Citicasters Co. v. Stop 26-Riverbend, Inc.

771 N.E.2d 317, 147 Ohio App. 3d 531
CourtOhio Court of Appeals
DecidedMay 2, 2002
DocketCase Nos. 00 C.A. 149, 00 C.A. 212.
StatusPublished
Cited by25 cases

This text of 771 N.E.2d 317 (Citicasters Co. v. Stop 26-Riverbend, Inc.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Citicasters Co. v. Stop 26-Riverbend, Inc., 771 N.E.2d 317, 147 Ohio App. 3d 531 (Ohio Ct. App. 2002).

Opinion

Gene Donofrio, Judge.

{¶ 1} Defendants-appellants, Stop 26-Riverbend, Inc. (“Stop 26”), Esq. Communications, Inc. (“ESQ”), and attorney Percy Squire (“Squire”), appeal a decision of the Mahoning County Common Pleas Court finding them in contempt of court.

{¶ 2} The relationship between the parties here dates back to at least May 20, 1998 when plaintiff-appellee, Citicasters Co. 1 (“Citicasters”), and Stop 26 entered into an Assets Purchase Agreement (“APA”) whereby Stop 26 agreed to sell to Citicasters certain assets associated with the ownership and operation of a radio station now known as WBTJ, 101.9 FM (“the Station or 101.9”). 2 The studio for *537 101.9 is located in Youngstown, Ohio, and the transmitter site is owned by ESQ. Purportedly, there is substantial identity between the officers, directors, and shareholders of Stop 26 and ESQ. Under the APA, Stop 26 agreed to cause ESQ to convey ownership of the transmitter site to Citicasters. Pursuant to various promissory notes and amendments to the APA, Citicasters advanced to Stop 26 $1,725,000 of the $2,750,000 total purchase price. The advance was secured by a security interest on the Station’s assets.

{¶ 3} In connection with the advance, the parties also entered into a Time Brokerage Agreement (“TBA”) dated June 30, 1998, 3 whereby, for a monthly fee of $12,000, Stop 26 agreed to accept and broadcast programming supplied by Citicasters. 4 The TBA’s term is until the APA is either closed or terminated, neither of which has occurred. Citicasters had broadcast its programming on the Station from June 30,1998 until the events which sparked this lawsuit.

{¶ 4} Citicasters filed its complaint in Mahoning County Common Pleas Court on June 20, 2000, and, on that same day, obtained a temporary restraining order (“TRO”) against Stop 26. The complaint alleged that, on June 1, 2000, Stop 26, through its counsel and principal shareholder Squire, advised Citicasters by letter that Stop 26 intended to resume operational control of WBTJ on or about June 11, 2000. 5 Stop 26 had been broadcasting programming to Youngstown’s adult African-American community, its target audience, on WRBP, 1440 AM pursuant to the terms of another TBA with that station’s owner. Stop 26 had been intending to sell WBTJ to Citicasters and buy the 1440 station but, due to its inability to obtain financing, Stop 26 has never been able to close either deal. The owner of 1440 got tired of waiting and found another buyer.

{¶ 5} Citicasters rejected the proposal contained in the letter of June 1, 2000. Therefore, on June 12, 2000, Stop 26 sent another letter indicating that it was *538 terminating the TBA, that it intended to resume operations on 101.9 on June 21, 2000 and that it would notify the FCC immediately that the Station’s call letters would change from WBTJ to WRBP on June 21, 2000. 6 Citicasters rejected this proposal by letter dated June 13, 2000. 7

{¶ 6} Although there was an additional series of letters exchanged, the parties remained at an impasse and Citicasters filed its complaint and obtained a TRO from the Mahoning County Common Pleas Court on June 20, 2000. The Mahoning County Common Pleas Court ordered appellants “restrained from in any manner, either directly or indirectly, interfering, obstructing, or disrupting [Citicasters] in broadcasting its programming from WBTJ, 101.9 FM or taking any actions in violation of [Citicasters’] rights under its Time Brokerage Agreement.” On the same day, Stop 26 removed the case to the United States District Court, Northern District, Eastern Division, and, on June 21, 2000, filed a motion to dissolve the TRO. After a conference with the parties, the federal court issued an order on June 21, 2000, dissolving the TRO and setting up a schedule whereby Citicasters would be permitted to move to reinstate the TRO and/or to remand the case. The parties subsequently represented to the federal court that they had agreed to temporarily retain the status quo while they attempted to work out a mutually agreeable solution. They requested that the filing deadlines be extended to July 7, 2000, and an order to that effect was issued on June 27, 2000.

{¶ 7} On June 29, 2000, Squire, principal shareholder of and counsel for Stop 26, met with representatives of Citicasters to discuss proposals concerning alternatives for consummating the acquisition of the Station. Citicasters indicated its willingness to work with Stop 26 toward a mutual solution. It agreed to a material reduction in the amount of Stop 26’s outstanding promissory note obligations to Citicasters, provided Stop 26 would be able to negotiate similar agreements with its principal secured creditors and provided further that such reductions would permit the transfer to Citicasters of the Station’s assets free and clear of all third party claims.

*539 {¶ 8} In response to Stop 26’s stated desire to resume broadcasting to its target audience in the Youngstown area, Citicasters offered to sell Stop 26 several radio stations in Youngstown, contingent upon several matters including Stop 26’s ability to obtain financing for the transaction and Stop 26’s ability to concurrently close the purchase of 101.9.

{¶ 9} Notwithstanding Squire’s expressed appreciation for Citicasters’ attempts to resolve this matter, by letter dated June 30, 2000, Squire proposed to preempt 30 percent of Citicasters’ programming beginning July 1, 2000, indicating that he would not implement any changes if Citicasters disclosed its plans within a reasonable time. Although Citicasters responded by telephone within two hours, its programming was completely preempted beginning on July 1, 2000, at approximately 6:58 p.m. local time. The programming was replaced by Stop 26’s programming.

{¶ 10} Believing that it was being threatened with loss of its programming on 101.9 and in anticipation of what it deemed an eventuality, at about 12:35 p.m. on June 30, 2000, Citicasters began simulcasting its 101.9 programming, a product Citicasters calls “The Beat,” on 95.9 FM. It is this simulcasting which Stop 26 holds out as justification for its assertion of rights under paragraph 4 of the TBA. 8 Stop 26 is of the view that simulcasting violates Section 73.3556, Title 47, C.F.R., giving Stop 26 the right to cancel Citicasters’ programming on 101.9, an action which it took at about 6:58 p.m. on July 1, 2000.

{¶ 11} On July 3, 2000, Citicasters filed a motion for temporary restraining order and motion to remand in federal court. Subsequent to a hearing on the motions, the federal court filed a memorandum decision and order on July 6, *540 2000. The court decided that the case had been improperly removed to federal court. The decision was based on the court’s finding that the case involved a breach-of-contract claim and did not implicate any federal questions.

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Cite This Page — Counsel Stack

Bluebook (online)
771 N.E.2d 317, 147 Ohio App. 3d 531, Counsel Stack Legal Research, https://law.counselstack.com/opinion/citicasters-co-v-stop-26-riverbend-inc-ohioctapp-2002.