Wilson v. Pride , 2019 Ohio 3513 ( 2019 )

[Cite as Wilson v. Pride, 2019-Ohio-3513.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
KILEY WILSON, ET AL., :
Plaintiffs-Appellants, :
No. 107793
v. :
SPENCER PRIDE, ET AL., :
Defendants-Appellees. :
JOURNAL ENTRY AND OPINION
JUDGMENT: REVERSED AND REMANDED
RELEASED AND JOURNALIZED: August 29, 2019
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-17-883441
Appearances:
Fred D. Middleton, for appellants.
Ciano & Goldwasser, L.L.P., Andrew S. Goldwasser, and
Sarah E. Katz; Law Office of John J. O’Shea, P.L.C., and
John J. O’Shea, for appellees.
LARRY A. JONES, SR., J.:
This case stems from an automobile accident that occurred in 2013
when a Mack truck, driven by defendant-appellee Spencer Pride (“Pride”), collided
with a car driven by plaintiff-appellant Kiley Wilson. Wilson sustained injuries that
required surgery on both shoulders. The trial court enforced a settlement agreement
between the parties and this appeal followed. Finding merit to the appeal, we
reverse and remand the case to the trial court.
Procedural History and Facts
In 2015, Wilson filed a complaint against Pride and his employer,
Ferris Process of Cleveland (collectively referred to as “Pride”). Also named as
plaintiffs in the complaint were two minors who were riding in Wilson’s vehicle at
the time of the accident and Wilson’s wife, Quavae Wilson (“Quavae” and the
plaintiffs are at times collectively referred to as “Wilson”). Wilson dismissed his
complaint but refiled it in 2017 against the same parties. In his complaint, Wilson
alleged: (1) Pride was at fault for the accident; (2) Pride’s employer was responsible
for Pride’s negligence; (3) Wilson incurred over $14,000 in medical expenses and
would continue to incur expenses; (4) each minor incurred $1,162 in medical
expenses; (5) Wilson incurred property damage in the amount of $5,355.42 and car
rental expenses totaling $1,057.84; and (6) a loss of consortium claim on behalf of
Quavae.1
Trial for the case was set for Monday, September 10, 2018. Attorneys
for the parties engaged in settlement negotiations by phone the Thursday and Friday
prior to trial, September 6 and 7. Appellee’s attorney claimed that the parties did,
in fact, reach a settlement agreement on September 7, agreeing to settle the case for
$25,000. Approximately 20 minutes after the parties allegedly agreed on a $25,000
1 Quavae’s claim was later dismissed pursuant to Civ.R. 41.
settlement, appellee’s attorney sent an email to the court, copying appellant’s
attorney, to inform the court that the parties had reached a settlement. Upon receipt
of the email, appellant’s attorney phoned the court, informing the court that the
parties had not reached a settlement.
Wilson subsequently filed a motion to vacate the settlement. Pride
responded with a motion to enforce the settlement agreement. The settlement
agreement was never reduced to writing.
In his motion to vacate the settlement agreement, Wilson stated that
his attorney never agreed to the $25,000 offer because there had not been a
“complete agreement as to the settlement for the children because [appellant’s]
counsel never had any discussion with the parents of the minor children regarding
the settlement or authority to settle their case.” In the motion to enforce, Pride
argued that a settlement agreement had been reached and Wilson should be bound
by their oral agreement.
On September 10, the court issued a journal entry stating that the
parties had reached a settlement and ordered the parties to file a dismissal entry
within 30 days of the entry. The court also scheduled a hearing on the parties’
competing motions for the next day, September 11.
The matter proceeded to a hearing on September 11. Appellee’s
attorney, Wilson, and the father of the two minor plaintiffs testified under oath and
were subject to cross-examination.
The following evidence was adduced at the hearing.
Appellee’s attorney testified that he contacted appellant’s attorney on
September 6, 2018, and extended a settlement offer for $25,000. Appellant’s
attorney countered with a demand for $75,000 to settle all claims.
Later that day, appellee’s attorney again phoned appellant’s attorney
and told the attorney that he (appellee’s attorney) had spoken with the court’s staff
attorney and discovered that the court ruled on several pretrial motions in Pride’s
favor. Appellee’s attorney requested that counsel for the appellant take the
settlement offer back to his client, stating that the offer might “no longer be on the
table” if appellee had to incur the cost of trial preparation.
