Allied Erecting & Dismantling Co., Inc. v. Qwest Communications Internatl., Inc.

2010 Ohio 5939

• Court: Ohio Court of Appeals
• Decided: December 2, 2010
• Docket: 08 MA 212
• Status: Published

Opinion

[Cite as Allied Erecting & Dismantling Co., Inc. v. Qwest Communications Internatl., Inc., 2010-Ohio-5939.] STATE OF OHIO, MAHONING COUNTY IN THE COURT OF APPEALS SEVENTH DISTRICT

ALLIED ERECTING AND ) CASE NO. 08 MA 212 DISMANTLING CO., INC. ) ) PLAINTIFF-APPELLEE ) ) VS. ) OPINION ) QWEST COMMUNICATIONS ) INTERNATIONAL, INC., et al. ) ) DEFENDANTS-APPELLANTS )

CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common Pleas of Mahoning County, Ohio Case No. 2006 CV 182

JUDGMENT: Affirmed.

APPEARANCES: For Plaintiff-Appellee: Atty. Christopher R. Opalinski Atty. F. Timothy Grieco Eckert, Seamans, Cherin & Mellott, LLC 44th Floor, 600 Grant Street Pittsburgh, PA 15219

Atty. Robert S. Hartford Atty. Jay M. Skolnick Atty. Peter B. Grinstein Nadler, Nadler & Burdman Co., LPA 20 Federal Plaza West, Suite 600 Youngstown, Ohio 44503

For Defendant-Appellant: Atty. Thomas J. Wilson Comstock, Springer & Wilson Co., LPA 100 Federal Plaza East, Suite 926 Youngstown, Ohio 44503-1811

Atty. David J. Driscoll Garlin, Driscoll, Howard, LLC 245 Century Circle, Suite 101 Louisville, Colorado 80027

JUDGES: -2-

Hon. Cheryl L. Waite Hon. Gene Donofrio Hon. Mary DeGenaro Dated: December 2, 2010 [Cite as Allied Erecting & Dismantling Co., Inc. v. Qwest Communications Internatl., Inc., 2010-Ohio-5939.] WAITE, J.

{¶1} Appellants, Qwest Communications International, Inc. and Qwest

Communications Corp., appeal the judgment entry of the Mahoning County Court of

Common Pleas denying their motion to enter the terms of settlement in this breach of

contract action. For the following reasons, the judgment of the trial court is affirmed.

{¶2} Appellants are successors in interest to an easement originally granted

to Litel Telecommunications Corporation (“Litel”) by Pittsburgh and Lake Erie

Railroad Company (“P&LE”), which authorized Litel to install telecommunications

equipment on property owned by P&LE in 1985. Appellee, Allied Erecting and

Dismantling Co., Inc., who is the successor in interest to P&LE, filed a breach of

contract action in January, 2006, alleging that Appellants were in violation of several

provisions contained in the easement.

{¶3} At a mediation in the matter conducted by Richard Blair, the common

pleas court mediator, the parties reached a settlement that was memorialized in a

handwritten memorandum of understanding (“MOU”). It reads, in pertinent part:

“This memorandum confirms the essential settlement terms reached this day, which

will be further memorialized in settlement documents to be drawn by counsel and

consistent with the terms herein.” (MOU, p. 1.)

{¶4} In the MOU, the parties agreed that, by November 15, 2007, Appellants

would “install and activate facilities off of [Appellee’s] property,” and “vacate and

relinquish to [Appellee] their rights and interests in the subject easement on

[Appellee’s] property* * *.” (MOU, p. 1, ¶1.) The MOU further states that on

November 15, 2007, “[Appellants] shall relinquish full control and ownership of its -2-

facilities located on [Appellee’s] property * * * and will have no obligation thereafter to

[Appellee] or others for the care and maintenance of such facilities.” (MOU, p. 2, ¶4.)

{¶5} Appellee agreed to pay the sum of $40,000 to Appellants and also

agreed that it would not “sell, assign, lease or convey [Appellants’] abandoned

facilities as outlined above, to any telecommunications service provider, cable

provider, satellite provider, or similar entity on [Appellee’s] property.” (MOU, p. 2,

¶5.) Appellee reserved the right to “dig up, destroy, modify, sell as scrap, or make

any other disposition whatsoever of the facilities except as set forth above.” (MOU,

p. 2, ¶5.)

{¶6} Importantly, the MOU also contained the following agreement: that

“any dispute relating to the interpretation of this Memorandum of Understanding or

the parties’ settlement agreement will be resolved by Rick Blair, whose rulings will be

final and binding, until the relocation of [Appellants’] facilities has been completed

pursuant to the settlement agreement; provided, however, that after such time, the

parties agree that this settlement agreement can be enforced by either party in any

court of competent jurisdiction.” (MOU, p. 4, ¶11.)

