Court Opinion

ID: 4450006
Source: CourtListenerOpinion
Date Created: 2019-10-24 20:09:08.110859+00
Date Added: 2024-06-11T12:43:40.036175
License: Public Domain

[Cite as Parker v. Smith, 2019-Ohio-4346.]

                              COURT OF APPEALS OF OHIO

                             EIGHTH APPELLATE DISTRICT
                                COUNTY OF CUYAHOGA

KATHY PARKER, ET AL.,                              :

                Plaintiffs-Appellees,              :
                                                             No. 107711
                v.                                 :

ROBERT SMITH, III,                                 :

                Defendant-Appellant.               :

                               JOURNAL ENTRY AND OPINION

                JUDGMENT: AFFIRMED
                RELEASED AND JOURNALIZED: October 24, 2019

            Civil Appeal from the Cuyahoga County Court of Common Pleas
                                Case No. CV-12-787232

                                             Appearances:

                Alan I. Goodman, for appellees.

                Gilbert W.R. Rucker, III, for appellant.

EILEEN T. GALLAGHER, P.J.:

                   Defendant-appellant, Robert Smith, III, appeals a judgment in favor

of plaintiffs-appellees, Kathy Parker and Deryl L. Gibson (collectively “appellees”),

rendered as enforcement of a settlement agreement. Smith claims the following two

errors:
      1. The trial court erred in granting Plaintiff’s Motion for Judgment,
      filed on May 17, 2018, in the amount of $68,500.00, where the court’s
      entry found that consideration in paragraph 5 of the Supplemental
      Agreed Judgment was “unenforceable, void, and stricken from the
      record.”

      2. The trial court erred in granting Plaintiff’s motion for judgment, filed
      on May 17, 2018, in the amount of $68,500.00 because the
      Supplemental Agreed Judgment was based upon coercion by the
      Plaintiffs and renders the August 23, 2018 judgment void.

               We find no merit to the appeal and affirm the trial court’s judgment.

                        I. Facts and Procedural History

               Appellees filed a legal malpractice action against Smith after a

judgment was rendered against them in federal court. Following a year and a half

of pretrial litigation, the parties agreed to settle the case and signed an agreed

judgment entry awarding appellees “$50,000 in compensatory damages and

$50,000 in punitive damages plus interest” at a rate of six percent. The parties

agreed that appellees would not enforce the judgment on punitive damages as long

as Smith paid the judgment on compensatory damages, plus the six percent interest,

in 50 equal installments within 50 months of February 1, 2014. The parties also

agreed that “[t]he other terms of the settlement shall remain confidential so long as

Defendant meets his obligations set out in the Supplemental Consent Judgment

Entry.” The agreed judgment entry further provided that “[i]f Defendant fails to

meet those obligations, the parties agree and after Defendant is notified by Plaintiff’s

counsel of Defendant’s breach, the Court shall enter a supplemental judgment entry

incorporating all the terms of the settlement agreement.”
              Smith breached the settlement agreement by failing to make some

monthly payments, and appellees filed a motion to incorporate the confidential

terms into a supplemental settlement agreement. Following mediation that resulted

in a second settlement agreement, the court rendered a supplemental agreed

judgment entry in favor of appellees in the amount $34,000, that represented the

amount still owed on the compensatory damages, and $50,000 in punitive damages,

plus six percent interest on both amounts. Punitive damages were no longer

contingent since Smith defaulted on the original agreement.

              The supplemental agreed judgment further provided that Smith

would pay appellees $1,000 per month until the total amount of the judgment was

fully paid. To that end, the supplemental agreed judgment required Smith to pay

appellees the sum of $7,500 by January 31, 2017, in conjunction with his regular

monthly payment of $1,000. In addition to providing new terms governing default,

including penalties for nonpayment, the supplemental agreed judgment stated, in

relevant part in paragraph five:

      5. In all other respects, the terms of the original judgment, including
      the terms of the original Settlement Agreement, shall remain in effect,
      however the terms of that Agreement shall no longer be confidential
      and are therefore incorporated herein except that the Plaintiffs agree
      not to bring this matter to the attention of the Supreme Court of Ohio
      unless the Defendant is more than Sixty days (60) in arrears on the
      payments set out herein. Those terms are set forth in Exhibit A
      attached hereto and incorporated herein.

              Smith again defaulted, and appellees filed another motion seeking a

judgment for $18,500, the amount still owed in compensatory damages plus a
$5,000 penalty, and $50,000 in punitive damages. This time, the court entered

judgment, dated August 23, 2018, in favor of appellees and against Smith “in the

amount of $68,500 plus interest at rate of 6 percent.” The court’s judgment entry

further provided, in relevant part:

      However, paragraph 5 of the supplemental agreed entry and the second
      full paragraph of Exhibit A to supplemental judgment are
      unenforceable, void, and stricken from the agreement and record.

              Smith now appeals the trial court’s August 23, 2018 judgment.

                              II. Law and Analysis

                             A. Severed Provisions

              In the first assignment of error, Smith argues the parties’ settlement

agreements, and the court’s supplemental judgment entry that were based on the

parties’ settlement agreements, are void and unenforceable because the trial court

“found that the consideration in paragraph 5 of the Supplemental Agreed Judgment

was ‘unenforceable, void, and stricken from the record.’” (Appellant’s brief p. 5.)

              However, the court never mentioned the word “consideration” in its

judgment entry. The court’s judgment entry states, in relevant part:

      However, paragraph 5 of the supplemental agreed entry and the second
      full paragraph of Exhibit A to supplemental judgment are
      unenforceable, void, and stricken from the agreement and record.

