Lucas Contracting, Inc. v. Altisource Portfolio Solutions, Inc.

2016 Ohio 474

• Court: Ohio Court of Appeals
• Decided: February 9, 2016
• Docket: 2015CA00102
• Status: Published

Opinion

[Cite as Lucas Contracting, Inc. v. Altisource Portfolio Solutions, Inc., 2016-Ohio-474.]

COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT

LUCAS CONTRACTING, INC. : JUDGES: : Hon. William B. Hoffman, P.J. Plaintiff - Appellee : Hon. Patricia A. Delaney, J. : Hon. Craig R. Baldwin, J. -vs- : : ALTISOURCE PORTFOLIO : Case No. 2015CA00102 SOLUTIONS, INC. : : Defendant - Appellant : OPINION

CHARACTER OF PROCEEDING: Appeal from the Stark County Court of Common Pleas, Case No. 2014- CV-01361

JUDGMENT: Affirmed

DATE OF JUDGMENT: February 9, 2016

APPEARANCES:

For Plaintiff-Appellee For Defendant-Appellant

SIDNEY N. FREEMAN MICHAEL J. ZBIEGIEN, JR. 12370 Cleveland Avenue, N.W. JENNIFER B. ORR P.O. Box 867 Taft Stettinius & Hollister, LLP Uniontown, Ohio 44685 200 Public Square, Suite 3500 Cleveland, Ohio 44114-2302

ROBERT MCNAMARA McNamara, Demczyk Co., LPA 12370 Cleveland Ave., N.W. P.O. Box 867 Uniontown, Ohio 44685 Stark County, Case No. 2015CA00102 2

Baldwin, J.

{¶1} Defendant-appellant Altisource Portfolio Solutions, Inc. appeals from the

February 23, 2015 and April 23, 2015 Judgment Entries of the Stark County Court of

Common Pleas.

STATEMENT OF THE FACTS AND CASE

{¶2} On June 9, 2014, appellee Lucas Contracting, Inc. brought an action against

Berghorst Enterprises, LLC and Heritage Home Solutions, LLC for statement on an

account, breach of contract, promissory estoppel, implied contract and alter ego liability.

The complaint related to property preservation services that appellee alleged the two had

purchased from appellee. Appellee, in its complaint, alleged that neither Berghorst

Enterprises nor Heritage Home had ever had a separate corporate existence from the

other and that it was owed a total of $65,187.75.

{¶3} On July 29, 2014, appellee filed a motion seeking to add appellant

Altisource Portfolio Solutions, Inc. as a new party defendant. Appellee, in its motion,

alleged that while it had contact with Berghorst Enterprises, LLC and Heritage Homes

Solutions, LLC, the services that appellee had performed on foreclosed properties were

actually ordered by appellant. The trial court granted such motion as memorialized in a

Journal Entry filed on July 29, 2014 and an Amended and Supplemental Complaint

adding appellant as a new party defendant was filed on July 31, 2014. Appellant filed an

answer on October 6, 2014. A pretrial was scheduled for November 10, 2014.

{¶4} The trial court, as memorialized in an Order filed on November 13, 2014,

dismissed the case after it was represented to the court at the November 10, 2014 pretrial Stark County, Case No. 2015CA00102 3

that the matter was settled by agreement of the parties. The trial court ordered the parties

to file a final agreed upon judgment entry approved by all counsel within thirty (30) days.

{¶5} Thereafter, on December 10, 2014, appellee filed a Motion to Enforce

Settlement. Appellant filed a response to the same on December 26, 2014. The trial court

scheduled an oral hearing on such motion for February 6, 2015.

{¶6} The trial court, pursuant to a Judgment Entry filed on February 23, 2015,

found that a full settlement and compromise had been made in this case and instructed

appellee to prepare “a Final Judgment Entry according to the terms that were exchanged

on November 10, 2014 as outlined in this entry and submit it for signatures and to the

Court for approval within thirty (30) days of the date of this Entry.” A Settlement

Agreement approved by the trial court and counsel for appellee, but not for appellant, was

then filed on April 23, 2015.

{¶7} Appellant now raises the following assignments of error on appeal:

{¶8} I. THE TRIAL COURT ERRED AS A MATTER OF LAW IN ITS FEBRUARY

23, 2015 JUDGMENT ENTRY GRANTING LUCAS CONTRACTING’S MOTION TO

ENFORCE SETTLEMENT BECAUSE THERE WAS CLEAR EVIDENCE

DEMONSTRATING THAT THE PARTIES DID NOT INTEND TO BE BOUND UNTIL A

FORMALIZED WRITTEN DOCUMENT WAS SIGNED BY BOTH PARTIES AND

BECAUSE IT ENFORCED A SETTLEMENT AGREEMENT AGAINST AN ENTITY,

ALTISOURCE PORTFOLIO SOLUTIONS, INC., WHO WAS NOT AN INTENDED

PARTY TO ANY ALLEGED SETTLEMENT AGREEMENT.

