January 22, 2009

Is it too late to funnel some of that bailout money to the Chargers?

In a move that surprised everyone, including the Chargers, the City of San Diego sued the Chargers on Wednesday, for breach of contract.  Details, from the San Diego Union Tribune,

The city of San Diego has filed a breach-of-contract suit against the Chargers, claiming the team owes the city more than $170,000 for use of Qualcomm Stadium in 2004, including more than $44,000 in accrued interest.

The suit came as a surprise to the Chargers, who noted that the team’s lease with the city calls for any controversy between the two parties to be decided in arbitration – and not in a lawsuit.

The idea behind mandatory arbitration was to save legal expenses and time. Fabiani said he expected the suit to be dismissed because of this lease stipulation.

The city’s suit says the Chargers were obligated to pay $250,000 per game in rent for the city-owned stadium, subject to certain rent credits allowed by the city in the lease. In 2005, the city audited payments by the team for 2004 and found the team underpaid the city by $125,795 as a result of the Chargers claiming skybox rent credits that were previously disallowed by the city for the 1996 through 2000 seasons.

When I initially read this article, the only thing I kept thinking was, “They have no arbitration provisi…Oh, there it is. Why is this lawsuit even happening?”  Apparently the city filed the suit at the behest of the treasury department, in an effort to beat the running statute of limitations.  Which normally would make perfectly good sense, except for the arbitration provision in the contract that some representative of the city of San Diego signed, would probably has language to this effect,

In the event of any dispute between the parties which arises under this Agreement, such dispute shall be settled by arbitration in accordance with the rules for commercial arbitration of the American Arbitration Association (or a similar organization) in effect at the time such arbitration is initiated, and subject further to the provisions of the Pennsylvania Uniform Arbitration Act, incorporated by reference. A list of arbitrators shall be presented to the Claimant and Respondent from which one will be chosen using the applicable rules.  The decision of the arbitrator shall be final and binding upon all Parties. (Emphasis added.)

So…why the lawsuit again?  Lets look for this one to be dismissed rather quickly.  LT can rest safely in San Diego…until the Chargers decide to trade him anyway.

San Diego Union Tribune — San Diego city sues Chargers; team surprised

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