[Cite as Franklin Mgt. Industries, Inc. v. Far More Properties, Inc., 2014-Ohio-5437.]

Court of Appeals of Ohio 

EIGHTH APPELLATE DISTRICT 

COUNTY OF CUYAHOGA 

JOURNAL ENTRY AND OPINION 

No. 101397 

FRANKLIN MANAGEMENT 

INDUSTRIES, INC. 

PLAINTIFF-APPELLANT 

vs. 

FAR MORE PROPERTIES, INC., ET AL. 

 DEFENDANTS-APPELLEES 

JUDGMENT:

REVERSED AND REMANDED 

 

Civil Appeal from the 

Cuyahoga County Court of Common Pleas 

Case No. CV-08-666009 

BEFORE: Stewart, J., Celebrezze, P.J., and E.T. Gallagher, J. 

RELEASED AND JOURNALIZED: December 11, 2014 
ATTORNEY FOR APPELLANT

Michael R. Houston 

Houston Legal Counsel, Inc., L.P.A. 

2450 One Cleveland Center 

1375 East Ninth Street 

Cleveland, OH 44114 

FOR APPELLEES 

Attorneys for Far More Properties, Inc., et al. 

Jon J. Pinney 

Sarah Gabinet 

Melissa Yasinow 

Kohrman Jackson & Krantz, P.L.L. 

One Cleveland Center, 20th Floor 

1375 East Ninth Street 

Cleveland, OH 44114 

Attorney for Lee G. Seidman, et al.

Justine L. Konicki 

One Cleveland Center, 20th Floor 

1375 East Ninth Street 

Cleveland, OH 44114 

MELODY J. STEWART, J.: 
{¶1} The issue in this appeal is whether a mutually agreed- upon deadline in a contract for 

payment is absolute. Acknowledging that a payment that came two days late was untimely, the 

court nonetheless found that the payment constituted “reasonable compliance” with a contract 

that not only included a date deadline, but a time deadline as well. We find that the court 

reached this conclusion in error because, though good intentioned, the court ignored the express 

terms of the parties’ agreement and failed to give one party the benefit of its bargain. 

 I 

{¶2} The underlying facts are undisputed. In February 2009, appellant Franklin 

Management Industries, Inc. (“FMI”) received an arbitration award against Lee G. Seidman, 

James G. Pilla, Motorcars Infiniti, Inc., Motorcars East, Inc., Far More Properties, Inc., 

International Motorcars, Inc., and Motorcars Group, (collectively “Motorcars”) in the amount of 

$1.1 million including postjudgment interest and costs. FMI had difficulty collecting its 

judgment — a difficulty that the court believed was caused by Motorcars’ “pattern of 

obstructionism throughout these proceedings.” Judgment entry at 3. By January 2012, FMI 

had yet to collect its award. 

{¶3} The parties entered into a settlement agreement and mutual release that provided that 

Motorcars would make three payments of $350,000 according to the following schedule: 

$350,000 no later than January 5, 2012 

$350,000 no later than January 4, 2013 

$350,000 no later than January 4, 2014 

Settlement Agreement ¶ 1. The settlement agreement also provided that: 

Notwithstanding anything to the contrary in this Agreement, in the event that any 

of the three installment payments referenced in paragraph 1, above, is not received 

by FMI by 5:00 p.m. EST on January 41

 of 2012, 2013 or 2014, this Agreement 

 1

The January 2012 payment date differs in paragraphs 1 and 7 of the settlement agreement. 
and Mutual Release shall be null and void, and FMI shall have the right to 

immediately file with the Clerk of Court the applicable consent judgments 

attached to this Agreement as Exhibits B, C and D, and to execute and collect on 

such judgment to the full extent permitted by law. If the first payment is not 

received, the consent judgment attached as Exhibit B shall be applicable. If the 

second payment is not received, the consent judgment attached as Exhibit C shall 

be applicable. If the third payment is not received, the consent judgment 

attached as Exhibit D shall be applicable. Absent a default in payment as 

described herein, FMI shall take no action on these consent judgments. 

