Graham v. Boerger , 2015 Ohio 3261 ( 2015 )

[Cite as Graham v. Boerger, 2015-Ohio-3261.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
DARKE COUNTY
KIMBERLY GRAHAM :
: Appellate Case No.2014-CA-17
Plaintiff-Appellant :
: Trial Court Case Nos. 10-1-198
v. : Trial Court Case Nos. 12-4-001
:
CHRIS H. BOERGER, et al. : (Civil Appeal from Common Pleas
: Court, Probate)
Defendants-Appellees :
:
...........
OPINION
Rendered on the 14th day of August, 2015.
...........
ANDREW T. WHITE, Atty. Reg. No. 0074041, Dysinger & Patry, LLC, 249 South Garber
Drive, Tipp City, Ohio 45371
Attorney for Plaintiff-Appellant
JAMES S. DETLINE, Atty. Reg. No. 0042728, Detling, Harlan & Fliehman, Ltd., 421
Public Square, Greenville, Ohio 45331
Attorney for Defendant-Appellee, Chris H. Boerger
JOSHUA KOLTAK, Atty. Reg. No. 0078164, 100 South Main Avenue, Sidney, Ohio
45365
Attorney for Defendant-Appellee, David Boerger
.............
-2-
FAIN, J.
{¶ 1} The parties, Kimberly Graham, Diane Birt, and Chris, Theodore, Frank,
Jeffrey and David Boerger, are siblings, who shared in the assets of their mother’s trust
and estate as her beneficiaries. Kimberly Graham appeals from an order of the Darke
County Probate Court rejecting her caretaking claim against the estate, after the parties
had reached a settlement of all claims.
{¶ 2} We conclude that the trial court did not err in interpreting the settlement
agreement as a full release of all claims, thus preventing Graham from pursuing
additional claims not identified in the settlement agreement. Accordingly, the judgment of
the Probate Court is Affirmed.
I. The Course of Proceedings
{¶ 3} After Dorothy E. Boerger’s death on June 30, 2010, a case was opened in
Darke County Probate Court for a complete administration of her estate. Pursuant to her
will, Dorothy Boerger directed the payment of all debts of her estate, with the residue
passing to her seven children in equal shares. The will appointed Chris and Theodore
Boerger, as co-executors of the will, which was approved by the trial court in an entry
appointing them as fiduciaries for the estate. Chris and Theodore had previously been
named as co-trustees of the Dorothy E. Boerger Trust established in 1997. In the first
inventory and appraisal, the estate was valued at $238,159.82. On the schedule of
assets, it was noted that payments were being made on two promissory notes for loans to
two of the seven children, which had substantial balances owed to the estate: $102,000
-3-
and $92,400. The relationship between the siblings became hostile, and allegations
regarding missing assets and debts of the estate were reported to the court. One of the
executors produced two letters, allegedly signed by the mother two hours before her
death, itemizing advancements and loans, and expressing an intention to reduce certain
indebtedness. More letters were sent to the trial court with allegations of mismanagement
of the estate, which led to a status conference conducted before the court Magistrate. A
Magistrate’s Order described the acrimony between the siblings, detailed the contested
issues, and encouraged the parties to reach a global settlement of all claims. Dkt. 83-87.
Shortly thereafter, Graham filed a motion to remove her brothers as fiduciaries of the
estate and to appoint an attorney as a neutral administrator. The trial court approved the
request to remove the co-executors and approved appointment of an attorney as the
fiduciary of the estate.
{¶ 4} Graham also filed a separate action in the Darke County Probate Court to
remove her brothers as co-trustees of the Dorothy E. Boerger Trust. Chris and
Theodore both filed their resignations as co-trustees, and the court approved
appointment of the same attorney who had been appointed as fiduciary for the estate.
Numerous documents were filed attempting to challenge financial transactions of the
trust, and allegations were made suggesting theft, fraud, conversion and other
misfeasance. In a document itemizing the assets, disbursement, and receipts for the trust
from 6/11/12 to 3/5/13, it was reported that the trust had assets worth $664,314.23. The
parties attempted to engage in discovery, and the matter was set for trial to resolve
contested issues. Graham’s 150-page trial brief attempts to summarize and document
the issues related to each of the siblings, whether the debts should be considered
-4-
advancements, and whether the law requires reimbursement to an estate of any
advancement to a beneficiary when the amount exceeds that beneficiary’s share of the
estate. After two days of trial, Graham’s attorney prepared a proposed written settlement
agreement, exchanged drafts with opposing counsel, made revisions to the agreement,
and then sent it to the court for approval. On March 6, 2014, a hearing was conducted
before the Magistrate, and Graham’s attorney explained the amount of each sibling’s
advancement to be charged against that sibling’s share of the estate, and that Graham
was reserving the right to file a motion asking for payment of her legal fees from the trust.
