Aceste v. Stryker Corp.

[Cite as Aceste v. Stryker Corp., 2020-Ohio-4938.]
IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
LUCAS COUNTY
Frank Aceste, et al. Court of Appeals No. L-19-1166
Appellants Trial Court No. CI0201504798
v.
Stryker Corporation, et al. DECISION AND JUDGMENT
Appellees Decided: October 16, 2020
*****
Karin L. Coble, for appellants.
Susan M. Audey and Tariq M. Naeem, for appellees, Stryker Corporation
and Howmedica Osteonics Corp.
Paul C. Cosgrove and Joshua A. Klarfeld, and Georgia Hatzis, for appellee,
Hammill Manufacturing Company.
*****
PIETRYKOWSKI, J.
{¶ 1} Appellants, Frank and Rhonda Aceste, appeal the judgment of the Lucas
County Court of Common Pleas, dismissing with prejudice appellants’ claims against
appellees, Stryker Corporation, Howmedica Osteonics Corporation, and Hammill
Manufacturing Company. For the reasons that follow, we reverse.
I. Facts and Procedural Background
{¶ 2} The present matter was initiated on December 11, 2015, when appellants
filed a complaint against appellees for compensatory damages related to medical
problems and loss of consortium. The case was subsequently consolidated with another
pending case involving a separate plaintiff. Relevant here, the claims were mediated over
numerous sessions beginning in June 2016.
A. Trial Court Grants Appellees’ Motion to Enforce Settlement Agreement
{¶ 3} On April 10, 2017, appellees moved to enforce a settlement agreement that
was purportedly reached during the mediation sessions. In their motion, appellees
asserted that on September 30, 2016, counsel for appellants, Zoll & Kranz, LLC, sent
correspondence to appellees confirming that appellants, among others, agreed to the
settlement terms, including appellees’ payment of a sum of money to appellants,
dismissal of the lawsuit with prejudice, release of all present and future claims against
appellees, appellants’ responsibility for Medicare liens, and strict confidentiality and non-
disparagement. Appellees also asserted that Zoll & Kranz indicated, in the September 30,
2016 correspondence, that as part of the informed consent process, appellants were
provided with an explanatory form to review the terms of the settlement.
{¶ 4} The September 30, 2016 correspondence was not so specific regarding the
settlement terms, however. The correspondence stated, in its entirety,
2.
We have reached at least some conclusion with all remaining
[redacted] clients.
As you know, we allocated the offer with the assistance of Special
Master Judge Richard B. McQuade. Their responses can be broken into 3
categories:
Group A
[Redacted] people have accepted the allocated offer. [Redacted] of
those have returned a signed form and we are still waiting on the remaining
[redacted]. The total amount allocated to these [redacted] was [redacted].
Group B
[Redacted] people, [redacted] and [redacted] have accepted the
allocated offer contingent on resolution of their liens such that they do not
have to pay any subrogation. Both live in “made-whole” states where
subrogation is not due until the client has been made whole and we have
sent letters to both subrogation carriers demanding that they waive their
liens. The total amount allocated to these [redacted] is [redacted].
Group C
[Redacted] people, [redacted] and [redacted], have rejected the
allocated offer. The total amount allocated to these [redacted] was
[redacted].
3.
If you feel it would be helpful, we could provide Judge Welsh a
copy of the Special Master’s letter to the clients with the spreadsheet
showing each allocation and the bases for it. While the material is
confidential and privileged, we hope that she will determine that Judge
McQuade’s allocation was done fairly.
While we are still working to secure final signed acceptance as well
as aggressively pursuing the lien resolution issue on behalf of [redacted]
clients, we have essentially reached what we feel is fairly (sic) optimistic
point. We recognize there are a few contingent issues on behalf of our
clients and we are mindful that is not precisely what Stryker was seeking. I
welcome input on direction or next steps from this point.
{¶ 5} The next email, chronologically, that appellees attached to their motion to
enforce the settlement agreement was a November 23, 2016 email wherein Zoll & Kranz
sent to appellees their proposed Qualified Settlement Fund agreement (“QSF”) and
proposed Medicare and Non-Medicare releases. On November 28, 2016, appellees
replied with their proposed changes to the QSF and to the releases, and stated that if the
documents were acceptable, then appellees would need a list of the individuals
categorized into Medicare and Non-Medicare. On November 29, 2016, Zoll & Kranz
approved the documents and sent to appellees a list of the Medicare status for all settled
individuals for purposes of determining the correct release language. Appellants were
included on this list. Appellees then requested a list of the actual settlement proceeds
4.
allocated to each person. In response, a second list identifying the settled individuals
with their settlement allocations was sent to appellees on November 30, 2016. Again,
appellants were included on the list.
{¶ 6} Based on the representations of Zoll & Kranz, appellees prepared the
individualized “Confidential Settlement Agreement and Full Release,” which appellees
claim memorialized the basic settlement terms to which the parties had already agreed.
This release was sent to Zoll & Kranz on December 5, 2016, and was attached to
appellees’ motion to enforce the settlement agreement as Exhibit D. The December 5,
2016 “Confidential Settlement Agreement and Full Release” is the first document that
details any of the terms of the settlement agreement. Appellants did not sign the
December 5, 2016 “Confidential Settlement Agreement and Full Release.”
{¶ 7} Also attached to appellees’ motion to enforce the settlement agreement were
several email chains discussing appellants’ unwillingness to sign the “Confidential
Settlement Agreement and Full Release.” On January 12, 2017, Zoll & Kranz advised
appellees that appellants had raised an issue with the portion of the “Confidential
Settlement Agreement and Full Release” language pertaining to Medicare. On January
27, 2017, Zoll & Kranz provided appellees with proposed edits to the release which
removed the Medicare provisions, but specifically noted “We do not have client consent
but we at least wanted to give you a draft to consider.” A further email from Zoll &
Kranz on that date reiterated “But please bear in mind I have not yet been able to get the
client on board. Very difficult situation, even though he previously had agreed in
5.
writing.” On January 30, 2017, Zoll & Kranz contacted appellees to inquire on their
response to the proposed changes to the Medicare provisions, but again noted, “We do
not yet have client consent yet * * * * We hope that if the client accepts, we can quickly
get the final agreement to him for signature.” Appellees responded that they agreed to
the proposed edits, but to “keep [them] posted.” On February 3, 2017, Zoll and Kranz
advised appellees that they were sending the finalized release to appellants. The
February 3, 2017 “Confidential Settlement Agreement and Full Release” was attached to
appellees’ motion to enforce the settlement agreement as Exhibit H. Appellants have at
all times refused to sign either the December 5, 2016, or the February 3, 2017
“Confidential Settlement Agreement and Full Release.” On March 2, 2017, Zoll & Kranz
moved to withdraw as counsel.