Settlement Agreement ¶ 7. 

{¶4} Motorcars made the 2012 and 2013 payments by the deadline as established by the 

terms of the settlement agreement. As the deadline for 2014 approached, the agent for 

Motorcars, knowing that he would be out of the country at the deadline for the final payment to 

be made, arranged for Huntington Bank to deliver a certified check to FMI on Friday, January 3, 

2014. For unexplained reasons, Huntington Bank failed to deliver the check as promised. The 

5:00 p.m. deadline on January 4, 2014 (the date was a Saturday) passed. On January 6, 2014, 

FMI contacted Motorcars’ agent to advise him that the check had not been delivered. The agent 

contacted the bank, and the check was delivered before noon on January 6, 2014. 

{¶5} Invoking the consent judgment clause of the settlement agreement, FMI asked the 

court to enter a consent judgment consistent with Exhibit D to the settlement agreement. That 

exhibit stated: 

Waiving any and all defenses, garnishees Lee G. Seidman and James G. Pilla 

hereby consent to the entry of judgment against them, personally, jointly and 

severally, in the amount of $584,736.10, plus interest at the applicable rate from 

the date this judgment is filed with the Clerk of Courts, and costs as authorized by 

law. 

 

That difference is immaterial because the January 2012 is not an issue in this case. 
{¶6} For its part, Motorcars filed a motion to compel FMI to file a satisfaction of 

judgment on grounds that the January 6, 2014 payment constituted full performance under the 

settlement agreement. 

{¶7} The court denied issuing a consent judgment. Framing the issue as “whether the 

settlement agreement either explicitly or tacitly permits payment to be considered to be timely 

made when it is received after the 5:00 p.m deadline, where the delay results from a failure of a 

third-party to comply with its instructions,” the court rejected FMI’s “absolutist” position on the 

question. The court found that: 

[E]vidence of defendant’s reasonable efforts to ensure timely payment of the full 

amount, coupled with a full and fully-documented explanation of the failure of the 

third-party bank to meet its commitment and defendant’s own successful efforts to 

rectify the situation within hours of being able to do so, constitute reasonable 

compliance with the obligation to make timely payment of the final $350,000. 

{¶8} As a result of finding that no breach of the settlement agreement occurred, the court 

not only denied FMI’s request to journalize the consent judgment, but also granted Motorcars’ 

motion to compel FMI to file a satisfaction of judgment. Both the refusal to grant the consent 

judgment and the order compelling a satisfaction of judgment are raised as error. 

 II 

{¶9} “Contracts are the mutual exchange of promises, with each party holding an 

expectation of certain obligations and benefits.” Frenchtown Square Partnership v. Lemston, 

Inc., 99 Ohio St.3d 254, 2003-Ohio-3648, 791 N.E.2d 417, ¶ 12. When the provisions of a 

contract are “clear and unambiguous, courts cannot enlarge the contract by implication so as to 

embrace an object distinct from that originally contemplated by the parties.” Rhoades v. 

Equitable Life Assur. Soc. of the U.S., 54 Ohio St.2d 45, 47, 374 N.E.2d 643 (1978). The court 
must enforce clear contract terms as written. KeyBank Natl. Assn. v. Columbus Campus, L.L.C., 

2013-Ohio-1243, 988 N.E.2d 32, ¶ 27 (10th Dist.). 

{¶10} The settlement agreement could not have been clearer: it required Motorcars to 

make the third and final installment payment no later than 5:00 p.m. on January 4, 2014, or else 

Motorcars would consent to a judgment in the amount of $584,736.10 plus interest. There is no 

question that Motorcars did not meet this deadline. Motorcars’ breach was manifest. 

{¶11} The court concluded that despite missing the deadline, Motorcars reasonably 

complied with its obligations under the settlement agreement. This conclusion is wrong for 

several reasons. First, the court failed to apply the clear and unambiguous language of the 

settlement agreement. The settlement agreement did not require Motorcars to make its best 

efforts at compliance — the terms of the settlement agreement were absolute and required 

Motorcars to make the final payment no later than 5:00 p.m. on January 4, 2014. That a third 

party retained to make the payment was negligent in doing so is immaterial to the question of 

whether a breach occurred. The court improperly framed the issue before it in a way that 

enabled it to bypass the express terms of the settlement agreement so that it could consider fault 

by a third party as excusing performance. 

