Court Opinion

ID: 3778011
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:27:52.767278+00
Date Added: 2024-06-11T11:53:13.830109
License: Public Domain

I believe the trial court had jurisdiction to rule on appellants' motion for the pro rata allocation and distribution of attorney fees and expenses. The trial court retained jurisdiction to effectuate the settlement agreement, and the court has jurisdiction to enforce the settlement agreement.Spercel v. Sterling Industries (1972), 31 Ohio St.2d 36, 60 O.O.2d 20, 285 N.E.2d 324; Mack v. Polson Rubber Co. (1984),14 Ohio St.3d 34, 14 OBR 335, 470 N.E.2d 902. The award of attorney fees and provision for allocation of such fees is a term of the settlement agreement, which the court has the jurisdiction to enforce. The settlement agreement stated that appellees' two lead counsel would "apportion the fees among plaintiffs' counsel as they deem appropriate." However, this is not a *Page 57 
grant of unfettered discretion. The settlement agreement is a contract, Spercel, Mack, supra, and a contract may be subject to an implied covenant of good faith and fair dealing. SeeCanton Joint Venture v. Boardwalk Fries, Inc. (Nov. 29, 1993), Stark App. No. CA-9311, unreported, 1993 WL 500344; F  L Ctr.Co. v. Cunningham Drug Stores (1984), 19 Ohio App.3d 72, 76, 19 OBR 156, 159-160, 482 N.E.2d 1296, 1300-1301 (Nahra, J., dissenting); Sessions, Inc. v. Morton (C.A. 9, 1974),491 F.2d 854, 857. The trial court has the jurisdiction to determine whether the provision for division of fees was subject to an implied covenant of good faith and fair dealing, and if so, whether appellees' division of fees violated the implied covenant.
Appellees assert that the trial court has no jurisdiction to enforce any fee division provisions, because appellants and appellees are not parties to the lawsuit. Although attorneys are not parties to the action, the court has jurisdiction to award attorney fees in a shareholder derivative action. Mills v. Elec.Auto-Lite (1970), 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593. If the settlement agreement actually sets forth how the fees will be divided, the court must review the division to see if it is fair and in accordance with Disciplinary Rules. Kronfeld v.Transworld Airlines (S.D.N.Y. 1990), 129 F.R.D. 598; Rievman v.Burlington N. RR. Co. (S.D.N.Y. 1987), 118 F.R.D. 29. Thus, the court has jurisdiction over terms of the settlement agreement which affect the parties' attorneys, who are not themselves parties to the lawsuit. Additionally, an analogy can be made to probate court cases, which held that the probate court has jurisdiction over the settlement and disbursement of attorney fees from a personal injury settlement entered into on behalf of a ward. In re Guardianship of Jadwisiak (1992), 64 Ohio St.3d 176,  593 N.E.2d 1379; Waterman v. Elk  Elk Co., L.P.A. (1994),96 Ohio App.3d 772, 645 N.E.2d 1326. In these cases, the court had jurisdiction over a dispute between attorneys over the division of fees, although the attorneys were not parties.
DR 2-107(B) was not intended to override the court's authority to determine if a settlement agreement was breached, or the court's authority to award attorney fees. Model Rules of Professional Responsibility Rule 1.5, Comment (1983, amended 1994).
The court had a familiarity with the case and the work that went into it. The court should have held a hearing and resolved this dispute rather than turning the parties away and creating satellite litigation. I would reverse the decision of the trial court and remand for further proceedings. *Page 58