{¶ 8} In their motion to enforce the settlement agreement, appellees argued that
appellants’ “words, deeds, and acts establish that the parties had a meeting of the minds
as to the essential terms of a settlement agreement,” which were acceptance of a
settlement in an agreed-upon amount in exchange for a dismissal of appellants’ lawsuit
with prejudice and a release of their claims. Appellees further argued that appellants’
agreement to the terms of the settlement was corroborated by the fact that appellants only
contested the Medicare release language in the December 5, 2016 “Confidential
Settlement Agreement and Full Release.” Thus, appellees concluded that a valid
settlement agreement existed that should be enforced by the trial court.
6.
{¶ 9} Appellants responded by filing a pro se motion to vacate the motion to
enforce the settlement agreement. In their motion, appellants first argued that Rhonda
Aceste never agreed to the settlement, was not aware of any explanatory form regarding
the terms of the settlement agreement, never spoke with anyone from Zoll & Kranz’s
office, and never signed an informed consent letter.
{¶ 10} Additionally, appellants argued that while Frank Aceste signed an
“Informed Consent Acknowledgment and Consent to Settle” form on November 2, 2016,
he only did so after much pressure from counsel, and while he was mentally incapacitated
by pain. Furthermore, appellants contended that Frank was told by counsel that signing
the informed consent form was the only way that he could learn the terms of the
settlement, and that he would still have a right to decline the settlement once the full
terms were disclosed.
{¶ 11} The informed consent form, which was attached as an exhibit to appellants’
motion to vacate, stated, in pertinent part:
I have read and understand the terms of the foregoing letter
regarding the aggregate settlement offer being made to 22 clients of Zoll &
Kranz, LLC, including myself as well as the allocation of the funds among
the clients. I have also spoken to my attorneys and their staff on numerous
occasions leading up to this settlement and have been well-informed during
these communications.
7.
I accept the terms outlined in the letter, the Gross Individual
Settlement Amount, and my settlement allocation of * * *.1 I understand
that this is an estimate and my Net Individual Settlement Amount will be the
final settlement amount that will be distributed to me after confirmation of
the Settlement Criteria listed below, deductions for contingency attorney’s
fees, litigation costs, as well as any healthcare liens that are deducted from
the “Gross Individual Settlement Amount.”
***
I agree to the appointment of Judge Richard B. McQuade to resolve
any disputes that may arise in connection with this Settlement, including
the allocation of settlement proceeds.
Notably, the “foregoing letter” that was referred to in the informed consent form, and that
contained the terms of the settlement agreement, was not included in the documents
presented to the trial court in the litigation on the motion to enforce the settlement
agreement.
{¶ 12} Finally, appellants argued in their motion to vacate that the final December
5, 2016 “Confidential Settlement Agreement and Full Release” that Frank refused to sign
was drastically different from the original informed consent form that he signed on
November 2, 2016.
1
The specific dollar amount of appellant’s settlement allocation was included in the
informed consent letter, but is omitted here for purposes of confidentiality.
8.
{¶ 13} For all of the above reasons, appellants requested that the court vacate the
motion to enforce the settlement agreement, require appellees to provide all medical
records and study results relating to Frank, and allow appellants additional time to find
suitable counsel.
{¶ 14} Attached to appellants’ motion to vacate was, inter alia, an email exchange
between Frank Aceste and Zoll & Kranz. The email exchange evidences that counsel
was communicating to appellants that appellants could still opt out of the settlement
agreement as of late December 2016, well after Zoll & Kranz informed appellees that
appellants had agreed to the terms of the settlement. On December 28, 2016, counsel
emailed Frank and updated him on the need for an “MSA” (Medicare Medical Savings
Account), and suggested hiring a third-party expert to conduct an MSA analysis. If an
MSA was needed, it would reduce the amount of the settlement offer that Frank would
receive. At the end of the email, counsel posed the following conundrum: “we cannot
push forward with an MSA analysis until we know if you are going to accept the
offer…and I imagine you don’t know if you’re accepting the offer until you know how
the analysis will turn out.” On January 5, 2017, Frank replied, and indicated that he
could not make a decision without more information, or without certain assurances. Zoll
& Kranz replied on January 6, 2017, that, to clarify, the choice was:
[W]e either opt in to the current settlement program, or opt out. * * * If
you opt out, then our task is to return to fighting your case in court. If
Stryker decides to settle the other 19 people without you (their option), then
9.
they may approach you about settling on other terms (maybe we could ask
them to pay the MSA). Then again, when we only have 2 cases left (I have
one other person who opted-out months ago), then they may refuse any
more settlement talks and we’ll prepare for trial over the next 18-24
months.
On January 11, 2017, Frank emailed counsel to inform them that “I have decided to opt
out of the settlement agreement and to continue litigation.” After a further email from
Zoll & Kranz attempting to salvage the settlement agreement, Frank replied on January
12, 2017,
The MSA, which was brought to light with the final settlement docs,
has raised some issues I had not thought of earlier.
This settlement is unacceptable regardless of MSA and I will take
my chances.
[Appellees] should have disclosed the full settlement details from the
start.
{¶ 15} Also attached to appellants’ motion to vacate was a December 13, 2016
email from Zoll & Kranz to Frank’s sister, Claire Aceste. The email explained,
Regarding the original offer including 22 people, but now only 20:
Stryker did make their original offer contingent on all 22 people accepting.
Back then, first one person said “no” and we called Stryker and asked if we
should even continue our work. They said “please continue,” which we
10.
took to mean that they would proceed without one person. Then, when I
asked for final answers from the last 4 people (Frank was one of those last
4, as I recall), one more person said “no.” Everyone else said “yes.” Then,
Stryker considered whether they wanted to go forward for the 2 months that
followed…and very recently came back and said they would go forward
with the 20 of 22.
{¶ 16} On June 27, 2017, appellees filed their reply in support of their motion to
enforce the settlement. In their reply, appellees reiterated that appellants’ words, deeds,
and acts as conveyed through their counsel established a meeting of the minds as to the
essential terms of the settlement agreement. Appellees argued that this reality is
conclusively supported by the signed informed consent letter, in which Frank
acknowledged that he understood the terms of the agreement, that he was aware that the
gross settlement amount was subject to a series of deductions, and that he accepted the
settlement.
{¶ 17} On August 21, 2017, the trial court entered its judgment granting appellees’
motion to enforce the settlement agreement. The trial court reasoned that the informed
consent form signed by Frank on November 2, 2016, evidenced the satisfaction of the
essential terms of contract formation, namely offer, acceptance, consideration, and
manifestation of mutual assent. The court further found that there was no evidence in the
record to support appellants’ claim that Frank’s signature on the informed consent form
11.
was the product of mental incapacity or undue influence. Thus, the court held that a
binding settlement agreement existed.
