Court Opinion

ID: 4421461
Source: CourtListenerOpinion
Date Created: 2019-07-31 13:49:09.319091+00
Date Added: 2024-06-11T14:51:24.549276
License: Public Domain

[Cite as Weckel v. Cole + Russell Architects, 2019-Ohio-3069.]

                 IN THE COURT OF APPEALS
             FIRST APPELLATE DISTRICT OF OHIO
                  HAMILTON COUNTY, OHIO

FREDERIC C. WECKEL,                               :          APPEAL NO. C-180438
                                                             TRIAL NO. A-0407805
        Plaintiff-Appellee,                       :

  vs.                                             :              O P I N I O N.

COLE + RUSSELL ARCHITECTS,                        :

     Defendant-Appellant.                         :

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed

Date of Judgment Entry on Appeal: July 31, 2019

Tobias, Torchia & Simon and David Torchia, for Plaintiff-Appellee,

Keating Muething & Klekamp PLL and Kasey L. Bond, for Defendant-Appellant.
                     OHIO FIRST DISTRICT COURT OF APPEALS

BERGERON, Judge.

        {¶1}   Litigation often stirs emotions, hardens principles, and drains the

rationality from perfectly rational people. Cost-benefit analyses can be tossed out

the window, and positions might be pursued regardless of the odds. At the end of the

day, after the court or jury declares a winner and a loser, however, for many the

bitterest pill of all to swallow is their lawyer’s bill. But absent certain recognized

exceptions, the “American rule” dictates that parties must pay their own way in

litigation. Seeing no reason to depart from that principle in this case, we affirm the

judgment below denying an award of attorney’s fees.

        {¶2}   The underlying lawsuit here stretches back more than a decade,

concerning plaintiff-appellee Frederic C. Weckel’s termination from defendant-

appellant Cole + Russell Architects (“C+R”) in 2004. Mr. Weckel helped C+R grow

and expand, and he wore multiple hats at the firm—serving as a managing principal

in the firm, a member of the board of directors, and a shareholder. The parties tried

to negotiate a severance package, but those efforts fell through, and the matter

ultimately proceeded to litigation for wrongful discharge and breach of fiduciary

duty.

        {¶3}   After more than three years of litigation, the parties reached a

settlement agreement, set forth in a 2008 “Letter Agreement,” which contemplated

Mr. Weckel selling his firm stock to the firm’s employee stock ownership plan. But

the Letter Agreement was, as the title suggests, a letter that sketched out key

principles of the deal, and that anticipated a formal “Settlement Agreement.” The

entire deal was also contingent because C+R needed an independent advisor to

provide a professional opinion blessing the sale of the stock. Unfortunately for

everyone involved, that contingency did not come to pass, as the independent advisor

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                       OHIO FIRST DISTRICT COURT OF APPEALS

concluded that the sale could not proceed as formulated (for various reasons not

germane to this appeal). In the wake of that determination, C+R proclaimed the

Letter Agreement “null and void,” and the litigation that the parties hoped to put to

bed by the settlement roared back to life. Mr. Weckel responded to this volley by

seeking to enforce the Letter Agreement, but the trial court declined, pointing to the

failure of the condition precedent. In the midst of all of this, perhaps needless to say,

the parties never executed the Settlement Agreement contemplated by the Letter

Agreement.

       {¶4}      On appeal from the trial court’s denial of the motion to enforce, we

held that the trial court abused its discretion in extinguishing discovery (thereby

cutting off Mr. Weckel’s efforts to undermine the independence of the independent

advisor’s conclusions), and that as a result, it had prematurely denied the motion to

enforce. Weckel v. Cole + Russell Architects, 2013-Ohio-2718, 994 N.E.2d 885 (1st

Dist.) (“Weckel I”). We reversed the trial court’s denial of the motion to reopen

discovery, vacated the portion of the trial court’s order denying the motion to

enforce, and remanded for discovery.

       {¶5}      The matter then proceeded below with discovery and an evidentiary

hearing, but ultimately arrived at the same destination, as the trial court again

overruled the motion to enforce the settlement. On an encore appeal here, we

affirmed the trial court’s judgment, and the Ohio Supreme Court declined review.

Weckel v. Cole + Russell Architects, 1st Dist. Hamilton No. C-160591, 2017-Ohio-

7491, appeal not allowed, 152 Ohio St. 3d 1422, 2018-Ohio-923, 93 N.E.3d 1003

(“Weckel II”).

       {¶6}      During the course of that convoluted procedural history, C+R racked

up over $400,000 in attorney fees and expert witness fees. Evidently frustrated with

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                     OHIO FIRST DISTRICT COURT OF APPEALS

those costs for litigation that it had prevailed upon, it moved the trial court to have

Mr. Weckel foot the bill, clinging to a provision in the Letter Agreement that

referenced a to-be-included fee-shifting provision in the (never executed) Settlement

Agreement. The trial court denied the motion. C+R now appeals the trial court’s

decision with a single assignment of error contesting that determination. We review

the decision below, a question of contract law, de novo for “whether the trial court

erred as a matter of law.” Continental W. Condominium Unit Owners Assn. v.