{¶7} The parties were not able to agree on a draft of a formalized settlement

agreement. Thus, they submitted their opposing positions on several issues relating

to the settlement agreement to Blair. The parties concede that Blair was acting as an

arbitrator when he heard and resolved the matter, and all parties concede that his

decision and opinion, to the extent that it is within the authority granted to him

pursuant to the MOU, is final and binding. -3-

{¶8} Blair issued a decision and opinion, which read, in pertinent part:

{¶9} “With regard to representation and warranties as to the existing cable

and any environmental hazards, [Appellants] shall have no obligation to [Appellee] or

others for the care and maintenance of its facilities located on [Appellee’s] property

said facility being deactivated and abandoned. [Appellants] further represent[ ] and

warrant[ ] that it has only been involved with an approximately one (1) inch fiber optic

cable transversing [sic] [Appellee’s] property and said cable is not involved with any

environmentally controlled vaults, underground manholes or microwave towers.

[Appellants] further represent[ ] that its one (1) inch fiber optic cable does not at

present violate any local, state, or federal statutes, regulations, orders, direct

ordinances or similar promulgations on environmental matters. [Appellants] further

represent[ ] that said one (1) inch fiber optic cable after its abandonment and

deactivation presents no risk of environmental contamination as defined by existing

Federal or Ohio laws” (herein “representations and warranties” clause.) (10/9/07

Decision and Opinion, p. 2, ¶3.)

{¶10} Approximately seven months after the decision and opinion was issued,

Appellants filed a motion to enter the terms of settlement. In the motion they asked

the trial court to enter the terms of settlement without the representations and

warranties clause. Appellants contended that the parties’ predecessors in interest

failed to maintain “as built” drawings of the facilities on Appellee’s property. As a

result, neither party knows exactly what facilities are buried on Appellee’s property. -4-

Appellants argued that the representations and warranties clause altered the

substantive economic terms of the parties’ agreement to Appellants’ detriment.

{¶11} The trial court denied the motion, holding instead that the parties clearly

and unambiguously granted authority to Blair to resolve any disputes concerning the

MOU or the parties’ settlement agreement, and that they agreed that his decision

would be final and binding. The trial court held that, “the ruling Mediator Blair made

on October 5, 2007 is binding on the parties and that the settlement agreement shall

be finalized in accordance with his ruling.” (9/26/08 J.E.) The trial court also held

that any dispute concerning the finalization of the settlement agreement must be

submitted to Blair, consistent with the terms of the MOU.

{¶12} On appeal, Appellants argue that the representations and warranties

clause somehow imposes liability on Appellants for any environmental problems

caused by the existing facilities and that Blair exceeded the authority granted by the

MOU when he ruled that the clause should be included in the terms of the final

agreement. Appellants further assert that the arbitrator violated their first amendment

rights when he essentially forced them to make unfounded representations and

warranties regarding the existing facilities. Appellants claim that, in order to

determine whether the representations and warranties are true, Appellants would be

forced to dig up the facilities at a cost that far exceeds the $40,000 sum agreed to in

the MOU. Appellants also contend that Blair violated the mediation confidentiality

requirements of the Ohio Mediation Act to the extent that he relied on information he

obtained through the mediation process in fashioning his arbitral award. Finally, -5-

Appellants argue that Blair’s authority to interpret the MOU terminated when they

installed new facilities elsewhere. For the following reasons, the judgment of the trial

court is affirmed.

{¶13} Although Appellants listed four separate assignments of error in their

brief, they addressed the arguments contained in the first through third assignments

of error under a single analysis.

Assignment of Error No. 1

{¶14} “The trial court erred in overruling Defendants’ Motion to Enter Terms of

Settlement.”

Assignment of Error No. 2

{¶15} “The trial court erred in ruling that the Mediator’s October 5, 2007

Arbitral Decision and Opinion is binding on the parties.”

Assignment of Error No. 3

{¶16} “The trial court erred in ruling that the parties’ settlement agreement

shall be finalized in accordance with the Mediator’s October 5, 2007 Arbitral Decision

and Opinion.”

{¶17} Mediation is, by definition, “a procedure by which the parties negotiate a

resolution to their dispute with the assistance of a third party mediator. If the parties

do not reach an agreement, the mediation process is at an end; no resolution may be

imposed on the parties.” Oliver Design Group v. Westside Deutscher Frauen-Verein,

d.b.a. The Altenheim, 8th Dist. No. 81120, 2002-Ohio-7066, ¶12. However, in the

event that an agreement is reached through mediation, it is as enforceable as any -6-

contractual agreement. Forysiak v. Laird Marine & Mfg. (Oct. 19, 2001) 6th Dist. No.

