Citicasters Co. v. Stop 26 Riverbend, Inc.

Decision Date26 September 2002
Docket Number01 CA 99,02-LW-4181
Citation2002 Ohio 5197
PartiesCITICASTERS CO., PLAINTIFF-APPELLEE, v. STOP 26 RIVERBEND, INC., et al., DEFENDANTS-APPELLANTS CASE
CourtOhio Court of Appeals

Civil Appeal from Mahoning County Common Pleas Court, CASE NO 00CV1582.

Hon Joseph J. Vukovich, Hon. Gene Donofrio, Hon. Mary DeGenaro

For Plaintiff-Appellee: Attorney J. Michael Debbeler, GRAYDON, HEAD & RITCHEY, LLP, 511 Walnut St., Suite 1900, P.O. Box 6464, Cincinnati, OH 45201-6464

Attorney James E. Roberts, ROTH, BLAIR, ROBERTS,, STRASFELD & LODGE, CO., L.P.A., 600 City Centre One, 1100 Federal Plaza East, Youngstown, OH 44503

For Defendants-Appellants: Attorney Harry Reinhart, REINHART LAW OFFICE, 400 S. Fifth Street, Suite 202, Columbus, OH 43215-5430

OPINION

DeGenaro J.

This timely appeal comes for consideration upon the record in the trial court and the parties' briefs. Defendant-Appellant Percy Squire appeals the decision of the Mahoning County Court of Common Pleas which found him guilty of indirect criminal contempt of court for violating a temporary restraining order and ordered him to serve six days in jail. The issues before us are whether the trial court was legally entitled to find Squire in criminal contempt of court and whether the evidence supported a finding of criminal contempt. Because we conclude the trial court was entitled to find Squire in criminal contempt of court regardless of the validity of the underlying order, that the underlying order had not expired as a matter of law, and the evidence supports a finding that Squire was in criminal contempt of court, we affirm the trial court's decision.

This is the fifth appeal before this Court, in addition to an original action, arising out of the underlying case. Most of the following facts can be found in this court's recent opinion in Citicasters Co. v. Stop 26-Riverbend, Inc., 7th Dist. Nos. 00 CA 149, 00 CA 212, 2002-Ohio-2284 (Citicasters III). However, as many of them are relevant to this appeal, we will set them forth once again.

On May 20, 1998, Plaintiff-Appellee Citicasters Co. entered into an assets purchase agreement with Defendant-Appellee Stop 26-Riverbend, wherein 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 studio for 101.9 is located in Youngstown, Ohio, and the transmitter site is owned by Defendant-Appellee Esq. Communications, Inc. Purportedly there is substantial identity between the officers, directors, and shareholders of Stop 26 and Esq. Communications. Under the assets purchase agreement, Stop 26 agreed to cause Esq. Communications to convey ownership of the transmitter site to Citicasters. Pursuant to various promissory notes and amendments to the assets purchase agreement, 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 101.9's assets.

In connection with the advance, the parties also entered into a Time Brokerage Account ("TBA") wherein, for a monthly fee of twelve thousand dollars, Stop 26 agreed to accept and broadcast programming supplied by Citicasters. Pursuant to federal regulations, the TBA was filed with the Federal Communications Commission. The TBA was to be in effect until the assets purchase agreement is either closed or terminated. Citicasters had broadcast its programming on 101.9 from June 30, 1998, until the events that sparked this lawsuit.

Citicasters filed a complaint in the Mahoning County Court of Common Pleas on June 20, 2000, and, on that same day, obtained a temporary restraining order against Stop 26. The complaint alleged Stop 26, on June 1, 2000, through its counsel and principal shareholder, Squire, advised Citicasters by letter that Stop 26 intended to resume operational control of 101.9 on or about June 11, 2000. That letter proposed that Stop 26 and Squire would confess judgment for the advanced payment and begin broadcasting on 101.9. 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 intended to sell 101.9 to Citicasters and buy the 1440 station, but, due to its inability to obtain financing, Stop 26 had not been able to close either deal. The owner of 1440 eventually found another buyer for that station.