Howard E. Ferguson, Inc., 74 Ohio St. 3d 501, 502, 660 N.E.2d 431 (1996).

       {¶7}   Ohio follows the “American rule” with regard to attorney fees: “a

prevailing party in a civil action may not recover attorney fees as a part of the costs of

litigation.” (Citations omitted.) Wilborn v. Bank One Corp., 121 Ohio St. 3d 546,

2009-Ohio-306, 906 N.E.2d 396, ¶ 7. This rule is not without exception, but such

exceptions are generally limited to the presence of a specific provision for an award

of attorney fees in a statute or contract. Id. Otherwise, a prevailing party must

“demonstrate[] bad faith on the part of the unsuccessful litigant” to circumvent the

American rule. (Citation omitted.) Id.

       {¶8}   C+R pursues the contract path, relying on the following Letter

Agreement provision in its effort to fit into one of these exceptions:

       5.     The Settlement Agreement and a Mutual Release will also

       contain a provision stating that in any lawsuit between the parties

       relating to the Settlement Agreement, the prevailing party (1) will be

       entitled to an award of his/its attorneys fees and costs in

       prosecuting/defending the suit, and (2) in the event the court finds

       that an award of additional damages, including punitive damages, is

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                      OHIO FIRST DISTRICT COURT OF APPEALS

       allowed by the law, the court may award such additional damages to

       the prevailing party.

       {¶9}    C+R’s reliance on this language, however, suffers from several flaws.

First, C+R’s success in the prior appeals was largely predicated on its argument that

the Letter Agreement, upon the failure of the independent-advisor condition

precedent, became null and void. Indeed, that is exactly what the trial court held, a

result that we affirmed on appeal. Weckel II, 1st Dist. Hamilton No. C-160591, 2017-

Ohio-7491, at ¶ 21. We explained that if “a condition precedent is not fulfilled, the

parties are excused from performing under the contract[,]” and that here, the Letter

Agreement failed to include any “contingency plan” for that eventuality. (Citation

omitted.) Id. at ¶ 26, 33.

       {¶10} Having succeeded in the quest to invalidate the Letter Agreement,

C+R cannot now attempt to breathe new life into the contract that it scuttled. Nor

can it selectively pick and choose which provisions should retain vitality—that would

run afoul of our prior decision and basic contract law.

       {¶11} Second, the quoted language provides that the attorney fees may be

awarded for litigation “relating to the Settlement Agreement”—a document that the

parties agree does not exist. Cognizant of that problem, C+R essentially conflates the

Letter Agreement with the Settlement Agreement, blurring the lines between the

documents.     But, try as they might, they cannot get around the fact that the

Settlement Agreement never existed, and we fail to see how litigation can relate to an

imaginary agreement.         In other words, even if the Letter Agreement were fully

enforceable, the provision quoted above, by its terms, does not allow for an award of

fees in this situation.

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                     OHIO FIRST DISTRICT COURT OF APPEALS

       {¶12} Underscoring the point, the paragraph immediately preceding the one

relied upon by C+R offers context to the Settlement Agreement referenced in the

quoted language: “4.     The parties will execute a Settlement Agreement and Mutual

Release * * *.” (Emphasis added.) Nothing in either provision suggests that the

Letter Agreement itself provided for prevailing party attorney fees; they provide only

that a future “Settlement Agreement” will include such a provision. With the failure

of the independent-advisor-approval condition precedent, the parties never

consummated the anticipated Settlement Agreement.

       {¶13} The relevant provisions of the Letter Agreement here admit of no

ambiguity on this point, and we decline any invitation to rewrite them. See Shifrin v.

Forest City Ents., Inc., 64 Ohio St. 3d 635, 638, 597 N.E.2d 499 (1992) (“When the

terms in a contract are unambiguous, courts will not in effect create a new contract

by finding an intent not expressed in the clear language employed by the parties.”).

       {¶14} C+R has not pointed to a specific, enforceable contract term that

provides for fee shifting in the present circumstances. As a last resort, it reaches to

out-of-state authority, California-Am. Water Co. v. Marian Coast Water Dist., 18

Cal.App.5th 571, 227 Cal. Rptr. 3d 110 (Cal.App.2017), to support its position, positing

that fees can be awarded notwithstanding a determination of the invalidity of the

underlying contract. But that case offers little insights for our interpretation of Ohio

contract law. California provides for mutual attorney fees by a statute in certain

situations, which the California-Am. Water Co. opinion construed; no such Ohio

statute applies to the dispute at hand. Accordingly, we find that decision inapposite

to the case before us.

       {¶15} For the foregoing reasons, we overrule C+R’s single assignment of

error and affirm the judgment of the trial court.

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                     OHIO FIRST DISTRICT COURT OF APPEALS

                                                            Judgment affirmed.

MOCK, P. J., and MYERS, J., concur.

Please note:
       The court has recorded its own entry this date.

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