rco U ^^ 801 NiARCIA J. Nlr.l'^,+^CLCLERK IN THE SUPREME COURT OF OHIO JAY DUNKELMAN, et al 0-7 =a ;. ^ 2 G SUPIitIoL COt1F31' C?

Transcription

1 IN THE SUPREME COURT OF OHIO JAY DUNKELMAN, et al Plainti ffs-appelle es, V. THE CINCINNATI BENGALS, INC. Defendant-Appellant. 0-7 =a ;. ^ 2 G On Appeal from the Hamilton County Court of Appeals, First Appellate Judicial District Court of Appeals Case No. C MEMORANDUM IN SUPPORT OF JURISDICTION OF APPELLANT CINCINNATI BENGALS, INC. W. Stuart Dornette ( ) Counsel of Record John B. Nalbandian ( ) Eric K. Combs ( ) Taft, Stetti nius & Hollister LLP 425 Walnut Street, Suite 1800 Cincinnati, Ohio (513) (513) (fax) Counsel for Defendant-Appellant Cincinnati Bengals, Inc. Janet G. Abaray ( ) Calvin S. Tregre, Jr. ( ) Burg Simpson Eldredge Hersh & Jardine, P.C. 312 Walnut Street, Suite 2090 Cincinnati, Ohio (513) (513) (fax) Counsel for Plaintiffs-Appellees Jay Dunkelman, et al. rco U ^^ 801 NiARCIA J. Nlr.l'^,+^CLCLERK SUPIitIoL COt1F31' C?F OHIO

2 TABLE OF CONTENTS EXPLANATION OF WHY THIS CASE IS A CASE OF PUBLIC OR GREAT GENERAL INTEREST...1 STATEMENT OF THE CASE AND FACTS...3 ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW...9 PROPOSITION OF LAW NO. I: CONTRACTING PARTIES WHO INTEND FOR A REMEDIAL FORFEITURE CLAUSE TO EXCLUDE ANY OTHER REMEDY, INCLUDING ANY AVAILABLE AT COMMON LAW, MUST SPECIFY THAT EXCLUSION IN THE LANGUAGE OF THE CONTRACT CONCLUSION...15 CERTIFICATE OF SERVICE APPENDIX

3 EXPLANATION OF WHY THIS CASE IS A CASE OF PUBLIC OR GREAT GENERAL INTEREST This potential class action presents a significant and unresolved issue related to when a specific contractual remedy clause can bar a party from pursuing traditional common law remedies for breach of that contract. While this Court has determined, in cases applying the Uniform Commercial Code, that contract remedies only exclude cumulative common law remedies if the contract says so specifically, this Court has not resolved this issue outside of that particular context. Other Ohio courts of appeals, in non-ucc decisions, have required specific contractual exclusivity language and rejected any presumption that a remedy clause, standing alone, shows intent to exclude common law remedies. But a panel majority of the First District disagreed here and the issue remains in flux nationwide. For these reasons, this Court should review this case. This case involves a season ticket purchase agreement between premium "club" seat purchasers and the Cincinnati Bengals professional football club. As part of that agreement, the fans purchased seat licenses, which ensured rights to certain club seats in Paul Brown Stadium ("PBS"), and agreed to buy season tickets for terms of six, eight, or ten years. In recognition of the fans' multi-year purchase commitment, the seat license fees themselves were hundreds of dollars lower than the licenses for general admission seats. Fans also received, in exchange for the term-of-years promise, guarantees from the Bengals that the prices on those seats would not be increased beyond certain set percentages, which varied according to the lease term. 1

4 Plaintiff seat license owners brought this suit to prevent the Bengals from enforcing the term-of-years portions of their contracts. But instead of finding that the fans were obligated to purchase tickets for the full term of their contracts, a panel majority of the First District Court of Appeals determined that, in effect, the term contracts were merely unilateral options under which the plaintiffs could choose whether to purchase tickets one season at a time. Furthermore, the court held that the Bengals are still obligated to give the full contract price protections for the full term. The court found that a contract clause calling for the forfeiture of the seat license for failure to purchase tickets was the Bengals' exclusive remedy for the fans' breach of their term-of-years commitment. The forfeiture clause ensures that the Bengals can repossess the seats in the event of a breach but contains no language limiting the Bengals' right to pursue common law remedies for amounts due under the contract. The panel majority concluded, however, that that clause indeed negated any common law remedy that the Bengals might have had for breach of contract. In so doing, the majority departed from decisions of other Ohio courts of appeals that have refused to bar a party from pursuing traditional contract remedies, by virtue of a contractual remedy clause, unless the contract contains specific exclusionary language. Indeed, the court of appeals' interpretation of the club seat purchase contracts here creates the type of legal uncertainty and conflict that warrants review by this Court. The lower court's decision is not limited to long-term contracts for tickets. There is no language in the decision distinguishing other contract situations-including highly analogous real property cases or any contract 2

5 case for that matter-from the purchase of season tickets. The term-of-years contract in this case is analogous to a leasehold situation involving a tenant that binds itself to multiple years of occupancy at guaranteed rates. In that situation, it makes little sense to obligate the landlord to offer the agreed-upon rental rate for the full lease term but find that the tenant has the option to stop paying at any time. By departing from the way that other Ohio courts of appeals analyze the question of whether a contractual remedy clause ought to be preclusive, the First District has injected uncertainty into an important aspect of Ohio contract law. In addition, this particular case is itself important. It concerns the sale of "club" section season tickets by one of Ohio's only two National Football League franchises. That section includes 7,600 seats. This is a class action lawsuit that could potentially affect many of those club seat purchasers. PBS is the largest publicly-financed construction project in Hamilton County's history and is owned by the County. Therefore, not only does this case present a significant, unresolved legal issue that this Court ought to resolve, but it does so in a case that is of unique interest and importance. For these reasons, this Court should not only grant review of this case, but should reverse the decision of the First District. STATEMENT OF THE CASE AND FACTS A. Procedural Posture Plaintiffs filed a class action complaint on April 15, 2004 against the Cincinnati Bengals, Inc. ("Bengals").1 The case arises out of Plaintiffs' obligation to 1 Original named Plaintiffs Jay Dunkelman and Betty Brown have passed away since the fihng of the original Complaint. Named Plaintiffs Douglas Menne, Keith Chabut, and Ron Wellman were added later. T.d

