Roberts v. Marks , 2017 Ohio 1320 ( 2017 )

[Cite as Roberts v. Marks, 2017-Ohio-1320.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
HENRY COUNTY
DAVID H. ROBERTS,
PLAINTIFF-APPELLEE, CASE NO. 7-16-15
v.
JERRY A. MARKS,
DEFENDANT-APPELLANT
-and-
OPINION
WILLIAM R. MEYERS,
DEFENDANT-APPELLEE.
Appeal from Henry County Common Pleas Court
Trial Court No. 13CV0071
Judgment Affirmed
Date of Decision: April 10, 2017
APPEARANCES:
Tammy G. Lavalette and H. Buswell Roberts, Jr. for Appellant
Albert L. Potter, II for Appellee, William R. Meyers
Case No. 7-16-15
ZIMMERMAN, J.,
{¶1} Appellant, Jerry A. (Tony) Marks (“Marks”) appeals the September 26,
2016 judgment and order of the Henry County Court of Common Pleas awarding
judgment in favor of William R. Meyers (“Meyers”) on a breach of
contract/indemnification action.
Facts and Procedural History
{¶2} David H. Roberts (“Roberts”), Marks, and Meyers were equal co-
owners of an entity known as MRT Leasing, LLC (“MRT Leasing”). MRT Leasing
constructed and owned a warehouse operation located in Henry County, Ohio. On
December 29, 2005, Roberts, Marks, and Meyers entered into a purchase and sale
agreement (“Roberts Agreement”), in which Marks and Meyers purchased Roberts’
interest in MRT leasing. The Roberts Agreement provided that Marks and Meyers
were “individually and together collectively the Purchaser” of Roberts’ interest in
the leasing company for the purchase price of $450,000. The purchase contract
called for an initial $45,000 down payment, with the remaining balance to be paid
over a period of 96 months, with interest set at 3.5% per annum. Marks and Meyers
had a verbal agreement that Marks would make the payments to Roberts.
{¶3} On July 30, 2009, Meyers filed an action seeking a judicial dissolution
of MRT Leasing, then known as Southpoint Business Park, LLC (“Southpoint”) in
the trial court. Southpoint had a business loan with First Merit Bank and due to the
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judicial dissolution suit filed by Meyers, First Merit Bank called its note on the
Southpoint property. The trial court appointed a receiver for Southpoint.
{¶4} Shortly thereafter, Roberts filed suit against Marks and Meyers in the
trial court (in a case separate from the judicial dissolution action), due to their non-
payment under the Roberts Agreement. A hearing was held in that case on
September 2, 2010 revealing the balance of the debt owed (to Roberts) by Marks
and Meyers to be approximately $365,000. Neither Marks nor Meyers were aware
of the amounts paid on the debt (to Roberts) by the other.
{¶5} Thereafter, Marks and Meyers met on September 1, 2011 to discuss
settlement of the lawsuits. Both parties were represented by counsel. The meeting
resulted in a settlement between Marks and Meyers memorialized by a handwritten
agreement (Meyers Dep. Ex. A) signed by the parties. On November 15, 2011 a
written agreement, identified as the parties’ Settlement Agreement (“Settlement
Agreement”) (Meyers Dep. Ex. D) was signed by the parties. Both agreements
required Marks to pay the debt owed Roberts and to indemnify Meyers thereupon.
However, the handwritten agreement did not contain the exact amount of the debt
owed to Roberts, providing only that Marks was to pay the Roberts debt and
indemnify Meyers therein. Finally, First Merit Bank was aware of and approved
the Settlement Agreement (entered into by Marks and Meyers) and reinstated its
loan to Southpoint.
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{¶6} On May 15, 2013 Roberts again filed suit against Marks and Meyers in
the trial court, due to the nonpayment of the debt owed. On June 24, 2013 Meyers
filed his cross-claim against Marks asserting a breach of their Settlement Agreement
concerning the indemnification of the payments to Roberts. The trial court granted
Roberts summary judgment against Marks and Meyers, jointly and severally, in the
amount of $323,794.90 plus interest at the rate of 3.5% per annum.