{¶ 18} As to Rhonda’s claim for loss of consortium, the trial court found that such
a claim is a derivative claim that cannot survive if the main claim at issue is dismissed.
Thus, the court held that Rhonda’s claim was no longer enforceable, and that it was
subject to the settlement agreement.
{¶ 19} Finally, the court held that even if the informed consent form did not
establish that a settlement agreement existed, an agreement nonetheless materialized
when appellants presented a counter-offer to appellees—that included changes to the
Medicare language—which appellees accepted when they agreed to the modified
language.
B. Appellants Initiate Repeated Challenges to the Trial Court’s Judgment
Granting the Motion to Enforce the Settlement Agreement
{¶ 20} On September 26, 2017, appellants appealed the trial court’s judgment
granting the motion to enforce the settlement agreement. On December 6, 2017, this
court dismissed appellants’ appeal for lack of a final appealable order.
{¶ 21} In the meantime, appellants filed a pro se motion to stay the trial court’s
August 21, 2017 judgment. In their motion, appellants argued that Frank suffered from
diminished mental capacity, as evidenced by an attached listing of the prescription drugs
he takes, as well as notes from his psychiatrist relating the treatments and effects Frank
has experienced. Appellants further argued that extreme pressure from counsel was
placed upon Frank to induce him to sign the informed consent form. Finally, appellants
12.
argued that their prior counsel failed to look into Frank’s medical situation, and that
appellants have requested, but have not obtained, all of Frank’s records held by appellees.
{¶ 22} Notably, attached to appellants’ motion to stay was a December 6, 2016
letter from counsel to appellants that accompanied the December 5, 2016 “Confidential
Settlement Agreement and Full Release.”2 In the letter, counsel stated that they had been
waiting to hear if appellees would go forward with the settlement with only 20 of the 22
claimants agreeing to the settlement, and that counsel was now happy to report that
appellees had “agreed to go forward with the settlement.” Further, the letter stated that
“Stryker has made its revised offer contingent on all 20 people accepting the final terms.
If any of the 20 clients does not finalize the settlement, then the offer is withdrawn as to
all clients.”
{¶ 23} Appellees filed their opposition to appellant’s motion to stay, and included
a motion to amend the trial court’s August 21, 2017 judgment to set forth the parties’
respective obligations in light of the court’s decision to grant the motion to enforce the
settlement agreement. Appellees requested that the court amend its entry to order
appellants to execute the “Confidential Settlement Agreement and Full Release” setting
forth the terms of the settlement agreement and dismissing the claims with prejudice.
While not explicit, appellees referred to the December 5, 2016 “Confidential Settlement
Agreement and Full Release” in their motion to amend.
2
Later, the record reveals that the December 6, 2016 correspondence also included a
“Revised Informed Consent” form, although that form was not attached to appellants’
motion to stay.
13.
{¶ 24} Appellants then filed their reply in support of their motion to stay. In the
reply, appellants argued that the September 30, 2016 email chain relied upon by appellees
in their motion to enforce the settlement agreement did not support the existence of a
settlement agreement. Additionally, appellants asserted that there was never oral or
written discussion on the issue of dismissal with prejudice, and thus that term was not
part of the original settlement offer. Lastly, appellants stated that there was never
acceptance of the settlement offer, that they had the understanding that they still had the
choice to opt out of the settlement agreement, that the purported counter-offer from
appellants was not accepted by appellees because they only agreed to three of the seven
proposed changes, and that Frank’s mental illness precluded him from being able to enter
into the settlement agreement.
{¶ 25} Following our mandate dismissing appellants’ appeal for lack of a final
appealable order, appellants filed a pro se motion for a temporary restraining order and
preliminary injunction. Although not entirely clear, in their motion for a temporary
restraining order, appellants appeared to request that the court prohibit any further
litigation on appellees’ motion to enforce the settlement agreement because the
settlement agreement was negotiated on behalf of appellees by an attorney who is not
licensed to practice law in Ohio.
{¶ 26} Appellees responded, arguing that appellants’ motion was frivolous, and
that any litigation appellees participated in, including the motion to enforce the settlement
agreement, was properly brought by Ohio-licensed counsel.
14.
{¶ 27} Appellants replied in support of their motion for a temporary restraining
order, and also filed an opposition to appellees’ October 23, 2017 motion to amend the
trial court’s August 21, 2017 judgment entry. As to the opposition to the motion to
amend, appellants argued that the motion was untimely pursuant to Lucas County Court
of Common Pleas Local Rule 5.05(C) and (D).
{¶ 28} On May 16, 2018, the trial court entered its judgment denying appellants’
pro se motion to stay the judgment and pro se motion for a temporary restraining order,
and granting appellees’ motion to amend the August 21, 2017 judgment. The trial court
reasoned that appellants’ motion to stay was moot by virtue of the fact that the August
21, 2017 judgment was determined not to be a final appealable order. Further, to the
extent that appellants argued that the trial court’s judgment on the motion to enforce the
settlement agreement was erroneous, the trial court found that appellants’ arguments were
the same as in its opposition to the motion to enforce and the court found them to be
unpersuasive. As to appellants’ motion for a temporary restraining order, the trial court
found the motion to be without merit because all of the litigation in the case had been
conducted on behalf of appellees by an attorney licensed in Ohio. Finally, as to
appellees’ motion to amend the August 21, 2017 judgment entry, the trial court agreed,
and in an effort to enter a final appealable order, the trial court ordered:
Both Plaintiffs and Defendants herein are hereby ordered to execute
the Confidential Settlement Agreement and Full Release and Joint
Dismissal and undertake their respective obligations contained within such
15.
document(s). Furthermore, the parties are ordered to provide this Court
with a stipulated dismissal of all Plaintiffs’ claims, with prejudice, by
Friday, June 1, 2018, at 4:30 p.m.
The trial court did not specify whether the parties were to execute the December 5, 2016,
or the February 3, 2017 “Confidential Settlement Agreement and Full Release.”
{¶ 29} Shortly before the deadline, on May 31, 2018, appellants filed a “Proposed
Settlement Agreement and Dismissal” with the trial court. In their filing, appellants
asserted that they submitted a “General Release and Confidential Settlement Agreement”
to appellees, but that appellees have not executed the submitted agreement. Strikingly, in
the copy of the agreement that appellants submitted with their motion, appellants
included a provision that appellees pay an amount approximately 75 times more than the
settlement amount contained in the original proposed settlement agreement.