{¶12} Second, the court applied an equitable solution to a matter that it should have 

considered only as a matter of law. The construction of a written contract is a matter of law. 

Saunders v. Mortensen, 101 Ohio St.3d 86, 2004-Ohio-24, 801 N.E.2d 452, ¶ 9. In the opening 

sentence of its judgment, the court stated: “This is, one hopes, the final chapter in protracted 

litigation that already has long outlasted its anticipated shelf-life.” While the court’s motivation 

for seeking to terminate this dispute may have been noble, it should not have applied equity 
principles to this contract matter. The court was bound by the express terms of the settlement 

agreement, no matter how “absolutist” those terms may be. 

{¶13} Third, to the extent the court strove to find an equitable resolution of this case, the 

equities were more so with FMI. As the court made clear, the negotiation leading to the 

settlement agreement was the product of Motorcars’ “obstructionism” in avoiding paying the 

arbitration award. Motorcars could be said to have benefitted from this obstructionism because 

the settlement agreement gave Motorcars a discount off the arbitration award and further gave it 

three years in which to pay the award. To avoid a repeat of Motorcars’ avoiding payment on the 

arbitration award, the parties agreed, at arm’s-length, that any delay would come with substantial 

consequences for Motorcars. That Motorcars failed to perform in a timely manner, even though 

a third party may have been negligent in delivering payment, ignores the reality that Motorcars 

did not timely perform its obligation to make the 2014 payment. And it is worth noting that to 

the extent Motorcars found itself against a payment deadline, it put itself in that position. 

Knowing that its agent would be unavailable as the deadline for payment approached, it could 

have made the payment earlier (the settlement agreement required payment “no later than” 

January 4, 2012) and complied with the express terms of the agreement. 

{¶14} To justify its reluctance to take an “absolutist” position on the terms of the 

settlement agreement, the court cited Nippon Life Ins. Co. of Am. v. One Source Mgt., Ltd., 6th 

Dist. Lucas No. L-10-1247, 2011-Ohio-2175, for the proposition that Motorcars “substantially” 

performed its obligations under the settlement agreement because any breach by Motorcars “was 

not material” and any loss “was not substantial.” The better authority is Master Builders, Inc. v. 

Hardcore Composites, 8th Dist. Cuyahoga No. 87154, 2006-Ohio-3729, in which we ordered the 

trial court to uphold the express terms of a settlement agreement when non-payment by one party 
voided the terms of the settlement agreement and reverted the parties to the status quo ante 

existing before the settlement agreement. By relying on Nippon to the exclusion of Master 

Builders, the court substituted its own sense of what it considered to be a “de minimis” breach 

for what the express terms of the settlement agreement stated. 

{¶15} Although the contract did not contain a specific time-is-of-the-essence clause, it 

was certainly the case that Motorcars’ performance by the stated deadline was a material aspect 

of the settlement agreement. In that regard, time was of the essence. 

{¶16} We recognize the law in Ohio is to generally find that time of performance is not of 

the essence to a contract, Brown v. Brown, 90 Ohio App.3d 781, 784, 630 N.E.2d 763 (11th 

Dist.1993), unless expressed, Mays v. Hartman, 81 Ohio App. 408, 412, 77 N.E.2d 93 (1st 

Dist.1947), or implied from the nature of the contract or circumstances under which it was 

negotiated. Green, Inc. v. Smith, 40 Ohio App.2d 30, 37-38, 317 N.E.2d 227 (4th Dist.1974). 

And, some courts have found that time is of the essence whenever a definite date is fixed for 

compliance. See, e.g., Lake Ridge Academy v. Carney, 9th Dist. Lorain No. 91CA005063, 1991 

Ohio App. LEXIS 4993, * 10-11 (Oct. 16, 1991); Calabrese v. Vukelic, 7th Dist. Jefferson No. 

