[Cite as Blanchard Valley Health Sys. v. Canterbury Holdings, Inc., 2012-Ohio-5134.]

IN THE COURT OF APPEALS OF OHIO 

THIRD APPELLATE DISTRICT 

HANCOCK COUNTY 

 

BLANCHARD VALLEY HEALTH 

SYSTEM, ET AL., 

 CASE NO. 5-12-08 

 PLAINTIFFS-APPELLEES, 

 v. 

CANTERBURY HOLDINGS, INC., O P I N I O N 

 DEFENDANT-APPELLANT. 

 

Appeal from Hancock County Common Pleas Court 

Trial Court No. 2010 CV 00405 

Judgment Affirmed 

Date of Decision: November 5, 2012 

 

APPEARANCES: 

Barry W. Fissel and Scott A. Johnson for Appellant 

Stephen A. Rothschild and Nathan A. Hall for Appellees 
Case No. 5-12-08 

-2- 

WILLAMOWSKI, J. 

{¶1} Defendant-Appellant, Canterbury Holdings, Inc. (“Canterbury”), 

appeals the judgment of the Hancock County Court of Common Pleas granting 

Plaintiffs-Appellees’ petition to submit the parties’ dispute to arbitration and 

staying proceedings pending the outcome of arbitration. On appeal, Canterbury 

contends that the trial court erred in finding that the issues between the parties 

were subject to arbitration. For the reasons set forth below, the judgment is 

affirmed. 

{¶2} Appellees, Blanchard Valley Health System (“BVHS”) and Physicians 

Plus Urgent Care Center Condominium Unit Owners’ Association 

(“Condominium Association”), filed an Amended Complaint and Petition for 

Arbitration on July 30, 2010, alleging that Canterbury violated the restrictive 

covenants applicable to the medical condominium property that Canterbury 

purchased from BVHS. BVHS, which provides a full continuum of health care 

services, developed an office building known as the Physicians Plus Urgent Care 

Center, which it converted into a condominium (the “Condominium”) consisting 

of two units. BVHS retained ownership of the majority interest in the 

Condominium, identified as Unit 2, which it operates as an urgent care center. 

BVHS sold the portion of the Condominium identified as Unit 1 to Canterbury, 
Case No. 5-12-08 

-3- 

which is operated as a doctor’s office, the oncological healthcare practice of Dr. 

Sharon Cole. 

{¶3} Canterbury acquired Unit 1 from BVHS in February 2006, by 

Warranty Deed, which contained the following special use restrictions (“Use 

Restrictions”): 

a. The Grantee, and its successor, heirs, lessees and assigns shall 

only provide the following medical services to current patients or 

new patients of the Grantee * * *, and shall not offer these services 

to other medical professionals or to members of the general public 

who are not already patients or have newly become patients of the 

Grantee * * *: Physical Therapy; Occupational Therapy; MRI 

services; CAT scan services; radiological services, pharmacy 

services and laboratory services. 

b. The Grantee, and its successor, heirs, lessees and assigns, are 

prohibited from selling, assigning, conveying or leasing the 

Premises, by real property conveyance or by sale or assignment of 

the business assets of the Grantee * * * or an entity controlled by the 

Grantee * * * to any health care provider, health care organization or 

health care system that is in direct competition with the Grantor or is 

obtaining the Premises from Grantee * * * with their actual 

knowledge of said party’s intent of entering into competition with 

the Grantor. 

{¶4} Subsequently, in August 2006, the parties enlarged Unit 1 by signing a 

Real Estate Purchase Agreement (“Purchase Agreement”), transferring a portion 

of Unit 2 (the “Additional Premises”) to Dr. Cole through Canterbury to become a 

part of Unit 1.1

 The Purchase Agreement contained essentially the same Use 

 

1

 Rather than executing a separate deed transferring this Additional Premises to Dr. Cole or Canterbury, 

BVHS filed an Amendment to the Declaration of Physicians Plus Urgent Care Center Condominium, which 

removed the Additional Premises from the description of Unit 2 and added it to the description of Unit 1. 
Case No. 5-12-08 

-4- 

Restrictions as contained in the Warranty Deed. The Condominium Declaration 

also prohibited any unit owner, except BVHS, from selling, assigning, or 

conveying their Unit to anyone that is in direct competition with BVHS, or intends 

to compete with BVHS. The Condominium Declaration also incorporated the 

Purchase Agreement as part of the “condominium instruments.” 

