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Lawsuit shows details matter in stadium leases

The city of Avon in Lorain County, Ohio has sued Avon Baseball LLC, the owner of the Lake Erie Crushers independent league baseball team, over net advertising receipts from an electronic marquee along Interstate 90.

But what seemed like a cut-and-dried case of whether one party owed something to the other, the focus became what the stadium lease agreement said about how to settle disputes. The episode offers a lesson in the care that must be taken when drawing up stadium leases and each party's understanding of the terms, including procedural ones.

The city of Avon, which initially filed the lawsuit in Lorain County Common Pleas Court, claimed that the Crushers' owner defaulted in marquee advertising payments dating back to 2011. Meanwhile, owner Avon Baseball removed the lawsuit to the U.S. District Court for the Northern District of Ohio, based upon out-of-state diversity with Avon Baseball, which is located in Wilmette, Ill.

Federal Judge Patricia A. Gaughan, however, dismissed the suit in mid-April over language in the lease that she ruled provided first for mediation and arbitration before any dispute could be taken to state or federal court. The judge left open the right of the city of Avon to reinstate the suit if the alternative dispute resolution does not resolve the issue.

And that is, has Avon Baseball accounted for and paid to the city of Avon all of the net marquee revenues for the electronic sign that reaches traffic on Interstate 90? The ballpark lease, attached to the complaint as an exhibit, provides that the net marquee revenue must be paid to the city of Avon for deposit into a fund for improvements to the ballpark as needed.

The court documents reveal that the two sides have been talking. We will see what more it might take to resolve.


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