{¶ 30} On June 1, 2018, appellees filed a motion to dismiss appellants’ complaint
with prejudice, arguing that appellants have failed to comply with the terms of the trial
court’s May 16, 2018 judgment, and have attempted to extort appellees to settle their
claims.
{¶ 31} Before the trial court could rule on appellees’ motion to dismiss, appellants
appealed the court’s May 16, 2018 judgment entry ordering them to execute the
“Confidential Settlement Agreement and Full Release.”
{¶ 32} Thereafter, appellants filed their opposition to appellees’ motion to dismiss,
and a pro se motion for reconsideration of the trial court’s August 21, 2017 judgment
16.
granting the motion to enforce the settlement agreement. In their filing, appellants
attached, for the first time, the “Revised Informed Consent” form sent to appellants by
Zoll & Kranz as part of the December 6, 2016 correspondence. Appellants alleged that
the “Revised Informed Consent” form—which they refused to sign—contains fraudulent
statements by appellees as well as by Zoll & Kranz. Thus, appellants requested the court
to reconsider its granting of appellees’ motion to enforce the settlement agreement, and
deny appellees’ motion to dismiss.
{¶ 33} On July 19, 2018, this court dismissed appellants’ appeal of the trial court’s
May 16, 2018 judgment entry for lack of a final appealable order.
{¶ 34} Subsequently, on November 8, 2018, the trial court entered an order
reaffirming that appellants’ complaint against appellees has been settled pursuant to the
terms of the settlement agreement that was attached to appellees’ motion to enforce the
settlement agreement. This time the trial court ordered appellants to execute the February
3, 2017 “Confidential Settlement Agreement and Full Release,” and warned them that if
they failed to do so within 21 days, then the court would grant appellees’ motion to
dismiss, and would dismiss the complaint with prejudice.
{¶ 35} Appellants appealed the trial court’s November 8, 2018 judgment entry,
which this court again dismissed for lack of a final appealable order.
{¶ 36} On January 4, 2019, following our dismissal of the most recent appeal, the
trial court again ordered appellants to execute the “Confidential Settlement Agreement
and Full Release,” but did not specify whether they should execute the December 5,
17.
2016, or the February 3, 2017 version. The court notified appellants that if they failed to
do so within ten days, appellees’ motion to dismiss would be granted, and appellants’
complaint would be dismissed with prejudice.
{¶ 37} Ten days later, on January 14, 2019, appellants filed a pro se Civ.R. 60(B)
motion for relief from judgment, arguing that Frank underwent a surgery on December 7,
2018, that uncovered new evidence in support of appellants’ claims against appellees.
{¶ 38} Appellees opposed the motion, arguing that relief from judgment under
Civ.R. 60(B) is inappropriate because no final judgment had been entered. To that end,
appellees again requested that the trial court dismiss the complaint with prejudice, noting
appellants’ flagrant refusal to comply with the trial court’s order to execute the
“Confidential Settlement Agreement and Full Release.”
{¶ 39} Appellants then filed their reply in support of their motion for relief from
judgment, in which they argued that they did not give “informed” consent to settle
because Zoll & Kranz and appellees allegedly failed to disclose pertinent facts and
documents at the time of the original settlement negotiations. Appellants further alleged
that the original informed consent form that was executed on November 2, 2016, was
materially different than the version of the “Revised Informed Consent” form and
“Confidential Settlement Agreement and Full Release” that was presented to them on
December 6, 2016.
{¶ 40} On May 1, 2019, the trial court entered its judgment denying appellants’
motion for relief from judgment. Moreover, the court advised appellants “for the final
18.
time” that if they do not execute the settlement agreement within 20 days, the court will
dismiss the complaint with prejudice upon a proper motion by appellees.
{¶ 41} On May 23, 2019, because appellants continued to refuse to sign the
“Confidential Settlement Agreement and Full Release,” appellees moved to dismiss the
complaint with prejudice.
{¶ 42} On June 5, 2019, appellants filed their opposition, in which they raised a
number of issues: (1) Rhonda’s claim for loss of consortium is still enforceable; (2)
appellees’ counsel committed the unauthorized practice of law; (3) appellee Hammill
Manufacturing was not a party to the motion to enforce the settlement agreement; (4)
appellees are in default for failing to file an answer to appellants’ complaint; (5) the
September 2, 2016 informed consent letter did not contain the material terms of the
settlement agreement, including the dismissal of claims with prejudice; (6) the September
2, 2016 informed consent letter and the revised December 6, 2016 informed consent letter
state that if any client rejects the offer, then the offer is withdrawn as to all clients; (7)
appellants submitted a proposed settlement and dismissal to appellees on May 30, 2018,
which received no response; and (8) Frank’s mental illnesses and prescription
medications impacted his ability to enter into a settlement agreement.
{¶ 43} Attached to the opposition, for the first time, was the full September 2,
2016 letter from Zoll & Kranz to appellants describing the proposed settlement
agreement, and requesting appellants’ informed consent to the agreement. The letter
conveyed that appellees insisted that the settlement offer be accepted by all 22 clients,
19.
and if any client rejects the offer, then it is withdrawn as to all clients. Also included, for
the first time, was a portion of the December 6, 2016 letter from Zoll & Kranz to
appellants reporting that two people opted out of the original settlement offer, but counsel
continued to negotiate and appellees agreed to settle with the remaining 20 clients. Zoll
& Kranz again conveyed that “Stryker has made its revised offer contingent on all 20
people accepting the final terms. If any of the 20 clients does not finalize the settlement,
then the offer is withdrawn as to all clients.”
{¶ 44} Because appellants did not execute the “Confidential Settlement
Agreement and Full Release,” the trial court, on July 25, 2019, entered its judgment
dismissing appellants’ complaints with prejudice.
II. Assignments of Error
{¶ 45} Appellants timely appealed the trial court’s July 25, 2019 judgment entry,
and filed a pro se appellate brief setting forth 16 assignments of error. Thereafter,
appellants were able to retain counsel, and this court permitted counsel to submit a
supplemental brief, but this court ordered that counsel was “bound by the assignments of
error raised in [appellants’] pro se briefs and may not assert new, additional assignments
of error.” The 16 assignments of error set forth by appellants are:
1. Hundreds of pages of sealed Documents and Exhibits A-M were
not provided after the withdrawal of former appellants’ attorney’s Zoll &
Kranz on 3/6/2017.
20.
2. The contents of these Exhibits and Documents, which were in the
possession of Zoll & Kranz and were essential to making an informed
consent and were not disclosed to appellants before the delayed signing of
the informed consent on November 2, 2016.
3. These Exhibits and Documents were belatedly released to
Appellants by former Attorney Jim O’Brien, Zoll & Kranz on 6/29/2018.
4. Appellees Stryker et al refused to provide these Exhibits and
Documents.