{¶5} The dispute arose between the parties when Canterbury entered into 

an agreement with Lima Pathology Laboratories, Inc. (“Lima Pathology”), a 

known competitor of BVHS, to have Lima Pathology provide laboratory services. 

Appellees contend that the services being performed by Lima Pathology are in 

violation of the Use Restrictions applicable to the Unit 1 property. Appellees’ 

Complaint and Petition for Arbitration maintains that Article XXII, Section 2 

(“Arbitration Clause”), of the Condominium Declaration authorizes Appellees to 

demand that the dispute be submitted to arbitration. 

[I]n the event that any dispute between the Association and any Unit 

Owner or occupant, other than with regard to Assessments, is not 

settled by an agreement between them or Board hearing, the matter 

shall then be submitted to arbitration in accordance with and 

pursuant to the arbitration laws of Ohio then in effect[.] 

(1/26/2012 J.E., quoting Declaration at Article XXII(2). 

{¶6} Further, as a result of Canterbury’s alleged breach, Appellees contend 

that they are entitled to specific enforcement of the Use Restrictions by injunctive 

relief or monetary damages if specific performance is not appropriate. Appellees 
Case No. 5-12-08 

-5- 

also assert that the trial court must stay any proceedings that are not subject to 

arbitration until the arbitration proceedings are complete. 

{¶7} Canterbury claimed that the services being provided by Lima 

Pathology were not in violation of the Use Restrictions. Canterbury asserted that 

Appellees’ claim was not subject to arbitration because it involved a dispute of 

title to or possession of real estate pursuant to R.C. 2711.01(B)(1), making it 

exempt from arbitration. Canterbury also sought dismissal of the claim for failure 

to state a claim upon which relief can be granted, pursuant to Civ.R.12(B)(6). 

{¶8} The trial court found that the Arbitration Clause in the Condominium 

Declaration was applicable to this dispute and that the matter was subject to 

arbitration. “[A] dispute arising out of an alleged violation of the breach of 

covenants contained in the condominium instruments is not a dispute involving the 

title to or possession of real estate within the meaning of R.C. 2711.01(b)(1).” 

(1/26/2012 Judgment Entry and Order) However, the trial court did state that, 

under the wording of this Arbitration Clause, only the Condominium Association, 

and not BVHS, had standing to enforce the Arbitration Clause. 

{¶9} The trial court did not rule on Canterbury’s motion to dismiss because 

it found that when an action has claims that are both arbitrable and non-arbitrable, 

it is appropriate to stay the entire proceeding until the issues subject to arbitration 
Case No. 5-12-08 

-6- 

are resolved. Furthermore, it found that dismissal of a claim subject to arbitration 

was not a remedy authorized by R.C. 2711.01 et seq. 

{¶10} The trial court granted the petition to compel arbitration and stayed 

all further proceedings, pending the disposition of the arbitrable claims. It is from 

this judgment that Canterbury now appeals, raising the following two assignments 

of error for our review. 

First Assignment of Error 

The court erred in concluding as a matter of law that the 

underlying controversy between the parties does not involve the 

title to or possession of real estate and that R.C. 2711.01(B)(1) 

does not apply. 

Second Assignment of Error 

The court erred in failing to consider whether Physicians Plus 

Urgent Care Center Condominium Unit Owners’ Association 

satisfied conditions precedent to the written agreement for 

arbitration. 

