City of Cincinnati v. Cincinnati Reds, C-830063

• Decision Date: 04 April 1984
• Docket Number: No. C-830063,C-830063
• Parties: , 19 O.B.R. 378 CITY OF CINCINNATI, Appellant, v. CINCINNATI REDS, Appellee. *
• Court: Ohio Court of Appeals

Page 227

19 Ohio App.3d 227

483 N.E.2d 1181, 19 O.B.R. 378

CITY OF CINCINNATI, Appellant, v. CINCINNATI REDS, Appellee. ^*

No. C-830063.

Court of Appeals of Ohio, First District, Hamilton County.

April 4, 1984.

Syllabus by the Court

1. There can be no implied covenants in a contract in relation to any matter that is specifically covered by the written terms of the contract itself.

2. A lessor-owner of a baseball stadium has no right to relief for breach of a quasi-contract, or for unjust enrichment, where no duty arose by law that would require the lessee-baseball team to pay to the lessor amounts over and beyond those agreed to in the lease.

Richard A. Castellini, City Sol., W. Peter Heile and James F. McCarthy, Cincinnati, for appellant.

Frost & Jacobs and R.O. Klausmeyer, Cincinnati, for appellee.

BLACK, Judge.

The single inquiry in this appeal is whether under the lease of Riverfront Stadium from the city of Cincinnati (City) to The Cincinnati Reds (Reds), the City can recover, under any theory of law, percentage rent, admission tax, stadium use charges, or percentage share of concession sales, for that period (June 12, 1981 to August 9, 1981) when the major league baseball players were on strike and the nationally scheduled games were all cancelled. The lower court answered that inquiry in the negative. The trial court granted the Reds' motion for summary judgment and dismissed the City's complaint. We affirm.

We focus attention on the 1967 lease between the City and the preceding owner of Cincinnati's major league baseball team, a lease which is admittedly binding on the Reds. The term of the lease is forty years. Set forth in forty-eight typewritten pages, it is as complete a document as could be reached prior to the construction of the stadium. It contemplates the existence of a major league football team as "co-tenant," as well as the use of the stadium by other organizations for other events. The Reds have certain parts of the stadium complex for their sole use on a year-round basis (administrative offices, main ticket office, club house, storage area, and fifty parking spaces in the stadium garage). The Reds, further, have "the exclusive right, privilege, and obligation" to use and occupy the stadium during the baseball season for regularly scheduled (or rescheduled) baseball games in accordance with the official National League schedule. ¹ We believe it is unnecessary to say more about the lease other than that it contains those provisions one would expect to find in a long-term, multiple-occupancy lease, with one significant exception. The lease has no provision specifically relieving the Reds from any payment in the event of a players' strike.

The major league baseball players had never struck in the past, but on June 12, 1981, the baseball season was cancelled until further notice, by reason of a national strike called by the players' association. The schedule was not resumed until August 10, 1981. No games were played in the stadium during the strike, and twenty-six games were "lost" and never rescheduled. All other scheduled games were played. The City makes no charge of bad faith against the Reds for not playing the "lost" games.

The lease requires the Reds to make four types of payment to the City:

1. A fixed minimum rent of $175,000 per year (Section 502).

2. A percentage rent of 7 1/2 percent of all admissions in excess of $2,333,333.33 (Section 502).

3. A stadium use charge of $.25 per admission (Section 506).

4. A ten percent share of gross concession receipts (Section 604).

In addition, a City ordinance imposes an admission tax. ² During the year 1981, the Reds made the following payments to the City, based on the games actually played during the 1981 season (excluding, of course, the twenty-six games "lost" during the players' strike):

We note that the Reds paid in full the fixed minimum rent for the year 1981, and that the City does not contest the computation of the other amounts actually paid. However, the City filed the instant action to recover the payments it claims the Reds should have made for the twenty-six "lost" games during the strike, for percentage rent, stadium use charges, and share of concession receipts. We will sometimes refer to these as "the contingent payments," as a matter of convenience. The complaint has three counts: breach of express contract to use the stadium throughout the baseball season; breach of the indemnity clause ³; and breach of a quasi-contract, or unjust enrichment. On appeal from the dismissal of its complaint, the City presents the single assignment of error that the court erred in granting the Reds' motion for summary judgment. The City contends that it has a right to relief under theories of express contract, implied obligation to pay rent, and quasi-contract or unjust enrichment. We find no merit in the assignment of error under any theory. ⁴

The City has no right to relief for breach of an express contract, because there was no breach. The Reds made all of the 1981 payments required by the lease: the fixed annual minimum rental was paid in full for the year, and those payments that are calculated from ticket sales, attendance and concession sales (the contingency payments) were fully paid for those games that were actually played in 1981. The lease does not require more than that. The Reds were entitled and required to use the stadium for major league baseball games regularly scheduled or rescheduled in accordance with the official National League schedule. Under the clear and unequivocal terms of the lease, if some or all of the games under the National League schedule were cancelled in whole or in part, none of the contingency payments would be payable, for the simple reason that no ticket sales, admissions or concession sales would have been generated by the cancelled games. The lease did not give the Reds the exclusive use of playing (exhibition) areas of the stadium for the entire length of the baseball season, but only for the regularly scheduled games. The City reserved those areas for all those times when the Reds had no scheduled games. For instance, if a regularly scheduled game was cancelled because of the weather and never rescheduled by the National League in this stadium, the City would have no claim for the contingent payments. In sum, under the clear language of the lease, reasonable minds could only conclude that the risk of loss from the unavoidable, faultless cancellation of games was to be shared, in the sense that the Reds lost all revenue normally derived from games and the City lost all payments contingent on that revenue.

The City has no right to relief for the breach of an implied obligation to continue to make the contingent payments even though the players were on strike, for the reason that the language of the lease will not support any such implication. As already noted, the express contract between the parties provided for the contingent payments only when games were played in the stadium; this is the clear and unmistakable expression of the intent of the parties. Implied obligations can only arise when this is necessary to carry out the expressed intent of the parties. As stated in the first paragraph of the syllabus of Kachelmacher v. Laird (1915), 92 Ohio St. 324, 110 N.E. 933:

"There can be no implied covenants in a contract in relation to...