5. The trial court issued a judgment based on untrue allegations
presented by Appellees’ attorneys without the full understanding of the
Appellant Frank A. Aceste mental condition (Exhibit 5 Page 3 of 6 of
Plaintiffs’ Pro Se Motion to Vacate Stryker’s Motion to Enforce Settlement
filed 6/16/2017) and (Exhibit A of Appellants’ Pro Se Motion for Stay on
Judgment filed 10/10/2017) due to an oversight of the trial court’s non
recognition of proof of Frank’s mental incapacity to enter into an agreement
due to MDD (Major Depressive Disorder), Anxiety, and the prescription
medications’ (Effexor, Klonopin, Neurontin, Ambien) side effects on
decision making.
6. Frank A. Aceste was coerced into signing the first informed
consent, 32 days after the close of the informed consent process, without
the presence of his sister (Claire Aceste), acting as advisor due to his
21.
diminished mental capacity. Frank is not capable of making a decision of
this magnitude without an advisor as stated by his psychologist and
neurologist, Dr. Una Choday MD, PA, records from 2009 through present.
7. The informed consent did not contain a non negotiable offer,
acceptance, contractual capacity, or a consideration and was verbally
declined and not signed at the Sept. 30, 2016 end of the informed consent
process as claimed by Appellee Stryker.
8. Dismissal With Prejudice was never discussed.
9. Frank’s wife Appellant Mrs. Rhonda A. Aceste was never even
spoken to once by former counsel and did not sign the 1st Informed
Consent which Appellee Stryker claims binds Mrs. Rhonda A. Aceste to
the supposed settlement agreement.
10. All of Appellants’ edits were not agreed to by Appellees and
were not just limited to Medicare as Appellees claimed. (only 3 of 7 edits
were accepted).
11. In accordance with the Judgment Entry dated 5/17/2018 by
Judge Cook, being appealed here, there is included an order to Appellants
and Defendants to execute a confidential settlement agreement, full release
and joint dismissal and undertake their respective obligations contained
within such document(s), however, this did not state which settlement
document. Appellants Frank A. Aceste and Rhonda A. Aceste in
22.
compliance with the 5/16/2018 court order, submitted a proposed
settlement and dismissal to defendants and the court, filed 5/30/2018, which
received no response.
12. Appellant Frank A. Aceste entered into supposed Mediation
discussions with Appellee’s Stryker (not neutral) Mediator Honorable
Diane Welsh, a mediator at JAMS, Inc. arranged by Appellee’s attorney
Kim Catullo on 2/15/2017. She verbally admitted that not all the edits were
accepted as stated by Appellees. In this almost 2 hr. phone call former
counsel Jim O’Brien admitted to Mediator Diane Welsh that he told Mr.
Frank A. Aceste and his sister Mrs. Claire Aceste (acting as advisor) that
the Informed Consent was not final and that we still had the right of refusal
to continue litigation. The fact that Appellee Stryker scheduled this
mediation is proof that the first informed consent did not contain all the
elements necessary for settlement. The contents of the materially different
supposed settlement agreement were never disclosed to either Appellants or
their former attorney Jim O’Brien before receipt 12/6/2016.
13. Second Revised Informed Consent and First Settlement
Agreement and Full Release of 12/6/2016 was not signed and orally
rejected and contained fraudulent statements.
14. Second and Third Settlement Agreement and Full Release was
not signed and orally rejected and led to mediation phone call with the
23.
Honorable Diane Welsh, Stryker’s Appellees Mediator (sic), on 2/15/2017,
which resulted in no resolution.
15. Rhonda A. Aceste loss of Consortium is an independent claim
that is still enforceable.
16. Unlawful practice of law by Stryker Attorneys Paul Asfendis and
Kim Catullo of Gibbons P.C.
III. Analysis
{¶ 46} At the outset, we note that appellants have not separately argued their
assignments of error in their appellate brief, but it is clear that the central issue at dispute
is whether a settlement agreement existed between the parties as articulated in appellants’
seventh and thirteenth assignments of error.
The standard of review to be applied to a ruling on a motion to
enforce a settlement agreement depends primarily on the question
presented. If the question is an evidentiary one, this court will not overturn
the trial court’s finding if there was sufficient evidence to support such
finding. However, in a case such as this one where the issue is a question
of contract law, reviewing courts must determine whether the trial court’s
order is based on an erroneous standard or a misconstruction of the law.
(Internal citations omitted.) Turoczy Bonding Co. v. Mitchell, 2018-Ohio-3173, 118
N.E.3d 439, ¶ 15 (8th Dist.); see also Continental W. Condominium Owners Assn. v.
Howard E. Ferguson, Inc., 74 Ohio St.3d 501, 502, 660 N.E.2d 431 (1996) (“[B]ecause
24.
the issue is a question of contract law, Ohio appellate courts must determine whether the
trial court’s order is based on an erroneous standard or a misconstruction of the law. The
standard of review is whether or not the trial court erred.”).
{¶ 47} Here, the dispute is not whether the parties breached the terms of the
settlement agreement, but rather whether a settlement agreement exists in the first
instance. “We review de novo as a question of law a trial court’s decision on a motion to
enforce settlement of whether a settlement agreement exists as a contract between the
parties to terminate a claim by preventing or ending litigation.” Zimmerman v. Bowe, 6th
Dist. Lucas No. L-18-1200, 2019-Ohio-2656, ¶ 11, citing Marine Max of Ohio, Inc. v.
Moore, 6th Dist. Ottawa No. OT-15-033, 2016-Ohio-3202, ¶ 14; see also North Side
Bank & Trust Co. v. Trinity Aviation, LLC, 2020-Ohio-1470, --- N.E.3d ---, ¶ 17 (1st
Dist.) (“[W]e determine the existence of a contract as a question of law, and our standard
of review on questions of law is de novo.”); Alexander Local Sch. Dist. v. Village of
Albany, 2017-Ohio-8704, 101 N.E.3d 21, ¶ 31 (4th Dist.) (“[T]he existence of a contract
is a question of law. Therefore, the existence of a contract is a legal conclusion and not a
factual allegation.”); Union Sav. Bank v. Lawyers Title Ins. Corp., 191 Ohio App.3d 540,
2010-Ohio-6396, 946 N.E.2d 835, ¶ 20 (10th Dist.) (“Courts generally determine the
existence of a contract as a matter of law. This court reviews questions of law regarding
the existence of a contract de novo.”); Zelina v. Hillyer, 165 Ohio App.3d 255, 2005-
Ohio-5803, 846 N.E.2d 68, ¶ 12 (9th Dist.) (“The existence of a contract is a question of
law.”).
25.