{¶11} Arbitration is encouraged as a method of settling disputes. See 

Williams v. Aetna Fin. Co., 83 Ohio St.3d 464, 1998-Ohio-294. “A presumption 

favoring arbitration arises when the claim in dispute falls within the scope of the 

arbitration provision. An arbitration clause in a contract is generally viewed as an 

expression that the parties agree to arbitrate disagreements within the scope of the 

arbitration clause, and, with limited exceptions, an arbitration clause is to be 

upheld just as any other provision in a contract should be respected.” Id. at 471. 
Case No. 5-12-08 

-7- 

A court should not deny an arbitration clause in a contract unless it may be said 

with positive assurance that the clause is not susceptible of an interpretation that 

covers the asserted dispute, with any doubts resolved in favor of arbitration. 

Union Twp., Clermont Cty. v. Union Twp. Professional Firefighters' Local 3412, 

142 Ohio App.3d 542, 548 (12th Dist.2001) citing Gibbons-Grable Co. v. Gilbane 

Bldg. Co., 34 Ohio App.3d 170, 173 (8th Dist.1986). 

{¶12} When an appellate court reviews a trial court's decision to stay 

judicial proceedings pursuant to the parties' agreement to enter into arbitration, the 

appellate court accepts the trial court's findings of fact that are not clearly 

erroneous, but reviews questions of law de novo. Barhorst, Inc. v. Hanson Pipe & 

Prods. Ohio, Inc., 2006-Ohio-6858, ¶ 10 (3d Dist.). Cases, such as this, that 

involve contractual interpretation or statutory application are reviewed de novo, 

giving appropriate deference to the trial court’s findings of fact. See id.; 

Columbus Steel Castings, Inc. v. Real Time Staffing Servs., Inc., 10th Dist. No. L 

3210659, 2011-Ohio-3708, ¶ 11. 

{¶13} In the first assignment of error, Canterbury contends that arbitration 

is not the appropriate means to settle the present controversy because Canterbury 

claims that the issue involves “title to or possession of real estate,” which is 

exempt from arbitration by statute. Canterbury does not dispute the fact that it 
Case No. 5-12-08 

-8- 

agreed to the Arbitration Clause in the applicable documents. It claims that the 

exception set forth in R.C. 2711.01(B)(1) exempts this matter from arbitration. 

{¶14} Ohio's policy of encouraging arbitration has been codified by the 

legislature through the Ohio Arbitration Act in R.C. 2711.01 et seq. Henderson v. 

Lawyers Title Ins. Corp., 108 Ohio St.3d 265, 2006-Ohio-906, ¶ 48. R.C. 

2711.01(A) provides that an agreement to settle controversies by arbitration “shall 

be valid, irrevocable, and enforceable, except upon grounds that exist at law or in 

equity for the revocation of any contract.” R.C. 2711.01(A). If an “action is 

brought upon any issue referable to arbitration under an agreement in writing for 

arbitration,” the trial court, “upon being satisfied that the issue involved in the 

action is referable to arbitration * * * shall on application of one of the parties stay 

the trial of the action until the arbitration of the issue has been had.” R.C. 

2711.02(B). 

{¶15} R.C. 2711.01(B)(1) creates an exception to the general rule 

concerning enforceability of arbitration clauses in Ohio. It provides that 

arbitration clauses in contracts “do not apply to controversies involving the title to 

or the possession of real estate.” R.C. 2711.01(B)(1). 

{¶16} Canterbury contends that “title and possession are at the heart of the 

breach of the Restriction on Sale,” and therefore, this controversy falls under the 

exemption regarding the “title to or the possession of real estate” in R.C. 
Case No. 5-12-08 

-9- 

2711.01(B)(1). We do not find that Canterbury’s conclusions are supported by the 

plain language of the Use Restrictions or the facts applicable to this case. First, 

there are two paragraphs containing restrictions, and only the second paragraph 

restricts Canterbury’s right to sell or transfer its interest to a competitor. 

{¶17} The first paragraph provides limitations on the type of services that 

Canterbury can provide and it limits the recipients of those services to current or 

new patients; specifically, Canterbury may not offer laboratory and other such 

services to the general public. The trial court found that “the controversy between 

[Appellees] and [Canterbury] does not involve ownership of either parcel but 

rather the proper use of the Units and whether restrictive covenants were 

violated.” (Emphasis added. J.E. 8) The record supports the trial court’s findings 

of fact concerning the nature of the controversy. Therefore, the exception to 

arbitration set forth in R.C. R.C. 2711.01(B)(1) is not applicable, and the matter is 

subject to arbitration concerning whether the services being provided by Lima 

Pathology are a violation of the Use Restrictions set forth in the first paragraph of 

those restrictions. 