{¶7} Meyers then moved for summary judgment on his cross-claim versus
Marks for indemnification. Marks opposed the motion and filed his separate motion
for summary judgment. The trial court found material issues of fact present and
denied both motions. Thereafter, a bench trial on Meyers’ cross-claim occurred,
resulting in the trial court awarding judgment in favor of Meyers against Marks in
the amount of $323,794.90 plus interest. The trial court further granted judgment
in favor of Meyers (against Marks) for $37,000 for the amount which Meyers paid
(to Roberts) after the trial court granted summary judgment on January 9, 2015.
Marks appeals these judgments and the trial court’s failure to grant summary
judgment pursuant to his request.
Assignments of Error
{¶8} Marks presents the following two assignments of error for our review:
ASSIGNMENT OF ERROR NO. 1
THE TRIAL COURT ERRED IN DENYING
DEFENDANT/CROSS-CLAIM DEFENDANT APPELLANT
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MARKS’ CROSS-MOTION FOR SUMMARY JUDGMENT
REGARDING APPELLEE’S BREACH OF A WARRANTY IN
AN UNAMBIGUOUS AND INTEGRATED CONTRACT,
WHERE THE MOTION WAS DENIED BASED UPON THE
EXISTENCE OF QUESTIONS OF FACT REGARDING
INADMISSIBLE PAROL EVIDENCE.
ASSIGNMENT OF ERROR NO. 2
THE TRIAL COURT ERRED IN GRANTING JUDGMENT IN
FAVOR OF DEFENDANT/CROSS-CLAIM PLAINTIFF
APPELLEE MEYERS, AFTER A BENCH TRIAL, WHERE
THE TRIAL COURT’S FINDINGS OF FACT
DEMONSTRATE THAT THE TRIAL COURT RELIED ON
INADMISSIBLE PAROL EVIDENCE TO DISREGARD THE
CONTENTS OF AN UNAMBIGUOUS AND INTEGRATED
CONTRACT BETWEEN THE PARTIES.
{¶9} On appeal, Marks challenges the trial court's reliance on parol evidence
to interpret the Settlement Agreement between Meyers and Marks. Specifically,
Marks argues that the Settlement Agreement of September 1, 2011 was a complete
and integrated contract, and the trial court should have granted him summary
judgment on the pleadings and therefore the judgments of the trial court were
improper.
Standard of Review
{¶10} An appellate court reviews a trial court’s decision on a motion for
summary judgment de novo. Hancock Fed. Credit Union v. Coppus, 2015-Ohio-
5312, 54 N.E.3d 806, ¶ 15 (3rd Dist.). Summary judgment is appropriate when,
looking at the evidence as a whole: (1) there is no genuine issue as to any material
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fact; (2) reasonable minds can come to but one conclusion and that conclusion is
adverse to the party against whom the motion for summary judgment is made; and,
therefore, (3) the moving party is entitled to judgment as a matter of law. Civ.R.
56(C); Adkins v. Chief Supermarket, 3rd Dist. Paulding No. 11-06-07, 2007-Ohio-
772, ¶ 7. If any doubts exist, the issue must be resolved in favor of the nonmoving
party. Murphy v. Reynoldsburg, 65 Ohio St. 3d 356, 358-59, 1992-Ohio-95, 604
N.E.2d 138. The party moving for summary judgment has the initial burden of
producing some evidence which demonstrates the lack of a genuine issue of material
fact. Dresher v. Burt, 75 Ohio St. 3d 280, 292-93, 1996-Ohio-107, 662 N.E.2d 264.
In doing so, the moving party is not required to produce any affirmative evidence,
but must identify those portions of the record which affirmatively support his
argument. Id. “The nonmoving party must then rebut with specific facts showing
the existence of a genuine triable issue; he may not rest on the mere allegations or
denials of his pleadings”. Brickner v. Wittwer, 3rd Dist. Hardin No. 6-10-12, 2011-
Ohio-39, ¶ 11; Civ.R. 56(E).
