An Ohio appellate panel has reinstated a lawsuit against a Cincinnati used-car dealership and a finance company. The court ruled that the buyers are not required to arbitrate their claims.

The arbitration provision in their sales contract does not apply to disputes involving financing or insurance for the 1994 Chevrolet Blazer, according to the unanimous decision by the three-judge panel.

In January 1999, William and Regina Honchul bought the vehicle at Driver's Mart of Cincinnati. They signed separate contracts for supplemental life and disability coverage and for $18,614 in financing, according to the decision.

Their purchase contract included an arbitration clause, but the financing and insurance agreements did not.

After they reportedly made their first payment to financing company Transouth Corp., Regina Honcul fell ill. The Honchuls contacted the insurance company and discovered that William had been listed as the only insured. They also learned that Transouth had not processed the financing papers, according to the suit.

According to a dealership lawyer, Transouth declined to finance the deal, and Driver's Mart ended up as both seller and lender. The dealership refused the Honchuls' request to correct the note and sales agreement, delete the supplemental insurance, replace the payment allegedly made to Transouth and cover other losses, according to the suit.

The dealership repossessed the Blazer after the Honchuls fell behind in their payments. The Honchuls sued in Clinton County Court of Common Pleas, where the case was dismissed without trial on the ground that they were contractually required to arbitrate.

The Court of Appeals disagreed, finding that the arbitration provision applied only to disputes concerning their purchase of the vehicle.

The Honchuls' attorney, Richard Hurchanik of Hamilton, Ohio, said his clients are seeking monetary damages. The Honchuls have settled their claim against the insurance company.