Horstman v. Fanning ( 2019 )


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  • [Cite as Horstman v. Fanning, 2019-Ohio-2483.]
    IN THE COURT OF APPEALS OF OHIO
    THIRD APPELLATE DISTRICT
    PUTNAM COUNTY
    TED HORSTMAN ET AL.,
    PLAINTIFFS-APPELLEES,                             CASE NO. 12-18-14
    v.
    DAVID FANNING,                                            OPINION
    DEFENDANT-APPELLANT.
    Appeal from Putnam County Common Pleas Court
    Trial Court No. 17 CV 102
    Judgment Affirmed
    Date of Decision:    June 24, 2019
    APPEARANCES:
    Richard M. Kerger and Kimberly A. Conklin for Appellant
    Bruce Comly French for Appellees
    Case No. 12-18-14
    PRESTON, J.
    {¶1} Defendant-appellant, David Fanning (“Fanning”), appeals the October
    24, 2018 judgment of the Putnam County Court of Common Pleas. For the reasons
    that follow, we affirm.
    {¶2} This case stems from a business dispute between plaintiffs-appellees,
    Ted and Rick Horstman (“Ted” and “Rick”) (collectively the “Horstmans”),
    Fanning, and a fourth individual, Vincent Snell (“Snell”). Ted, Rick, Fanning, and
    Snell were members of Ultimate Systems, Ltd. (“Ultimate Systems”), an Ohio
    limited liability company that produced colorized rubber materials and end-user
    products such as rubber flooring. (See Doc. No. 48, Snell’s Sept. 13, 2018 Depo.,
    Ex. B). Each held a 25 percent member interest in Ultimate Systems. (Id.). In
    2013, a plan was devised to “freeze” Snell out of Ultimate Systems. (See Oct. 19,
    2018 Tr. at 8). Robert Honigford (“Honigford”), Ultimate Systems’s chief financial
    officer and corporate attorney, was the “mouthpiece” of the scheme to acquire
    Snell’s interest in Ultimate Systems. (Id. at 8-9). In late 2013, Snell’s 25 percent
    interest in Ultimate Systems was “eliminated in exchange for a payment of
    $525,000” based upon a valuation provided by an accounting firm hired by
    Honigford. (Doc. No. 48, Snell’s Sept. 13, 2018 Depo., Ex. B). The acquisition of
    Snell’s interest in Ultimate Systems was accomplished in conjunction with a merger
    between Ultimate Systems and RDT Manufacturing, LLC (“RDT”), an entity
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    owned equally by Ted, Rick, and Fanning, with RDT as the surviving entity. (Id.).
    In 2014, the assets of RDT, along with the assets of other entities owned by the
    Horstmans and Fanning, were sold to a subsidiary of Accella Performance
    Materials, Inc. (“Accella”) for $40 million. (Id.); (Doc. No. 19, Ted’s Jan. 25, 2018
    Depo. at 8-9).
    {¶3} Soon after the Accella transaction was consummated, Snell, through
    Lynx Services, Ltd. (“Lynx”), a company he had previously formed to hold his
    interest in Ultimate Systems, filed a complaint against the Horstmans and Fanning
    in the United States District Court for the Northern District of Ohio alleging that the
    plan to freeze him out of Ultimate Systems violated Ohio law. (See Oct. 19, 2018
    Tr. at 8-9); (See Doc. No. 28, Ex. A). Honigford was later added as a defendant to
    the federal lawsuit. (See Doc. No. 28, Ex. A).