Approval of the settlement agreement was verbally verified on the record by all seven
siblings. During the hearing, the Magistrate confirmed the finality of the agreement by
stating, “The whole idea is being no more delay. It’s done. There’s no appeal of my
decision or appeal to the Court of Appeals.” The written settlement agreement prepared
as an “Agreed Judgment Entry” was signed by all siblings, and their attorneys, and
approved by the Magistrate and the trial judge. The Agreed Judgment Entry
acknowledges that the entry was intended to resolve the disputes between the parties
regarding “the amount and nature of the debts and advancements that are properly
chargeable against the share of each beneficiary.” It further states that it was intended
“to bring a resolution to this dispute, to allow for the assets of the Estate and Trust to be
distributed, and for the Estate to be closed and the Trust terminated.” Paragraph 4 of the
entry provides that Diane’s note is adjusted to a zero balance, with no right to any share of
the estate residuary and the remaining six siblings will each receive 1/6 of the estate and
trust residuary, less specific adjustments for advancements, “[a]fter payment of all
outstanding claims, expenses and fees which are properly payable by the Estate and or
-5-
Trust.” The Agreed Judgment Entry includes a release, in paragraph 5, which states:
Each and every party hereby agrees to irrevocably release and
discharge; each and every Party and his or her agents, representatives,
insurers, successors and assigns; the attorney for every party; the
Co-Executors and Administrator WWA of the Estate of Dorothy E. Boerger;
the Co-Trustees of the Dorothy E. Boerger Trust; and all related persons or
entities from all claims relating to the distribution of assets of the Estate and
Trust of Dorothy E. Boerger. (Emphasis added).
{¶ 5} Subsequent to the filing of the agreed judgment entry, Graham filed a
motion for her attorney fees, which was opposed by Chris and David. After the trustee
filed documents referencing his final fees for administering the trust, and the court
approved an order to pay the final fees owed to the administrator of the estate and his
attorney, Jeff filed a motion to pay Graham a caretaking claim of $12,000 as an
outstanding debt of the estate and trust. To support his motion, Jeff attached a document
drafted by the estate fiduciary recognizing Graham’s claim as part of a proposed
settlement, but that proposal was never filed, accepted, or signed by any of the parties.
The record does not contain any documents to establish whether Graham ever filed a
creditor’s claim against the estate, or presented a written claim to the co-executors or the
administrator, in the manner prescribed by R.C. 2117.06. Chris filed a reply opposing
payment of Graham’s claim, on the basis that all claims of the beneficiaries were settled in
the Agreed Judgment Entry. A Magistrate Report and Suggestion of Settlement was sent
to all parties, recommending a compromise by paying $6,000 to satisfy Graham’s
caretaking claim. All seven siblings objected to the suggested settlement. Five objected
-6-
on the basis that it was precluded by the terms of the agreed judgment entry, and two
objected to the amount of the compromise.
{¶ 6} On August 14, 2014, the Magistrate overruled the motion for payment of
Graham’s caretaking claim, upon the ground that paragraph 5 of the settlement
agreement irrevocably released and discharged all claims to the distribution of assets of
the Estate and Trust. Graham moved to reconsider payment of her claim and/or
objections to the Magistrate’s Decision. The Magistrate overruled her motion for
reconsideration. On November 10, 2014 the trial court adopted the decision of the
Magistrate and overruled Graham’s objections. From this judgment entry, Graham
appeals.
II. Standard of Review
{¶ 7} The specific issue before us calls for an interpretation of the settlement
agreement executed by all the parties. Because resolution of this issue, the interpretation
of a contract, is a matter of law, we employ a de novo standard of review.
{¶ 8} The Supreme Court of Ohio, when reviewing a case involving the
enforcement of a settlement agreement, declared that “Ohio appellate courts must
determine whether the trial court’s order is based on an erroneous standard or a
misconstruction of the law.” Continental W. Condominium Unit Owners Assn. v. Howard
E. Ferguson, Inc., 74 Ohio St. 3d 501, 502, 660 N.E.2d 431 (1996). Therefore, the Court
held that the standard of review to be applied “is whether the trial court erred as a matter
of law in dismissing the motion to enforce the settlement agreement.” Id. See also Kilroy
v. Peters, 2d Dist. Montgomery No. 25547, 2013-Ohio-3384, ¶ 38.
-7-
III. The Settlement Agreement Did Preclude Any
Additional Claims by the Beneficiaries of the Estate
{¶ 9} Graham’s sole assignment of error is as follows:
THE TRIAL COURT ERRED AS A MATTER OF LAW WHEN IT
FOUND THAT A SETTLEMENT AGREEMENT DETERMINING THE
DEBTS AND ADVANCEMENTS TO BE CHARGED AGAINST THE
RESIDUAL SHARES OF THE BENEFICIARIES OF AN ESTATE AND
TRUST PRECLUDED PAYMENT OF A CLAIM OF A BENEFICIARY
AGAINST THE ESTATE AND TRUST.