94-J-37, 1995 Ohio App. LEXIS 5565, * 3 (Dec. 14, 1995), citing Domigan v. Domigan, 46 Ohio 

App. 542, 546, 189 N.E. 860 (5th Dist.1933). 

{¶17} In the case before us, we have no difficulty finding that the circumstances under 

which the settlement agreement was negotiated make clear that the date and time deadline for 

Motorcars’ performance was essential to the agreement. As previously stated, the court noted 

that Motorcars’ history of obstructionist conduct in satisfying the arbitration award lasted for a 

period of years. That history provides the background for why the payment deadlines were 

material under the settlement agreement. Apart from specifying both a date and exact time for 
completion of performance, the parties provided consideration in the form of financial 

incentives: if performance was timely, FMI agreed to forgo the additional amount of money (and 

accrued interest on that amount) that it was awarded in arbitration;2 if performance was 

untimely, Motorcars would pay the full amount of the arbitration award (plus interest) by 

confession of judgment. The deadline for payment was thus one in which time was of the 

essence. Marion v. Hoffman, 3d Dist. Marion No. 9-10-23, 2010-Ohio-4821, ¶ 22; Newman v. 

Hurni, 6th Dist. Williams No. 92WM000022, 1993 Ohio App. LEXIS 6409 (Dec. 30, 1993). 

{¶18} As the Supreme Court explained in Lake Ridge Academy v. Carney, 66 Ohio 

St.3d 376, 613 N.E.2d 183 (1993), “‘[w]hen it is said that time is of the essence, the proper 

meaning of the phrase is that the performance by one party at the time specified in the contract or 

within the period specified in the contract is essential in order to enable him to require 

performance from the other party.’” (Emphasis sic.) Id. at 378 (quoting 6 Williston, Contracts, 

Section 846, at 181 (3d Ed. 1962). The settlement agreement makes clear that absent timely 

payment, Motorcars could neither insist on FMI accepting less money in settlement than that 

stated in the arbitration award, nor require FMI to file a satisfaction of judgment. 

{¶19} While it is true that FMI was not obligated to file the confession of judgment upon 

breach, it was certainly its right to do so under the settlement agreement. That another, had it 

been in FMI’s position, may have accepted the late payment and moved on, is not the standard 

applied in contract law. To hold otherwise would allow equity principles to supersede the 

 2 The $584,736.10 consent judgment is reflective of the amount FMI agreed to 

forgo under the terms of the settlement agreement. In this regard, the amount 

cannot be deemed a penalty for Motorcars’ failure to perform by the deadline. See 

Lake Ridge Academy at 188, quoting 5 Williston, Contracts, Section 776, at 668 (3d Ed.1961) (a 

penalty subjects a breaching party to liability “disproportionate to the damage which could have been 

anticipated from the breach of the contract * * *.”) 
agreement, and the Ohio Supreme Court long ago rejected such an outcome. See, e.g., Scott v. 

Fields, 7 Ohio 90 (1836) (stating that the right to “frame their contracts as they please” means 

that parties may make time of the essence and that a court of equity cannot “relieve” them of 

their obligation). 

{¶20} We sustain the first assignment of error and remand with instructions for the court 

to journalize the consent judgment. The disposition of the first assignment of error necessarily 

compels us to sustain the second assignment of error relating to the order compelling FMI to file 

a satisfaction of judgment. The satisfaction of judgment is vacated. 

{¶21} This cause is reversed and remanded to the trial court for further proceedings 

consistent with this opinion. 

It is ordered that appellant recover of appellees its costs herein taxed. 

The court finds there were reasonable grounds for this appeal. 

It is ordered that a special mandate issue out of this court directing the Cuyahoga County 

Court of Common Pleas to carry this judgment into execution. 

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the 

Rules of Appellate Procedure. 

 

MELODY J. STEWART, JUDGE 

FRANK D. CELEBREZZE, JR., P.J., and 

EILEEN T. GALLAGHER, J., CONCUR