    {¶4} In late September 2016, Snell was subjected to deposition in Columbus,
    Ohio. The Horstmans and Fanning were present at Snell’s deposition; Honigford
    was not. (See Oct. 19, 2018 Tr. at 11, 37). On September 30, 2016, the second day
    of Snell’s deposition, Snell, Fanning, and the Horstmans met privately to discuss
    the possibility of settling the federal lawsuit. (Id. at 11). (See Sept. 30, 2016 Tr. at
    3). Eventually, Snell, Fanning, and the Horstmans agreed that Lynx would dismiss
    the federal lawsuit in exchange for $4.5 million. (Oct. 19, 2018 Tr. at 11, 37). That
    day, the parties recited the general terms of their settlement agreement into the
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    record. (Sept. 30, 2016 Tr. at 3-5). Later, the parties executed a “Global Settlement
    Agreement and General Release” providing that Lynx would dismiss the federal
    lawsuit with prejudice in exchange for $4.5 million, $3 million of which was due on
    or before November 15, 2016 and $1.5 million of which was due on or before April
    30, 2017. (Doc. No. 21, Ex. G). Neither the settlement agreement as recited into
    the record nor the written settlement agreement specify who was responsible for
    paying what percentage of the $4.5 million. According to the Horstmans and Snell,
    the Horstmans were to be responsible for paying $1.5 million each, Fanning was to
    pay $1.5 million, and Honigford was not to pay any part of the $4.5 million. (See
    Doc. No. 21, Ex. E); (See Oct. 19, 2018 Tr. at 13-14, 21-23). According to Fanning,
    however, he never agreed to contribute a specific sum toward the $4.5 million
    settlement, and he did not agree that Honigford should not have to pay at all. (See
    Fanning Affidavit at 4).
    {¶5} After the parties adopted the written settlement agreement, the
    Horstmans each paid $1.5 million to Lynx.1 Subsequently, on or about April 22,
    2017, Fanning advised the Horstmans that he did not intend to pay Lynx the
    remaining $1.5 million. (Doc. Nos. 1, 7). As a result, the Horstmans decided to
    1
    The written settlement agreement provided that Lynx would move to dismiss the federal lawsuit within one
    day after receiving the “Initial Payment” of $3 million due in November 2016. (See Doc. No. 21, Ex. G).
    Although $1.5 million of the $4.5 million remained outstanding in November 2016, because the Horstmans
    made the required $3 million Initial Payment in November 2016, the federal lawsuit was dismissed with
    prejudice in November 2016.
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    split the remaining $1.5 million payment evenly, with Ted and Rick each paying
    Lynx an additional $750,000. (Oct. 19, 2018 Tr. at 16).
    {¶6} On June 22, 2017, the Horstmans filed a complaint in the trial court
    against Fanning requesting a judgment for $1,501,748.73 plus interest.2 (Doc. No.
    1). On August 4, 2017, Fanning filed his answer to the Horstmans’ complaint.
    (Doc. No. 7).
    {¶7} On March 26, 2018, the Horstmans filed a motion for summary
    judgment. (Doc. No. 21). On April 24, 2018, Fanning filed a memorandum in
    opposition to the Horstmans’ motion for summary judgment as well as a cross-
    motion for summary judgment. (Doc. No. 28). On May 7, 2018, the Horstmans
    filed a memorandum in opposition to Fanning’s cross-motion for summary
    judgment. (Doc. No. 29). On May 9, 2018, Fanning filed a brief in reply to the
    Horstmans’ memorandum in opposition to his cross-motion for summary judgment.
    (Doc. No. 31).
    {¶8} Following a May 10, 2018 hearing on the motions for summary
    judgment, the trial court partially granted the Horstmans’ motion for summary
    judgment. (Doc. No. 33). First, the trial court found that the Horstmans and Fanning
    “agreed to the settlement amount and incorporated that agreement on the record and
    2
    The additional $1,748.73 represents “taxes due to an adjustment to the December 31, 2014, Form 1040 for
    RDT Manufacturing, LLC in the sum of one-third (1/3) of $1,290.68; and the sum for additional attorneys’
    fees from Bugbee & Conkle in the aggregate sum of $1,318.50.” (Doc. No. 1).
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    as a future written settlement agreement” but that “[t]he settlement agreement was
    silent as to the contribution amounts as it would pertain to any of the parties.” (Id.).