6 purchase club seat tickets to Bengals games for a term of years that they had chosen - six, eight, or ten years. As part of the same agreement, the fans also purchased seat licenses called Charter Ownership Agreements ("COAs") that ensured the fans the right to specific seats. The Plaintiffs have alleged causes of action based on the Declaratory Judgment Act, fraud, negligence, the Consumer Sales Practices Act, and the Deceptive Trade Practices Act. T.d. 31. The Bengals filed a motion for a stay of the case pending arbitration based on the arbitration clauses in two separate agreements. T.d. 6. The trial court granted that stay in July T.d. 16. The First District, however, reversed on December 3, Dunkelman et al. v. Cincinnati Bengals, Inc., 158 Ohio App.3d 604, 2004-Ohio-6425, 821 N.E.2d 198 ("Dunhelman P'). This Court denied the Bengals request for review of that decision. Dunkelman v. Cincinnati Bengals, Inc., 105 Ohio St.3d 1501, 2005-Ohio-1666, 825 N.E.2d 624 (Table). Following remand, Plaintiffs filed an Amended Complaint and requested class certification. The Bengals filed an Answer with compulsory counterclaims. Plaintiffs moved to dismiss the Bengal counterclaims and for sunimary judgment on their declaratoiy judgment claim. The trial court granted the Plaintiffs' motions, which necessitated an interpretation of the Agreement, and certified a class action. T.d. 69 (attached at Appendix B). The trial court certified its order for immediate appeal. Id. The Bengals appealed, arguing that the trial court improperly certified a class action without conducting any analysis of the relevant class action factors and incorrectly interpreted the relevant contract. The First District affirmed in part 4

7 and reversed in part. Dunkelman et al. v. Cincinnati Bengals, Inc., lst Dist. No. A , 2006-Ohio-6825 ("Dunkelman IP') (attached at Appendix A). It unanimously disapproved of the trial court's certification of a class and ordered the trial court to revisit that issue. A panel majority, however, affirmed the trial court's ruling on the contract issue, finding that the Plaintiffs were not obligated to purchase season tickets for the six, eight, or ten year terms they had chosen. The Bengals ask this Court for review. B. Statement of Facts This case involves season ticket holders who purchased premium "club" seats at PBS. At the heart of this case is the Club Seat Brochure and Order Form ("Order Form"), which constitutes the relevant contract in this case. The commercial transaction in this case is made up of several components. First, all PBS season ticket purchasers were required to purchase COAs. The COAs, among other things, ensured the purchaser the right to purchase season tickets to specific seats in the stadium - and to transfer that right to others - and therefore constitute a valuable asset in their own right. Next, the club seat season ticket purchasers agreed to purchase season tickets for those seats for a term of six, eight, or ten years. All of the elements of the transaction are contained in the Order Form.2 With respect to ticket purchases, the Order Form offered three alternative 2 In Dunkelman I, the Bengals contended that the club seat transaction was set forth in two separate agreements, the Order Form and the later Club Seat License Agreement ("CLSA"). But as a result of the First District's decision, the CSI.A ceased to be an enforceable part of the parties' transaction. As such, the Bengals lost the benefit of the CSLA's arbitration and acceleration provisions. To be sure, the Bengals would prefer a situation in which the CSLA's provisions applied including its acceleration of future season ticket payments upon default. But the absence of that provision does not relieve the purchaser of the yearly purchase obligation through the term of the contract. See, e.g., Gen. Devs. Corp. v. Wilbur-Rogers Atlanta Corp. (1971), 28 Ohio App.2d 35, 273 N.E.2d 908 (in absence of acceleration provision, rent of breaching party due annually as it accrued). 5

8 "lease term options": L E A S E T E R M S Club Seat pauons niay choose from three lease term options: l,cn^;rh of ['rirc Pricc f.case l^rcc'rc C;ap 10 years Years 1.2 & 3 3%perin year$ 4--1t1 8 years Years 1 & 4% per in years years Ygar 1 5% per in vears 2-6 'I'he Bengals rescrve the right to sell no more than 40% of Club Seats in any one lease term. T.d. 31, Exh. A. Patrons who chose the ten year option received the most price protection over the contract term. With the six year lease term, by contrast, the patron was not bound for the longer term but was subject to earlier and larger price increases. The difference, aggregating to as much as $1,227 for one season ticket through 2005, provided a strong incentive for a patron to commit to the 10-year lease term.3 One of the Rules and Regulations contained in the Order Form was Paragraph 12, which provided: Once you have purchased your COAs and the new stadium opens you must continue to purchase season tickets for your assigned seats on an annual basis to maintain your rights. Failure to purchase season tickets will forfeit your right to your COA. This provision was necessary to permit the Bengals to quickly and easily mitigate any damage in the event of a breach by taking legal ownership of the rights to buy 3 Like the Cincinnati Reds and other professional sports teams across the countty, the Bengals sold club seats for a term of years. Club seats represent substantial revenue to a team. In fact, securing this revenue long-term was so important that the Bengals and Hamilton County conditioned the stadium lease upon the sale of long-term club seat commitments. See T.d. 63, at 4-5, County-Bengals Memo. of Understanding, Sept. 11, 1996, 7(F)(3) (Conditions Precedent - Club Seats) ("The Team shall receive binding agreements for club seats... for each of the first ten football seasons."). 6

