Title: Hartmann v. Duffey

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as Hartmann v. Duffey, 95 Ohio St.3d 456, 2002-Ohio-2486.] 
 
 
 
HARTMANN, APPELLANT, v. DUFFEY ET AL., APPELLEES. 
[Cite as Hartmann v. Duffey, 95 Ohio St.3d 456, 2002-Ohio-2486.] 
Judgments — Interest — Plaintiff who enters into a confidential 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 — R.C. 1343.03(A) and (B), construed. 
(No. 2001-0741 — Submitted March 12, 2002 — Decided June 12, 2002.) 
APPEAL from the Court of Appeals for Stark County, No. 2000CA00239. 
__________________ 
SYLLABUS OF THE COURT 
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. 
__________________ 
 
FRANCIS E. SWEENEY, SR., J. 
{¶1} 
On April 5, 1999, plaintiff-appellant, Christina R. 
Hartmann, filed a medical malpractice action against defendants-appellees 
Jeffrey A. Duffey, M.D., Family Practice Development, Inc., and 
Community Health Care, Inc.  On June 5, 2000, the first day of trial, the 
parties entered into a confidential settlement agreement, and the case was 
dismissed without a formal judgment entry.  Seventeen days later, 
appellant filed a motion to enforce interest on the settlement amount 
pursuant to R.C. 1343.03(A) and (B).  Appellees ultimately delivered the 
settlement check to appellant on June 30, 2000. 
{¶2} 
Pursuant to R.C. 1343.03(B), the trial court denied 
appellant’s motion for interest on the ground that the settlement had not 
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been journalized.  In a split decision, the court of appeals affirmed on 
similar grounds.  The cause is now before the court upon the allowance of 
a discretionary appeal. 
{¶3} 
In this case, we are asked to construe R.C. 1343.03(A) and 
(B) and determine whether a plaintiff who enters into a confidential 
settlement agreement that has not been reduced to judgment is entitled to 
interest on the settlement, and, if so, when that interest begins to accrue. 
{¶4} 
R.C. 1343.03 provides: 
{¶5} 
“(A) In cases other than those provided for in sections 
1343.01 and 1343.02 of the Revised Code, when money becomes due and 
payable upon any bond, bill, note, or other instrument of writing, upon any 
book account, upon any settlement between parties, upon all verbal 
contracts entered into, and upon all judgments, decrees, and orders of any 
judicial tribunal for the payment of money arising out of tortious conduct 
or a contract or other transaction, the creditor is entitled to interest at the 
rate of ten per cent per annum, and no more, unless a written contract 
provides a different rate of interest in relation to the money that becomes 
due and payable, in which case the creditor is entitled to interest at the rate 
provided in that contract. 
{¶6} 
“(B) Except as provided in divisions (C) and (D) of this 
section, interest on a judgment, decree, or order for the payment of money 
rendered in a civil action based on tortious conduct, including, but not 
limited to a civil action based on tortious conduct that has been settled by 
agreement of the parties, shall be computed from the date the judgment, 
decree, or order is rendered to the date on which the money is paid.”  
(Emphasis added.) 
{¶7} 
Appellant argues that pursuant to R.C. 1343.03(A), a 
plaintiff who enters into a confidential settlement agreement is 
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automatically entitled to interest on his or her settlement and that such 
interest becomes “due and payable” upon creation of the settlement debt, 
which she says is the settlement date.  Appellees, however, contend, and 
the majority of the court of appeals found, that R.C. 1343.03(A) has no 
applicability to this case.  Instead, appellees state that R.C. 1343.03(B) is 
the controlling subsection and that under this provision, since no 
judgment, decree, or order was rendered in this case, appellant is 
precluded from obtaining interest. 
{¶8} 
We reject appellees’ position based upon the plain language 
of the statute.  We have repeatedly stated that “if the meaning of a statute 
is clear on its face, then it must be applied as it is written.”  Lake Hosp. 
Sys., Inc. v. Ohio Ins. Guar. Assn. (1994), 69 Ohio St.3d 521, 524, 634 
N.E.2d 611.  Thus, if the statute is unambiguous and definite, there is no 
need for further interpretation.  State ex rel. Herman v. Klopfleisch (1995), 
72 Ohio St.3d 581, 584, 651 N.E.2d 995.  The wording of R.C. 
1343.03(A) is clear.  The statute is written in the conjunctive and 