    The trial court concluded that the Horstmans had established that “an agreement to
    pay a settlement in the Federal case does exist.” (Id.). In essence, the trial court
    concluded that the only issue in dispute was the precise amount of money Fanning
    would be required to pay toward the $4.5 million settlement.                 (See id.).
    Consequently, the trial court denied the Horstmans’ motion for summary judgment
    in part so that the parties could “be heard on the matter as to contribution.” (Id.).
    Finally, the trial court denied Fanning’s cross-motion for summary judgment in its
    entirety. (Id.).
    {¶9} On October 19, 2018, a bench trial was held to determine the sole
    “remaining issue before the Court” which was “the allocation of contribution on
    [the Horstmans’] Complaint for Money Damages.” (Doc. No. 56). On October 24,
    2018, the trial court entered judgment for the Horstmans in the amount of $1.5
    million. (Id.).
    {¶10} Fanning filed a notice of appeal on November 21, 2018. (Doc. No.
    64). He raises one assignment of error for our review.
    Assignment of Error
    The trial court’s judgment is against the manifest weight of the
    evidence and contrary to law.
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    {¶11} In his assignment of error, Fanning argues that the trial court’s
    judgment in favor of the Horstmans is against the manifest weight of the evidence
    or otherwise contrary to law. Specifically, Fanning argues that “in the absence of
    proof of an agreement as to the amounts to be paid by each settling defendant, a
    judgment against [him] for $1.5 million is improper.” (Appellant’s Brief at 8).
    Furthermore, he argues that the trial court’s judgment is contrary to law because it
    is based on a conclusion that Honigford, as an employee of Ultimate Systems, could
    not have been compelled to make payments toward the settlement agreement. (Id.
    at 11). Fanning contends that this conclusion is erroneous as a matter of law. (See
    id.). Finally, Fanning argues that even if he did agree to pay $1.5 million, this
    agreement would be unenforceable under R.C. 1335.05, Ohio’s Statute of Frauds.
    (Id. at 13-14).
    {¶12} “‘When reviewing a civil appeal from a bench trial, we apply a
    manifest weight standard of review.’” Lump v. Larson, 3d Dist. Logan No. 8-14-
    14, 2015-Ohio-469, ¶ 9, quoting San Allen, Inc. v. Buehrer, 8th Dist. Cuyahoga No.
    99786, 2014-Ohio-2071, ¶ 89, citing Revilo Tyluka, L.L.C. v. Simon Roofing &
    Sheet Metal Corp., 
    193 Ohio App. 3d 535
    , 2011-Ohio-1922, ¶ 5 (8th Dist.). “‘[A]
    civil judgment “supported by some competent, credible evidence going to all the
    essential elements of the case will not be reversed by a reviewing court as being
    against the manifest weight of the evidence.”’” 
    Id., quoting Warnecke
    v. Chaney,
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    194 Ohio App. 3d 459
    , 2011-Ohio-3007, ¶ 13 (3d Dist.), quoting C.E. Morris Co. v.
    Foley Constr. Co., 
    54 Ohio St. 2d 279
    (1978), syllabus.
    {¶13} “‘“[W]hen reviewing a judgment under a manifest-weight-of-the-
    evidence standard, a court has an obligation to presume that the findings of the trier
    of fact are correct.”’” 
    Id. at ¶
    10, quoting Warnecke at ¶ 13, quoting State v. Wilson,
    
    113 Ohio St. 3d 382
    , 2007-Ohio-2202, ¶ 24. “‘The rationale for this presumption is
    that the trial court is in the best position to evaluate the evidence by viewing
    witnesses and observing their demeanor, voice inflection, and gestures.’” 
    Id., quoting Warnecke
    at ¶ 13, citing Seasons Coal Co., Inc. v. Cleveland, 
    10 Ohio St. 3d 77
    , 80 (1984). “‘“A reviewing court should not reverse a decision simply because
    it holds a different opinion concerning the credibility of the witnesses and evidence
    submitted before the trial court.”’” 
