In a recent decision, the Ohio Eighth District Court of Appeals reminded trial courts that when there’s a real dispute over whether an arbitration agreement is valid, the court must hold a hearing before deciding the issue. The case, Barttile Recovery Solutions, L.L.C. v. Cleavenger, 2025-Ohio-4589, reinforces Ohio’s strong preference for resolving disputes through arbitration when the parties agreed to it.
What Happened
Jessica Cleavenger bought a used vehicle from North East Auto Credit, LLC (NEAC) using a retail installment contract that included an arbitration clause. That clause said any disputes had to be resolved through arbitration instead of court.
After the sale, the contract changed hands from NEAC to another company, The LGM Company, Inc. (LGM), and later to Barttile Recovery Solutions. Barttile eventually sued Cleavenger for breach of contract, claiming she defaulted on her payments.
Cleavenger then filed counterclaims. She claimed she was pressured to sign new contracts while she was intoxicated and under duress, and that the contracts were unfair and unenforceable. NEAC and LGM asked the court to send the case to arbitration as the contract required, but the trial court refused and found the arbitration clause invalid.
The Appeal
On appeal, the Eighth District reversed. The court ruled that the trial judge should not have denied arbitration without first holding a hearing.
Under Ohio law, when someone challenges an arbitration agreement’s validity and presents conflicting evidence, like competing affidavits or factual disputes, the court must hold a hearing. Even if neither side asks for one, the court has an independent duty to hold it.
The appellate court also stressed that Ohio law strongly favors arbitration. If there’s any doubt about whether a dispute belongs in arbitration, the default answer is usually “yes.” The trial court, therefore, jumped the gun by deciding the clause was invalid without giving both sides a chance to present testimony and evidence at a hearing.
Why It Matters
This case is a good reminder for both businesses who contract with individuals: Arbitration clauses are generally enforceable in Ohio, but courts must follow proper procedure before ruling against them. Companies should make sure their contracts clearly state that arbitration applies to any disputes and that any assignee (such as a financing company) can enforce it.
What This Means for Our Clients
For our business clients, Barttile is an encouraging decision. The Eighth District made clear that Ohio courts cannot sidestep arbitration simply because one party later disputes the contract. When an arbitration clause exists, and there are factual disagreements about its validity, the court must hold a hearing before denying arbitration.
That safeguard matters. It ensures that your right to arbitrate, a key contractual protection, is not lost without a hearing. Arbitration often provides faster, more confidential and more cost-effective resolution of disputes than traditional litigation.
This decision reinforces several best practices for businesses who want to protect their rights:
- Keep clear records of each contract and assignment, so the enforcing party’s standing is undisputed.
- Use consistent, properly drafted arbitration clauses that explicitly cover disputes over validity, enforceability, or interpretation.
- Act promptly to move for arbitration as soon as a lawsuit is filed—delay can be viewed as waiver.
By following those steps, clients can better preserve their ability to resolve disputes efficiently and avoid costly court battles.
Bottom Line
The Barttile ruling reinforces that arbitration remains a favored method of dispute resolution in Ohio. Courts must take care to follow the statutory process, and parties on both sides should be prepared to present evidence if the validity of an arbitration clause is in question.
Contact
If you have questions regarding this decision, please reach out to KJK Litigation attorney Jeffrey R. Vaisa (JRV@kjk.com).