Specifically, appellee’s attorney testified that he called appellant’s
counsel on the morning of September 7 and
informed him that the $25,000 settlement offer was still on the table
and we would appreciate it if he would get back to us as soon as
possible because we were in preparation for trial and due to the costs
that the company was going to incur over the weekend, I would not ─
could not guarantee that that money would still be available on [the
day of trial].
Appellee’s attorney testified that appellant’s attorney called him two
hours later, around 12:30 p.m., and agreed to the $25,000 settlement offer.
According to appellee’s attorney, appellant’s attorney proposed that the settlement
funds be apportioned as follows: $21,000 to Wilson and $2,000 to each minor
child. Appellant’s counsel then asked counsel for appellee about the Medicaid lien
─ Wilson’s injuries totaled over $40,000 in medical bills, approximately $15,000 of
which Medicaid paid the Cleveland Clinic. Appellee’s attorney testified:
I informed him [appellant’s attorney] that I would need to check with
the company regarding how they wanted to handle the Medicaid lien,
because Medicaid paid certain medical bills and that I would call him
back regarding the Medicaid lien after I spoke to [co-counsel] about
how the company wanted to handle that particular matter, and I also
told him that I would confirm in writing the settlement.2
Appellee’s counsel admitted appellant’s attorney asked for a return
call regarding the Medicaid issue, but did not think it warranted further discussion
with regard to the proposed settlement: “I considered it to be how the company
wanted to treat the Medicaid payment on the settlement check.”
On cross-examination, appellee’s attorney insisted that although
appellant’s attorney had asked for a return call to discuss the Medicaid payment and
he had not made the return call, any discussion of the Medicaid payments was not
“a further discussion of the settlement.” Appellee’s attorney testified:
I did not consider it to be a further discussion of the settlement. I
considered it to be how the company wanted to treat the Medicaid
payment on the settlement check. In other words, whether the
company was going to include Medicaid on the check or going to write
a separate check to Medicaid, how that was going to be handled.
Appellee’s attorney testified that he informed appellant’s attorney
that he was going to confirm the settlement in writing but did not tell appellant’s
attorney that he planned on emailing the court to say that the case had been settled.
Appellee’s attorney further admitted that he emailed the court without opposing
counsel’s knowledge. According to appellee’s attorney, appellant’s attorney called
him back shortly after they agreed to settle the case to say that Wilson had “changed
2The settlement was never reduced to writing.
his mind” and was not going to accept the $25,000 settlement offer. Appellee’s
attorney testified that counsel for appellant never indicated during settlement
negotiations that he did not have authority to accept a settlement offer on behalf of
his clients or that he needed to discuss the terms of the settlement with his clients
prior to accepting an offer.
Appellee’s attorney stipulated during the hearing that appellant’s
counsel called the court’s staff attorney shortly after receiving appellee’s email notice
to the court, and stipulated that appellant’s counsel told the staff attorney that his
client was not willing to go forward with the settlement and no settlement had been
reached.
Wilson testified that he did not discuss a $25,000 settlement offer
with his attorney, would not accept a settlement in that amount, had outstanding
medical bills, and wanted to proceed with trial. The father of the two minor plaintiffs
testified that neither he nor the children’s mother agreed to a $4,000 settlement,
would not settle for that amount, and wanted to proceed with trial.
Following the hearing, the court issued an opinion denying Wilson’s
motion to vacate and granting Pride’s motion to enforce the settlement agreement:
Plaintiffs failed to present any evidence to rebut [appellee attorney’s]
testimony that [appellant’s attorney] accepted the $25,000
settlement offer on behalf of his clients. [Appellant’s attorney] chose
not to testify. Neither of Plaintiffs’ witnesses were parties to the
telephone call between [opposing counsel] on Friday 9/7/2018 at
12:30 p.m. Plaintiffs’ motion to vacate settlement is not evidence that
plaintiffs can rely upon to support [appellant attorney’s] version of
events.
***
Plaintiffs presented no evidence regarding the phone call that took
place between [opposing counsel] on Friday 9/7/2018 at
approximately 12:30 p.m. The only evidence before the court
regarding this phone call is the testimony of [appellee’s attorney],
leaving no factual dispute for this court to resolve.
The parties have entered into a binding settlement agreement because
there was a meeting of the minds as to the essential terms of the
contract. There was sufficient particularity in the oral settlement
agreement to form a binding contract. A party cannot refuse to
proceed due to a mere change of mind. Plaintiffs’ counsel accepted
the defendants’ offer of settlement as the agent of all plaintiffs and
therefore had apparent authority to finalize the terms of the
settlement agreement.