    Id., quoting Warnecke
    at ¶ 13, quoting Seasons
    Coal Co. at 81. “‘“A finding of an error in law is a legitimate ground for reversal,
    but a difference of opinion on credibility of witnesses and evidence is not.”’” 
    Id., quoting Warnecke
    at ¶ 13, quoting Seasons Coal Co. at 81.
    {¶14} We conclude that competent, credible evidence supports the trial
    court’s $1.5 million judgment in favor of the Horstmans. At the outset, we
    acknowledge the trial court’s finding that “[t]here were never any discussions as to
    who would pay what percentage of the $4,500,000.” (Doc. No. 56). We also
    recognize that both the written settlement agreement and the agreement as recited
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    into the record fail to include provisions allocating responsibility for paying the $4.5
    million between the Horstmans, Fanning, and Honigford. Nevertheless, the record
    supports that at the time the settlement agreement was finalized, it was understood
    that Ted, Rick, and Fanning would each be responsible for paying Lynx $1.5 million
    and that Honigford would not be required to pay any part of the $4.5 million. Thus,
    the trial court’s conclusion that Fanning should reimburse the Horstmans for the
    $1.5 million they paid to discharge his obligation under the settlement agreement is
    not against the manifest weight of the evidence.
    {¶15} The testimony of Snell and Ted, as well as other documentary
    evidence submitted during the case, support that it was the parties’ understanding
    that Fanning would be required to pay $1.5 million and Honigford would be
    required to pay nothing. In connection with their motion for summary judgment,
    the Horstmans submitted an affidavit executed by Snell that provides:
    [D]uring September 2016, a meeting took place between myself,
    [Ted], [Rick], and [Fanning].
    The purpose of the meeting was to agree [to] an out of court
    settlement. After some negotiations, it was agreed that a payment of
    $4.5 million would be paid.
    It was agreed by Ted and Rick Horstman that they would settle their
    share of $3 million within 30 days, Dave Fanning asked if I would
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    wait until the end of April 2017 for him to settle his share of $1.5
    million as he said it would take about six months to get that amount
    realized.
    I agreed to this and then reported our agreement and payment terms
    to my lawyer * * *.
    (Doc. No. 21, Ex. E). Snell’s deposition testimony further supports that this was the
    arrangement contemplated by the parties present at the settlement negotiations. In
    his deposition testimony, Snell confirmed that he, the Horstmans, and Fanning
    negotiated to settle the federal lawsuit for $4.5 million. (See Doc. No. 48, Snell’s
    Sept. 13, 2018 Depo. Tr. at 8-9). Snell testified that the terms of the agreement were
    that he “wanted all the cash immediately.” (Id. at 9). According to Snell, the
    Horstmans said that they could have their share within a matter of days but Fanning
    “said, * * * after it was agreed, he would need approximately six months to realize
    his share of it, which was a third, because we were talking * * * one and a half
    million dollars each.” (Id.). He testified that he expected to receive the final
    installment of $1.5 million from Fanning in April 2017 and that he incentivized
    Fanning to get the money to him sooner by providing a $5,000 per month discount
    for early payment. (Id. at 9-10). Snell stated: “The agreement was [that Fanning]
    was going to pay [Snell] one and a half million at the end of April the following
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    year.” (Id. at 14). He testified that he believed that the terms of the agreement and
    the parties’ understanding of the agreement were “crystal clear.” (Id.).
    {¶16} On cross-examination, Snell acknowledged that Honigford was also a
    defendant in the federal lawsuit.      (Id. at 24-25).   However, he testified that
    Honigford was not present at the settlement negotiations and that it was his
    understanding that the $4.5 million payment was to be divided between the three
    defendants present at the deposition, namely the Horstmans and Fanning. (Id. at
    28). Furthermore, Snell testified that he remembered hearing Fanning state that he
    would pay $1.5 million. (Id.). Finally, Snell stated that he later called Fanning to
    “make sure that the one and a half million was still coming along” but that he had
    not spoken to Fanning since. (Id. at 32-33).
