Title: Kostelnik v Helper

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as Kostelnik v Helper, 96 Ohio St.3d 1, 2002-Ohio-2985.] 
 
 
KOSTELNIK, EXR., APPELLANT, v. HELPER ET AL., APPELLEES. 
[Cite as Kostelnik v. Helper, 96 Ohio St.3d 1, 2002-Ohio-2985.] 
Civil actions — Wrongful death — Settlement agreement not enforceable, when. 
(No. 2000-2236 — Submitted December 12, 2001 — Decided July 3, 2002.) 
APPEAL from the Court of Appeals for Cuyahoga County, No. 76809. 
__________________ 
LUNDBERG STRATTON, J. 
{¶1} 
On June 9, 1995, appellant, Michael R. Kostelnik, Jr., as executor 
of the estate of Jacqueline M. Kostelnik, filed a wrongful-death action against 
appellee Steven D. Helper, M.D., and appellee Meridia Hillcrest Hospital.  The 
complaint alleged that Jacqueline M. Kostelnik’s death was proximately caused 
by the negligence of Dr. Helper and Meridia Hillcrest Hospital.  The trial was set 
for September 29, 1997.  However, on that day, in the presence of the trial judge, 
Kostelnik agreed to settle the case against Dr. Helper and Hillcrest Hospital.  
Accordingly, the parties filed a “Stipulation for Dismissal and Judgment Entry,” 
which read, “Settled and Dismissed with prejudice at Defendant’s costs.  No 
record.”  The judge and all the parties signed the entry. 
{¶2} 
On September 30, 1997, counsel for Hillcrest Hospital sent a letter 
to Kostelnik confirming that Hillcrest was to pay $100,000 to settle the case, 
along with a release to be executed in exchange for the payment.  On October 8, 
1997, counsel for Dr. Helper sent a release for Kostelnik to execute in 
contemplation of a $1,100,000 payment to Kostelnik from Dr. Helper’s insurer, 
P.I.E. 
{¶3} 
On December 11, 1997, the probate court approved the settlement 
and distribution of the proceeds.  On that same day, Kostelnik executed and 
returned the release to Dr. Helper and sought to collect the $1,100,000 from P.I.E.  
SUPREME COURT OF OHIO 
2 
However, Kostelnik was unsuccessful in these collection efforts, and on 
December 15, 1997, by order of the Franklin County Court of Common Pleas, 
P.I.E. was placed under the control of the Superintendent of the Department of 
Insurance pursuant to the provisions of R.C. Chapter 3903 due to P.I.E.’s 
financial problems.  The order also stayed all actions in which P.I.E. was 
obligated to defend a party. 
{¶4} 
On December 23, 1997, Kostelnik filed a motion for relief from 
the September 29, 1997 settlement entry as to Dr. Helper only and for judgment 
nunc pro tunc against Dr. Helper only in the amount of $1,100,000.  Dr. Helper 
opposed the motion, arguing that the pending liquidation of P.I.E. required that 
the case be stayed.  On January 13, 1998, the trial judge stayed consideration of 
Kostelnik’s motion for relief from judgment pursuant to the P.I.E. stay. 
{¶5} 
On February 4, 1999, after the stay against P.I.E. was lifted, the 
trial court placed the case back on the active docket. 
{¶6} 
On May 14, 1999, Kostelnik withdrew his motion for relief from 
judgment and moved the court to reduce the settlement to a judgment against Dr. 
Helper and Hillcrest Hospital jointly and severally in the amount of $1,200,000.  
Both Hillcrest Hospital and Dr. Helper opposed Kostelnik’s motion to enforce the 
judgment jointly and severally.  Hillcrest Hospital also moved the court to enforce 
the settlement against it in the amount of $100,000 and against Dr. Helper in the 
amount of $1,100,000.  Dr. Helper filed a brief in opposition, arguing that his 
settlement was predicated upon the understanding that he was covered by liability 
insurance that would pay the settlement.  Thus, Dr. Helper requested that the court 
find that the settlement was null and void due to P.I.E.’s insolvency or 
alternatively that he may satisfy his settlement obligation by paying $300,000 
available from the Ohio Insurance Guarantee Association. 
{¶7} 
On July 27, 1999, the trial court held an evidentiary hearing to 