9 tickets in the seats back from the original purchaser. The Order Form has no language suggesting that this is the only remedy that the Bengals possess in the event of a breach of a purchaser's term-of-years ticket commitment. In 2004, the Bengals sent correspondence to persons who had committed to purchase club seats using the original Order Form but had failed to do so, asking them to honor the original bargain. The Plaintiffs responded by bringing claims against the Bengals (a) seeking a declaration that they were not bound by any contract and (b) claiming that, by taking the legal position that Plaintiffs were bound by a contract, the Bengals had perpetrated a fraud. The Bengals filed compulsory counterclaims against three of the Plaintiffs for breach of the multi-year purchase commitments contained in the order form contract they signed. Plaintiffs have contended that the order form gives them a series of options to purchase club tickets. These "lease term options" allegedly do nothing more than set the numbers of years for which the Bengals are obligated to offer price-protected tickets. Under the Plaintiffs' view, the only consequence for their failure to purchase tickets is the loss of the COA itself under Paragraph 12. This view is teeming with problems, including its failure to account for why any rational club seat purchaser, allegedly not bound to purchase any tickets, would have chosen the six year term instead of opting for the greater price protections of the ten year term. In any event, the trial court agreed with the Plaintiffs, finding that under the Order Form, "class members are under no obligation to purchase club seat tickets for 6, 8, or 10 years and may discontinue purchase of club seat tickets at any time with the only penalty being the forfeiture of the club seat COA and the $150 per 7

10 club seat COA purchased." T.d. 69. The Bengals appealed that construction. Judges Sundermann and Painter affirmed the trial court's decision on the contract issue. They held that Paragraph 12 constituted the exclusive remedy for the Bengals for any failure to pay for season tickets annually. Dunhelman II, 2006-Ohio-6825, at 19. According to the court, "[ujnder the unambiguous terms of the contract, [the purchasers] obligated themselves to make annual payments for club-seat tickets only if they wanted to maintain ownership of their club-seat licenses. Otherwise, they would forfeit their club-seat licenses to the Bengals." Id. at 20. The court held that the plaintiffs "had the unilateral right to cancel their club-seat licenses by not purchasing club-seat tickets." Id. at 21. Judge Gorman dissented. After noting the distinction between the COA and the purchase of tickets, he determined that when the purchaser accepted one of the three "lease-term options, they were under an obligation to buy season tickets for the term of years selected. In return, they received guaranteed price protection as determined by the length of the lease term they selected." Id. at 32. Moreover, the dissent specifically rejected the majority's conclusion that Paragraph 12 was the Bengals' exclusive remedy for failure to purchase tickets. That conclusion "ignores the obvious distinction between the COA and the lease term." Paragraph 12 was "intended to protect the Bengals' business interest," by ensuring that after a breach the Bengals would have the authority to sell the tickets in that location. Without a forfeiture, the purchaser would retain the COA and hence the exclusive rights to those seats. Id. at 33. Finally, Judge Gorman noted that the majority's holding, forcing the Bengals to continue to offer price protections 8

11 without the benefits of the lease term, "defies all considerations of mutuality and begs the question why anyone would ever choose less than a ten-year lease term with lesser price protection if the brochure so clearly allowed the purchaser a unilateral right to rescind." Id. at 34. ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW PROPOSITION OF LAW NO. I: CONTRACTING PARTIES WHO INTEND FOR A REMEDIAL FORFEITURE CLAUSE TO EXCLUDE ANY OTHER REMEDY, INCLUDING ANY AVAILABLE AT COMMON LAW, MUST SPECIFY THAT EXCLUSION IN THE LANGUAGE OF THE CONTRACT Under the plain language of the Order Form, Plaintiffs were bound to purchase tickets for the term of years they chose as part of a bargained-for exchange with the Bengals. The panel majority's decision to the contrary rests solely on its conclusion that the Bengals' only remedy for failure to purchase tickets is forfeiture of the COA. But that conclusion is inconsistent with the Ohio caselaw that requires some specific manifestation of the parties' intent to exclude common law remedies beyond the mere existence of a contractual remedy. A. The Club Seat Order Form Brochure clearly binds Plaintiffs for a term of years. The straightforward language of the Order Form obligates club seat ticket buyers to purchase Club Seat tickets for six, eight, or ten years. Plaintiffs themselves checked the area labeled "Lease Term" and thereby accepted the Bengals' offer of a lease with a six, eight, or ten year term. The ordinary meaning of the word "term" is that it refers to a fixed period of time. State ex rel. Daly v. City of Toledo (1942), 142 Ohio St. 123, 129, 50 N.E.2d 338 ("Term' denotes a period of 9

12 time within fixed limits"); see also Franklin v. Ladd (Dec. 15, 1988), 3rd Dist. No ("the word `term' [indicates] the period of time for which use and occupancy was granted"). Applying the maxim, "common words appearing in a written instrument will be given their ordinary meaning," Alexander v. Buckeye Pipeline Co. (1978), 53 Ohio St.2d 241, 245, 374 N.E.2d 146, the only reasonable interpretation is that when Plaintiffs selected a "Lease Term," they recognized an obligation to purchase for the period of years they indicated. And the Plaintiffs received value for their choices. The longer the length of the lease term, the less the purchaser would pay for his tickets. In other words, Plaintiffs and the Bengals exchanged mutual obligations-plaintiffs agreed to purchase tickets for a term of years of their choosing and the Bengals agreed to abide by the corresponding price freeze and price cap for the length of that lease term. The panel decision-that Plaintiffs had the right to purchase tickets for a term of years but were not obligated to purchase tickets-renders those mutual obligations meaningless and is contrary to the terms of the Order Form. Other language in the Order Form points to the same conclusion. "Payments for the initial year of the lease will be due in two equal installments... Thereafter payments for each season will be due in two equal installments." The security deposit is "refundable at the conclusion of the lease term."4 In addition, the Order Form specifically explained that "In recognition of annual premiums, Club Seats have the lowest one-time Charter Ownership Agreement (COA) cost in 4 T.d. 31, Exh. A. (emphasis added). 10