    {¶17} Ted’s deposition testimony and trial testimony further corroborate
    Snell’s account of the settlement negotiations and the agreement reached by the
    parties. Ted remembered the settlement negotiations as follows:
    So after an hour’s worth of discussion, we came upon a number * * *.
    And that number was $4.5 million, of which Rick and I were going to
    pay 1.5 apiece * * * and get that done because it was going to take a
    while for us to get our money out of our different entities to get a $1.5
    million, we needed a month so that gave it to October 31.
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    Mr. Fanning, because he had just purchased a company, * * * said,
    Vince, I need more time, * * * because I’m just purchasing a company,
    I don’t have the money right now. * * * Vince gave him an additional
    six months, th[at] being the * * * end of April deadline.
    Vince Snell also said, I tell you what, I’ll give you $5,000 a month
    credit for every month before April that you can pay me off.
    (Doc. No. 19, Ted’s Jan. 25, 2018 Depo. Tr. at 20-21). (See Oct. 19, 2018 Tr. at 11-
    13). Ted insisted repeatedly that at the end of the September 30, 2016 settlement
    negotiations, they “ended up settling [on] 4 and a half, which was a million and a
    half a piece” with the understanding that he and Rick “were each to pay a million
    and a half, [and] Mr. Fanning was to pay a million and a half, with a $30,000
    incentive if he could pay it off early.” (Oct. 19, 2018 Tr. at 11-12). Ted testified
    that he did not question why the written settlement agreement failed to specify who
    would be responsible for paying what portion of the $4.5 million “[b]ecause as
    [they] were all in the room, the four of [them], that would be Mr. Snell, Rick,
    [Fanning], and [himself], [they] had [their] agreement amongst [themselves]. * * *
    [They] decided how it was going to be settled.” (Doc. No. 19, Ted’s Jan. 25, 2018
    Depo. Tr. at 25). He remarked that Fanning understood that the $1.5 million due in
    April 2017 was “his portion to pay.” (Id. at 28).
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    {¶18} As to Honigford’s payment obligations under the settlement
    agreement, Ted testified that Honigford “wasn’t involved in the pay-out” to Snell at
    all because “[h]e was not an owner” of Ultimate Systems. (Id. at 22). He stated that
    “it was agreed upon between [Rick], and [Fanning], and [himself], [that] Mr.
    Honigford was just the attorney, he had nothing in it.” (Id. at 22-23). According to
    Ted, the parties understood that Honigford did not “have the asset base” to pay into
    the settlement. (Id. at 23). Ted testified that he knew that Honigford would agree
    to the terms of the settlement agreement because “when the four of [them] came out
    of that room with an agreement, it was * * * one million and a half dollars for
    [himself], one million and [a] half dollars for Rick, and one million and a half dollars
    for Dave Fanning”; it was “agreed there would be no contribution by Mr.
    Honigford” and “nothing [was] coming out of his pocket.” (Oct. 19, 2018 Tr. at
    23). He stated that Honigford’s ultimate assent to the terms of the settlement
    agreement was based on Honigford’s understanding that he would not be liable for
    any part of the $4.5 million. (See 
    id. at 13-14).
    Finally, Ted testified that Fanning
    did not say or do anything at the settlement negotiations suggesting that he was
    dissatisfied with the arrangement obligating him to pay $1.5 million and he did not
    suggest that Honigford should pay some portion of the $4.5 million. (Id. at 17-18).
    {¶19} In contrast, Fanning’s recollection of the settlement negotiations and
    the arrangement agreed to by the parties deviates significantly from the version
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    advanced by Ted and Snell. Fanning’s version of events is well summarized by an
    affidavit he submitted with his cross-motion for summary judgment. His affidavit
    provides, in relevant part:
    Ted, Rick, [Snell], and I went into a room without lawyers and Ted
    announced that [Snell] wanted $5 million to settle and we were
    offering $4.5 million. [Snell] said okay and the conversation went on
    about how 3 million would get paid in 30 days and then the rest by
    April of 2017.
