Case Title: Layne v. Progressive Preferred Ins. Co.

Citation: 2004-Ohio-6597

Docket Number: 20031447

State: ohio

Court: Ohio Supreme Court

Date: 2004-12-15T00:00:00Z

Document:
[Cite as Layne v. Progressive Preferred Ins. Co., 104 Ohio St.3d 509, 2004-Ohio-6597.] 
 
 
LAYNE, APPELLANT, v. PROGRESSIVE PREFERRED INSURANCE COMPANY, 
APPELLEE. 
[Cite as Layne v. Progressive Preferred Ins. Co., 104 Ohio St.3d 509, 2004-
Ohio-6597.] 
Judgments – Interest – R.C. 1343.03(A) – Interest payable from date of settlement 
agreement until settlement amount paid – Written settlement agreement 
containing integration clause negates earlier oral settlement agreement 
for purposes of calculating interest. 
(No. 2003-1447 — Submitted June 9, 2004 — Decided December 15, 2004.) 
APPEAL from the Court of Appeals for Stark County, Nos. 2002CA00327 and 
2002CA00335, 2003-Ohio-3575. 
 
O’CONNOR, J. 
{¶ 1} This case arises from an underlying suit brought by appellant, 
Allen R. Layne, against appellee, Progressive Preferred Insurance Company, 
seeking damages allegedly resulting from an automobile accident involving 
Layne and one of Progressive’s insureds.  A pretrial conference was held in that 
case on October 31, 2000.  Although the parties differ on the nature and extent of 
the understanding reached at that pretrial conference, they agree that the parties’ 
attorneys orally agreed to settle the case for $12,500.  One week later, on 
November 7, 2000, Progressive’s counsel sent Layne’s counsel a settlement check 
in the amount of $12,500, a written agreement for Layne to sign, and a stipulation 
for dismissal and judgment entry.  The agreement contained an integration clause 
that read: “[N]o promise, inducement or agreement not herein expressed has been 
made to [Layne], and this release contains the entire agreement between the 
parties hereto.” 
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{¶ 2} On November 15, 2000, Layne signed the agreement, striking 
through an indemnification provision.  Layne’s attorney signed the stipulation and 
returned the documents to Progressive.  The stipulation was signed by the trial 
judge and filed on November 27, 2000. 
{¶ 3} More than 18 months later, on June 12, 2002, Layne filed the case 
sub judice seeking statutory interest under R.C. 1343.03(A) on the $12,500 
settlement for the period between October 31, 2000 and November 7, 2000, which 
would amount to approximately $24.  Layne alleged that the parties had entered 
into an oral settlement agreement on October 31 and that the settlement amount 
was due and payable on that day.  He argued that he was entitled to interest on the 
$12,500 for the seven days between the oral agreement and his receipt of 
Progressive’s check.  Layne amended his complaint two days later, adding class 
action allegations and a claim for declaratory judgment. 
{¶ 4} Progressive filed an answer denying the material allegations of 
Layne’s complaint and denying that the settlement was entered into on October 
31, 2000.  Progressive argued that the settlement agreement was not formed until 
November 15, 2000, when Layne signed the written agreement. 
{¶ 5} Both parties filed motions for summary judgment.  The trial court 
denied Layne’s motion for class certification, denied Progressive’s motion for 
summary judgment, and granted Layne’s motion for summary judgment and 
awarded statutory interest on the settlement.  Progressive appealed from the entry 
of summary judgment in Layne’s favor.  Layne separately appealed from the 
denial of his motion for class certification.  The appellate court addressed the 
appeals in one opinion. 
{¶ 6} The appellate court reversed the trial court’s grant of summary 
judgment and award of interest to Layne.  The court determined that the 
November 15 written agreement signed by Layne contained an integration clause 
that nullified any prior oral agreement that may have existed between the parties.  
January Term, 2004 
3 
Having determined that Layne’s argument for interest was without merit, the 
court held that Layne was not a member of the class he sought to certify.  The trial 
court’s denial of class certification was accordingly affirmed. 
{¶ 7} This case is now before us pursuant to our acceptance of Layne’s 
discretionary appeal. 
{¶ 8} Layne’s primary argument is that under R.C. 1343.03(A) the 
obligation to pay interest on a settlement is triggered on the settlement date, not 
the date a release of claims is signed.  Layne relies upon our holding in Hartmann 
v. Duffey, 95 Ohio St.3d 456, 2002-Ohio-2486, 768 N.E.2d 1170, in which we 