{¶9} II. THE TRIAL COURT ERRED AS A MATTER OF LAW IN ADOPTING

LUCAS CONTRACTING’S PROPOSED SETTLEMENT ENTRY IN ITS APRIL 23, 2015 Stark County, Case No. 2015CA00102 4

SETTLEMENT ENTRY, BECAUSE IN DOING SO, IT ENFORCED SETTLEMENT

TERMS THAT ARE CONTRADICTORY TO THE VERY TERMS THAT THE COURT

FOUND THE PARTIES HAD AGREED TO IN ITS JUDGMENT ENTRY GRANTING

LUCAS CONTRACTING’S MOTION TO ENFORCE SETTLEMENT.

I

{¶10} Appellant, in its first assignment of error, argues that the trial court erred in

granting appellee’s Motion to Enforce Settlement. Appellant specifically argues that there

was clear evidence showing that the parties did not intend to be bound until a formal

written document was signed by both parties and that the trial court erred in enforcing a

settlement agreement against an entity that was not an intended party to any alleged

settlement agreement.

{¶11} A settlement agreement is a particularized form of a contract. Noroski v.

Fallet, 2 Ohio St.3d 77, 79, 442 N.E.2d 1302 (1982). It is a “contract designed to terminate

a claim by preventing or ending litigation, and * * * such agreements are valid and

enforceable by either party.” 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. If a contract

encompasses the essential terms of the agreement, it is binding and enforceable. Mr.

Mark Corp. v. Rush, Inc., 11 Ohio App.3d 167, 169, 464 N.E.2d 586 (8th Dist.1983). 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.” Oglebay Norton Co.

v. Armco, Inc., 52 Ohio St.3d 232, 235, 556 N.E.2d 515 (1990). The parties must have a

“distinct and common intention that is communicated by each party to the other.” Stark County, Case No. 2015CA00102 5

Champion Gym & Fitness, Inc. v. Crotty, 178 Ohio App.3d 739, 744, 2008-Ohio-5642,

900 N.E.2d 231, ¶ 12.

{¶12} As noted by the court in Klever v. Stow, 13 Ohio App.3d 1, 468 N.E.2d 81

(9th Dist. 1983), a trial court has the authority to conduct a hearing to determine whether

or not a verbal settlement agreement has been reached. The court stated that “when the

parties agree to a settlement offer, this agreement cannot be repudiated by either party,

and the court has the authority to sign a journal entry reflecting the agreement and to

enforce the settlement.” Id at 4. The Ohio Supreme Court has held that “where the

meaning of terms of a settlement agreement is 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.” Rulli v. Fan Co., 79 Ohio St.3d 374, 377,

1997–Ohio–380, 683 N.E.2d 337.

{¶13} As is stated above, a hearing before the trial court was held on February 6,

2015. While the trial court offered to hear testimony from witnesses, the parties agreed to

rest on their filings and submitted exhibits. The parties thus waived their right to an

evidentiary hearing by failing to request such a hearing or to object to the lack of an

evidentiary hearing. Monea v. Campisi, 5th Dist. Stark No.2004CA00381, 2005–Ohio–

5215.

{¶14} At the February 6, 2015 hearing, an e-mailed faxed letter dated November

10, 2014 from appellee’s counsel to appellant’s counsel was admitted as an exhibit. The

letter states as follows: Stark County, Case No. 2015CA00102 6

Confirming our telephone conversations this date, we

tentatively have agreed to settle the case, in principle, as

follows:

1. Altisource will pay Lucas Contracting immediately

the full sum of $30,000;

2. Lucas Contracting will assign to Altisource all

claims, rights and causes of action it may possess

against Berghorst Enterprises, LLC, and Heritage

Home Solutions, LLC; and

3. Lucas Contracting will provide reasonable

assistance to Altisource in pursuing claims

Altisource may wish to bring against Berghorst

Enterprises, LLC. And Heritage Home Solutions,

LLC (but this does not include paying the fees of

attorneys or expenses necessary to any litigation

or collection, and does not include any agreement

to warrant, defend or hold harmless Altisource

with regard to any such actions).

Obviously, all of this is subject to approval of settlement

documents. If you could forward same for my review and

approval as soon as possible it would be appreciated, as time

is of the essence in getting this concluded, and is a material

consideration in my client’s decision to settle. Stark County, Case No. 2015CA00102 7

{¶15} Also admitted as an exhibit was a November 10, 2014 response from

appellant’s counsel to appellee’s counsel stating as follows:

Thank you for the letter. As Jeff Pomeranz [of

Altisource] and I mentioned on the phone, Jeff will send you

the standard settlement and release agreement in the next

day or two. The executed settlement and release agreement

will establish the parties’ respective obligations. In the

meantime, I want to clarify that before Altisource will pay

Lucas Contracting, Lucas must be set up as a vendor in

Altisource’s system (requires a W-9 and other administrative

information such as how to remit payment), in addition to

executing the settlement and release agreement and a

dismissal of the claims. Assuming everything proceeds

smoothly, we anticipate that this process will be completed

within 30 days.

