Dispute Over Seat License Agreement Should Be Heard by Court

Jan 13, 2005

An Ohio state appeals court has sided with a group of Cincinnati Bengals football fans, finding that a trial erred when it “punted” their legal dispute with the club over seat license agreements to arbitration. The court also held that the court should have heard the motion for preliminary injunction prior to making a determination on arbitration.
The underlying dispute centered on the Bengals’ modification of the requirements around its seat license agreements. In a suit filed last year, the plaintiffs, represented by Janet G. Abaray in the Cincinnati office of Lopez, Hodes, Restaino, Milman & Skikos, alleged that the Bengals changed the terms of a contract after the fans signed a Charter Ownership Agreement (COA) and sent in their deposit.
The COA gave the fans the right to buy season tickets. However, the club subsequently sent a Club Seat License Agreement (CSLA), which added some provisions that were not part of the original COA. These provisions required fans to be responsible for the value of the season tickets for the length of the COA and required arbitration for any disputes.
The plaintiffs filed common-law claims of negligent misrepresentation and fraud, along with statutory violations of the Ohio Consumer Sales Practices Act
The defendant sought to have the case resolved through arbitration. The trial court agreed, staying the legal proceedings until the arbitration path was exhausted. The plaintiffs appealed, claiming the Bengals could not force them to submit to arbitration by sending them invoices that included arbitration clauses after a contract had already been formed by the plaintiffs’ acceptance of a seat-license agreement containing no such arbitration provision.
In reviewing the case, the appeals court compared it to Reedy v. Cincinnati Bengals (2001), 143 Ohio App.3d 516, 758 N.E.2d 678, another legal dispute involving the Bengals and seat licenses agreements and arbitration. The court the found arbitration was improper.
“The Bengals now argue these fans’ payments of the invoices demonstrated their assent to the terms in the CSLA,” wrote the court. However, “what was true in Reedy is true here. … The only way the fans could be bound to arbitration is if they agreed to it during their purchase of the COA and club seats.”
Turning to the preliminary injunction issue, the court was clear: “When a trial court is faced with a motion to stay pending arbitration and a motion for a preliminary injunction, the motion for a preliminary injunction should be heard first. Yudin v. Knight Industries Corp. (1996), 109 Ohio App.3d 437, 439, 672 N.E.2d 265.” Dunkelman et al. v. The Cincinnati Bengals, Inc.; Ohio App.1st; APPEAL NO. C-040427; 12/3/04
Attorneys of Record: (for plaintiff) Janet G. Abaray of Lopez, Hodes, Restaino, Milman & Skikos in Cincinnati. (for defendant) Eric Combs, and Katherine Ruwe of Taft, Stettinius & Hollister.


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