Therefore, the court never commented on the consideration given for the

settlement agreement.

              Paragraph five of the supplemental judgment entry precluded

appellees from reporting Smith’s conduct as their attorney to the Ohio Supreme
Court unless Smith was more than 60 days in arrears on his monthly payments.

Smith contends this provision was stricken because it violated public policy. When

a contract contains a provision offensive to Ohio law or policy, “that provision is void

while the remainder of the contract remains enforceable.” Ford Motor Credit Co. v.

Jones, 8th Dist. Cuyahoga No. 92428, 2009-Ohio-3298, ¶ 13; see also DeVito v.

Autos Direct Online, Inc., 8th Dist. Cuyahoga No. 100831, 2015-Ohio-3336, ¶ 2, 4

(Unconscionable provision in arbitration agreement was excised from contract as

against public policy while the “non-offending terms of the arbitration agreement

remain enforceable.”). Therefore, the remaining terms of the parties’ settlement

agreement, as incorporated into the court’s supplemental judgment entry, were

enforceable even though paragraph five was stricken from it.

               Moreover, the remaining terms of the parties’ settlement agreement

constituted an enforceable contract. “A contract is generally defined as a promise,

or a set of promises, actionable upon breach.” Kostelnik v. Helper, 96 Ohio St. 3d 1,

2002-Ohio-2985, 770 N.E.2d 58, ¶ 16, quoting Perlmuter Printing Co. v. Strome,

Inc., 436 F. Supp. 409, 414 (N.D.Ohio 1976). To be enforceable, a contract must have

an offer, acceptance, consideration, and a manifestation of mutual assent. Id. Smith

argues the consideration necessary for an enforceable contract was “eviscerated”

when the court struck paragraph five of the supplemental judgment entry.

               “Consideration” is a promisor’s promise to give something of value to

the promisee in exchange for the promisee’s promise to give something of value to
the promisor. Minster Farmers Coop. Exchange Co., Inc. v. Meyer, 117 Ohio St. 3d
459, 2008-Ohio-1259, 884 N.E.2d 1056, ¶ 28.

      Valuable consideration consists of the acquisition of some legal right by
      the promisor, in return for which he or she makes the promise, or in
      the giving up of some legal right by the promisee, in return for which
      the promise is made to him or her.

17 Ohio Jurisprudence 3d, Contracts, Section 46, at 509 (2010). In other words,

“[c]onsideration may consist of either a detriment to the promisee or a benefit to

the promisor.” Lake Land Emp. Group of Akron, L.L.C. v. Columber, 101 Ohio

St.3d 242, 2004-Ohio-786, 804 N.E.2d 27, ¶ 16, citing Irwin v. Lombard Univ., 56
Ohio St. 9, 19, 46 N.E. 63 (1897).

              Smith contends appellees’ promise not to report him to the Ohio

Supreme Court set forth in paragraph five of the parties’ settlement agreement

constituted the sole consideration for the contract and that without it, the contract

was void. However, the Ohio Supreme Court has held that giving up a right to trial,

in addition to the corresponding rights of that judicial process, is adequate

consideration to enforce a contract. Hayes v. Oakridge Home, 122 Ohio St. 3d 63,

2009-Ohio-2054, 908 N.E.2d 408, ¶ 42-43. Thus, although the trial court struck

appellees’ promise not to report Smith to the Ohio Supreme Court, appellees’

forbearance of their right to trial, which they gave in exchange for Smith’s promise

to pay them damages, remained to enforce the contract.

              Therefore, the first assignment of error is overruled.
                                   B. Coercion

              In the second assignment of error, Smith argues the parties’

settlement agreement is void because it was “based upon coercion.”

              The Ohio Supreme Court considered the issue of coercion in

avoidance of contract in Blodgett v. Blodgett, 49 Ohio St. 3d 243, 551 N.E.2d 1249

(1990):

      To avoid a contract on the basis of duress, a party must prove coercion
      by the other party to the contract. It is not enough to show that one
      assented merely because of difficult circumstances that are not the fault
      of the other party.

Id. at syllabus. The Blodgett court further held that to prove duress, the party

seeking to avoid the contract must establish

      (1) that one side involuntarily accepted the terms of another; (2) that
      circumstances permitted no other alternative; and (3) that said
      circumstances were the result of coercive acts of the opposite party.
      * * * The assertion of duress must be proven to have been the result of
      the defendant’s conduct and not by the plaintiff’s necessities. * * * ”
      (Emphasis added.) (Citations omitted.)

Id. at 246.

              Smith does not make any argument or provide any evidence in the

record to support his coercion claim. As far as we can tell, Smith could have gone to

trial to prove he did not commit malpractice or if he thought the terms of the

settlement agreement were unfair. The initial settlement agreement also allowed

him to avoid punitive damages if he paid the full amount of the compensatory

damages in monthly installments within a 50-month period. There is no evidence

in the record that appellees made any threats or that Smith involuntarily accepted
the terms of the settlement agreement.        Indeed, there were two settlement

agreements, and Smith appears to have entered into both agreements willingly and

voluntarily.

               Therefore, the second assignment of error is overruled.

               Judgment affirmed.

      It is ordered that appellee recover from appellant costs herein taxed.

      The court finds there were reasonable grounds for this appeal.

      It is ordered that a special mandate be sent to the common pleas court 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.

EILEEN T. GALLAGHER, PRESIDING JUDGE

ANITA LASTER MAYS, J., and
KATHLEEN ANN KEOUGH, J., CONCUR