Cales v. Armstrong World Indus., Unpublished Decision (3-28-2003)

CourtOhio Court of Appeals
DecidedMarch 28, 2003
DocketNo. 02CA2851.
StatusUnpublished

This text of Cales v. Armstrong World Indus., Unpublished Decision (3-28-2003) (Cales v. Armstrong World Indus., Unpublished Decision (3-28-2003)) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cales v. Armstrong World Indus., Unpublished Decision (3-28-2003), (Ohio Ct. App. 2003).

Opinion

DECISION AND JUDGMENT ENTRY
{¶ 1} This is an appeal from a Scioto County Common Pleas Court judgment in favor of appellees1 on their motion to enforce a settlement agreement against CertainTeed Corporation, defendant below and appellant herein. The following errors are assigned for our review:

FIRST ASSIGNMENT OF ERROR:

"The court of common pleas erred by refusing to order arbitration of the dispute over the liability of appellant Certainteed Corporation for amounts allocated to but unpaid by another party to the settlement agreement, where the settlement agreement requires arbitration of `any disputes that may arise while carrying out the terms and conditions of this agreement.'"

SECOND ASSIGNMENT OF ERROR:

"The court of common pleas erred by entering judgment against appellant Certainteed Corporation for amounts allocated to but unpaid by another party to the settlement agreement, where the settlement agreement unambiguously both states that each party thereto, including Certainteed Corporation, `shall be liable under this settlement agreement only for its individual share' of the settlement payments and bars the appellees-plaintiffs from seeking to hold certainteed corporation liable for any other company's unpaid share."

{¶ 2} Appellees are part of a group of 1,185 plaintiffs who brought asbestos related lawsuits against various companies in a number of states, including Ohio. Appellant is a member of the Center for Claims Resolution (CCR) which is a non-profit company created in 1988 by various asbestos producers, including appellant and Armstrong World Industries (Armstrong), to handle asbestos related litigation.2 Relations between CCR and its members are governed by a "Producer Agreement Concerning Center for Claims Resolution" (Producer Agreement) which specifies, among other things, that CCR acts as sole agent for its member companies with respect to "settlement, payment or defense of all asbestos-related claims" against those members.

{¶ 3} On June 11, 2000, appellees and CCR entered into a Settlement Agreement which called for each appellee to be paid $2,500 (for a total of $20,000)in settlement of their claims.3 Later that year, Armstrong filed bankruptcy and did not fund its share of those proceeds. On February 15, 2001, CCR sent a check to appellees for $10,426.72 representing the amount of the settlement, less the share owed by Armstrong. Appellees negotiated that check.

{¶ 4} On March 20, 2001, appellees asked the trial court to enforce the previous Settlement Agreement and to order appellant to pay them the remaining $9,573.28 due under the agreement. Appellant filed a Notice of Removal to remove the matter to the United States District Court on grounds that appellant had a right of indemnification against Armstrong for any recovery by appellees, thus affecting Armstrong's bankruptcy and giving the federal courts jurisdiction under Section 1452(a), Title 28, U.S.Code. On July 17, 2001, the District Court declined to accept jurisdiction and returned the case to the Scioto County Common Pleas Court.

{¶ 5} Subsequently, appellant filed a motion to stay the proceedings and to compel arbitration of appellees' claim. Appellant's motion was based on a provision in the Settlement Agreement that called for the submission of disputes to binding arbitration. Appellant argued that this provision, as well as the requirements of the Federal Arbitration Act, codified at Section 1 et seq. of Title 9, U.S. Code (FAA), mandated a stay of appellees' motion to enforce the Settlement Agreement and a submission of their claims to arbitration. Appellees argued that nothing should be submitted to arbitration because the Settlement Agreement is unambiguous and required appellant to pay the remainder of the settlement proceeds.

{¶ 6} The trial court filed its decision and judgment entry on August 26, 2002, and found in favor of appellees. Although the Settlement Agreement had a broad arbitration provision subject to enforcement under the FAA, the trial court held that the Settlement Agreement's unambiguous language allowed appellees to enforce the terms of the settlement against the remaining parties to the agreement (i.e. appellant). Thus, the trial court refused to send the matter to arbitration and further ordered appellant to pay the balance of the $2,500 settlement to each appellee.4 This appeal followed.5

I
{¶ 7} Before we review the merits of appellant's assignments of error, we first pause to consider the appropriate standard of review. The trial court's August 26, 2002 judgment enforced the Settlement Agreement. Because this matter is, in essence, a question of contract law, we must determine whether the trial court's order is based on an erroneous standard or a misconstruction of the law. Continental W.Condominium Unit Owners Assn. v. Howard E. Ferguson, Inc. (1996),74 Ohio St.3d 501, 502, 660 N.E.2d 431. We thus afford no deference whatsoever to the trial court's decision and conduct our own independent review to ascertain whether the trial court properly enforced the Settlement Agreement. Id.; also see Leonhart Gas Oil, Inc. v.Boyer (Apr. 4, 2000), Richland App. No. 99CA69-2; Route 46 Development,Inc. v. Sharpe (Jun. 24, 1999), Mahoning App. No. 98CA154.

{¶ 8} Appellees note in their brief, however, that appellate courts typically apply an abuse of discretion standard when reviewing trial court decisions on motions to stay proceedings and refer a matter to arbitration. See e.g. Carter Steel Fabricating Co. v. DanisBldg. Constr. Co. (1998), 126 Ohio App.3d 251, 254, 710 N.E.2d 299;Harsco Corp. v. Crane Carrier Co. (1997), 122 Ohio App.3d 406, 410,701 N.E.2d 1040; Giltner v. Mitchell, Summit App. No. 21039, 2002-Ohio-5771, at ¶ 11. They assert that we should, likewise, apply an abuse of discretion standard in the instant case at least to that part of the trial court's judgment which denied the request to stay the proceedings and to compel arbitration of this dispute.6 We are not persuaded.

{¶ 9} The case sub judice is distinguishable from the cases that appellees cite because the judgment herein did not simply deny appellant's motion to compel arbitration. Rather, the trial court denied the motion in the larger context of construing and enforcing the Settlement Agreement. This brings us within the ambit of Continental Condominium, supra. We further note that when courts review orders that enforce settlement agreements, the Ohio Supreme Court, as well as other appellate courts, have rejected the application of the abuse of discretion standard. See Continental Condominium, supra at 502; also see NorthHampton Day Care Learning Center, Inc. v. Ohio Dept. of HumanServices (Apr. 4, 1997), Clark App. No. 96-CA-20. Thus, we will review the trial court's August 26, 2002 judgment to determine if the court erred as a matter of law, not whether the court abused its discretion.

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Cales v. Armstrong World Indus., Unpublished Decision (3-28-2003), Counsel Stack Legal Research, https://law.counselstack.com/opinion/cales-v-armstrong-world-indus-unpublished-decision-3-28-2003-ohioctapp-2003.