    There was never an agreement as to how the 4.5 million would be paid
    among the four Defendants- and since Honigford was not even at this
    meeting my assumption was that we would work it out later. I recall
    Ted suggesting that we all pay an even 1.5 million, but that left
    Honigford out and I never agreed to it. Later Ted informed me that
    Honigford “couldn’t pay” so we were just going to forget about him
    and so I had to pay $1.5 million. At no time did I agree to pay 1.5
    million towards the settlement.
    (Fanning Affidavit at 4).
    {¶20} In his deposition testimony and trial testimony, Fanning reiterated that,
    with respect to the division of responsibility for paying the $4.5 million settlement,
    they “never agreed upon who owed what.” (Doc. No. 20, Fanning’s Jan. 25, 2018
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    Depo. Tr. at 41). (See Oct. 19, 2018 Tr. at 44). He testified that there was an
    agreement that the federal lawsuit would be settled but that “there was no package
    put together” concerning how payment for the $4.5 million would be allocated.
    (Doc. No. 20, Fanning’s Jan. 25, 2018 Depo. Tr. at 44). Fanning stated that he was
    silent throughout the settlement negotiations until it was generally agreed that the
    federal lawsuit would be settled for $4.5 million, at which point he “just told them
    [he] had all [his] money tied up and there was no way [he] could do it.” (Oct. 19,
    2018 Tr. at 39-40, 42-43). Fanning conceded, however, that during the settlement
    negotiations, he never said that he was not going to pay anything toward the $4.5
    million and he never expressed the “slightest concern on [his] part about paying the
    bill.” (Id. at 44-45). He further acknowledged that he owes “some” obligation to
    pay a portion of the $4.5 million, but he testified that he never specifically agreed
    to pay $1.5 million. (Doc. No. 20, Fanning’s Jan. 25, 2018 Depo. Tr. at 57-59, 70).
    {¶21} Fanning disputed Ted’s and Snell’s testimony that the $1.5 million due
    in April 2017, along with the $5,000 per month discount for early payment, was
    meant to accommodate his inability to pay $1.5 million in 2016. Fanning testified
    that all “that was said [was that Ted and Rick would] pay in 30 days * * * and then
    six months from now 1.5.” (Oct. 19, 2018 Tr. at 50). He insisted that it was not his
    understanding that he would have to pay the $1.5 million due in April 2017 but that
    “it * * * just laid out on the table that’s just how the payments would go.” (Id.).
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    According to Fanning, “[i]t was never laid out who was going to do what, when and
    where. * * * It was just lump numbers.” (Id.). Nevertheless, he testified that it was
    “probably” a “perfectly fair conclusion” that, because the Horstmans were paying
    $1.5 million each and there was $1.5 million “out there for six months,” he was
    responsible for paying the $1.5 million due in April 2017. (Id. at 51).
    {¶22} Finally, regarding Honigford’s potential responsibility to pay a portion
    of the $4.5 million, Fanning testified that “Ted said that Honigford didn’t have any
    money so [they were] not even going to ask him” to pay. (Id. at 56). Fanning stated
    that he believed that he should ask about Honigford’s contribution but that he did
    not ask and he did not know why he did not ask other than that the Horstmans were
    “driving” the settlement negotiations. (Id.). Fanning testified that there was no
    conversation during the settlement negotiations about whether Honigford would
    contribute to the settlement agreement. (Id. at 58). He testified that he believed that
    he suggested that Honigford pay something toward the settlement but he could not
    remember when he said so. (Id.). However, Fanning stated that he did not express
    concern that Honigford was absent from the settlement discussions. (Id. at 37).
