Court Opinion

ID: 2701288
Source: CourtListenerOpinion
Date Created: 2014-08-04 19:31:30.338174+00
Date Added: 2024-06-11T12:31:28.481522
License: Public Domain

[Cite as Brothers v. Century Container Corp., 2011-Ohio-1176.]

                          STATE OF OHIO, COLUMBIANA COUNTY

                                  IN THE COURT OF APPEALS

                                        SEVENTH DISTRICT

JILL BROTHERS,                   )
                                 )                         CASE NO.   10 CO 3
    PLAINTIFF-APPELLEE,          )
                                 )
    - VS -                       )                         OPINION
                                 )
CENTURY CONTAINER CORP., et al., )
                                 )
    DEFENDANTS-APPELLANTS. )

CHARACTER OF PROCEEDINGS:                             Civil Appeal from Common Pleas Court,
                                                      Case No. 09CV134.

JUDGMENT:                                             Affirmed in part; Remanded in part.

APPEARANCES:
For Plaintiff-Appellee:                               Attorney David Barbee
                                                      Attorney Robert Herberger
                                                      Attorney Joseph Bishara
                                                      Attorney Elizabeth Farbman
                                                      100 Federal Plaza East, Suite 600
                                                      Youngstown, Ohio 44503

For Defendants-Appellants:                            Attorney Charles Dunlap
                                                      3855 Starr Centre Drive, Suite A
                                                      Canfield, Ohio 44406

                                                      Attorney C. Scott Lanz
                                                      201 E. Commerce Street
                                                      Atrium Level Two
                                                      Youngstown, Ohio 44503

JUDGES:
Hon. Joseph J. Vukovich
Hon. Gene Donofrio
Hon. Mary DeGenaro

                                                      Dated: March 9, 2011
VUKOVICH, J.