It is from this decision that Wilson appeals, raising the following
assignments of error for our review:
I. The court erred when it ordered settlement based on “undisputed
evidence” despite plaintiff’s denial they entered an agreement for
settlement of the case and refused to have a hearing to consider
plaintiff’s filed motions to vacate the order of settlement.
II. The court erred by excluding the direct, circumstantial evidence
and stipulated evidence that plaintiff never accepted an offer or made
the oral contract.
III. The court erred when it forced a settlement on parties who did not
accept or approve the settlement.
IV. The court erred when it failed to find the alleged agreement did
not state all the necessary terms to create a binding contract.
Law and Analysis
In the first assignment of error, Wilson claims that the trial court
erred when it granted Pride’s motion to enforce without considering Wilson’s
motion to vacate the settlement agreement. Specifically, Wilson argues that the trial
court ignored his motion and only considered Pride’s motion. We disagree.
Before the hearing started, the trial court noted on the record:
“[Appellant’s attorney] filed a motion to vacate settlement of the case and closing
case judgment entry. On behalf of the defense, there was a motion to enforce the
settlement[,] * * * we are going to hear arguments from both parties in this case.”
The trial court proceeded to do just that ─ hear arguments from both
parties. Wilson’s attorney decided not to testify in support of his motion to vacate,
telling the court, “I’d rather not [testify] as the counsel.” In its September 13, 2018
journal entry granting Pride’s motion, the trial court stated “Defendant’s motion to
enforce settlement, filed 09/10/2018 is granted. Plaintiff’s motion to vacate journal
entry of settlement, filed 09/09/2018, is denied.”
Although Wilson contends that the court failed to consider his
motion, it is clear that the trial court considered both motions and found Wilson’s
motion to be without merit.
Accordingly, the first assignment of error is overruled.
In the second assignment of error, Wilson contends that the trial
court erred by failing to consider evidence that his attorney did not accept the
$25,000 settlement agreement.
Wilson claims that the trial court should have considered statements
his attorney made in his motion to vacate as “persuasive evidence” because the trial
court stated at the hearing that the “hearsay rules” would be relaxed. We disagree.
Unlike the testimony given at the hearing, the statements appellant’s attorney made
in his motion to vacate were not under oath or subject to cross-examination and
were not in affidavit form. Wilson’s attorney chose not to testify at the hearing,
telling the court “I’d rather not [testify] as the counsel.”
Under Ohio law, arguments of counsel are not evidence to be
considered by the trier of fact. See Grove v. Fresh Mark, Inc., 156 Ohio App. 3d 620,
626, 808 N.E.2d 416 (8th Dist.2004) (“Passionate argument of counsel is not
evidence.”) In this case, each party had an opportunity to present witnesses and
submit exhibits into evidence. Wilson’s counsel chose not to testify. Thus, he chose
not to submit his version of events as factual evidence in this case.
In light of the above, the second assignment of error is overruled.
In the third assignment of error, Wilson contends that the trial court
erred in enforcing the settlement agreement. In the fourth assignment of error,
Wilson contends that the settlement agreement was not enforceable because “there
was no meeting of the minds.” We consider these assignments of error together.
A settlement agreement is a contract designed to terminate a claim by
preventing or ending litigation. Rayco Mfg. v. Murphy, 2018-Ohio-4782, 117
N.E.3d 153, ¶ 32 (8th Dist.), citing Continental W. Condominium Unit Owners Assn.
v. Ferguson, 74 Ohio St. 3d 501, 660 N.E.2d 4317 (1996). Like any other contract, a
settlement agreement requires an offer, acceptance, consideration, and mutual
assent between two or more parties with the legal capacity to act. Rayco at id. The
burden of establishing the existence and terms of a settlement agreement lies with
the party who claims it exists. Id., citing Turoczy Bonding Co. v. Mitchell, 8th Dist.
Cuyahoga No. 106494, 2018-Ohio-3173, ¶ 19, citing Nilavar v. Osborn, 127 Ohio
App.3d 1, 11, 711 N.E.2d 726 (2d Dist.1998).
An oral settlement agreement may be enforceable if there is sufficient
particularity to form a binding contract. Kostelnik v. Helper, 96 Ohio St. 3d 1, 2002-
Ohio-2985, 770 N.E.2d 58, ¶ 15, citing Spercel v. Sterling Industries, Inc., 31 Ohio
St.2d 36, 39, 285 N.E.2d 324 (1972). Oral settlement agreements may be binding
and enforceable even though the settlement terms are negotiated without the trial
court’s assistance. Walland v. Rinehart, 8th Dist. Cuyahoga Nos. 51935 and 52672,
1987 Ohio App. LEXIS 6805, 4 (Mar. 26, 1987). “The agreement need not be in
writing and no funds are required to be exchanged in order to establish the existence
of the settlement contract.” Id.