consider the two motions to enforce the settlement agreement.  All the parties 
January Term, 2002 
3 
attended and argued the positions set out in their briefs.  On August 2, 1999, the 
trial court issued an entry that stated: 
{¶8} 
“Plaintiff’s motion to reduce settlement to judgment against 
defendants jointly and severally is denied.  Defendant Meridia Hillcrest Hospital’s 
motion to enforce settlement is denied.  This case is set for trial 11-17-99 at 9 
a.m.” 
{¶9} 
Kostelnik appealed, arguing that the total settlement should have 
been jointly and severally enforced against Hillcrest Hospital and Dr. Helper.  
Hillcrest Hospital cross-appealed, arguing that the judgment should have been 
enforced against Hillcrest Hospital in the amount of $100,000 only.  Dr. Helper 
did not participate in the appeal.  The appellate court affirmed the trial court’s 
judgment, finding that the parties never agreed to joint and several liability and 
finding that there was no meeting of the minds as to the terms of the settlement. 
{¶10} This matter is before this court pursuant to the allowance of a 
discretionary appeal by Kostelnik. 
{¶11} The issue before this court is whether an enforceable settlement 
agreement exists and, if so, what its terms are.  Upon examination of the record, 
we find that there is an enforceable settlement agreement whereby Kostelnik 
settled with Hillcrest Hospital for $100,000 and separately with Dr. Helper for 
$1,100,000. 
{¶12} Initially we address the arguments of Dr. Helper before this court. 
Dr. Helper filed a brief with this court arguing that “[n]either the briefs of 
Appellant in the trial court and Court of Appeals nor the lower court opinions 
address the issue of whether Dr. Stephen Helper would be personally responsible 
if the settlement agreement entered into by the P.I.E. Mutual Insurance Company 
on behalf of Dr. Helper and the appellant was enforceable” and thus “it is waived 
and cannot be decided by this Court.”  Dr. Helper goes on to argue that if the 
SUPREME COURT OF OHIO 
4 
settlement agreement was enforceable, it can be enforced only against P.I.E.’s 
liquidator, and not against Dr. Helper personally. 
{¶13} At the evidentiary hearing before the trial court to consider 
Kostelnik’s and Hillcrest Hospital’s motions to enforce the settlement agreement, 
Dr. Helper argued that his agreement to settle with Kostelnik was contingent upon 
P.I.E. paying the $1,100,000 on his behalf, and therefore, due to P.I.E.’s 
insolvency, the settlement could not be enforced against Dr. Helper personally.  
The trial court issued an entry that merely denied both motions to enforce the 
settlement agreement without comment and set the case for trial.  The trial court 
did not address Dr. Helper’s issues.  A motion not expressly decided by a trial 
court when the case is concluded is ordinarily presumed to have been overruled.  
State ex rel. V Cos. v. Marshall (1998), 81 Ohio St.3d 467, 469, 692 N.E.2d 198. 
{¶14} Both Kostelnik’s appeal and Hillcrest Hospital’s cross-appeal 
included Dr. Helper as a party to the settlement agreement.  However, Dr. Helper 
did not file a cross-appeal, and thus he failed to preserve his argument that his 
settlement was contingent upon P.I.E.’s paying the $1,100,000.  By failing to 
appeal these issues to the appellate court, Dr. Helper failed to preserve for appeal 
the arguments that he now attempts to make in this court. 
{¶15} It is preferable that a settlement be memorialized in writing.  
Pawlowski v. Pawlowski (1992), 83 Ohio App.3d 794, 798-799, 615 N.E.2d 1071.  
However, an oral settlement agreement may be enforceable if there is sufficient 
particularity to form a binding contract.  Spercel v. Sterling Industries, Inc. 
(1972), 31 Ohio St.2d 36, 39, 60 O.O.2d 20, 285 N.E.2d 324. Terms of an oral 
contract may be determined from “words, deeds, acts, and silence of the parties.”  