{¶ 48} Initially, we note that this case would have benefited greatly from a hearing
on the motion to enforce the settlement agreement, as is actually required by Rulli v. Fan
Co., 79 Ohio St.3d 374, 377, 683 N.E.2d 337 (1997) (“Where the meaning of terms of a
settlement agreement is disputed, or where there is a dispute that contests the existence of
a settlement agreement, a trial court must conduct an evidentiary hearing prior to entering
judgment.”). However, because neither appellants nor appellees ever requested a hearing
in the trial court, and because appellants did not raise the issue as an assignment of error,
the issue is waived. Wilson v. Wilson, 2018-Ohio-3820, 111 N.E.3d 110, ¶ 21 (6th Dist.)
(“If a trial court does not hold the required hearing, an appellant nonetheless waives this
error for purposes of appellate review where ‘[t]he record shows no indication that
appellant requested an evidentiary hearing or objected to the nature of the
proceedings.’”). Thus, our review will be limited to whether the evidence presented to
the trial court on the motion to enforce the settlement agreement establishes that a
settlement agreement did in fact exist.
{¶ 49} “A contract is generally defined as a promise, or a set of promises,
actionable upon breach. Essential elements of a contract include an offer, acceptance,
contractual capacity, consideration (the bargained for legal benefit and/or detriment), a
manifestation of mutual assent and legality of object and of consideration.” Kostelnik v.
Helper, 96 Ohio St.3d 1, 2002-Ohio-2985, 770 N.E.2d 58, ¶ 16. “A meeting of the minds
as to the essential terms of the contract is a requirement to enforcing the contract.” Id.“The burden of proof for each element is by a preponderance of the evidence on the party
26.
seeking to enforce the settlement agreement.” Zimmerman at ¶ 9, citing Savoy Hosp.,
LLC v. 5839 Monroe St. Assocs. LLC, 6th Dist. Lucas No. L-14-1144, 2015-Ohio-4879, ¶
26.
{¶ 50} In this case, we find that the evidence does not support the existence of an
offer and acceptance forming an oral settlement agreement.
“An offer is the manifestation of willingness to enter into a bargain,
so made as to justify another person in understanding that his assent to that
bargain is invited and will conclude it.” 1 Restatement of the Law 2d,
Contracts (1981), Section 24. An offer is binding on the offeror when
accepted by the offeree. An offer remains open for acceptance by the
offeree until it is revoked by the offeror, rejected by the offeree, or until the
time for its acceptance has expired. Id., Section 36.
When an offer is rejected, it ceases to exist, and a subsequent
attempted acceptance is inoperative to bind the offeror. A rejection is
implied in a counteroffer, which is “interpreted as being in effect a
statement by the offeree not only that he will enter into the transaction on
the terms stated in his counteroffer, but by implication that he will not
assent to the terms of the original offer.” 1 Williston On Contracts (4 Ed.
Lord Ed.1990) 631, Section 5:3. An offeree’s power to conclude the
bargain through his acceptance of the offer is, therefore, terminated by his
making of a counteroffer. Restatement, supra, Section 39(2).
27.
Garrison v. Daytonian Hotel, 105 Ohio App.3d 322, 325, 663 N.E.2d 1316 (2d
Dist.1995).
{¶ 51} Here, in a December 13, 2016 email to Frank’s sister, Zoll & Kranz
described the original offer:
Regarding the original offer including 22 people, but now only 20:
Stryker did make their original offer contingent on all 22 people accepting.
Back then, first one person said “no” and we called Stryker and asked if we
should even continue our work. They said “please continue,” which we
took to mean that they would proceed without the one person. Then, when
I asked for final answers from the last 4 people (Frank was one of those last
4, as I recall), one more person said “no.” Everyone else said “yes.” Then,
Stryker considered whether they wanted to go forward for the 2 months that
followed...and very recently came back and said they would go forward
with the 20 of 22.
Thus, the original offer required all 22 clients to accept it. This is supported by the
September 30, 2016 email, in which Zoll & Kranz relayed that Group A accepted the
offer, Group B accepted the offer contingent on the resolution of liens, and Group C
rejected the offer. At the end of the email, Zoll & Kranz stated, “We recognize there are
a few contingent issues on behalf of our clients and we are mindful that is not precisely
what Stryker was seeking. I welcome input on direction or next steps from this point.”
(Emphasis added.) In effect then, the September 30, 2016 email was not an acceptance of
28.
the offer, but rather a counteroffer to settle with less than 22 clients. The counteroffer
constituted a rejection of the original offer, and therefore appellants’ purported
acceptance of the original offer as evidenced by Frank’s November 2, 2016 signing of the
informed consent form was ineffective to create a binding settlement agreement.3
{¶ 52} Furthermore, appellees December 5, 2016 “Confidential Settlement
Agreement and Full Release,” cannot be construed to be an acceptance of the
counteroffer because in the intervening months, the parties engaged in negotiations
resulting in changed language reflected in the December 5, 2016 “Confidential
Settlement Agreement and Full Release.” “A reply to an offer which purports to accept
but is conditional on the offeror’s assent to terms additional to or different from those
offered is not an acceptance but is a counteroffer.” Foster v. Ohio State Univ., 41 Ohio
App.3d 86, 88, 534 N.E.2d 1220 (10th Dist.1987), citing 1 Restatement of the Law 2d,
Contracts (1981) 144, Section 59. Therefore, appellees’ December 5, 2016 “Confidential
Settlement Agreement and Full Release” constituted a further counteroffer, which
3
The dissent asserts that we err by concluding that appellants’ acceptance must have
occurred on November 2, 2016, or not at all. The dissent then points to the September
30, 2016 email as evidence that appellants accepted the offer. First, we note that we do
not conclude that appellants must have accepted the offer on November 2, 2016, or not at
all. Rather, we conclude that the November 2, 2016 signing of the informed consent
form is evidence of appellants’ purported acceptance of the offer. That purported
acceptance, however, was ineffective because the original offer had already been rejected
by the September 30, 2016 email. Second, as discussed above, the September 30, 2016
email was not an acceptance of the offer because the offer was contingent on all 22
plaintiffs accepting, and at least two of the plaintiffs did not accept. The fact that Frank,
individually, was one of the people that initially indicated acceptance of the offer does
not create a binding settlement agreement where contingencies related to the offer were
not met.
29.
appellants clearly rejected.4 Accordingly, we hold that the record does not establish an
offer and acceptance forming a binding settlement agreement between the parties.5
{¶ 53} Nonetheless, even if we were to find that an offer and acceptance existed,
we find that the settlement agreement is unenforceable because the record contains no
evidence as to the terms of that agreement.