{¶11} Similarly, the construction and interpretation of contracts are matters
of law subject to a de novo standard of review. Langfan v. Carlton Gardens Co.,
183 Ohio App. 3d 260, 2009-Ohio-3318, 916 N.E.2d 1079, ¶ 24 (3rd Dist.). When
evidence is admitted in violation of the parol evidence rule, the standard of review
is “harmless error.” Id. The elements necessary to form a contract include “an offer,
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acceptance, contractual capacity, consideration (the bargained for legal benefit
and/or detriment), a manifestation of mutual assent and legality of object of
consideration.” Kostelnik v. Helper, 96 Ohio St. 3d 1, 2002-Ohio-2985, 770 N.E.2d
58, ¶ 16 quoting Perlmuter Printing Co. v. Strome, Inc., 436 F. Supp. 409, 414
(N.D.Ohio 1976). In addition, “[a] meeting of the minds as to the essential terms of
the contract is a requirement to enforcing the contract. Id.
Settlement Agreements
{¶12} Settlement agreements are contracts designed to terminate a claim by
preventing or ending litigation. Continental W. Condominium Unit Owners Assn.
v. Howard E. Ferguson, Inc., 74 Ohio St. 3d 501, 502, 1996-Ohio-158, 660 N.E.2d
431. Such agreements are valid and enforceable by either party. Kaple v.
Benchmark Materials, 3rd Dist. Seneca No. 13-03-60, 2004-Ohio-2620, ¶ 6. To
resolve issues involving settlement agreements, the reviewing court must analyze
what the parties are disputing. “[W]here the meaning of terms of a settlement
agreement are disputed, or where there is a dispute that contests the existence of a
settlement agreement, a trial court must conduct an evidentiary hearing prior to
entering judgment.” Id. at ¶ 4, quoting Rulli v. Fan Co., 79 Ohio St. 3d 374, 1997-
Ohio-380, 683 N.E.2d 337, syllabus. “ ‘[A]ll agreements have some degree of
indefiniteness and some degree of uncertainty. In spite of its defects, language
renders a practical service. In spite of ignorance as to the language they speak and
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write, with resulting error and misunderstanding, people must be held to the
promises they make.’” Kostelnik at ¶ 17, quoting 1 Corbin on Contracts, Section
4.1, (Rev. Ed. 1993).
First Assignment of Error: Ruling on Summary Judgment
{¶13} In the first assignment of error, Marks asserts that the trial court erred
in overruling his motion for summary judgment because the trial court considered
inadmissible parol evidence in determining (that) a question of fact existed as to the
exact amount of indemnification owed on the Roberts Agreement.
{¶14} “When reviewing the grant of a motion for summary judgment,
appellate courts review the judgment independently and do not give deference to
the trial court.” J.A. Industries, Inc. v. All Am. Plastics, Inc., 133 Ohio App. 3d 76,
82, 1999-Ohio-817, 726 N.E.2d 1066 (3rd Dist.). “Accordingly, the appellate
standard for summary judgment is the same as that of the trial court.” Id.
{¶15} Furthermore, in Dresher, the Ohio Supreme Court held that parties
seeking summary judgment must “specifically point to some evidence of the type
listed in Civ.R. 56(C) which affirmatively demonstrates that the nonmoving party
has no evidence to support the nonmoving party’s claims.” Dresher, supra, at 293.
If the moving party satisfies that burden, the party opposing summary judgment
must “set forth specific facts showing that there is a genuine issue for trial,” and
summary judgment is proper if the party opposing judgment fails to set forth such
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facts. Id., citing Civ.R. 56(E). Finally, we are mindful of the general rule that
reviewing courts may not reverse a correct judgment merely because it was based
upon erroneous reasoning. See, e.g., State ex rel. Parsons v. Fleming, 68 Ohio St. 3d
509, 514, 1994-Ohio-172, 628 N.E.2d 1377.