Rutledge v. Hoffman (1947), 81 Ohio App. 85, 36 O.O. 405, 75 N.E.2d 608, 
paragraph one of the syllabus; see, also, Ford v. Tandy Transp., Inc. (1993), 86 
Ohio App.3d 364, 380, 620 N.E.2d 996. 
January Term, 2002 
5 
{¶16} “A contract is generally defined as a promise, or a set of promises, 
actionable upon breach.  Essential elements of a contract include an offer, 
acceptance, contractual capacity, consideration (the bargained for legal benefit 
and/or detriment), a manifestation of mutual assent and legality of object and of 
consideration.”  Perlmuter Printing Co. v. Strome, Inc. (N.D.Ohio 1976), 436 
F.Supp. 409, 414.  A meeting of the minds as to the essential terms of the contract 
is a requirement to enforcing the contract.  Episcopal Retirement Homes, Inc. v. 
Ohio Dept. of Indus. Relations (1991), 61 Ohio St.3d 366, 369, 575 N.E.2d 134. 
{¶17} “To constitute a valid settlement agreement, the terms of the 
agreement must be reasonably certain and clear,” and if there is uncertainty as to 
the terms then the court should hold a hearing to determine if an enforceable 
settlement exists.  Rulli v. Fan Co. (1997), 79 Ohio St.3d 374, 376, 377, 683 
N.E.2d 337.  However, “[a]ll agreements have some degree of indefiniteness and 
some degree of uncertainty.  In spite of its defects, language renders a practical 
service.  In spite of ignorance as to the language they speak and write, with 
resulting error and misunderstanding, people must be held to the promises they 
make.”  1 Corbin on Contracts (Perillo Rev.Ed.1993) 530, Section 4.1. 
{¶18} None of the parties has ever disputed that Kostelnik initially agreed 
to accept a total of $1,200,000 to settle this case with Hillcrest Hospital and Dr. 
Helper.  The only issue is whether the $1,200,000 settlement was to impose joint 
and several liability or was merely the sum of two separate settlements. 
{¶19} A letter from counsel for Hillcrest Hospital confirming the 
settlement agreement stated:  
{¶20} “This will formally confirm the agreement * * * in the sum of 
$1,200,000.  As I am sure you are aware the breakdown of this settlement is 
$1,100,000 which will be paid by PIE on behalf of Dr. Stephen Helper and 
Hillcrest Hospital will contribute $100,000.  Further, with respect to the 
settlement please find enclosed that which is below described: 
SUPREME COURT OF OHIO 
6 
{¶21} “1. 
Full and Final Release for Hillcrest Hospital only in the 
sum of $100,000.” 
{¶22} Relying on Wallace v. Jewell (1871), 21 Ohio St. 163, Kostelnik 
asserted that two offerors who jointly promise to pay a sum of money in 
settlement are as a matter of law jointly and severally liable to the amount 
promised.  Kostelnik claims that Hillcrest Hospital’s letter’s reference to “the 
agreement” “in the sum of $1,200,000” was evidence that Hillcrest Hospital and 
Dr. Helper made a single agreement, thereby making them jointly and severally 
liable for the $1,200,000 by operation of law.  Wallace is clearly distinguishable 
from this case. 
{¶23} In Wallace, several persons signed a promissory note for $2,000.  
Subsequently, another party also signed the note as maker. The payee of the note 
argued that because the note stated, “I promise to pay * * *,” liability went only to 
the first party to sign, the second party to sign was merely a surety, and thus the 
addition was not a material alteration.  (Emphasis added.)  The court disagreed 
and held that the pronoun “I” in the phrase “I promise to pay” did not relieve the 
second party from joint and several liability to the note because “I” represented 
the signers collectively and severally. 
{¶24} In Wallace, there was a note signed by two parties for a single sum 
of money.  In this case, there is no written contract and the evidence establishes 
that the parties agreed to pay different amounts.  Therefore, we find that Wallace 
is not on point. 
{¶25} Kostelnik further argues that the letter’s statement that Hillcrest 