13 the stadium, $ "5 Club seat ticketholders paid only $150 for COAs that cost up to $1,500 for general admission seats.6 It is clear on the face of the Order Form that this discounted COA was an incentive for Club Seat patrons to enter into a contract for a term of years, unlike general admission tickets for which there are no lease term obligations. The panel majority's conclusion writes out of the contract all of that language. This is improper. Shifrin v. Forest City Enterprises, Inc. (1992), 64 Ohio St. 635, 638, 597 N.E. 2d 499 ("When the terms in a contract are unambiguous, courts will not in effect create a new contract by finding an intent not expressed in the clear language employed by the parties.") (citing Alexander, 53 Ohio St.2d at 246). In addition to the language of the Order Form, common sense dictates the determination that Plaintiffs agreed to purchase tickets for a term of years. Neither the panel majority nor Plaintiffs are able to answer the obvious questions that arise from their interpretation of the contract: Why would the Bengals offer three different terms of years-six, eight, or ten-if all contracts were cancelable after one year? If the contract were cancelable by the ticket buyer after one year, why would any ticket buyer have chosen a six or eight year lease instead of the maximum price protection afforded by the ten year lease? If the contract were cancelable by the ticket buyer after one year, why was there a "security deposit... refundable at the conclusion of the lease term"? What obligation did the security deposit secure, if not the performance of future years of the contract? In those questions can be found the intent of both parties in entering into this contract. SId. (emphasis added). 6 T.d. 42 at 6. 11

14 B. The language of the Order Form does not limit the Bengals' remedies to enforce the Lease Terms. The key to the panel majority's determination that the Plaintiffs hold a unilateral option, rather than the bilateral contractual rights and obligations for which both they and the Bengals bargained, is its determination that the COA forfeiture provision in Paragraph 12 of the Order Form cuts off all of the Bengals' remedies with respect to the term-of-years portion of the bargain, including any common law remedies. There is nothing, however, in Paragraph 12 that shows that the parties intended to exclude other remedies for breach. As such, the First District's determination is inconsistent with what other Ohio courts of appeals have found in similar contexts and with the prevailing view of the law regarding the exclusivity of contract remedies nationwide. The majority's decision raises a serious issue that this Court should clarify. This Court appears to have adopted the general rule in UCC cases that contractual remedies preclude common law remedies only where the contract says so explicitly. See Goddard v. Gen. Motors Corp. (1979), 60 Ohio St.2d 41, 44, 396 N.E.2d 761 (noting presumption that limiting clauses provide cumulative remedies unless it is clearly stated otherwise). But the UCC itself makes that doctrine explicit. See R.C (A)(2) ("[r]esort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive").7 Nevertheless, at least two Ohio courts of appeals have applied that doctrine in a non-ucc context. See David Moore Builders, Inc. v. Hudson Village Joint Venture, 9th Dist. No , ' Official Comment to R.C (A)(2) (explaining that it "creates a presumption that clauses prescribing remedies are cumulative rather than exclusive. Ijthe parties intend the term to describe the sole remedy under the contract, this must be clearly expressed." (emphasis added)). 12

15 2004-Ohio-4950, at (finding in a real property case that "[t]he fact that one `remedy was available did not, without more, necessarily preclude the parties from pursuing other remedies"') (quoting Forest Park Partners Ltd. Partnership v. Ponderosa, Inc. (Oct. 18, 1996), 2d Dist. No (similar result in lease case)).8 The panel majority's decision in this case is inconsistent with both of these cases. This Court, however, has not expressly adopted the presumption against exclusivity in other contract cases, and the question is not definitively settled as a matter of law across the country. Although the weight of authority is consistent with the Ohio courts of appeals rulings noted above, caselaw and commentators recognize that there remains conflicting authority regarding the question of whether a contract clause stating particular remedies presumptively excludes other remedies, when the language of the clause does not state that the remedies are exclusive. See, e.g., Insight Communications Co., Inc. v. Telecommunications Board of N. Ky. (E.D.Ky. Jan. 25, 2006), No. Civ.A DLB ('The first question presented... is whether a particular remedy stipulated in a contract for its breach is exclusive of other remedies afforded by law. Although this question arises frequently, there is no consensus on the appropriate answer."); Annotation (1962 & Supp. 2002), Contractual Provision as to Remedy as Excluding Other Possible Remedies, 84 A.L.R.2d 322, Section 2(a) (footnotes omitted) ("It must be admitted, however, that there is a conflict of authority in that some of the cases take the view that a contractual remedy is exclusive only where the contract clearly esee also Morris Invest. Co. v. Sawyer Indian Hill Apothecary (1993), 63 Ohio Misc.2d 202, 620 N.E.2d 313 (lessor entitled to collect rent for unexpired term despite existence of a forfeiture clause). 13