{¶16} Marks’ contention that the trial court considered inadmissible parol
evidence in denying his summary judgment motion is misplaced. “‘The parol
evidence rule states that ‘absent fraud, mistake, or other invalidating cause, the
parties’ final written integration of their agreement may not be varied, contradicted,
or supplemented by evidence of prior or contemporaneous oral agreements, or prior
written agreements.’” Galmish v. Cicchini, 90 Ohio St. 3d 22, 27, 2000-Ohio-7, 734
N.E.2d 782, quoting 11 Williston on Contracts, Section 33:4, at 569-570 (4
Ed.1999). “The parol evidence rule * * * is not a rule of evidence but is one of
substantive law.” Id. “The rule comes into operation when there is a single and
final memorial of the understanding of the parties. When that takes place, prior and
contemporaneous negotiations, oral or written, are excluded; or as it is sometimes
said, the written memorial supersedes these prior or contemporaneous
negotiations.’” Id., quoting In re Gaines’ Estate, 15 Cal. 2d 255, 264-265, 100 P2d
1055 (1940). The parol evidence rule is designed to protect the integrity of final,
written agreements. Cronkelton v. Guaranteed Constr. Servs., 2013-Ohio-328, 988
N.E.2d 656, ¶ 9 (3rd Dist.).
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{¶17} In the case before us, the parties did not have a “single and final
memorial” of their settlement, rather, they had two agreements: the handwritten
agreement and the typed Settlement Agreement, which were in conflict as to
indemnification. (Meyers Dep. Ex. A, D). Thus, the trial court correctly determined
that a genuine issue of material fact existed as to the amount of indemnification (to
Roberts), the terms of such agreement in that regard, and the parties’ intent.
{¶18} The Ohio Supreme Court has stated that the issue of “whether the
parties intended to be bound * * * is a question of fact properly resolved by the trier
of fact.” B.W. Rogers Co. v. Wells Bros., 3rd Dist. Shelby No. 17-11-25, 2012-
Ohio-750, ¶ 21, quoting Oglebay Norton Co. v. Armco, Inc., 52 Ohio St. 3d 232,
235, 556 N.E.2d 515, (1990); Normandy Place Assoc. v. Beyer, 2 Ohio St. 3d 102,
106, 443 N.E.2d 161, (1982) (“Whether the parties intended a contract remains a
factual question, not a legal one, and as such is an issue to be resolved by the finder
of fact.”) See, also, Am.’s Floor Source, L.L.C. v. Joshua Homes, 191 Ohio App. 3d
493, 2010-Ohio-6296, 946 N.E.2d 799, ¶ 44 (10th Dist.); Grdn. Alarm Co. v.
Portentoso, 196 Ohio App. 3d 313, 2011-Ohio-5443, 963 N.E.2d 225, ¶ 17 (3rd
Dist.).
{¶19} Furthermore, the Ohio Supreme Court, in Rulli stated that “[w]here
the meaning of the terms of a settlement agreement is disputed, * * * a trial court
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must conduct an evidentiary hearing prior to entering judgment.” (Emphasis
added.) Rulli, supra, at paragraph two of the syllabus.
{¶20} Because a genuine issue of material fact existed as to the exact amount
Marks and Meyers’ owed Roberts, a fact which was not reconciled by the parties’
handwritten and typed settlement agreements, the trial court was required to conduct
a hearing on that issue before entering judgment. Thus, the trial court properly
denied Marks’ motion for summary judgment. The first assignment of error is
overruled.
Second Assignment of Error – Judgment on Cross Claim
{¶21} In his second assignment of error, Marks maintains that the trial court
erred in granting judgment in favor of Meyers by relying upon inadmissible parol
evidence to disregard the parties’ unambiguous and integrated contract.
{¶22} We disagree.