Hospital would “contribute” $100,000 to settle the case was evidence of a 
contribution agreement with joint and several liability.  The mere fact that the 
word “contribute” was used in the letter is insufficient, as a matter of law, to 
prove that the parties intended joint and several liability. 
January Term, 2002 
7 
{¶26} Contrary to Kostelnik’s assertions, we find that the letter 
established that Hillcrest Hospital and Dr. Helper reached separate settlements 
with Kostelnik.  Notably, the letter never stated that the settlement imposed joint 
and several liability.  Rather, it indicated that Dr. Helper had settled for 
$1,100,000 and Hillcrest Hospital had settled for $100,000. 
{¶27} The release for Hillcrest Hospital that accompanied the settlement 
confirmation letter and the check for $100,000 would have discharged Hillcrest 
Hospital from liability upon its payment of $100,000.  Dr. Helper’s release would 
have discharged him from liability upon payment of $1,100,000 from P.I.E.  
Neither release was contingent upon a total payment of $1,200,000. 
{¶28} Kostelnik never objected to the terms of these releases.  Instead, 
Kostelnik sought approval of the settlement and distribution of the proceeds from 
the probate court.  In fact, upon the probate court’s approval, Kostelnik signed 
Helper’s release and tendered it to Dr. Helper and attempted to collect the 
$1,100,000.  Hillcrest Hospital maintains that Kostelnik still has possession of 
both Hillcrest’s check and release although Kostelnik has not cashed the check.  
Kostelnik did not dispute this assertion.   
{¶29} Finally, Kostelnik’s December 23, 1997 motion for relief from 
judgment sought relief from the September 29, 1997 settlement “against 
Defendant Dr. Helper only” in the amount of “One Million One Hundred 
Thousand Dollars ($1,100,000).”  If Kostelnik believed that the settlement had 
imposed joint and several liability, then he would have sought relief from the 
judgment in the amount of $1,200,000. 
{¶30} Kostelnik argues that his motion for relief from judgment merely 
represented an effort to collect from Dr. Helper in light of P.I.E.’s financial 
troubles.  Irrespective of Kostelnik’s argument, his motion for relief from 
judgment is evidence that he settled with Dr. Helper for $1,100,000 only, and not 
$1,200,000 jointly and severally. 
SUPREME COURT OF OHIO 
8 
{¶31} The letter, releases, and Kostelnik’s actions establish that 
Kostelnik settled with Hillcrest Hospital for $100,000 and that $1,100,000 was 
Dr. Helper’s separate obligation.  “Part performance under an agreement may 
remove uncertainty and establish that a contract enforceable as a bargain has been 
performed.”  1 Restatement of the Law 2d, Contracts (1981), Section 34(2). 
{¶32} If Kostelnik wanted the settlement to impose joint and several 
liability, that terminology should have been placed on the record or memorialized 
in some writing at the time the case was settled.  It was not, and under the 
evidence and circumstances in this case, we will not impose such a term on this 
settlement.  Kostelnik’s motion to enforce the settlement jointly and severally 
appears to be a belated effort to reach Hillcrest Hospital’s deep pocket in light of 
the insolvency of Dr. Helper’s insurer. 
{¶33} Therefore, we find that there is no evidence to prove that the 
settlement imposed joint and several liability on Hillcrest Hospital and Dr. 
Helper.  However, there is sufficient evidence to establish as a matter of law that 
Kostelnik settled with Dr. Helper for $1,100,000 and with Hillcrest Hospital for 
$100,000.  Thus, we hold that the appellate court erred in affirming the judgment 
of the trial court.  Accordingly, we reverse the judgment of the court of appeals 
and remand the cause to the trial court with instructions to enforce the settlement 
agreement against Dr. Helper for $1,100,000 and against Hillcrest Hospital for 
$100,000.   
 