{¶18} Canterbury contends that “title and possession are at the heart of the 

breach” of the Use Restrictions referenced in the second paragraph of the 

restrictions, and therefore, this matter is exempt from arbitration because of that 

reason. (Appellant’s Brief p. 9) Canterbury claims that the issue as to “whether 
Case No. 5-12-08 

-10- 

Canterbury transferred title to or possession of Unit 1 to Lima Pathology is 

fundamental to this case.” (Id.) Again, we are in concurrence with the trial 

court’s finding of facts on this matter. 

The facts before the Court, as they were alleged in the Amended 

Complaint, declare that [Canterbury] has contracted with Lima 

pathology and is permitting Lima pathology to provide laboratory 

services at Unit 1. These facts do not affirm [Canterbury] has given 

up title to or possession of Unit 1. Even though [Appellees] have 

requested injunctive relief, an injunction would not necessarily 

involve title to or possession of real estate. 

(J.E. p. 7) Although Canterbury attempts to characterize the issue as involving 

title to and possession of real property, neither party disputes that Canterbury 

holds title to its condominium unit, and neither party has initiated an action to 

quiet title. The controversy here revolves around the use of the property, rather 

than title or possession. Nothing in the record indicates that Canterbury has 

transferred title or possession to Lima pathology. In fact, Canterbury affirmatively 

states in its brief that it “has not sold or leased Unit 1 to a competitor of BVHS.” 

(Appellant’s Brief, p. 4) 

{¶19} The facts in this case closely parallel those in Murtha v. Ravines of 

McNaughton Condominium Assn., 10th Dist. No. 09AP–709, 2010–Ohio–1325. 

In Murtha, the Tenth District Court of Appeals found that the dispute over the 

restrictions in the condominium’s declaration documents prohibiting an owner 

from renting his unit was essentially a dispute involving contract interpretation; it 
Case No. 5-12-08 

-11- 

was not a dispute over who was entitled to possess the property or who holds title. 

Id. at ¶ 13. Such disputes do not fall within the exception to the validity of 

arbitration agreements outlined in R.C. 2711.01(B)(1), but rather, they fall within 

the general rule that disputes between condominium associations and unit owners 

are subject to arbitration under a valid arbitration clause. Id.

{¶20} Canterbury’s arguments rely upon Kedzior v. CDC Dev. Corp., 123 

Ohio App.3d 301, 303 (8th Dist.1997), which holds that a case which will 

ultimately be decided on grounds that involve title to or possession of real estate 

should not be subject to arbitration. However, that case is distinguishable in that 

the plaintiff raised a claim for specific performance, asking the trial court to 

award him title to and possession of property. Id. at 303. In response to the 

plaintiff's action, the defendant moved the trial court to refer the matter to 

arbitration as provided in the purchase agreement. Id. at 302–303. The Eighth 

District held that because a final disposition of the plaintiff's claims would 

ultimately involve a determination on the claim for specific performance to 

compel possession and title, the matter should not have been referred to 

arbitration. Id. See, also, Kent Partners v. Crossings at Golden Pond-Portage 

Cty., L.L.C., 11th Dist. No. 2010-P-0028, 2011-Ohio-2842 (matter in controversy 

between buyers of condominium units and sellers, whether buyers were entitled to 

specific performance of sales contracts and whether sellers were required to 
Case No. 5-12-08 

-12- 

provide buyers with title and possession of units, involved title and possession of 

real estate, and thus could not be referred to arbitration, under statute limiting 

ability of parties to arbitrate issues involving title and possession of real estate). 

The dispute in this case has nothing in common with the facts in cases such as 

Kedzior and Kent, other than they involve arbitration agreements applicable to real 

property. However, that alone does not mean that every controversy concerning 

real property involves “title to or possession of real estate.” 

