ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Wednesday, September 9, 2009

A Simple Contract Issue or a Moral Issue? Ask a 5th grader.

Chalk-boardThis week, it is back to school for 5th graders across the U.S.  Maybe we should ask them who should win a legal battle that is heating up in Georgia. 

Kathy Cox, the superintendent of Georgia's schools, won $1 million on the Fox TV game show Are You Smarter Than A Fifth Grader?  On the show, Cox pledged to give the winnings to three public schools for the deaf and blind.  However, after Cox won, her husband filed for bankruptcy.  Now the creditors say that the game show earnings belong to them, not the Georgia schools.  The creditors point to Cox's contract with Fox; the Georgia schools present a powerful moral appeal. Here's the story from yesterday's NPR Morning Edition (you can listen if you follow the link): 

The Atlanta Area School for the Deaf is one of the schools to which Cox promised the money. The school had planned to use part of its share of the money to buy uniforms for its basketball team. The school's athletic director, Reginald Bess, says the team's uniforms are secondhand.

"Most of the uniforms that we have — sort of hand-me-downs — don't fit the kids. They're kind of squeezed into some of the uniforms, and it's a little bit embarrassing for them if they go play other teams," Bess says.

However, the school is now competing for the money with dozens of creditors of Cox's husband, John.

A homebuilder, John Cox filed for bankruptcy after his wife's TV appearance. Atlanta's slow housing market left him and his wife $3.5 million in debt — she had co-signed many of his loans.

Alex Teel, a lawyer for the bankruptcy trustee, says regardless of what Kathy Cox said on the show, the contract she signed with Fox TV says the money is hers.

"The terms of the agreements are that prize money won is income to the recipient subject to taxation," Teel says.

A Legal — And Moral — Issue

Teel says the question of who gets the money is a simple issue of contract law, and that the $1 million would be the Coxes' only asset. But for some in the deaf community, it's a moral issue.

About two-dozen hearing-impaired people marched recently in a quiet circle outside the bankruptcy trustee's office. They hoisted signs reading, "One Million Belongs To The Deaf Children" and "Robbing From The Blind, Shame On You."

Georgia state officials have vowed to fight for the $1 million.

"The state of Georgia's position is that Superintendent Cox was invited to appear on this game show solely in her official capacity as school superindendent, and accordingly, the winnings belong to the Department of Education for the benefit for those three schools," says Russ Willard of the state attorney general's office.

For her part, Cox says she never considered the winnings to be her money. But she does remember signing documents before the show.

"I'm not an attorney," she says. "And so I basically was just cooperating and thinking I was signing, you know, what everybody signs."

Fox TV plans to pay the $1 million winnings to the bankruptcy court, where a judge will decide whether Georgia or creditors will get the money.

[Meredith R. Miller]

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