Judgment reversed 
and cause remanded. 
 
MOYER, C.J., and PFEIFER, J., concur. 
 
COOK, J., concurs in judgment. 
 
DOUGLAS, RESNICK and F.E. SWEENEY, JJ., concur in part and dissent in 
part. 
__________________ 
January Term, 2002 
9 
FRANCIS E. SWEENEY, SR., J., concurring in part and dissenting in 
part. 
{¶34} I agree with the majority’s conclusion that the parties entered into 
a valid settlement agreement.  However, I respectfully dissent from that part of 
the decision that holds that there is no evidence to impose joint and several 
liability on appellees Steven D. Helper, M.D., and Meridia Hillcrest Hospital. 
{¶35} The majority finds that the appellees reached separate settlements 
with Kostelnik.  Yet I believe the evidence shows otherwise.  In fact, Hillcrest 
Hospital acknowledged in its letter to plaintiff’s counsel that the parties entered 
into a single settlement agreement when it stated:  “This will formally confirm the 
agreement reached * * * in the sum of One Million Two Hundred Thousand 
Dollars ($1,200,000).  * * *  Further with respect to the settlement, please find 
enclosed [the release for Hillcrest Hospital for $100,000].”  (Emphasis added.)   
{¶36} Despite this clear language, the majority believes that the 
defendants settled separately with Kostelnik and drafted separate releases 
accordingly.  In my opinion, the fact that the defendants agreed to pay separate 
amounts to Kostelnik and receive separate releases does not support the 
majority’s conclusion that separate agreements were reached.  Instead, this simply 
shows that at the time of settlement the defendants agreed between themselves as 
to the proportion of money each would contribute toward the single settlement of 
$1,200,000. 
{¶37} Further, both defense counsel for Hillcrest Hospital and for Dr. 
Helper conceded that the defendants were contributing to the single settlement.  
In particular, Hillcrest Hospital stated in its letter that it would “contribute” 
$100,000 toward the full settlement amount.  At the evidentiary hearing on 
plaintiff’s motion to reduce the settlement to judgment, defense counsel for Dr. 
Helper advised the court that “a settlement was reached where contributions were 
being made on behalf of the respective defendants.”  (Emphasis added.)  The 
SUPREME COURT OF OHIO 
10 
majority finds that the use of the word “contribute” is insufficient to prove that the 
parties intended joint and several liability.  However, I disagree with the majority 
on this point. 
{¶38} Contribution is a term that is regularly employed in the context of 
joint and several liability.  See, e.g., Motorists Mut. Ins. Co. v. Huron Rd. Hosp. 
(1995), 73 Ohio St.3d 391, 653 N.E.2d 235.  According to Black’s Law 
Dictionary (7th Ed.1999) 329, “contribution” means:  “1.  The right that gives one 
of several persons who are liable on a common debt the ability to recover ratably 
from each of the others when that one person discharges the debt for the benefit of 
all; the right to demand that another who is jointly responsible for a third party’s 
injury supply part of what is required to compensate the third party.  * * *  3.  The 
actual payment by a joint tortfeasor of a proportionate share of what is due.”  
Thus, in my opinion, the fact that defense counsel chose to use the term 
“contribute” in confirming and describing the settlement is highly relevant. 
{¶39} Moreover, the affidavit of plaintiff’s counsel, attached to his 
motion to reduce settlement to judgment, is further evidence illustrating the 
circumstances under which the parties settled the case.  In this affidavit, plaintiff’s 
counsel averred that he negotiated for and received a single agreement, payable 
by both defendants, that he did not enter into separate negotiations with either of 
the defendants, that during the course of negotiations, plaintiff’s counsel’s only 
concern was with the single aggregate sum, and not with the extent of 
participation of each defendant, and that the defendants decided among 
themselves the amount each would pay to the plaintiff.  Clearly, this affidavit, 
which was never refuted, also indicates that the parties negotiated a single 
settlement agreement that was intended to impose joint and several liability. 
{¶40} The majority, however, ignores this evidence.  Instead, it reasons 
that Kostelnik’s actions show that he never intended there to be joint and several 
liability.  In particular, the majority states that Kostelnik initially sought relief 
January Term, 2002 
11 
from the dismissal order and sought judgment against Dr. Helper for $1,100,000.  
It reasons that had Kostelnik intended there to be joint and several liability, he 
would have gone after the full $1,200,000.  Yet the majority fails to mention the 
circumstances under which this motion was filed.  According to Kostelnik, the 
original motion was filed as a way to provide the Superintendent of the Ohio 
Department of Insurance, as rehabilitator for P.I.E., with a legal basis to 
implement Helper’s obligation of $1,100,000 to judgment.  Although a 
rehabilitator was appointed, it was not certain that no claims could be paid.  
However, when the common pleas court ordered P.I.E. into liquidation, Kostelnik 
knew that it would be futile to seek the $1,100,000 from Helper.  At that point, the 
issue of joint and several liability arose.  Kostelnik therefore withdrew his initial 
motion against Helper and subsequently filed his motion to reduce the $1,200,000 
settlement to judgment against Helper and Hillcrest jointly and severally.  In my 
opinion, the actions by Kostelnik in initially seeking partial payment from Helper 
lend little support to the majority’s holding. 
{¶41} For the foregoing reasons, I would find that the settlement 
agreement imposed joint and several liability on the defendants. 
 
DOUGLAS and RESNICK, JJ., concur in the foregoing opinion. 
__________________ 
 
Chattman, Gains & Stern, Michael B. Michelson, John V. Scharon, Jr., 
and Dale A. Nowak, for appellant. 
 
Weston, Hurd, Fallon, Paisley & Howley, L.L.P., Ronald A. Rispo, Daniel 
A. Richards and John B. Robertson; Bonezzi, Switzer, Murphy & Polito and 
William D. Bonezzi, for appellee Dr. Helper. 
 
Reminger & Reminger Co., L.P.A., James L. Malone, Marilena DiSilvio, 
Brian D. Sullivan and Amy Fulmer Stevenson, for appellee Meridia Hillcrest 
Hospital. 
__________________