16 shows an intention of the parties to make the remedy exclusive, and that the remedy is exclusive only where the contract so declares, while other cases proceed on the theory that a contractual remedy is presumptively exclusive."); see also 17A American Jurisprudence 2d (2004) 668, Contracts, Section 710. Given this uncertainty and the fact that the exclusivity issue has not been resolved by this Court outside of the UCC context, this Court ought to accept this case to examine that issue. This case illustrates why courts should be reluctant to preclude common law remedies in the absence of explicit language. The Paragraph 12 exclusivity argument fails to recognize the distinction between the COA (the transferable seat license that entitles a person to purchase tickets) and the purchase of the game tickets themselves. The COA granted a right to buy the tickets, but the agreement to purchase the actual game tickets for six, eight, or ten years was a second, separate obligation set forth on the face of the Order Form. The COA is not a ticket; it is a right to purchase tickets. See, e.g., Marinik v. The Cascade Group (1999), 103 Ohio Misc.2d 18, 22, 724 N.E.2d. 877 ("A [seat license]... is a wholly separate and distinct interest from game tickets"); Rayle v. Bowling Green State Univ. (2000), 108 Ohio Misc.2d 60, 63, 739 N.E.2d 1260 ("personal seat license... 'is not a mere license to purchase football tickets but rather is a valuable expectancy interest in renewable rights to season tickets that is a wholly separate and distinct interest from game tickets."') Only after a ticket buyer had purchased a COA could that buyer purchase tickets from the Bengals for those specific seats in the stadium. In the case of general admission seats, there was no further agreement to a "Lease Term," simply the right to purchase tickets on a year- 14

17 to-year basis. In the case of club seats, there was an additional agreement to purchase club seat tickets for a term of six, eight, or ten years. Paragraph 12 applies by its terms only to the COA purchase, not to the additional promise to buy tickets for a term of years. Because COA holders have rights in their seats, the Bengals may not sell tickets for those seats to other fans. Thus, without Paragraph 12, the Bengals would risk losing club seat revenue because the COAs would prevent the Bengals from reselling the tickets. Paragraph 12 ensured that if ticketholders breached their obligations under the Lease Term to purchase tickets for six, eight, or ten years, they did not retain the right to purchase seats, which they could have otherwise retained or transferred to someone else. But Paragraph 12 gives no indication that it otherwise supplanted the Bengals' common law remedy to obtain damages in the form of the money owed on season tickets that the Bengals were not able to sell. CONCLUSION Because this case implicates an issue that is of public and great general interest, this Court should accept this discretionary appeal for review. Respectfully submitted, w VvAief ^rrrj eet. l`y /'/rc,&/ Il- W. Stuart Dornette ( ) 9^/ Nf ^O '1 Counsel of Record /ltn ^,(^t4^vwt7f ^ % ^ Counsel for the Cincinnati Bengals, Inc. 15

18 CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing was served upon Janet G. Abaray, Esq., Attorney for Plaintiffs-Appellees, Burg Simpson Eldredge Hersh & Jardine, P.C., 312 Walnut Street, Suite 2090, Cincinnati, Ohio by regular U.S. mail this 5th day of February, /t.

19 Appendix A

20 IN THE COURT OF APPEALS IRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO JAY DUNKELMAN,' EDWARD WALTON, ROBERT AND BETTY BROWN, DOUGLAS MENNE, KEITH CHABUT, and APPEAL NO. C TRIAL NO. A ,/ JUDGMENT ENTRY. IIIIJ1IIIIH RONALD WELLMAN, Plaintiffs-Appellees, vs. THE CINCINNATI BENGALS, Defendant-Appellant. This cause was heard upon the appeal, the record, the briefs, and arguments. The judgment of the trial court is affirmed in part, reversed in part, and cause remanded for the reasons set forth in the Opinion filed this date. Further, the court holds that there were reasonable grounds for this appeal, allows no penalty and orders that costs are taxed under App. R. 24. 'While Jay Dunkelman's name appears on the notice of appeal, the record reveals that he died shortly after the first appeal and is no longer a party to the lawsuit.

21 The court forther orders that 1) a copy of this Judgment with a copy of the Opinion attached constitutes the mandate, and 2) the mandate be sent to the trial court for execution under App. R. 27. To The Clerk; Enter upon the Journal of the Court on December 22,2006 per Order of the Court. Presiding Judge 2

22 IN THE COURT OF APPEALS FIRST APPELI.ATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO JAY DUNKELMAN,i EDWARD WALTON, ROBERT AND BETTY BROWN, APPEAL NO. C TRIAL NO. A OPINION, DOUGLAS MENNE, KEITH CHABUT, and RONALD WELLMAN, Plaintiffs-Appellees, vs. THE CINCINNATI BENGALS, Defendant-Appellant. Civil Appeal From: Hamilton County Common Pleas Court Judgment Appealed From Is: Affirmed in Part, Reversed in Part, and Cause Remanded Date of Judgment Entry on Appeal: December 22, 2006 Lopez, Hodes, Retstaino, Milman & Skikos, Janet C. Abaray, Beverly H. Pace, and Calvin S. Tregre, Jr., for Plaintiffs-Appellees, Tafi, Stettinius & Hollister, H. Stuart Dornette, Eric Combs, and Katherine Ruwe, for Defendant-Appellant. 'While Jay Dunkelman's name appears on the notice of appeal, the record reveals that he died shortly after the first appeal and is no longera party to the lawsuit.

