On March 9, 2018, Deatrich Wise Jr., a defensive end for the New England Patriots, filed a lawsuit against The Professional Athlete’s Insurance Group, PLLC (PAIG), agent Matthew Allen, Certain Underwriters at Lloyd’s, London, and International Specialty Insurance, Inc. (ISI). In the lawsuit, Wise alleged that the defendants misrepresented and failed to tender insurance benefits to Wise under the NCAA “loss of value” insurance policy. Wise is a former NCAA football player. He was designated as an “exceptional student-athlete” prior to the start of the 2016 NCAA football season. Wise decided to forego early entry into the NFL draft and instead returned to the NCAA for his senior year. According to the compliant, in doing do, Wise gave up the opportunity to receive millions in an NFL entry-level contract and risked potential injury that could hinder or eliminate his earning potential in the NFL.
The “exceptional student-athlete” designation qualified Wise to purchase “loss of value” and permanent disability insurance policy. “Loss of value” is an insurance policy “that protects a student-athletes future [professional] contract value from decreasing below a predetermined amount due to a significant injury or illness.” According to the complaint, the ability to purchase such insurance is “indispensable” to NCAA’s ability to incentivize student-athletes to continue playing in the NCAA. PAIG, the company that issued the policy, approached Wise’s father, Deatrich Wise Sr., though PAIG’s agent Matthew Allen. PAIG and Allen promised that Wise Jr. would be financially protected from any loss of value associated with an injury, they ensured that Wise would recover or mitigate any future loss of income that might result if he were injured, and they told Wise Jr. that any injury that caused him to drop in projected value would be covered. Subsequently, on September 1, 2016, Wise purchased the insurance policy.
Before the start of the 2016 NCAA football season, ESPN draft analysts listed Wise as a first-round top-30 overall prospect for the 2017 NFL Draft. However, during the 2016 season opener, Wise broke his hand and when returned to the field, he separated his shoulder. After the latter injury, Wise only played the rest of the season as a third-down pass-rushing specialist and had an overall disappointing season. As a result, Wise was no longer thought of as a top-30 pick and was not selected until the fourth round of the 2017 NFL Draft. In the NFL, the round that a player is selected in is immensely important, because if a player slips in the draft, they stand to lose millions. For example, in the 2015 NFL draft, the top pick, Jameis Winston, signed a contract worth $25.4 million. Further, in the second round, the average contract was worth about $4.8 million, in the third-round, the average was about $3.1 million, but once a player fell past the third round the average was about $2.3-2.4 million. According to Wise’s complaint, at all times, he understood, and was informed by PAIG and Allen, that his insurance policy would protect him from a similar “loss of value” event.
In May 2017, Wise signed a contract reportedly worth $2.98 million, and subsequently made a claim to recover his “loss of value” under the policy. However, after numerous delays and requests for information, ISI, the holders of Wise’s insurance policy, still have yet to accept Wise’s claim. Wise’s lawsuit says that this failure to accept constitutes breach of contract. In response, ISI claimed that the Wise did not suffer a bodily injury under the policy. According to the complaint, ISI’s interpretation of the policy directly contradicted what was represented to Wise by PAIG and Allen.