{¶ 10} Arguments presented within this assignment of error include an argument
that the trial court erred in overruling objections to the Magistrate’s Decision, and that the
trial court erred by concluding that Graham’s caretaker claim had been waived.
{¶ 11} “Where the parties enter into a settlement agreement in the presence of
the court, such an agreement constitutes a binding contract.” Spercel v. Sterling
Industries, 31 Ohio St. 2d 36, 285 N.E.2d 324 (1972). “It is axiomatic that a settlement
agreement is a contract designed to terminate a claim by preventing or ending litigation
and that such agreements are valid and enforceable by either party.” Continental W.
Condominium Unit Owners Assn. v. Howard E. Ferguson, Inc., 74 Ohio St. 3d 501, 502,
660 N.E.2d 431 (1996). “Further, settlement agreements are highly favored in the law.”
Id., citing State ex rel. Wright v. Weyandt , 50 Ohio St. 2d 194, 363 N.E.2d 1387 (1977).
{¶ 12} In view of these policies favoring settlement agreements, we must look to
the terms of the agreement to determine whether the parties agreed to a final resolution of
-8-
all claims of the beneficiaries and intended to preclude any further claims against the
estate or trust, other than the amounts listed in the agreement. In the case before us, the
trial court relied on the express language in the settlement agreement that all parties,
including Graham, agreed to irrevocably release and discharge all claims relating to the
distribution of assets of the Estate and Trust of Dorothy E. Boerger.
{¶ 13} “Generally, courts presume that the intent of the parties to a contract
resides in the language they chose to employ in the agreement.” First Capital Corp. v. G &
J Industries, Inc., 131 Ohio App. 3d 106, 115, 721 N.E.2d 1084 (8th Dist.1999), citing Kelly
v. Med. Life Ins. Co., 31 Ohio St. 3d 130, 509 N.E.2d 411 (1987). “When the terms in a
contract are unambiguous, courts cannot in effect create a new contract by finding an
intent not expressed in the clear language employed by the parties.” Alexander v.
Buckeye Pipe Line Co., 53 Ohio St. 2d 241, 246, 374 N.E.2d 146 (1978). “[I]f no ambiguity
exists, the terms of the contract must simply be applied without resorting to methods of
construction and interpretation.” Buckeye Check Cashing, Inc. v. Madison, 8th Dist.
Cuyahoga No. 90861, 2008-Ohio-5124, ¶ 12.
{¶ 14} As explained by the Eighth District Court of Appeals,
A release ordinarily operates to extinguish a right in exchange for
some consideration and effectively operates as an estoppel or a defense to
an action by the releasor. As such, it is a contract between parties,
enforceable at law subject to the rules governing the construction of
contracts. Whether a release operates upon a certain liability depends
entirely upon the intention of the parties, which is to be gathered from the
language of the release and the state of facts then existing. If the parties to a
-9-
release intend to leave some things out of a release, then “their intent to do
so should be made manifest.” When the terms of a contract are
unambiguous, courts will not, in effect, create a new contract by finding an
intent not expressed in the language employed by the parties. Moreover,
when the parties have negotiated the release with the assistance of legal
counsel, and both sides have agreed to the language included in the
release, there is an assumption that the parties are fully aware of the terms
and scope of their agreement. (Internal citations omitted).
Weisman v. Blaushild, 8th Dist.Cuyahoga No. 88815, 2008-Ohio-219, ¶ 24.
{¶ 15} We conclude that the language of the release was unambiguous, and was
intended to terminate all claims and end the protracted and hostile litigation between the
Boerger siblings. The intent of the release was identified in the opening paragraph, which
specifically stated that it was “to bring a resolution to this dispute, to allow for the assets of
the Estate and Trust to be distributed, and for the Estate to be closed and the Trust
terminated.” Any claim against the estate assets would necessarily have a direct effect
on the amount of each beneficiary’s share, prevent distribution of assets, and delay the
termination of the estate until the claim’s resolution. Graham does not suggest that her
caretaking claim was new, so that it was not contemplated at the time the settlement
agreement was executed. If her caretaking claim was intended to be left out of the
agreement, it should have been identified in the same manner as the outstanding legal
fee claims that were expressly excluded from the scope of the agreement. To except her
caretaking claim from the release, the trial court would have had to rewrite the contract or
add words that were not written or agreed to by all of the parties. We conclude that the
-10-
court did not err as a matter of law in its interpretation of the contract in a manner that
gives effect to the parties’ clear intent to release all claims that any of the parties had
against the estate or trust. Graham’s sole assignment of error is Overruled.
IV. Conclusion
{¶ 16} The sole assignment of error having been overruled, the judgment of the
trial court is Affirmed.
.............
DONOVAN and WELBAUM, JJ., concur.
Copies mailed to:
Andrew T. White
James S. Detling
Joshua Koltak
Diane Birt
Frank Boerger
Gary Brown
Jeffrey Boerger
Theodore Boerger
Thomas Guillozet
Hon. Jason R. Aslinger