expressly provides that a creditor is entitled to interest in the following 
situations:  (1) when a bond, bill, note, or other instrument of writing 
becomes due and payable; (2) upon any book account; (3) upon settlement 
between parties; (4) upon verbal contracts entered into; and (5) upon all 
judgments, decrees, and orders of any judicial tribunal for the payment of 
money arising out of tortious conduct or a contract or other transaction.  
Based upon the plain language of the statute, a settlement that has not been 
reduced to judgment clearly falls within the purview of R.C. 1343.03(A), 
and under this subsection, plaintiffs are entitled to interest on such a 
settlement. 
{¶9} 
In contrast, R.C. 1343.03(B) is a more narrow provision 
that is triggered only when a settlement has been reduced to judgment or 
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where there has been a decree or order.  In such a case, interest is 
computed from the date of the judgment, decree, or order.  If we were to 
accept appellee’s interpretation and apply R.C. 1343.03(B) to the instant 
type of case, this would render R.C. 1343.03(A) meaningless as it pertains 
to settlements not reduced to judgment.  Moreover, this result would 
preclude a plaintiff who enters into a confidential settlement agreement 
from collecting interest, since the existence of a judgment, decree, or order 
is a condition precedent to receiving interest under R.C. 1343.03(B).  For 
these reasons, we conclude that R.C. 1343.03(B) has no application to the 
present case.  Instead, we find that R.C. 1343.03(A), which entitles a 
creditor to interest upon settlement, is the controlling provision. 
{¶10} Having decided that interest may arise from a settlement 
not reduced to judgment, we next consider when that interest accrues.  To 
answer this question, we again look at the language of the statute.  
Pursuant to R.C. 1343.03(A), the creditor is entitled to interest “when 
money becomes due and payable.”  Appellant maintains that in the 
absence of a specific “due and payable” date, interest becomes “due and 
payable” on the date of settlement.  Appellant contends that this 
interpretation is consistent with the public policy of promoting prompt 
payment of settlements, of fully compensating the plaintiff, of ensuring 
that the plaintiff receives the use of money that rightfully belongs to her, 
and of preventing a party from benefiting from its own delay. 
{¶11} We agree with the position advanced by appellant.  The 
plain language of R.C. 1343.03(A) states that money becomes due and 
payable “upon any settlement between parties.”  Thus, from this language, 
it is clear that the date of settlement is the accrual date for interest to begin 
to run.  At the point of settlement, a settlement debt is created, and 
plaintiff becomes a creditor entitled to the settlement proceeds.  Thus, the 
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plaintiff is entitled to be compensated for the lapse of time between 
accrual of that right (the date of settlement) and payment. 
{¶12} This conclusion is further supported by the public policy 
reasons behind the award of interest.  In Musisca v. Massillon Community 
Hosp. (1994), 69 Ohio St.3d 673, 676, 635 N.E.2d 358, a case involving 
the issue of when the right to prejudgment interest accrues, we stated that 
“any statute awarding interest has the * * * purpose of compensating a 
plaintiff for the defendant’s use of money which rightfully belonged to the 
plaintiff.”  (Emphasis added.)  Therefore, the entitlement to interest, 
whether 
it 
be 
prejudgment 
interest, 
postjudgment 
interest, 
or 
postsettlement interest, “ ‘is allowed, not only on account of the loss 
which a creditor may be supposed to have sustained by being deprived of 
the use of his money, but on account of the gain being made from its use 
by the debtor.’ ”  Landis v. Grange Mut. Ins. Co. (1998), 82 Ohio St.3d 
339, 342, 695 N.E.2d 1140, quoting Hogg v. Zanesville Canal & Mfg. Co. 
(1832), 5 Ohio 410, 424, 1832 WL 26.  By assessing interest from the date 
of settlement as provided for in R.C. 1343.03(A), we believe that this 
public policy of fully compensating the plaintiff will be achieved. 
{¶13} Accordingly, we hold that 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.  We reverse the judgment of the 
court of appeals and grant appellant’s motion for interest on the settlement 
amount, to run from June 5, 2000, to June 30, 2000. 
Judgment reversed. 
 
MOYER, C.J., DOUGLAS, RESNICK and PFEIFER, JJ., concur. 
 