       ¶{1}   Defendant-appellant Don       Brothers   appeals   the decision of      the
Columbiana County Common Pleas Court, which ruled against him on the motion to
show cause for contempt filed by his daughter, plaintiff-appellee Jill Brothers. She
urged that appellant was violating the court’s prior judgment, which had interpreted a
settlement agreement, by refusing to pay the $34,000 annual premium for a life
insurance policy he was ordered to maintain. Appellant countered that it would not
cost $34,000 per year to maintain the policy.
       ¶{2}   The court ruled that appellant was violating its prior judgment entry,
which obligated him to pay annual insurance premiums of $34,000 until he turned 80
years of age, stating that he could not satisfy this obligation out of the cash value of
the policy. The court noted that this would ensure the policy lasted in perpetuity.
       ¶{3}   On appeal, appellant argues that the court interpreted the settlement
agreement beyond its four corners because he should only be obligated to pay the
amount of premiums that were necessary to keep the insurance policy in effect until he
turned 80, which he claimed was approximately $5,800 per year. He also states that
the court should not have added perpetuity language to its prior order.
       ¶{4}   For the following reasons, the judgment of the trial court is upheld in
main part as appellant previously had been held to be liable under a settlement
agreement to pay $34,000 per year until he turns 80 years old. However, in order to
avoid confusion, the trial court’s judgment is ordered to be modified to eliminate the
extraneous wording surrounding the phrase, “the insurance policy was to be
maintained in perpetuity”.
                             STATEMENT OF THE CASE
       ¶{5}   Appellee is the minority shareholder and appellant is the majority
shareholder of three corporations: Century Industries Corp., Century Container Corp.,
and Century Consultants, Inc. On February 5, 2009, appellee filed a complaint against
appellant for declaratory relief and for an injunction in order to enforce a shareholder
agreement.
       ¶{6}   On April 19, 2009, the parties filed a joint notice of settlement. Appellant
had previously set up an irrevocable trust with appellee as the beneficiary. The trust’s
main asset was a life insurance policy. The parties’ settlement stated in pertinent part
that appellant, who was seventy-one years old at the time, would “maintain life
insurance trust until age 80.”
       ¶{7}   When a dispute arose as to appellant’s obligation under the agreement
to maintain the life insurance policy, appellee filed a motion to enforce the settlement
agreement.    A hearing was held in July of 2009 where it was explained that the
insurance policy was guaranteed to pay $2,000,000 as long as annual premiums of
approximately $34,000 were submitted separately from any cash value distributions
and were continued to be paid annually until appellant turned 80. Appellant had paid
these $34,000 annual premiums in the past. (Tr. 43); Plaintiff’s Exhibit No. 22.
       ¶{8}   On July 21, 2009, the court dismissed the case as being settled and
enforced the settlement agreement in pertinent part as follows:
       ¶{9}   “Defendant is to maintain the life insurance trust for the benefit of the
plaintiff and her heirs in the amount of two million dollars on the life of the defendant
until he turns 80. It was the intent of the parties that the amount of the insurance
should remain two million dollars and that the defendant was to pay any premiums in
whatever manner to maintain the policy in the amount of two million dollars. (See
Exhibits 3 & 4 and the appendix of 3 & 4). It was not in the contemplation of the
parties that the amount of the insurance should drop below two million dollars. The
cash value of the policy is paying part of that premium but an additional $34,000
premium will have to be paid each year by the defendant to keep that policy in effect at
two million dollars. Defendant is to sign a cognovit note to secure payment of these
life insurance premiums.” (07/21/09 J.E. ¶10).
       ¶{10} Appellant did not appeal from this judgment. Thereafter, appellee filed a
motion to show cause for failure to comply with the court’s July 21, 2009 order.
Appellee claimed that appellant was refusing to pay the $34,000 annual premium
needed to be paid until appellant turned 80 in order maintain the $2,000,000
guarantee perpetually. Appellant responded that the $2,000,000 guarantee would last
until he was 80 if he merely paid $5,800 per year in premiums until he turned 80.
       ¶{11} A hearing was held on December 11, 2009. In attempting to show that
he was not in contempt of the court’s order, appellant presented evidence that only
$5,800 needs to be paid each year for the $2,000,000 policy to remain in effect until
age 80.   As appellee pointed out, the judgment required appellant to pay annual
premiums of $34,000 until age 80, and this would result in the policy continuing in
perpetuity after age 80. (Tr. 53-55).
       ¶{12} The court announced that its order was clear that appellant was required
to pay $34,000 per year in premiums and thus its intent was for the $2,000,000
guarantee to extend past age 80. (Tr. 56). The court’s December 11, 2009 judgment
entry thus stated following:
       ¶{13} “This Court’s Findings of Fact issued July 21, 2009, clearly indicate that
the Court intended that Don R. Brothers maintain the Two Million Dollar ($2,000,000)
life insurance policy until he turns age eighty (80) for the benefit of the Trust, and that
to do so he would have to pay annually, until he turns eighty (80), the Thirty-four
Thousand Dollar ($34,000) premium.
       ¶{14} “The Findings of Fact used the following phrase: ‘* * * but an additional
thirty-four thousand dollar premium will have to paid each year by the Defendant to
keep that policy in effect at Two Million Dollars ($2,000,000).’        It also uses the
language that the Defendant is to sign a cognovits note to secure payment of ‘these
life insurance premiums.’
       ¶{15} “While the Court can appreciate that there could be a different
interpretation of this language, the Court’s intent seems clear that the insurance policy
was to be maintained in perpetuity, and that the Court’s finding was that it took Thirty-
four Thousand Dollars ($34,000) per year to do that.”
       ¶{16} The Court then ordered appellant to pay the $34,000 insurance premium
by December 28, 2009 and each year thereafter until he turns 80 and to sign cognovit
notes to secure future payment of these premiums. Appellant filed timely notice of
appeal from this entry.
                               ASSIGNMENT OF ERROR
       ¶{17} Appellant’s sole assignment of error provides:
       ¶{18} “THE COURT ERRED RULING THAT DON R. BROTHERS HAS TO
PAY $34,000 PER YEAR TO MAINTAIN A $2 MILLION LIFE INSURANCE POLICY IN
PERPETUITY.”
       ¶{19} First, appellant argues that the language of the settlement agreement
obligating him to “maintain life insurance trust until age 80,” was unambiguous and that
the court rewrote the agreement by requiring appellant to pay $34,000 in annual