In Ivanicky v. Pickus, 8th Dist. Cuyahoga No. 91690, 2009-Ohio-37,
this court noted:
It is preferable that a settlement be memorialized in writing. However,
an oral settlement agreement may be enforceable if there is sufficient
particularity to form a binding contract. Terms of an oral contract may
be determined from words, deeds, acts, and silence of the
parties. * * *
To constitute a valid settlement agreement, the terms of the
agreement must be reasonably certain and clear * * *.
(Citations omitted). Id. at ¶ 9, quoting Kostelnik at ¶ 15, 17.
A settlement agreement may also be enforced regardless of whether
it has been reduced to writing so as long as the terms of the agreement can be
established by clear and convincing evidence. Carkido v. Sweeney, 8th Dist.
Cuyahoga No. 107383, 2019-Ohio-460, ¶ 15, citing Shetler v. Shetler, 9th Dist.
Wayne No. 00CA0070, 2001 Ohio App. LEXIS 2289, 3 (May 23, 2001). Clear and
convincing evidence “is that which will provide in the mind of the trier of facts a firm
belief or conviction as to the facts sought to be established.” Shetler at id., citing
Cincinnati Bar Assn. v. Massengale, 58 Ohio St. 3d 121, 122, 568 N.E.2d 1222 (1991).
This court has held that that “[o]nce a settlement offer has been
accepted, the settlement agreement is mutually binding; the settlement agreement
cannot be set aside simply because one of the parties later changes its mind.” Rayco,
2018-Ohio-4782, 117 N.E.3d 153, at ¶ 31; see also Turoczy Bonding Co., 8th Dist.
Cuyahoga No. 106494, 2018-Ohio-3173, at ¶ 18 (“Once there is * * * a meeting of the
minds, one cannot refuse to proceed with settlement due to a mere change of
mind.”). This court has also recognized that when a client authorizes his or her
attorney to negotiate a settlement and the attorney negotiates a settlement within
the scope of that authority, the client is bound by it. Rayco at id.; see also Bromley
v. Seme, 2013-Ohio-4751, 3 N.E.3d 1254, ¶ 25 (11th Dist.) (holding that a party may
be bound by the conduct of his or her attorney in reaching a settlement).
The standard of review applied when reviewing a ruling on a motion
to enforce a settlement agreement depends on the question presented. Carkido at
¶ 15; Rayco at ¶ 29. If the question is a factual or evidentiary one, the reviewing
court will not overturn the trial court’s finding if there was sufficient evidence to
support the finding. Turoczy at ¶ 15, citing Chirchiglia v. Ohio Bur. of Workers’
Comp., 138 Ohio App. 3d 676, 679, 742 N.E.2d 180 (7th Dist.2000). If the issue is a
question of contract law, the reviewing court must review the agreement de novo to
determine whether the trial court’s order is based on an erroneous standard or a
misconstruction of the law. Turoczy at id. Wilson raises a factual issue on appeal:
Did Wilson’s attorney, on behalf of the plaintiffs, agree to the defendants’ settlement
offer? Wilson also raises a legal issue, which we review de novo: Did the parties
agree upon all the essential terms of the alleged oral settlement agreement? See
Kinnett v. Corporate Document Solutions, Inc., 1st Dist. Hamilton No. C-180189,
2019-Ohio-2025, ¶ 27.
Pride contends that Wilson is bound by the settlement agreement
because Wilson’s attorney had full authority to settle the claims on Wilson’s behalf
and Wilson belatedly changed his mind about accepting the settlement offer.
According to Wilson, he did not change his mind. Rather, there was no meeting of
the minds as to the essential terms of the settlement agreement, specifically, the
parties had not agreed on what would be done with the Medicaid reimbursement.
It is uncontested that the attorneys for the parties discussed a
$25,000 settlement offer. Appellant’s attorney questioned the effect the Medicaid
reimbursement would have on the settlement, and appellee’s counsel conceded he
never “got back” to appellant’s counsel on the matter. Appellee’s counsel also never
told appellant’s counsel that he would inform the court of the settlement; he only
told appellee’s counsel that he would confirm the settlement in writing, which he
never did. As soon as appellant’s attorney discovered that appellee’s counsel had
emailed the court to say the parties had reached a settlement, appellee’s counsel
phoned the court to say that there had not, in fact, been an agreement.