{¶16} On November 12, 2014, appellee received from appellant its proposed

settlement agreement, which was introduced at the February 6, 2015 hearing as an

exhibit. The proposed settlement agreement contained terms that were not mentioned in

either of the November 10, 2014 e-mails. The agreement, for example, contained

language requiring the personal signature of Jennifer Lucas, who was not a party to the

proceedings.

{¶17} At the hearing, appellant’s counsel indicated to the trial court that the

parties’ settlement provided that Altisource Solutions S.a.r.l., which is not a party to this Stark County, Case No. 2015CA00102 8

case, would pay the $30,000.00 “in exchange for execution of Altisource’s

standard…settlement and release agreement, which included execution by a principal of

the company,…” Transcript at 15. Counsel for appellant agreed that there was no specific

discussion about Jennifer Lucas signing personally, but contended that “that’s part of the

standard settlement agreement in a release.” Transcript at 17. Counsel for appellee

indicated that personal liability was intended when the parties exchanged e-mails on

November 10, 2014. However, at the hearing, appellee’s counsel agreed that he never

told appellant’s counsel that personal liability was part of appellant’s standard settlement

agreement. When asked by the trial court why he did not fax the standard settlement

agreement to appellee’s counsel, appellant’s counsel stated that he did not have the

agreement printed up and that he personally had never seen the standard settlement

agreement. As noted by the trial court, “[t]herefore, it appears… that [appellant’s counsel]

was not originally aware that Altisource would try to hold Jennifer Lucas to the terms of

the settlement in her individual capacity.”

{¶18} We find that the trial court did not err by granting the Motion to Enforce

Settlement. Appellee clearly set out the terms of the settlement in its November 10, 2014

e-mail and in its response the same day, appellant never contradicted or challenged the

same. We concur with the trial court that the parties, through their respective e-mails,

agreed to the terms of the settlement. In neither of the November 10, 2014 e-mails, was

any mention made that, as part of the agreement, Jennifer Lucas was to be held

personally responsible. While appellant also argues that the settlement was between

appellant and Altisource Solutions S.a.r.l. and not appellant, which was not a party to the

settlement agreement, there is nothing in the November 10, 2014 e-mails so indicating. Stark County, Case No. 2015CA00102 9

{¶19} Based on the foregoing, appellant’s first assignment of error is, therefore,

overruled.

II

{¶20} Appellant, in its second assignment of error, argues that the trial court erred

in adopting appellee’s proposed settlement agreement in its April 23, 2015 Settlement

Entry. Appellant maintains that the Entry contains provisions that the parties never agreed

on and that were contrary to the trial court’s own findings in its February 23, 2015

Judgment Entry.

{¶21} Appellant first argues that the trial court’s statement in its April 23, 2015

Settlement Entry that “judgment” be granted in favor of appellee and against appellant

improperly constitutes an admission of liability when the parties did not intend such an

admission. We disagree. The trial court, in is April 23, 2015 Settlement Entry, stated

that it found appellee’s Motion to Enforce Settlement to be well-taken and granted

judgment in the amount of $30,000.00. There is no indication of any admission of liability.

{¶22} Appellant also argues that the April 23, 2015 Settlement Entry does not

contain an assignment by appellee of its claims against Berghorst and Heritage. Appellant

notes that the trial court found that this was part of the agreement between the parties.

However, the trial court’s April 23, 2015 Settlement Entry states, in relevant part, as

follows: “It is further Ordered that, conditioned upon, and only at such time as payment in

full of the aforesaid THIRTY THOUSAND AND NO/100 DOLLARS ($30,000.00) is made

by Altisource to Plaintiff, all claims, rights and causes of action that Plaintiff had or may

possess against Berghorst Enterprises, LLC and Heritage Home Solutions, LLC, will

belong to Altisource.” We find that this language constitutes an assignment. Stark County, Case No. 2015CA00102 10

{¶23} Appellant, in its second assignment of error, further argues that the trial

court’s Settlement Entry did not contain a release of appellee’s claims against appellant,

which appellant argues is a standard term found in a settlement agreement. As noted by

appellant, appellee’s counsel, in a November 21, 2014 e-mail to Jeffrey Pomeranz of

Altisource, stated that the “release should be mutual, with both parties releasing the

other;…” However, in a December 2, 2014 response, Pomeranz stated that the release

provision needed to remain “unilateral.” There is nothing in the parties November 10,

2014 exchanged e-mails requiring appellee to release its claims against appellant as part

of the settlement.

{¶24} Appellant’s second assignment of error is, therefore, overruled.

{¶25} Accordingly, the judgment of the Stark County Court of Common Pleas is

affirmed.

By: Baldwin, J.

Hoffman, P.J. and

Delaney, J. concur.