COOK and LUNDBERG STRATTON, JJ., dissent. 
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COOK, J., dissenting. 
{¶14} I agree with Justice Lundberg Stratton that R.C. 1343.03(B) 
is the relevant provision for determining the date of interest accrual here.  
Inasmuch as this is “a civil action based on tortious conduct,” the 
settlement between these parties more appropriately falls under this 
division and interest would be payable as of the date the trial court entered 
its judgment of dismissal following the parties’ settlement agreement. 
{¶15} Although I would apply R.C. 1343.03(B) in this case, I 
recognize that R.C. 1343.03(A) could apply in an appropriate case.  If the 
settling parties expressly agree to a term specifying the date on which the 
settlement proceeds become “due and payable,” the parties will have 
triggered R.C. 1343.03(A) as the relevant provision governing the 
calculation of interest.  Conversely, if the settlement agreement contains 
no such term, R.C. 1343.03(B) becomes the default provision governing 
the calculation of interest. 
{¶16} The appellant in this case offered no evidence of record that 
the parties agreed to settlement terms specifying a date on which 
settlement proceeds were due and payable.  Absent any proof that such a 
term was part of the parties’ settlement, the trial court correctly denied 
Hartmann’s motion to enforce interest.  I would therefore affirm the 
judgment of the court of appeals. 
 
LUNDBERG STRATTON, J., concurs in the foregoing dissenting opinion. 
__________________ 
 
LUNDBERG STRATTON, J. dissenting. 
{¶17} I dissent from the majority’s interpretation of R.C. 
1343.03(A) and (B). I believe that the majority’s interpretation is based on 
a misreading of this section and renders part of subsection (B) 
meaningless and incapable of ever applying. 
January Term, 2002 
 
 
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{¶18} R.C. 1343.03(A) refers to a “settlement between parties” as 
triggering the accrual of interest.  One could accept the majority’s 
interpretation only if subsection (B) did not exist.  However, subsection 
(B) states: 
{¶19} “Except as provided in divisions (C) and (D) of this 
section, interest on a judgment, decree, or order for the payment of money 
rendered in a civil action based on tortious conduct, including but not 
limited to a civil action based on tortious conduct that has been settled by 
agreement of the parties, shall be computed from the date the judgment, 
decree, or order is rendered to the date on which the money is paid.”  
(Emphasis added.) 
{¶20} The majority misconstrues subsection (B), which refers to a 
settlement arising out of a civil action that has been settled by the parties 
and reduced to a judgment, decree, or order.  The order or judgment could 
simply be the order of dismissal.  There is no requirement that it contain 
the language of the settlement.  But all civil actions that are settled are 
terminated by some entry or order.  That entry triggers the accrual of 
interest. 
{¶21} Since subsection (B) specifically refers to a “civil action 
based on tortious conduct,” it controls over subsection (A), which only 
generally refers to “any settlement between parties” and makes no 
reference to any court action.  It could be any dispute between parties that 
was resolved outside court.  This is logical because there would be no 
“judgment, decree, or order” to start the clock if there were no lawsuit 
filed.  But if a civil action based on tortious conduct is filed, a different 
time frame applies because there is a definite point at which the clock can 
begin to run, i.e., the date of the judgment, decree, or order.  However, 
under the majority’s interpretation, the settlement language of subsection 
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(B) would never apply because once the case was settled, subsection (A) 
would kick in and interest would start.  The legislature surely inserted the 
settlement language in subsection (B) for a purpose and certainly did not 
intend it to be merely window dressing.  The majority’s interpretation 
turns subsection (B) into merely superfluous language; under its version, 
the clock started the moment “settled” was uttered regardless of when the 
entry went on.  A party always would have settled at some point before 
actually putting on the dismissal entry.  As the majority states, “if the 
meaning of a statute is clear on its face, then it must be applied as it is 
written.”  Lake Hosp. Sys., Inc. v. Ohio Ins. Guar. Assn. (1994), 69 Ohio 
St.3d 521, 524, 634 N.E.2d 611.  Thus, if the statute is unambiguous and 
definite, there is no need for further interpretation.  State ex rel. Herman v. 
Klopfleisch (1995), 72 Ohio St.3d 581, 584, 651 N.E.2d 995.  In addition, 
the specific controls over the general, and the legislature has devised a 
specific procedure to apply once a civil action has been filed. 
{¶22} Therefore, I respectfully dissent. 
__________________ 
The Okey Law Firm., L.P.A., Steven P. Okey and Scott A Washam, for 
appellant. 
Hanna, Campbell & Powell, L.L.P., Michael Ockerman, Robert L. Tucker 
and John R. Chlysta, for appellees. 
Allen Schulman, Jr., urging reversal for amicus curiae Ohio Academy of 
Trial Lawyers. 
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