{¶ 54} “It is preferable that a settlement be memorialized in writing. However, an
oral settlement agreement may be enforceable if there is sufficient particularity to form a
binding contract. Terms of an oral contract may be determined from ‘words, deeds, acts,
and silence of the parties.’” (Internal citations omitted.) Kostelnik, 96 Ohio St.3d 1,
4
The dissent argues that the December 5, 2016 “Confidential Settlement Agreement and
Full Release” was an acceptance of appellants’ counteroffer, but does not address the fact
that the release contained additional or different terms.
5
In reaching the opposite conclusion, the dissent places great emphasis on its
characterization that appellants did not contest the existence of a settlement agreement in
their response to the motion to enforce the settlement agreement. This characterization,
though, does not reflect appellants’ arguments, wherein Frank asserted, “In fact, it was
my understanding, after numerous discussions and e-mails with my counsel that even if I
signed this original [November 2, 2016] informed consent, I would indeed have the
choice of accepting the final settlement, if and when, it was offered.” From this
statement, Frank was clearly indicating that he did not believe there was a settlement
agreement, only preliminary negotiations. Furthermore, Frank’s understanding that the
settlement agreement was not final is supported by the emails from his counsel as of
December 2016 informing him that he still had the option “to decline the settlement once
the full terms were disclosed.” The dissent argues that poor advice or inadequate legal
representation is not sufficient to repudiate a settlement agreement, but this argument
misses the point that Frank’s belief that he could still decline the settlement goes to
whether there was a true meeting of the minds.
30.
2002-Ohio-2985, 770 N.E.2d 58, at ¶ 15, quoting Rutledge v. Hoffman, 81 Ohio App. 85,
75 N.E.2d 608 (1st Dist.1947).
{¶ 55} “To constitute a valid settlement agreement, the terms of the agreement
must be reasonably certain and clear.” Rulli, 79 Ohio St.3d at 376, 683 N.E.2d 337.
“A court cannot enforce a contract unless it can determine what it is. It is
not enough that the parties think that they have made a contract. They must
have expressed their intentions in a manner that is capable of being
understood. It is not even enough that they had actually agreed, if their
expressions, when interpreted in the light of accompanying factors and
circumstances, are not such that the court can determine what the terms of
that agreement are.”
Id., quoting 1 Corbin on Contracts (Rev. Ed.1993) 525, Section 4.1. While “it is
generally within the discretion of the trial judge to promote and encourage settlements to
prevent litigation * * * * [a] trial judge cannot, however, force parties into a settlement.”
Id.{¶ 56} Appellees sought to enforce the settlement agreement under the terms of
the December 5, 2016 “Confidential Settlement Agreement and Full Release.” It is
indisputable that appellants refused to sign the December 5, 2016 “Confidential
Settlement Agreement and Full Release.” Thus, to have those terms enforced, it was
incumbent upon appellees to demonstrate that those terms accurately reflected the oral
settlement agreement that was purportedly reached following the mediation sessions.
31.
However, appellees presented no evidence to establish the terms of the oral settlement
agreement.
{¶ 57} As evidence of the oral agreement, appellees cited the September 30, 2016
email, wherein Zoll & Kranz relayed,
Group A
[Redacted] people have accepted the allocated offer. [Redacted] of
those have returned a signed form and we are still waiting on the remaining
[redacted]. The total amount allocated to these [redacted] was [redacted].
Group B
[Redacted] people, [redacted] and [redacted] have accepted the
allocated offer contingent on resolution of their liens such that they do not
have to pay any subrogation. Both live in “made-whole” states where
subrogation is not due until the client has been made whole and we have
sent letters to both subrogation carriers demanding that they waive their
liens. The total amount allocated to these [redacted] is [redacted].
On appeal, appellees also point to the “Informed Consent Acknowledgment and Consent
to Settle” that appellant signed on November 2, 2016, as evidence that a settlement
agreement was reached. Yet, neither the September 30, 2016 email, nor the November 2,
2016 informed consent form set forth any terms of the settlement agreement other than
32.
the amount.6 Those two documents do not set forth any terms regarding Medicare
releases, confidentiality and non-disparagement, appellants’ release of any future claims
against appellees, or the dismissal of appellants’ present claims with prejudice.
{¶ 58} Appellees also cite, as evidence that a settlement agreement existed, the
inclusion of Frank Aceste on two lists sent by Zoll & Kranz on November 29 and 30,
2016. While those emails could potentially support the existence of an earlier agreement
to settle, they too—like the September 30, 2016 email and the November 2, 2016
informed consent form—do not provide any details on the terms of the settlement
agreement. Likewise, the entire email chain that began on November 23, 2016, does not
describe any of the terms of the settlement agreement.
{¶ 59} The first, and only, evidence of the specific terms of a settlement
agreement is found in the December 5, 2016 “Confidential Settlement Agreement and
Full Release.” But there is nothing in the record tying those terms to the oral settlement
agreement that was allegedly reached following the mediation sessions; there is no
separate evidence of the terms of the oral settlement agreement for comparison, there is
no affidavit attesting that those were the terms of the oral settlement agreement, and there
is no testimony to that effect either. Simply put, appellees cannot rely solely on a
rejected written proposal to establish the terms of a prior oral agreement. See Apple v.
6
While the November 2, 2016 informed consent form did reference the terms of the
settlement offer as set forth in an attached letter, that letter was not provided to the trial
court before it entered its decision on appellees’ motion to enforce the settlement
agreement.
33.
Hyundai Motor Am., 2d Dist. Montgomery No. 23218, 2010-Ohio-949, ¶ 10 (“Hyundai
could not use the written settlement document to impose additional duties on the Apples
to which they had not agreed.”).
{¶ 60} Because of the lack of any evidence of the terms of the oral settlement
agreement, the present case is distinguishable from the cases relied upon by appellees.
Illustratively, appellees cite three cases as examples of settlement agreements that were
enforced even though they were made outside of the presence of the court and were not
reduced to a signed writing.
{¶ 61} In Turoczy Bonding Co. v. Mitchell, 2018-Ohio-3173, 118 N.E.3d 439, ¶ 10
(8th Dist.), the plaintiff moved to enforce a settlement agreement, arguing that the parties
had agreed to mutually dismiss their claims at their own costs. Attached to the plaintiff’s
motion was an email exchange in which counsel for the plaintiff stated, “I wanted to
confirm what we talked about earlier today. Your client will agree to a mutual dismissal
of all claims, with prejudice. Each party to bear their own costs with a broad release.