stated, “Pursuant to R.C. 1343.03(A), a plaintiff who enters into a settlement 
agreement that has not been reduced to judgment is entitled to interest on the 
settlement, which becomes due and payable on the date of settlement.”  Id. at 
syllabus.  Layne asserts that the appellate court’s decision in this case flouted our 
holding in Hartmann.  We disagree. 
{¶ 9} Layne’s assertion is misguided because it ignores a fundamental 
factual difference between Hartmann and this case.  In Hartmann, it was 
undisputed that the parties had entered into a confidential settlement agreement on 
the first day of trial.  Hartmann stands for the proposition that under R.C. 
1343.03(A), interest begins to accrue on the settlement date.  It does not speak to 
the determination of what constitutes the settlement date, which is the primary 
focus of this case. 
{¶ 10} Layne urges this court to hold that he and Progressive entered into 
an agreement on October 31, 2000, and characterizes the November 15 agreement 
as a mere “release of claims.”  Progressive counters that the appellate court 
correctly held that the integration clause in the November 15 written agreement 
nullifies any prior oral agreement between the parties; that, therefore, no 
settlement agreement could have existed before that date; and that because Layne 
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had been paid the settlement amount on November 7, he was entitled to no 
interest under R.C. 1343.03(A). 
{¶ 11} We agree with Progressive and the appellate court that the 
integration clause in the November 15 agreement nullified the alleged October 31 
oral agreement between the parties.  “ ‘When two parties have made a contract 
and have expressed it in a writing to which they have both assented as the 
complete and accurate integration of that contract, evidence, whether parol or 
otherwise, of antecedent understandings and negotiations will not be admitted for 
the purpose of varying or contradicting the writing.’ ”  Ed Schory & Sons v. 
Society Natl. Bank (1996), 75 Ohio St.3d 433, 440, 662 N.E.2d 1074, quoting 3 
Corbin, Corbin on Contracts (1960) 357, Section 573.  Layne argues that when a 
release of claims containing an integration clause is silent or ambiguous on the 
issue, parol evidence may be offered to show the date of contracting.  But the 
November 15 agreement is neither silent nor ambiguous as to the date of 
settlement.  The November 15 agreement lists only November 15 as the date of 
agreement and makes no mention of any prior date of agreement.  The integration 
clause only adds to Layne’s problem with this argument – not only does the 
November 15 agreement fail to mention any other date of agreement between the 
parties, but it also bars the acknowledgment of any other such agreement that may 
have existed. 
{¶ 12} Layne cautions that upholding the appellate court’s decision would 
have “sweeping consequences” that would undermine the ability to settle 
disputes.  We do not doubt that settlements are often orchestrated in the manner 
employed here, nor do we hold that plaintiffs who resolve disputes in this manner 
are absolutely precluded from obtaining interest on settlement amounts until a 
release of claims is signed.  Rather, we hold fast to our statement in Hartmann 
that the accrual of interest from the date of settlement best serves the “public 
policy of promoting prompt payment of settlements, of fully compensating the 
January Term, 2004 
5 
plaintiff, of ensuring that the plaintiff receives the use of money that rightfully 
belongs to [him or] her, and of preventing a party from benefiting from its own 
delay.”  Id., 95 Ohio St.3d 456, 2002-Ohio-2486, 768 N.E.2d 1170, ¶ 10. 
{¶ 13} Further, the parties to an oral agreement such as this one must be 
responsible for ensuring that the date of settlement, and the due and payable date, 
if different, are negotiated and agreed upon.  Layne did not strike or modify the 
integration clause, nor did he negotiate beforehand for a certain date on which 
interest would begin to accrue.  He struck only the indemnification clause and 
chose not to negotiate any other term of the agreement.  Instead, he signed a 
written release of claims on November 15 that included an integration clause 
nullifying the October 31 oral agreement.  Layne is consequently not entitled to 
the roughly $24 of interest he seeks. 
{¶ 14} Having determined that the appellate court decision on the motions 
for summary judgment was correct, we conclude that Layne’s proposition of law 
regarding the class certification is moot. 
Judgment affirmed. 
 