Citicasters objected to the proposal contained in Stop 26's June 1, 2000 letter. Therefore, on June 12, 2000, Stop 26 sent another letter indicating it was terminating the TBA, it intended to resume operations on 101.9 on June 21, 2000, and it would notify the FCC immediately that 101.9's call letters would change from WBTJ to WRBP on June 21, 2000. Citicasters rejected this proposal by letter dated June 13, 2000.

Although the parties continued to exchange letters, they remained at an impasse until Citicasters filed its complaint and obtained the TRO from the Mahoning County Court of Common Pleas. The trial court ordered the defendants be "restrained in any manner, either directly or indirectly, [from] 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." Stop 26 immediately removed the case to the United States District Court, Northern District of Ohio, Eastern Division, and 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 remand the case to state court. The parties subsequently represented to the federal court that they had agreed to temporarily maintain the status quo while they attempted to work out a mutually agreeable solution. They requested the filing deadlines be extended to July 7, 2000, and the federal court issued an order to that effect.

On June 29, 2000, Squire, acting on the behalf of Stop 26, met with representatives of Citicasters to discuss proposals concerning alternatives for consummating the acquisition of 101.9. Citicasters indicated its willingness to work with Stop 26 toward a mutual solution. It agreed to a material reduction of 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 reduction would permit the transfer of 101.9's assets to Citicasters free and clear of all third party claims.

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. This sale would be 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.

Notwithstanding Squire's expressed appreciation for Citicasters' attempts to resolve the matter, by letter dated June 30, 2000, Squire proposed to pre-empt thirty percent of Citicasters' programming beginning on July 1, 2000. This letter indicated Squire 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 pre-empted by Stop 26's programming beginning on July 1, 2000, at approximately 6:58 p.m. local time.

On June 30, 2000, after receiving Squire's letter, Citicasters believed it was being threatened with the loss of his programming on 101.9 and, in anticipation of what it deemed an eventuality, began, at about 12:35 p.m., simulcasting its 101.9 programming, a product Citicasters calls "The Beat", on 95.9 FM. Stop 26 viewed and continues to view that simulcasting as a violation of C.F.R. 73.3556, giving Stop 26 the right, under paragraph four of the TBA, to cancel Citicasters' programming on 101.9.

On July 3, 2000, Citicasters filed a motion for temporary restraining order and motion to remand in the federal court. The federal court heard the motions and, in a July 6, 2000 decision and order, found the case had been improperly removed to federal court and remanded the case to the Mahoning County Court of Common Pleas. The federal court found the case involved a breach of contract claim and did not implicate any federal questions. The United States Sixth Circuit Court of Appeals declined to review the decision and denied a petition for writs of prohibition and mandamus filed by Stop 26.

On remand, Citicasters filed an amended and supplemental complaint and a motion to reaffirm and continue the TRO. On July 21, 2000, the trial court issued an order reaffirming and continuing the TRO. Stop 26 and Esq. Communications appealed this order to this court. That appeal was dismissed for lack of a final, appealable order in Citicasters Co. v. Stop 26-Riverbend, Inc. (Aug. 17, 2000), 7th Dist. No. 00 CA 144 (Citicasters I).

On July 25, 2000, Citicasters filed a motion requesting an order to show cause why Stop 26 and Esq. Communications should not be held in contempt for violating the TRO. The same day, the trial court issued the requested order.

On July 27, 2000, Stop 26 and Esq. Communications filed a motion to dismiss and a memorandum concerning the trial court's order to show cause. Stop 26 and Esq. Communications argued the trial court lacked subject matter jurisdiction and the proper place for the case was in federal court.

The same day, the trial court heard Citicasters' motion for contempt. At the hearing,...

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