    {¶23} In this case, the trial court was tasked with selecting between two
    competing narratives. In one, the version urged by the Horstmans, it was clearly
    understood by all parties at the time the settlement agreement was finalized that the
    $4.5 million payment would be divided equally between Ted, Rick, and Fanning
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    and that Honigford would not be liable for any share of the $4.5 million. In the
    other, promoted by Fanning, the parties agreed that $4.5 million would be paid to
    Lynx but there was no understanding as to who would be responsible for paying
    what portion of the $4.5 million. Ultimately, the trial court credited the Horstmans’
    version of events over Fanning’s, and as detailed above, there is ample evidence in
    the record supporting the trial court’s decision to do so. Therefore, the trial court’s
    conclusion that Fanning incurred a $1.5 million obligation under the settlement
    agreement and that he should reimburse the Horstmans for paying his obligation is
    not against the manifest weight of the evidence.
    {¶24} In addition to arguing that the trial court’s judgment is against the
    manifest weight of the evidence, Fanning also argues that the trial court’s judgment
    is contrary to law. First, Fanning argues that the trial court’s judgment is contrary
    to law because it is based, at least in part, on the trial court’s incorrect legal
    conclusion that Honigford “was an employee of the business and would not have
    responsibility to contribut[e] to the settlement.” (Doc. No. 56). Fanning’s argument
    is without merit. Assuming (without deciding) that Fanning is correct that the trial
    court erred by concluding that Honigford would not have responsibility to contribute
    to the settlement because he was merely an employee of Ultimate Systems, such
    error would have no impact on whether Honigford has a responsibility to pay any
    part of the $4.5 million. Here, Honigford’s liability, or lack thereof, is not rooted in
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    general principles of employment or agency law.         Rather, Honigford is not
    responsible for paying a portion of the $4.5 million settlement because the parties
    agreed that Honigford would bear no responsibility for any part of the $4.5 million.
    Thus, even if Honigford would be liable under the default rules of employment or
    agency law, the parties, through their arrangement, bypassed those rules.
    {¶25} Furthermore, Fanning argues that the trial court’s judgment is contrary
    to law because any oral agreement he may have made to pay $1.5 million is
    unenforceable under R.C. 1335.05, Ohio’s Statute of Frauds. Specifically, Fanning
    argues that any promise to pay Lynx $1.5 million would necessarily include a
    promise to pay part of Honigford’s share of the $4.5 million settlement figure.
    (Appellant’s Brief at 13-14). He contends that “[b]y agreeing to let Honigford out
    without paying a dime, [he] would not have been serving his own business or
    pecuniary interest * * *.” (Id. at 14). According to Fanning, “any promise * * * to
    pay [Honigford’s] share would have needed to be in writing and signed pursuant to
    R.C. 1335.05.” (Id.).
    {¶26} Fanning’s argument is misplaced. R.C. 1335.05 provides:
    No action shall be brought whereby to charge the defendant, upon a
    special promise, to answer for the debt, default, or miscarriage of
    another person * * * unless the agreement upon which such action is
    brought, or some memorandum or note thereof, is in writing and
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    signed by the party to be charged therewith or some other person
    thereunto by him or her lawfully authorized.
    Thus, the existence of a promise to answer for a “debt, default, or miscarriage of
    another person” is essential to the applicability of R.C. 1335.05. Under the trial
    court’s factual findings, which, as discussed above, are supported by competent,
    credible evidence, Honigford did not incur any debt in connection with the federal
    lawsuit. The entire debt owed to Lynx, $4.5 million, arose from the settlement
    agreement and was divided equally between Fanning and the Horstmans. Therefore,
    Fanning’s assent to paying $1.5 million was not a promise to answer for the debt of
    another; it was a promise to pay his own debt and his own debt alone.
    {¶27} Fanning’s assignment of error is overruled.
    {¶28} Having found no error prejudicial to the appellant herein in the
    particulars assigned and argued, we affirm the judgment of the trial court.
    Judgment Affirmed
    ZIMMERMAN, P.J. and WILLAMOWSKI, J., concur.
    /jlr
    -19-
    

Document Info

Docket Number: 12-18-14

Judges: Preston

Filed Date: 6/24/2019

Precedential Status: Precedential

Modified Date: 6/24/2019