henry, Paul Kelly and Carlos Lucero that because the contract failed to deliver the Tribune back to the McCartheys, the original intent of the contract failed.

Henry questioned why the McCartheys signed the contract if it was lacking in clarity. "This is contract 101, why did they sign it if they didn't mean it?" Henry said.

MediaNews attorney Kevin Baine argued that the oral agreement between Gallivan and the family led to the drawing up of the written contract. Because of this, Utah law states the oral contract does not legally exist under the integration clause of the law.

Baine also pointed out that the family is also contesting the appraised value of the paper under that paper contract in another case, lending legitimacy to that contract.

Lucero said the situation strays from the concept "that a man's bond is his word" and said it appeared that MediaNews was not acting in "good faith" in following the original intent of the contract. Baine replied that the contract guaranteed the McCarthey family control of the paper for five years and that in 2002 that part of the contract expired.