Wilson and the father of the two injured minors testified that they had
not agreed to settle for $25,000. Although “[a] party cannot avoid a settlement that
was negotiated through counsel by claiming that his [or her] attorney lacked actual
authority to enter into the settlement,” Rayco, 2018-Ohio-4782, 117 N.E.3d 153, at
¶ 31, Wilson testified that he only told his attorney “to fight as well as you can and
let me know.” Wilson further argues that his attorney called Pride’s attorney on
September 7, 2018, to ask for clarification with regard to Medicaid reimbursement,
not to accept the $25,000 settlement offer.
Pride relies on this court’s holding in Rayco, where this court upheld
the trial court’s enforcement of a settlement agreement. Rayco is distinguishable
from the case at bar. In Rayco, the settlement agreement was “evidenced by writings
on all sides, including the mutual exchange of drafts of the written settlement
agreement that set forth the essential terms of the settlement.” Id. at ¶ 40. Here,
the alleged agreement was never reduced to writing. As Pride stipulated to during
the hearing, as soon as appellant’s attorney became aware of appellee’s email to the
court, appellant’s attorney called the court to say that no settlement had been
reached.
Other Ohio cases we reviewed involve either settlement agreements
that had been reduced to writing, see Kostelnik, 96 Ohio St. 3d 1, 2002-Ohio-2985,
770 N.E.2d 58, parties who testified that they initially agreed to the oral settlement
offer but then changed their mind, see Brilla v. Mulhearn, 168 Ohio App. 3d 223,
2006-Ohio-3816, 859 N.E.2d 578 (9th Dist.); in-court settlement agreements, see
Kolar v. Shapiro, 11th Dist. Lake No. 2007-L-148, 2008-Ohio-2504, ¶ 21, or
settlement agreements where there was a passage of time between the alleged
acceptance and revocation of the acceptance, see, generally, Ivanicky, 8th Dist.
Cuyahoga No. 91690, 2009-Ohio-37.
In light of the above, there was insufficient evidence to support the
trial court’s finding that the parties had reached a settlement. Based on the parties’
testimony and the trial court record, the terms of the alleged agreement were not
stated with sufficient particularity and Wilson’s assent to those terms were not
established by clear and convincing evidence. A more logical explanation based on
the evidence before this court is that Pride offered to settle for $25,000 and Wilson
needed more clarification as to what effect the Medicaid reimbursement would have
on the settlement amount ─ would Pride’s employer reimburse Medicaid or would
the Medicaid reimbursement come out of the settlement proceedings? This is
evidenced by counsel for appellee’s testimony at the hearing:
I considered [the discussion] to be how the company wanted to treat
the Medicaid payment on the settlement check. In other words,
whether the company was going to include Medicaid on the check or
going to write a separate check to Medicaid, how that was going to be
handled.
We find that, contrary to Pride’s claim, the effect a $15,000 Medicaid
reimbursement would have on a $25,000 settlement offer was a material part of the
agreement.3 Pride never offered that clarification and instead emailed the court
stating the case had been settled a mere 20 minutes after Wilson’s alleged
acceptance. Once Wilson discovered Pride’s email, he contacted the court to clarify
that no settlement had been reached. Thus, there was no meeting of the minds. In
reaching this conclusion, we have also considered the amount of time that passed
between the offer of settlement on September 6 and the alleged acceptance on
September 7 and the amount of time, a couple of hours, that passed between the
alleged acceptance, appellee counsel’s email to the court that the offer had been
accepted, and appellant attorney’s call to the court to dispute that an agreement had
been reached.
In light of the above, the trial court erred in granting Pride’s motion
to enforce the settlement agreement and denying Wilson’s motion to vacate the
settlement agreement.
The third and fourth assignments of error are sustained.
Judgment reversed; case remanded for proceedings consistent with
this opinion.
It is ordered that appellants recover from appellees costs herein taxed.
The court finds there were reasonable grounds for this appeal.
3Using a 30% contingency fee as an example, if Wilson settled the case for $25,000,
with $4,000 going to the minor claimants and his attorney receiving 30% of the total
settlement amount, Wilson would recover around $14,700, which is less than what was
owed to Medicaid.
It is ordered that a special mandate be sent to said court to carry this judgment
into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
LARRY A. JONES, SR., JUDGE
PATRICIA ANN BLACKMON, P.J., and
RAYMOND C. HEADEN, J., CONCUR