Michael Nowels

Monday, June 29, 2015

Court says Glendale must make quarterly payment, ups Coyotes’ bond to $1 million

The city of Glendale must still make its scheduled $3.75 million quarterly payment to the Arizona Coyotes despite the city’s motion earlier this month to have that waived.

Judge Dawn Bergin announced her decision Monday morning after a pretrial conference in Maricopa County Superior Court.

The payment is required as part of the city’s arena lease and management deal with the team. The City Council voted to void that deal on June 10, but Bergin granted the team’s request for a temporary restraining order two days later.

Monday’s ruling followed the city’s June 18 motion that asked the court to modify the temporary restraining order so that Glendale would not be forced to make the quarterly payment.

Bergin cited the fact that the Coyotes were still conducting business as usual at the arena.

“I’ve got a problem with the city not having to pay anything for services rendered,” Bergin said before she announced her decision.

Bergin also increased the bond the Coyotes must pay as part of the temporary restraining order from $250,000 to $1 million. This bond protects the city against potential damages from the restraining order if the city eventually wins the case.

On the whole, Coyotes’s officials said they were happy with Bergin’s decision Monday.

“We are pleased with the ruling and will continue to pursue our rights,” Coyotes President, CEO and co-owner Anthony LeBlanc said in a statement.

Glendale Mayor Jerry Weiers and Vice Mayor Ian Hugh did not respond to requests for comment, but the city did issue a statement.

“We’re satisfied with the outcome,” Glendale’s acting city manager Dick Bowers said in the statement. “We’ve said all along that our primary obligation is to our citizens. The judge’s ruling enforcing an increase in the bond payment is an assurance for our taxpayers that we’re looking out for their best interests.”

One major argument at issue in Monday’s pretrial conference was defining status quo in this instance. The temporary restraining order mandates that status quo be upheld until a future ruling.

Cynthia Ricketts of Sacks, Ricketts & Case LLP argued on behalf of the city that no payment would be status quo. She said that without the restraining order, Glendale would have canceled the lease and thus would have owed the Coyotes nothing.

Arguing for IceArizona, the Coyotes’ ownership group, James Condo of Snell & Wilmer LLP argued that the restraining order went into effect to preserve the arrangement as it was before the City Council voted to cancel the lease. He said that requiring the Coyotes to continue performing their duties under the restraining order while not requiring the city to pay for those services would be inequitable.

Bergin sided with Condo on that point, but conceded that the city should have more potential protection against the restraining order, hence the $750,000 increase in the bond payment requirement.

Condo reaffirmed the Coyotes’ prior stance that the city intends to use the lease cancelation as pretext for negotiating a new contract.

Depositions in the case are expected to begin July 7, and the hearing on the preliminary injunction, the next step in the Coyotes case, begins July 31.

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