OT-00-049, citing Stark Brinkr, Inc. v. United Riggers, Inc. (Feb. 22, 2000), 5th Dist.

No.1999CA00179. The parties to this appeal do not challenge the fact that the MOU

is an enforceable agreement.

{¶18} The parties also concede that Blair was acting as an arbitrator when he

issued the decision and opinion. A trial court may only vacate an arbitrator’s award

under the very limited circumstances described in R.C. 2711.10. Relevant to this

case, R.C. 2711.10(D) provides:

{¶19} “In any of the following cases, the court of common pleas shall make an

order vacating the award upon the application of any party to the arbitration if:

{¶20} “* * *

{¶21} “(D) The arbitrators exceeded their powers, or so imperfectly executed

them that a mutual, final, and definite award upon the subject matter submitted was

not made.”

{¶22} The trial court may not reverse an arbitrator’s award simply because the

court may disagree with the arbitrator’s findings of fact or contractual interpretation.

Goodyear Tire & Rubber Co. v. Local Union No. 200 (1975), 42 Ohio St.2d 516, 520.

The standard of review for an appellate court is the same as that of the trial court.

Barnesville Exempted Village Sch. Dist. Bd. of Edn. v. Barnesville Assn. of Classified

Employees (1997), 123 Ohio App.3d 272, 274.

{¶23} Courts do not review claims of factual or legal error by an arbitrator in

the same manner as an appellate court conducts its review of trial court judgments. -7-

Southwest Ohio Reg. Transit Auth. v. Amalgamated Transit Union (2001), 91 Ohio

St.3d 108, 110, quoting United Paperworkers Internatl. Union v. Misco, Inc. (1987),

484 U.S. 29, 37-38. Review on all levels is much more limited. The Ohio Supreme

Court noted the policy behind arbitration and the limited review allowed by the courts:

{¶24} “Were the arbitrator's decision to be subject to reversal because a

reviewing court disagreed with findings of fact or with an interpretation of the contract,

arbitration would become only an added proceeding and expense prior to final

judicial determination. This would defeat the bargain made by the parties and would

defeat as well the strong public policy favoring private settlement of grievance

disputes arising from collective bargaining agreements.” Goodyear Tire & Rubber

Co. at 520.

{¶25} Appellants contend that the representations and warranties clause

constitutes an entirely new substantive term. They also claim that the clause directly

contradicts the language of the MOU, to the extent that the MOU provides that

Appellants are no longer responsible for the care and maintenance of the facilities on

Appellee’s property following the installment of new facilities. In other words,

Appellants construe the language of the MOU to mean that their potential liability for

any environmental liability absolutely ended when the new facilities were installed.

{¶26} Appellee counters that the language of the clause accurately reflects

the parties’ positions because Appellants represented throughout the pendency of

the case that the only facilities they maintained on Appellee’s property were harmless

fiber optic cables. Appellee posits that the MOU did not in any way shift Appellants’ -8-

possible current or future liabilities for any environmental damages caused by the

facilities installed by their predecessor in interest, but, rather, maintained the status

quo.

{¶27} The MOU plainly provides Blair with final and binding authority to

resolve “any dispute relating to the interpretation of this Memorandum of

Understanding or the parties’ settlement agreement.” The parties to the MOU were

free to limit Blair’s authority. Instead, they chose to give him virtually unrestricted

authority to resolve any issue arising from interpretation of the MOU and/or the

ultimate settlement agreement. Appellants contend that the MOU was intended to

shift environmental liability to Appellee. Appellee contends that it was intended to

maintain the status quo. While it appears to us that Appellee is correct, this particular

matter is beyond our realm. Both arguments require an interpretation of the MOU.

Based on the blanket authority granted to Blair to interpret the MOU, we hold that he

acted within his authority in fashioning the representations and warranties clause in

dispute.

{¶28} Appellants also argue that the decision and order violate the

confidentiality requirements of the Ohio Mediation Act. See generally, R.C. Chapter

2710. R.C. 2710.06, captioned “Disclosure by mediator” reads, in pertinent part:

{¶29} “(A) Except as provided in division (B) of this section and section

3109.052 of the Revised Code, a mediator shall not make a report, assessment,

evaluation, recommendation, finding, or other communication regarding a mediation -9-

to a court, department, agency, or officer of this state or its political subdivisions that

may make a ruling on the dispute that is the subject of the mediation.”

{¶30} The parties in the case sub judice were not bound by an arbitration

agreement when they filed this action. However, they agreed to arbitration after they

completed mediation, and, more importantly, they selected Blair to be their arbitrator.