premiums until age 80 which would end up allowing the policy to exist beyond age 80.
       ¶{20} However, the instant appeal concerns whether or not appellant is in
contempt of the court’s July 21, 2009 order. That order involved the interpretation of
the April 2009 settlement agreement which imposed an obligation upon appellant to
pay $34,000 per year (without using cash value distributions) until age 80 in order to
maintain a life insurance policy. Appellant did not appeal that entry.
       ¶{21} Contrary to a suggestion appellant presented at oral argument, the
propriety of the court’s interpretation of the settlement agreement was not the subject
of the court hearing. Rather, the hearing was scheduled as a result of a show cause
motion filed by appellee. The purpose of the hearing was to set forth what that prior
court order stated and to present evidence on the issue of whether appellant was in
contempt of that prior order. There were various sub-issues raised, such as cognovit
notes, vehicle titles, personalty, a criminal case, dental insurance, and business
expenses. (Tr. 5).
       ¶{22} Of those issues, the only one relevant to this appeal was the one
involving whether appellant was going to satisfy his court-ordered obligation to pay the
$34,000 annual premium due before the end of the year. Appellant presented a few
pages of substantive evidence to argue that he was not in contempt of the court’s
order because his payment of less than $34,000 would satisfy his court-ordered
obligation to maintain the policy at $2,000,000.
       ¶{23} He presented his own testimony that he would not pay $34,000 per year
but instead would pay only the amount determined due by the trustee and his
accountant.   In two pages of testimony each, the trustee and an insurance agent
(unrelated to the policy) testified that approximately $5,800 per year in premiums
would maintain the $2,000,000 life insurance policy until age 80. This filled in the
blanks of appellant’s testimony as to what he was being advised to pay each year and
thus what he would pay each year. The combination of this testimony showed that
appellant was contemplating engaging in contempt by failing to pay what the court had
previously ordered him to pay. That it simultaneously may have been an attempt to
reargue the propriety of the court’s prior order does not mean appellant was permitted
to relitigate the prior interpretation of the settlement agreement.
       ¶{24} The court thus found that the payment option appellant was
contemplating would not fulfill his obligation under the prior judgment entry, which
specifically stated $34,000 per year was to be paid until age 80. The words and
language used in that prior judgment are free of ambiguity and doubt and express
appellant’s obligation clearly and plainly. See, e.g., Alexander v. Buckeye Pipe Line
Co. (1978), 53 Ohio St.2d 241, 246; In the Matter of Blake (Dec. 11, 1986), 7th Dist.
No. 85-J-36. The court found that its prior language was clear but gave appellant the
benefit of the doubt by allowing him to presently comply by making the premium
payment instead of punishing him for contempt. (Tr. 56-57).
       ¶{25} In any event, appellant does not argue that the court erred in interpreting
its prior judgment or in factually finding him to be in contempt of the requirements of
that judgment.    Rather, his argument here is that the prior judgment improperly
expanded upon the settlement agreement by inserting monetary amounts.
       ¶{26} Because appellant did not appeal the July order, he cannot now relitigate
the propriety of ordering $34,000 annual premiums to be paid. See, e.g., Shoemaker
v. First Nat’l Bank of Ottawa (1981), 61 Ohio St.3d 304, 313-314; Whitehead v.
General Tel. Co. (1969), 20 Ohio St.2d 108, 112. Similarly, he cannot argue that the
settlement agreement did not provide for $2,000,000 in death benefits. The court
previously interpreted the contractual term “maintain” to mean that appellant should
continue to pay the $34,000 annual premium which, if paid until age 80, would act to
keep the $2,000,000 death benefit in effect. As this contract interpretation decision
was not appealed at the time it was made, it cannot be argued on appeal at this time.
See id.
       ¶{27} Regardless, it was a proper decision in the first place as the parties’ use
of the word “maintain” contemplates payment of the same premium as had been paid
in the past. The fact that it would result in the policy lasting past age 80 is merely the
effect of the payments.
       ¶{28} Appellant’s brief presents a second argument that essentially states that
the court’s December order changed the effect of or “amended” the July order
because the court “added” the language about perpetuity.                   However, the court’s
perpetuity language is basically a statement clarifying the effect of the judgment rather
than an order for appellant to perform an additional act. As appellant conceded at oral
argument, the court clearly did not order appellant to pay premiums in perpetuity.
Rather, the court re-ordered appellant to pay $34,000 per year in premiums, as he had
been doing, until he turned 80, which could have the effect of allowing a “perpetual” life
insurance policy. Notably, the perpetuity language was derived from language used
by both parties’ attorneys in arguments and in questioning of the witnesses. (Tr. 38-
39, 53).
       ¶{29} In other words, appellant’s obligation to pay annual premiums in the
amount of $34,000 was clearly expressed in the July 21, 2009 order, which was not
appealed. Language in the later order stating that “the insurance policy was to be
maintained in perpetuity” and that it would take $34,000 per year until age 80 to do
that is merely an expression of what the order to pay $34,000 per year could
potentially accomplish.
       ¶{30} Still, appellant’s only court-ordered obligation under the July 21, 2009
judgment entry is to pay $34,000 per year in premiums until he turns 80. Under no
reasonable interpretation of the judgment being enforced did the court impose an
alternate obligation that, for instance, if this amount did not accomplish the purpose of
perpetual funding, then another amount had to be paid. See, e.g., Contos v. Monroe
Cty., 7th Dist. No. 04MO3, 2004-Ohio-6380, ¶15 (only ambiguous if subject to more
than one reasonable interpretation). Because there is a chance that even the court-
ordered payments may not result in perpetual1 funding, we hereby order the trial court
to eliminate the whole paragraph containing the perpetuity language in the December
11, 2009 judgment entry.

       1
          The use of perpetuity refers to the potential to maintain the $2,000,000 guarantee. For
example, there was testimony that the coverage could last until appellant turned 110 years of age. In
addition, there was testimony that even after appellant has paid the court-ordered premiums until age
80, the beneficiary may need to pay some other annual premium to maintain the guarantee, and the
beneficiary expressed no problem with this eventuality.
      ¶{31} For the foregoing reasons, the judgment of the trial court is hereby
affirmed in part and remanded in part.

Donofrio, J., concurs.
DeGenaro, J., concurs.