23 OHIO FIRST DISTRICT COURT OF APPEALS SuNmExmAtvN, Judge. { 1} The Cincinnati Bengals appeal the judgment of the Hamilton County Court of Common Pleas granting plaintiffs-appellees Edward Walton, Robert and Betty Brown, Douglas Menne, Keith Chabut, and Ronald Wellman's motion for class certification and motion for summaryjudgment on their declaratory-judgment claim, as well as their motion to dismiss the Bengals' counterclaims for breach of contraet against Brown, Walton, and Wellman. The Ctass Aetion Tawsait {12} Plaintiffs-appellees ("the plaintiffs") are the named representatives in a class-action lawsuit against the Bengals. Plaintiffs signed an order form to purchase personal seat licenses or Charter Ownership Agreements for club seats in Paul Brown Stadium, but then opted not to purchase their dub-seat season tickets annually. When the Bengals contacted the plaintiffs several years later and notified them that they were in default of their obligation to pay for their club-seat tickets, the plaintiffs filed suit against the Bengals, alleging common-law claims for negligent misrepresentation and fraud, and statutory violations of the Ohio Consumer Sales Practices Act, and reque.sting declaratory and injunctive relief. Plaintiffs also filed a motion for a preliminary injunction to prohibit the Bengals from communicating with previous club-seat holders to collect monies for club-seat season tickets until the merits of the case had been adjudicated. { 3} The Bengals moved to stay the class-action suit, arguing that the plaintiffs were bound by the arbitration provision in a subsequent document entitled the Club Seat License Agreement ("CSLA"). The trial court granted the Bengals' motion for a stay 2

24 OHIO FIRST DISTRICT COURT OF APPEALS pending arbitration and stayed the plaintiffs' motion for a preliminary injunction pending the outcome of the arbitration. Dunkelman I {14} The plaintiffs appealed the trial cour['s decision? On appeal, they argued that the trial court had erred in granting the Bengals' motion to stay the proceedings 3 They maintained that the contract between the Bengals and the plaintiffs was formed when they signed brochures for club-seat licenses and submitted their initial payments.4 The Bengals argued, among other things, that the CSLA was valid because the plaintiffs' payments toward their season tickets served as separate consideration for the terms contained therein.5 {151 In holding that the Club Seat Brochure and Order Form was the controlling agreement between the parties, we rejected the Bengals' argument that the plaintiffs' payments following their receipt of the CSLA constihred consideration for the terms outlined the CSI.A.6 As a result, we held that the arbitration provision in the C.SLA was unenforceable because it only appeared in the terms of the ('.3LA, which the plaintiffs had not agreed to, and which did not constitute a contract between the partles.7 We finther stated that because the plaintiffs had never agreed to the terms of the CSLA, they never agreed to the default and acceleration provisions that also appeared in that document.8 Thus, we held that the trial court had erred in granting the 'Dunkefman v.cincinnari Bengals, Inc., 158 Ohio App.3d 604, 2004-Ohio-6425, 821 N.E.2d 198 ("Dunkelman f'). Id.at 13. Id. ld. at 36. ` Id. at ' Id. at Id. at T 14 and

25 OHIO FIRST DISTRICT COURT OF APPEALS Bengals' motion to stay the proceedings pending arbitration.9 Consequently, we remanded the case to the trial court with insriuctions to lift the stay pending arbitration and to proceed with the case and to rule on the plaintiffs' motion for a preliminary injunction.30 Trial Court Proceedir gs FoIIowing Dunkehnan I { 6} Following our remand in Dunkelman I, the parties joined in an agreed entry regarding the preliminary injunction. Plaintiffs then fded an amended complaint, which removed Dunlcelman, now deceased, as a named class representative, and added Menne, Chabut, and Welhnan as additional class representatives. Also added were two new claims: one for a violation of the Ohio Deceptive Trade Act and one for fraudulent inducement. { 7} Plaintiffs also moved for class certification on behalf of all club-seat license holders who had purchased their tickets with the original Club Seat Brochure, but had then decided to stop purchasing tickets. The Bengals filed an answer to the amended complaint and compulsory counterclaims against Brown, Walton, and Wellman. Plaintiffs moved for dismissal of the Bengals' counterclaims and for summary judgment on their claims for declaratory and injunctive relief. The plaintiffs sought a declaration that the only binding terms between the parties were found in the rules and regulations of the Club Seat Brochure, and that those terms provided that the plaintiffs and the class could discontinue purchasing club-seat season tickets, with the only penalty being forfeiture of their seat license and their payment of $i5o per seat, and that the Bengals oould not rightfiilly demand payment for six to ten years of season tickets. 9 Id. at 139. 'oid.at 47. 4

26 OH{O FIRST DISTRICT COURT OF APPEALS (581 The Bengals filed a crass-motion for summary judgment on their counterclaims. They argued that, under the Club Seat Brochure, plaintiffs Brown, Walton, and Wellman had signed up for a lease of six, eight, or ten years, and thus were obligated to purchase dub-seat tickets for the term of years they had chosen. The trial court permitted the parties to engage in limited discovery with respect to the classcertification issues. Following discovery, the plaintiffs sought to certify a broader class consisting of all persons or entities who had purchased club-seat licenses through the Club Seat Brochure. Trial Conrt's Order { 9} After a one-hour hearing on the respective motions, the trial court granted the plaintiffs' motions for class certification on all their claims. The trial courrs order certified a class of "aâ persons or entities who purchased club seat Charter Ownership Agreements ("COA") through the original Club Seat Brochure and/or Club Seat Order Form for Bengals football games in Paul Brown Stadium." The trial court also certified a subclass consisting of "all person or entities who purchased club seat COAs through the original Club Seat Bmchure and/or Club Seat Order Form for Bengals football games in Paul Brown Stadium, who then discontinued or attempted to discontinue purchasing club seat season tickets." The trial court's order additionally stated that the court was certifying the class under all three subsections of (4v.R a^g(b). { 10} In the same order, the trial court granted the plaintiffs' motion for summary judgment and dismissed the Bengals' counterclaims. The trial court held that "under the terms of the contract, class members are under no obligation to purchase club seat tickets for 6, 8, or io years and may discontinue the purchase of dub seat tickets at any time with the only penalty being the forfeiture of the dub seat COA and 5

