| abstract
| - Dangy Knutson was awarded $617,800 in damages in Orange County Superior Court after a jury found that Richard J. Foster (a national and international aquatic sports power broker) committed a breach of fiduciary duty and fraud by willful concealment while advising her to accept a financial settlement with USA Swimming, the sport’s national governing body, in a dispute over a promise of financial support by former U.S. national team director Mark Schubert. The ruling ends a lengthy legal battle that pitted Knutson and her attorneys against the swimming and aquatic sports establishment and Schubert, considered by many to be the greatest coach in swimming history. During that period Knutson experienced financial problems, battled severe depression and an eating disorder and eventually faded from the sport. The trial, which lasted more than two weeks, even featured dueling Olympic champion expert witnesses: Nancy Hogshead-Makar, a law school professor, and Janet Evans, vice chairman of the LA 2024 Olympic bid committee. “From 2010, 2011 I’ve fought all these uphill battles where I thought it was all my fault, that I was a poor athlete, I was not disciplined enough, wasn’t a good enough swimmer,” Knutson said Wednesday. “This shows that I was tricked, taken advantage, manipulated, schemed basically. “(The jury verdict) was something I was waiting to hear for so long. The determination of my case proved that it was not my fault. It was a relief, it brought closure. I felt like I had worth again.” Foster, a former president of USA Water Polo and longtime official for FINA, global governing body for aquatic sports, said he would appeal the verdict. “Sometimes juries make bad decisions and I think this is a good example,” Foster said in an email. “I negotiated the most lucrative contract for her in USA Swimming history and didn’t charge her for my services and I get sued. There are very strong grounds for appeal, and I do intend to appeal.” Because the jury found Foster committed fraud by willful concealment he must report the verdict to the state bar association, said Bob Allard, Knutson’s attorney. Foster did not address a Register question about the self-reporting issue in his email. “Instead of representing Dagny’s best interest, Foster cut a deal that benefitted USA Swimming and was to the detriment of Dagny,” Allard said. In the spring of 2010, Knutson was headed to Auburn until Schubert convinced her to give up her NCAA eligibility and join USA Swimming’s “Center of Excellence” program based at Fullerton Aquatics Swim Team. Under the agreement, USA Swimming would provide rent and living expenses such as phone, electricity and gas, tuition to a nearby college, expenses for competition trips, and an agent. She would train with U.S. Olympic and World championships coach Sean Hutchinson. The deal would run through the 2016 Olympics. Knutson and Kate Ziegler, another rising star, relocated to Orange County in August 2010. But within two months Schubert was forced out as U.S. national team director. Hutchinson resigned in December 2010 amid charges that he was involved in a romantic relationship with an adult female swimmer he was coaching. After Schubert was placed on leave and eventually terminated, the swimmers were told by USA Swimming officials that only part of the agreements would be honored. Knutson also said the only payments she received from USA Swimming were based on her world rankings and would have received them even had she stayed in North Dakota. Nearly 2,000 miles from home, Knutson, cut off from her family and her sport, her promised financial and infrastructure support also gone, felt directionless and grew more and more depressed. In April 2011, Knutson, encouraged by her attorney, accepted a financial agreement with USA Swimming that was worth less than her original deal with the sport’s national governing body, she said The deal, Allard wrote in a filing, was a “one-sided settlement agreement” that was an “unmitigated disaster” for Knutson. Knutson’s attorneys, portray Foster as the ultimate aquatic sports insider who failed to reveal “’severe’ conflicts of interests” because of his relationships with USA Swimming and Schubert while convincing Knutson to accept the financial settlement. Knutson and her attorneys alleged Foster failed to disclose that as U.S. Aquatics Sports president he represented USA Swimming before FINA, the international aquatics sport governing body; was a former U.S. Olympic Committee board member; was chairman of the 2004 U.S. Olympic Swimming Trials; was distributor for a pool company that was a “professional provider” for USA Swimming; and had longtime professional and personal relationships with both the federation’s outside legal counsel and USA Swimming chief executive Chuck Wielgus. Emails revealed the access Foster had to Wielgus and other major players in swimming as well the unique relationship between the attorney and the U.S. sport’s top executive. “I would appreciate your help resolving a situation involving Dagny Knutson and Kate Ziegler,” Foster began a Nov. 10, 2010 email to Wielgus. “Let’s not let this escalate,” Wielgus responded in an email a little over an hour later. “The reason I sent you the email is that I don’t want this to escalate either. Be happy that I am Evan’s counsel and not some other attorney,” Foster replied a day later, referring to Evan Morgenstein, the agent for Knutson and several Olympic medalists. Emails showed that Wielgus bounced ideas and concerns about the Knutson and Ziegler situation off the attorney and strategy regarding a settlement strategy and issues with Foster. “STRICTLY CONFIDENTIAL – PLEASE JUST KEEP THIS BETWEEN YOU AND ME,” Wielgus began a Nov. 16, 2010 email to Foster. “Confidentially, I have posed the following questions,” to two top USA Swimming staffers and the federation’s attorney, Wielgus continued in the email as he outlined the federation’s legal positions and concerns with the Knutson and Ziegler, and Schubert cases. Despite Wielgus’ request, Foster shared the email that day with Morgenstein. “Keep this confidential so that I stay in confidence with Chuck,” Foster wrote in an email to the agent. “Will send the response to Chuck in a few minutes.” In his email response to Wielgus, Foster wrote, “As you know, I represent a lot athletes, including a fairly large group of swimmers. It is rare that an issue arises between my clients and USA Swimming. If an issue comes up, I will discuss it with you in hopes of resolving the issue. I won’t, however, get involved with litigation against USA Swimming. I have too many friends in your organization, including you.” In an April 23, 2014 letter to Allard, in which Schubert was copied on, Foster warned that if “Dagny persists with legal action, it will be groundless and neither Mr. Schubert nor I will hesitate to vigorously defend and we will file malicious prosecution actions against Dagny, you and your partners.”
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