Miami Marlins. Photo: Jan von Uxkull-Gyllenband / Shutterstock.com

A Florida appellate court has tossed a victory to the former owners of the Miami Marlins in their legal battle with Miami-Dade County and City of Miami officials over the proceeds of the baseball team's 2017 sale.

Florida's Third District Court of Appeal Wednesday vacated a Miami-Dade Circuit Court's injunction against Miami Marlins L.P. and reversed an order denying a motion to stay a circuit court case pending arbitration.

The originating lawsuit was brought against the team by the City of Miami and Miami-Dade County and stems from the $1.2 billion sale of the team by previous owner Jeffrey Loria to an ownership group that included businessman Bruce Sherman and retired New York Yankee Derek Jeter in September 2017.

Although an agreement was reached between Loria and local officials in April 2009 that provided for Miami-Dade to receive 5% of the net proceeds from a prospective sale of the team, Loria argued the contract's language regarding the net proceeds calculation left nothing on which the government could collect.

The original profit-participation arrangement between the parties outlined for the money to be put toward public infrastructure and a new baseball stadium.

The city and county subsequently filed a breach of contract complaint against Loria in Miami-Dade Circuit Court in February 2018. The case reached the Third District Court of Appeal after an appeal was submitted by Loria and the team concerning the lower court's denial of their motion to stay litigation pending arbitration.

The appeals court accepted the argument presented by the Marlins' former and current owners, who claimed the 2009 agreement between the team and Miami officials requires the parties to first enter arbitration to resolve any disputes. The appellate panel found “the tests for compulsory, exclusive arbitral resolution of all disputes pertaining to the County/City Equity Payment are satisfied in the present case.” Its ruling means Miami officials must now pursue their grievances with the Marlins through an arbitration panel rather than the courtroom.

Read the opinion:

The opinion also noted the change in ownership over the team did not relieve Loria of the “obligation to honor the County/City Equity Payment provisions,” further necessitating the altercation between the parties to proceed through arbitration.

“As used here, any disagreement about the computation, the scope and completeness of the documents provided or relied upon, the level of detail provided in a party's objections, or the timeliness of objections or delivery of information—all such disagreements are subject to each party's right to commence arbitration in accordance with the Operating Agreement,” the order said. The opinion's conclusion noted the appellate court is “neither requiring nor prohibiting subsequent action by the trial court” should the parties request subpoenas or similar orders during the arbitration proceedings.

Attorneys from the Holland & Knight and Proskauer Rose who are representing the Marlins did not return requests for comment by press time.

Miami-Dade County Attorney Abigail Price-Williams did not respond immediately to press inquiries by deadline, but Miami City Attorney Victoria Méndez said the municipality would “continue to work with all of the parties to ensure the of the City of Miami's interests are preserved.”

Related stories:

'The Devil Is in the Details' When Negotiating a Profit Participation Arrangement

Facing Difficulties at the Ballpark, Marlins Seek Victory in Court

Marlins Strike Out in Play for Home 'Court' Advantage