27 OHIO FIRST DISTRICT COURT OF APPEALS the $150 per dub seat COA purchased." The trial court used the same holding to dismiss the Bengals' counterclaims. The trial oourt, finding no just reason for delay, certified the judgment pursuant to Civ.R 94B). In this appeal, the Bengals now raise three assignments of error. Class Certification {111} In their fast assigmnent of error, the Bengals argue that the trial court erred in granting the plaintiffs' motion for class cer 'hf'ication, because the ttial court failed to provide any analysis when certifying the class, because the certification order failed to meet the express requirements for class certification under the Ohio Consumer Sales Practices Act ("OCSPA"), and because the plaintiffs could not adequately reptesent the certified class. { 12} In its order, the trial court certified the class with respect to all of the plaintiffs claims, including their OCSPA claim. "RC (B) provides that a consumer may qualify for a class action status only when a supplier acted in the face of prior notice that its conduct was deceptive. The prior notice may be in the form of (i) a nile adopted by the Attorney General under R.C. 134g.o5(B)(2) or (2) a court decision made available for public inspection by the Attorney General under R.C. r345 o5(a)(3) "11 In Johnson v. Microsoft Corp.,37 this court affitmed a trial court's decision dismissing a class-action complaint for fai7ure to plead compliance with the prerequisites of R.C. i345.o9(b).13 {113} In this case, the plaintiffs did not plead in their filings, nor did the trial court find, that the requirements set forth in RC. x345.og(b) had been met. "Marrone v. Philip Morris USA, Inc., 110 Ohio St.3d 5, 2006-Ohio-2869, 850 N.E.2d 31, ai Ohio App.3d 626, 2003-Ohio-7153, 802 N.E.712, at " See, also, City ojfindlay v. Hote7s.com, L.P. (N.D.Ohio 2006), 441 F. Supp.2d 855,

28 OHIO FIRST DISTRICT COURT OF APPEALS Consequently, we hold that the trial court erred as matter of law in certifying the plaintiffs' OCSPA claim as a class action in the absence of any "prior rule or court decision that would have entitled them to pursue [O]CSPA relief under R.C (B):'14 { 14} With respect to the trial cotul's certification of the plaintiff.s' four remaining claims, we note that the certification of a class action under Civ.R. 23 "involves a sophisticated and necessary judgmental appraisal of the future course of [the] litigation."15 Consequently, the Ohio Supreme Court has held that trial courts must "carefuuy apply the class action requirements and conduct a rigorous analysis into whether the prerequisites of Civ.R. 23 have been satisfied."16 In Robinson v. Johnston Coca-Cola Bottling Group, Inc., this court relied on that requirement in rejecting a trial court's class-certification order that contained no analysis.'7 In Robinson, we held that the trial court's ffflure to artitailate any rationale for certifying a class action precluded meaningfiil appellate review and consbtuted an abuse of discretion.'g Consequently, we remanded the case to the trial court "so that it [could] conduct a rigorous analysis of the requirements of Civ.R. 23 in its consideration of plaintiffs' motion for class certification."'9 { 15} Our review of the record reveals that this case presents complex issues related to class certification. The trial coures entry certifying the dass, however, is devoid of aay rationale, yet alone any rigorous analysis, relating to any of the Marrone, supra, at 130. s Barber v. Meister Proteetion Services, Sth Dist. No , 2003-Ohio-1520, at quoting Waldo v. North American Van Lines, Inc. (W.D.Pa. 1984), 102 F.R.D " Hamilton v. Ohio Sav. Bank (1998), 82 Ohio St.3d 67, 70, 694 N.E.2d 442. "153 Ohio App3d 764, 2003-Ohio-4417, 796 N.E.2d l, at 17. ^g Id. at d. at 13. 7

29 OHIO FIILST DISTRICT CO1O12T OF APPEALS prerequisites for class certification. Given the inadequacy of the record before us, we cannot properly review the trial court's entry granting class certification with respect to the plaintiffs' remaining claims under an abuse-of-discretion standard. We, therefore, agree with the Bengals that the trial courrs ru]ing must be also be reversed on the basis of our holding in Robinson.20 Consequently, we sustain the Bengals' first assignment of error for those reasons set forth in our analysis. The Club Seat Brochure {1161 In their second assignment of error, the Bengals argue that the trial court erred in dismissing their counterclainis. In their third assignment of error, they argue that the trial court erred in granting the plaintiffs' motion for a declaratory judginent Because both of these assignments address the contractual obligations of the plaintiffs under the Club Seat Brochure, we address them together. { I7} The trial court held that "under the terms of the contract, class members are under no obligation to purchase club seat tickets for 6, 8, or io years and may discontinue the purchase of club seat tickets at any time with the only penalty being the forfeiture of the club seat COA and the $i5o per club seat COA purchased." The same holding was used to justify the dismissal of the Bengals' counterclaims. ( i8) The Bengals argue that the Club Seat Brochure unambiguously obligated the plaintiffs to purchase club seats for a definite lease term. They argue that, under the plain language of the order form, the plaintiffs were bound to purchase tickets for the number of years they selected. The plaintiffs argue, on the other hand, that the contract j 20 See, also, Maas v. Penn Central Corp., I I th Dist. No T-0 t23, 2004-Ohio-7233, at IM22-33; Martin v. Grange Mutual Ins. Co., l lth Dist. Nos G-2473 and , 2003-Ohio-4869, at