MOYER, C.J., LUNDBERG STRATTON and O’DONNELL, JJ., concur. 
 
PFEIFER, J., concurs with separate opinion. 
 
RESNICK, J., concurs in judgment only. 
 
F.E. SWEENEY, J., dissents. 
__________________ 
 
PFEIFER, J., concurring. 
{¶ 15} I concur that the integration clause in the written agreement in this 
case nullified the prior oral agreement between the parties.  The court’s holding 
here is thus consistent with our holding in Hartmann v. Duffey, 95 Ohio St.3d 
456, 2002-Ohio-2486, 768 N.E.2d 1170, syllabus, that “a plaintiff who enters into 
a settlement agreement that has not been reduced to judgment is entitled to 
interest on the settlement, which becomes due and payable on the date of 
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settlement.”  In the future, settling parties should be aware of what they are giving 
up in signing an integration clause. 
{¶ 16} I would have used this case to institute a permanent, workable rule 
for the calculation of interest on settlements.  The clock should not run on interest 
payments at the moment the last party says “O.K.”  Interest should accumulate on 
settlement amounts after a reasonable time has passed for administrative 
activities.  This court should impose a seven-day period for the payment of settled 
claims without the calculation of interest.  After that seven-day period, a settling 
payor would be liable for interest calculated back to the day of settlement.  This 
rule would recognize the role of settlements in the administration of justice, allow 
for the practical realities of paperwork, and encourage cases to be settled and 
debts paid in an orderly manner. 
__________________ 
The Okey Law Firm, L.P.A., Steven P. Okey; Landskroner Grieco, Ltd., 
and Jack Landskroner; Lerach, Coughlin, Stoia, Geller, Rudman & Robbins, 
L.L.P., Frank J. Janacek Jr., Kevin K. Green, and Timothy Blood, for appellant. 
 
Baker & Hostetler, L.L.P., Ernest E. Vargo, Ronald S. Okada, Brett A. 
Wall, and Bridget M. Brennan, for appellee. 
 
Allen Schulman Jr. and Edward A. Icove, urging reversal on behalf of 
amici curiae Ohio Academy of Trial Lawyers and National Association of 
Consumer Advocates. 
 
Frost Brown Todd L.L.C., Douglas R. Dennis and Maureen P. Haney, 
urging affirmance on behalf of amicus curiae Ohio Association of Civil Trial 
Attorneys. 
 
Thompson Hine, L.L.P., and Alan F. Berliner, urging affirmance on behalf 
of amicus curiae Property Casualty Insurers Association of America. 
January Term, 2004 
7 
 
Eastman & Smith Ltd. and M. Charles Collins, urging affirmance on 
behalf of amici curiae National Union Fire Insurance Company of Pittsburgh, PA 
and Commerce & Industry Insurance Company. 
 
Baker & Hostetler, L.L.P., Mark A. Johnson and Rodger L. Eckelberry, 
urging affirmance on behalf of amici curiae Ohio Insurance Institute, State Farm 
Mutual Automobile Insurance Company, Cincinnati Insurance Company, and 
Westfield Insurance Company. 
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