{¶23} Our de novo review of the trial court’s decision as to the terms of the
parties’ Settlement Agreement, raises “mixed questions of fact and law.” Hickman
v. Cole, 3rd Dist. Hancock No. 5-98-30, 1999 WL 254379, *4 (April 7, 1999). “’We
accept the facts found by the trial court on some competent, credible evidence, but
freely review application of the law to the facts. A reviewing court should be guided
by a presumption that the findings of a trial court are correct, since the trial judge is
best able to view the witnesses and observe their demeanor, gestures and voice
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inflections, and use their observations in weighing credibility of the proffered
testimony.’” B.W. Rogers, Co., 3rd Dist. Shelby No. 17-11-25, 2012-Ohio-75, ¶ 29,
quoting Cramer v. Bucher, 3rd Dist. Hancock No. 5-02-01, 2002-Ohio-3397, ¶ 9,
quoting McSweeney v. Jackson, 117 Ohio App. 3d 623, 632, 691 N.E.2d 303 (4th
Dist.1996).
{¶24} The trial court’s judgment entry recites its factual findings relative to
the judgment rendered in favor of Meyers. The trial court found that Meyers was
unaware of the exact amount of the obligation owed to Roberts and relied upon
Marks’ representations as to the amount owed at the time of their settlement. (Doc.
No. 87). The trial court further determined that the amount of $237,504.22 (the
amount warranted by Meyers to Marks as the amount owed to Roberts) was not the
negotiated amount of the parties, but the amount that would have been owed had
Marks made payments (to Roberts) in accordance with the Roberts Agreement. Id.
{¶25} The trial court further determined that Meyers had no direct
knowledge at the time he entered into the Settlement Agreement with Marks as to
the exact amount Marks had actually paid Roberts from December 29, 2005 through
November 28, 2011 pursuant to the Roberts Agreement. Id. Meyers relied upon
Marks’ representation of the balance owed. Id.
{¶26} Further, the trial court determined that Marks’ failure to pay Roberts
precipitated Roberts into filing suit and obtaining a judgment against Marks and
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Meyers in the amount of $323,794.90 plus interest at the rate of 3.5% per annum
from February 5, 2014. Id.
{¶27} While there is some indefiniteness between the testimony of Marks
and Meyers as to the amount of indemnification agreed to, “people must be held to
the promises they make.” Kostelnik, 96 Ohio St. 3d 1, 2002-Ohio-2985, 770 N.E.2d
58, at ¶ 17, quoting 1 Corbin on Contracts, Section 4.1, (Rev. Ed. 1993). In this
regard, Marks agreed that the debt owed Roberts was $323,794.90, plus interest at
the rate of 3.5% per annum (see Doc. No. 41). Marks was further aware, or should
have been aware, that his payments to Roberts did not reduce the debt owed to
Roberts to $237,504.22.1 Rather, the trial court relied on competent and credible
evidence to determine that the stated amount of $237,504.22 was not a negotiated
indemnification amount (between Marks and Meyers) but merely the debt balance
owed to Roberts if (Marks) had made all debt payments per his amortization
schedule. (Doc. No. 87). Our appellate determination finds competent and credible
evidence exists to support these findings and judgments by the trial court. This case
was decided upon the credibility of witnesses and the trial judge was in the best
position to make such a determination.
1
We note that Marks and Meyers were aware that the debt owed to Roberts, as of September 2010, was in
excess of $365,000 and no evidence was submitted to the trial court that Marks or Meyers reduced that debt
to $237,504.22 by September, 2011.
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{¶28} The record clearly reflects the factual findings of the trial court were
based upon competent and credible evidence and that parol evidence played no part
in such findings as the parties were not aware of the precise debt amount owed
Roberts prior to or contemporaneous with the settlement. As such, the trial court
correctly applied the law as to settlement agreements and to the facts and
circumstances in this case. Marks’ second assignment of error is overruled.
{¶29} Having found no error prejudicial to the Appellant herein in the
particulars assigned and argued, we affirm the judgments of the trial court.
Judgment Affirmed
PRESTON, P.J. and WILLAMOWSKI, J., concur.
/jlr
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