{¶21} The arbitrator in this case will be charged with reviewing the Use 

Restrictions, reviewing Canterbury’s relationship with Lima Pathology, and 

determining whether that relationship violates the Use Restrictions. No issue has 

been raised and no decision will be rendered concerning Canterbury’s title to or 

possession of Unit 1. The determination of what conduct is permitted under the 

Use Restrictions, and specifically whether Canterbury can allow Lima Pathology 

to provide laboratory services in Unit 1, requires a review and interpretation of the 

contractual language chosen by the parties. The real estate exemption contained in 

R.C. 2711.01(B)(1) is not applicable to the issues raised in this case. Therefore, 

Canterbury’s first assignment of error is overruled. 

{¶22} In the second assignment of error, Canterbury asserts that the 

Arbitration Clause contains “conditions precedent” to arbitration, and that the 

matter should not have been referred to arbitration because Appellees failed to 
Case No. 5-12-08 

-13- 

comply with them. Canterbury states that the language stating that “in the event 

that any dispute between the Association and any unit owner * * *is not settled by 

an agreement between them, or Board hearing, the matter shall then be submitted 

to arbitration” should be interpreted to mean that these conditions precedent must 

be met before an issue is submitted to arbitration. (Emphasis added.) Canterbury 

claims that Appellees’ alleged failure to provide it with notice and an opportunity 

to be heard was a violation of its procedural due process rights. 

{¶23} Appellees maintain that procedural arbitrability issues, including 

contractual prerequisites to arbitration, must be resolved by the arbitrator, not the 

court, citing to Baker-Henning productions, Inc. v. Jaffe, 10th Dist. No. No. 00AP36, 2000 WL 1664869 (Nov. 7, 2000). Further, Appellees assert that Canterbury’s 

argument is baseless in that Canterbury was aware of Appellees’ position that it 

was violating the Use Restrictions long before suit was filed; Appellees tried to 

resolve the conflict informally; and that Canterbury had notice of the lawsuit and 

request for arbitration. They argue that the plain language of the agreement does 

not contemplate a multi-step dispute resolution process – it simply states that if the 

parties do not resolve their differences, then the matter must be arbitrated. 

{¶24} Given the parties’ lengthy involvement in this matter and their 

current position, it seems apparent that Canterbury has been made aware of the 

issue and that agreement could not be reached between the parties. However, it is 
Case No. 5-12-08 

-14- 

appropriate that the arbitrator determine whether these claimed procedural 

prerequisites are material and whether they have been met. “Once it is determined 

* * * that the parties are obligated to submit the subject matter of a dispute to 

arbitration, ‘procedural’ questions which grow out of the dispute and bear on its 

final disposition would be left to the arbitrator.” Council of Smaller Enterprises v. 

Gates, McDonald & Co., 80 Ohio St.3d 661, 665, 1998-Ohio-172, quoting John 

Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 556-557 (1964). Accord, N. Elec. 

v. Amsdell Constr., Inc., 8th Dist. No. 85293, 2005 -Ohio- 4134, ¶ 21; Council of 

Smaller Enterprises v. Gates, McDonald & Co., 8th Dist. Nos. 68510, 69868, 

1996 WL 170020 (Apr. 22, 1996) (procedural questions, such as whether a party 

made a timely demand for arbitration, should be left to the arbitrator); Bd. of 

Library Trustees, Shaker Hgts. Pub. Library v. Ozanne Constr. Co., Inc., 100 Ohio 

App.3d 26 (8th Dist.1995), (“Once arbitration is selected as the proper forum, the 

arbitrator determines all issues of procedural arbitrability, i.e., whether the party 

demanding arbitration has complied with all precedent conditions set forth in the 

agreement itself.”) 

{¶25} Procedural arbitrability falls within the purview of the arbitrator. 

Canterbury’s second assignment of error is overruled. 
Case No. 5-12-08 

-15- 

{¶26} Having found no error prejudicial to the appellant herein in the 

particulars assigned and argued, we affirm the judgment of the trial court. 

Judgment Affirmed 

SHAW, P.J. and ROGERS, J., concur. 

/jlr