Based on the record, it appears that the parties chose Blair to arbitrate any future

issues due to his familiarity with the facts of the case. Consequently, Blair did not

violate the Ohio Mediation Act to the extent that he may have considered any facts

adduced at mediation in his arbitral award.

{¶31} Finally, Appellants argue that the representations and warranties clause

is contrary to public policy because it violates their first amendment right to free

speech. It is well settled that the first amendment guarantee of free speech, which is

applicable to the states through the fourteenth amendment, serves to protect against

government action, either federal or state, rather than against the actions of private

persons. Hudgens v. N.L.R.B. (1976), 424 U.S. 507, 513; Columbia Broadcasting

System, Inc. v. Democratic National Committee (1973), 412 U.S. 94, 114, 93 S.Ct.

2080, 36 L.Ed.2d 772; Public Utilities Commission v. Pollack (1952), 343 U.S. 461.

Appellants fail to identify a state actor, here. Although Blair is the common pleas

court mediator, he was acting as a private arbitrator selected by the parties in the

MOU when he determined that the disputed clause should be incorporated into the

final settlement agreement. -10-

{¶32} It is apparent that no constitutional violation has occurred as a result of

the trial court’s enforcement of the settlement agreement if only because Blair was

not a state actor engaged in state action. Consequently, Appellants’ public policy

and First Amendment challenges to the decision and order must fail. Appellants’ first

three assignments of error are overruled.

Assignment of Error No. 4

{¶33} “The trial court erred in ruling that any further disputes concerning the

finalization of the parties’ settlement agreement shall be submitted to the Mediator for

resolution.”

{¶34} In this assignment, Appellants argue that Blair’s authority as an

arbitrator ended when Appellants completed their relocation work prior to filing the

motion to enter terms of settlement. In so doing, Appellants rely on paragraph 11 of

the MOU, which states:

{¶35} “The parties agree that any dispute relating to the interpretation of this

Memorandum of Understanding or the parties’ settlement agreement will be resolved

by Rick Blair, whose rulings will be final and binding, until the relocation of

[Appellants’] facilities has been completed pursuant to the settlement agreement;

provided, however, that after such time, the parties agree that this settlement

agreement can be enforced by either party in any court of competent jurisdiction.”

(MOU, p. 4, ¶11.)

{¶36} Appellants argue that, “the use of the term ‘settlement agreement’ in

Paragraph 11 is not a reference to the parties’ execution of settlement documents -11-

which will further memorialize those terms,” but instead, “the relocation of the

facilities pursuant to the agreed-on settlement terms confirmed in the MOU.” (Reply

Brf., p. 9.) In other words, Appellants claim that the term “settlement agreement”

refers to the MOU, itself, rather than the “settlement documents to be drawn by

counsel and consistent with the terms herein” referred to on page one of the MOU.

Hence, Appellants argue that once they relocated the fiber optic cable sometime prior

to the judgment entry, the completion of this relocation divested Blair of his authority

under the MOU.

{¶37} It is axiomatic that clear and unambiguous contractual language is

applied without consideration of extrinsic evidence, and the plain language in a

contract is reviewed de novo. City of Steubenville v. Jefferson Cty., 7th Dist. No.

07JE51, 2008-Ohio-5053, ¶22. Here, the language of the MOU is clear and

unambiguous. Appellants’ suggested interpretation of the phrase “settlement

agreement” is misguided. Paragraph 11 of the MOU itself refers to “any dispute

relating to the interpretation of this Memorandum of Understanding or the parties’

settlement agreement.” These terms plainly refer to two different documents.

Therefore, the “settlement agreement” referred to in paragraph 11 cannot be the

MOU. While the MOU was signed by all parties, the actual settlement agreement

was not yet finalized. Appellants’ relocation and reliance on it as a means to divest

Blair of jurisdiction was, then, premature; relocation could not have been made

pursuant to the “settlement agreement” because this document did not yet exist.

Accordingly, the trial court did not err in concluding that Blair’s authority to interpret -12-

the parties’ disputes did not terminate when Appellants relocated the fiber optic

cable. Appellants’ fourth assignment of error is also overruled.

{¶38} Based on the above, the parties chose to have Blair interpret both the

MOU and the settlement agreement and vested him with final and binding authority to

resolve any disputes arising from the interpretation of the MOU and/or the drafting of

the settlement agreement. Blair did not exceed his authority in fashioning the

representations and warranties clause, and the trial court did not err in overruling the

motion to enter the terms of settlement accordingly. The trial court did not err when it

concluded that Blair had continuing jurisdiction over the terms of the settlement

agreement. Thus, all of the assignments of error are overruled and the judgment of

the trial court is affirmed.

Donofrio, J., concurs.

DeGenaro, J., concurs in judgment only.