30 OHIO FIRST DISTRICT COURT OF APPEALS unambiguously gave them the right not to purchase tickets and to forfeit their seat licenses. We agree with the plaintiffs. {119} The express written language of Rule 12 in the Club Seat Brochure states, "Once you have purchased your COAs and the new stadium opens, you must continue to purchase season tickets for your assigned seats on an annual basis to maintain your rights. Fdure to purchase season tickets wiil forfeit your right to the COA." H`mthermore, the plain language of the authorization states, "The undersigned has read the Rules and Regulations provided with this application, understands them, and agrees to be bound by them." { 20} When the plaintiffs purchased their seat licenses, they purchased the right to purchase season tickets at a discounted rate for a specified number of years. Under the unambiguous terms of the contract, they obligated themselves to make annual payments for club-seat tickets only if they wanted to maintain ownership of their club-seat licenses. Otherwise, they would forfeit their club-seat licenses to the Bengals, who would then resell them to others. (I{Ll} Because the contract contained clear and unambiguous language that the plaintiffs had the uni{ateral right to cancel their club-seat licenses by not purchasing club-seat tickets, the Bengals argument that the "Lease Term" section obligated the plaintiffs to pay for six to ten years of club-seat tickets is without merit. We, therefore, overrule the Bengals' second and third assignments of error. { 22} Based on the foregoing, we sustain the Bengals' first assignment of error and overrtile their second and third assignments of error. Accordingly, we affirm the t.rial couri's disposition of the declaratory-judgment claim in the plaiutif s' favor, but reverse the trial oourt's judgment as to the class certification. The trial oourt erred as a 9

31 OHIO FIILST DISTRICT COURT OF APPEALS matter of law in certifying the plainti$'s' OCSPA claim as a class action under RC. x345 og(b). However, with respect to the plaintiffs' remaining class-action claims, we remand this cause so that the trial court can conduct a rigorous analysis of the requirements.of Civ.R 23, and for a determiaation whether the disposition of the plaintiffs' declaratory judgment claim applies only to the named plaintiffs or to an entire class. But we emphasize that, on remand, no further consideration shall be given to certifying a class for the OCSPA claim. Judgment affirmed in part and reversed in part, and cause remanded. PAnvTSx, J., concurs separately. GoaazAtv, P.J., dissents. PAnvTEx, J., concurring. { 23} Iconcur. But I do agree with the dissent insofar as the class certification wastoo broad. It should belimited to those people who bought the seat licenses and then did not wish to continue buying tlckets. The people happy with the present arrangement should not be part of the class. {$24} The balance of the dissent rehashes what we have previously decided-the seat license was the contract WIu1e the Bengals may have intended otherwise, they were bound by the language theywrote. The rules cacmot be changed once the game is over. Goitmatv, P.J., (lissenting. I. Clas.s Certification { 25} One aspect of this case is now certain: The supreme courrs opinion in Mnrrone, supra, sounded the death knell for the Dunkleman plaintiffs' claim under the 10

32 OHIO FIRST DISTRICT COURT OF APPEALS OCSPA. Just as certain, in my opinion, is that a class should not be cer[ified for the bunkleman plaintiffs' four remaining claims. { 26} I adhere to my dissent in Robinson v. Johnson Coca-Cola Bottling Co. 153 Ohio App.3d 764, 2003-Ohio-4417, 796 N.E.2d i, and the reasons why the trial courrs order granting class certification need not include a "rigorous analysis" of the Civ.R 23 class-action requirements as a prerequisite to appeaate review. This case reinforces my point. The record is replete with evidence upon which a reviewing court can unequivocally determine that the trial court abused its discretion in granting class certification. ( 27} As a prerequisite to class certification, class representatives must "fairly and adequately protect the interests of the class." See Gtiv.R 23(A)(4). The putative class representatives in this case can not fairly or adeqaately represent the broad Class of fans, exceeding 2,200 individuals, who purcbased their COAs and season tickets from the Club Seat Brochure, because none are current season-ticket holders. The putative class representatives - all former club-seat season-ticket holders - do not wish to be bound by the six-,, eight-, or ten-year lease terms they initially selected from the Club 8eat Brochure. By cont<-ast, current club-seat season-ticket holders want the terms to be binding because the terms include season-ticket price protection. This fundamental conflict between the named representatives and the putative class members is fatal to class certification of all claims in the Dunkleman plaintiffs' complaint. See In re Kroger Co. Shareholder Litigation (lggo), 7o Ohio App.3d 52, 59o N.E.2d 391, citing United Indep. Flight Officers, Inc. v. United Air Lines, Inc. (CA7, 1985). 756 F.zd 1274; Berman v. NarragansettRacingAsm., Inc. (CAi, i969), 4i4 F.2d 3u. H. Relief Granted to Unidentified Plaintiffs 11

33 OHIO FIRST DISTRICT COURT OF APPEALS {128} It is also troubling that the majority has decided to address the declaratory-relief claim without knowing if a class even exists. None of the putative class members cerdfied under Civ.R. 23(B)(3) have been given notice of the action, an opportunity to enter an appearance through counsel, or an opportunity to opt out as is providedby Civ.R. 23(C)(2). While I appreciate that ornlythe Civ.R23 (B)(2) elaim, i.e., the one for declaratory and injunctive relief, was ruled on by the trial oourt, resolution of this claim is central to determining the merits of the remaining claims. Addressing the merits of the Dunkleman plaintiffs' claims as the majority has done before knowing whether a class exists violates the due-process rights of the Civ.R. 23(B)(3) putative class members - if this class does indeed exist. See, generally, Mullane u. Centrat Hanover Bank & Trust Co. (i95o), 399 U.S. 3o6, yo S.Ct The effect of the majority opinion is to grant relief to unidentified plaintiffs and to bind putative class members without following proper procedural safeguards. M. The Club Seat Brochure { 29} While I disagree with the majority's decision to address the merits of the declaratory-relief claim, I am nevertheless compelled to comment on what I view as inaccuracies in its analysis. A. The COA and the Lease Term are'itvo Different Things {130} Permanent seat licenses are a method that several NFL franchises and government authorities have used to raise the initial capital for financing stadium construction. Typically, a permanent seat license grants the buyer ownership of a specific seat location in the stadium and a continuing right to purchase season tickets for that seat under tenns agreed to by the team and the purchaser. See. Reese, Nagel, and Southall, National Football I.eague '15cket 'Iransfer Policies: Legal and Poficy Issues 12