You can draft the release.” Counsel for the defendant replied, “Yes * * * provided it’s
happening ASAP and not after I do a bunch more work.” Id. at ¶ 7. Several days later,
counsel for the plaintiff inquired how the release was coming along, and counsel for the
defendant responded that he “was working on it * * * no worries.” Id. at ¶ 8. However,
several days after that, the defendant changed his mind and no longer wished to enter into
a settlement agreement. Id. The defendant argued that there was no enforceable
settlement agreement because he never signed a written agreement, and because the email
34.
communications did not contain any clear and definite terms. Id. at ¶ 11. On appeal, the
Eighth District affirmed the trial court’s decision to enforce the settlement agreement,
rejecting the defendant’s contention that the terms of the settlement agreement were
vague and indefinite. The Eighth District reasoned that the emails “clearly reflect a
definite offer and acceptance concerning the parties’ agreement to mutually dismiss their
claims with prejudice at their own cost. Given the implications of a dismissal of all
claims at the parties’ own cost, no further action or discussion of additional terms was
contemplated or required. In short, no unresolved contingencies remained.” Id. at ¶ 21.
{¶ 62} In Cugini & Capoccia Builders, Inc. v. Tolani, 5th Dist. Delaware No. 15
CAE 10 0086, 2016-Ohio-418, ¶ 11, the plaintiffs filed a motion to enforce a settlement
agreement, which the trial court granted. The court ordered, “In accordance with the
parties’ settlement agreement, judgment is granted in favor of the Plaintiff against the
Defendants for $35,000, and the Plaintiff is ordered to complete the designated list of
work items.” Id. at 25. On appeal, the Fifth District affirmed. The Fifth District found
that the trial court had reviewed the correspondence between the parties, and that the
correspondence showed that the parties agreed that (1) the defendants would pay the
plaintiff $35,000, (2) the plaintiff would complete a defined list of work items; and (3)
the defendants would deposit the funds into their attorney’s trust account, and the funds
would be released upon completion of the work. Id. at ¶ 19. Thus, the Fifth District
concluded that the trial court’s order finding the existence of a completed settlement
agreement was proven by clear and convincing evidence. Id. at ¶ 21.
35.
{¶ 63} Finally, in Apple v. Hyundai Motor Am., 2d Dist. Montgomery No. 23218,
2010-Ohio-949, ¶ 10, the Tenth District affirmed the trial court’s decision to grant the
defendant’s motion to enforce a settlement agreement. In that case, the plaintiffs sued the
defendant for breach of Ohio’s Lemon Law. The plaintiffs orally proposed to settle the
lawsuit in return for a $7,000 payment from the defendant. The defendant accepted the
offer, and confirmed acceptance by sending a letter to counsel for the plaintiffs. The
defendant then sent the plaintiffs a copy of a standard form of release that it used when
settling litigation. Id. at ¶ 3. The next day, counsel for the plaintiffs sent the standard
release back to the defendant with two of the paragraphs crossed out. Notations in the
margin explained that the paragraphs had not been agreed to by the plaintiffs. The
paragraphs provided for non-disclosure, and that the plaintiffs would indemnify the
defendant for future losses arising from claims by third parties. Counsel for the plaintiffs
explained that the settlement would remain intact if those two paragraphs were removed
from the release. Id. at ¶ 4. Before the defendant responded, the plaintiffs contacted their
counsel and explained that they no longer wished to settle because they were continuing
to have problems with their car. Id. at ¶ 5. Counsel then relayed that the plaintiffs would
not abide by the settlement agreement, and the defendant responded by filing a motion to
enforce the settlement agreement, while agreeing in the process to delete the two
objectionable paragraphs. Id. On appeal, the Tenth District reasoned that while the
defendant could not use the written settlement document to impose additional duties, the
36.
plaintiffs could not repudiate their performance promised in the oral agreement. Id. at ¶
10.
{¶ 64} Turoczy, Cugini, and Apple, are all distinguishable from the present case,
because in each of them, although the settlement agreements were not reduced to a signed
writing, evidence was presented establishing enforceable terms of an oral agreement. For
the same reasons, appellees reliance on Santomauro v. Sumss Property Mgmt., LLC,
2019-Ohio-4335, 134 N.E.3d 1250, ¶ 4 (9th Dist.) (settlement agreement read into the
record in open court); Mathews v. E. Pike Local School Dist. Bd. Of Edn., 4th Dist. Pike
No. 12CA831, 2013-Ohio-4437, ¶ 11 (the trial court held a hearing and received
testimony that Mathews’ attorney was authorized to accept the settlement agreement);
Aber v. Vilamoura, Inc., 184 Ohio App.3d 658, 2009-Ohio-3364, 922 N.E.2d 236 (9th
Dist.) (testimony taken at a hearing on the motion to enforce the settlement agreement
from the parties’ lawyers); Kostelnik, 96 Ohio St.3d 1, 2002-Ohio-2985, 770 N.E.2d 58(examined the evidence surrounding the settlement agreement—which included a letter
from one of the defendants confirming the settlement agreement, the releases separately
provided by the two defendants, Kostelnik’s conduct of not objecting to the terms of the
releases and seeking approval of the settlement and distribution of the proceeds from the
probate court, and Kostelnik’s later action of seeking relief from judgment against only
one of the defendants—and concluded that joint and several liability was not one of the
terms of the settlement agreement); and Spercel v. Sterling Indus., Inc., 31 Ohio St.2d 36,
38, 285 N.E.2d 324 (1972) (hearing was held on the motion to vacate, at which the trial
37.
judge in the original action testified that the parties had come to a firm agreement), is
likewise misplaced.
{¶ 65} In contrast, here, the only term of the oral settlement agreement that
appellees have established is the amount. There is no evidence that the remainder of the
terms contained in the December 5, 2016 “Confidential Settlement Agreement and Full
Release” were part of the oral settlement agreement.7 Thus, even if we held that there
was an offer and acceptance of the oral settlement agreement, that agreement is not
enforceable because the terms have not been defined. See Rulli, 79 Ohio St.3d at 376,
683 N.E.2d 337 (“A court cannot enforce a contract unless it can determine what it is. It
is not enough that the parties think that they have made a contract.”). Therefore, we hold
that the record does not demonstrate an enforceable oral settlement agreement.
{¶ 66} Finally, we find that Zoll & Kranz’s conduct following appellants’
rejection of the December 5, 2016 “Confidential Settlement Agreement and Full Release”
cannot establish a settlement agreement between the parties. In its decision granting the
motion to enforce the settlement agreement, the trial court alternatively found that Zoll &
Kranz’s raising of an issue regarding the Medicare language of the December 5, 2016
“Confidential Settlement Agreement and Full Release” constituted a counteroffer, which
appellees accepted. The trial court’s alternative reasoning, however, ignores that in all of
its correspondence on this issue, Zoll & Kranz expressly notified appellees that it did not
7
Notably, despite concluding that the terms of the rejected “Confidential Settlement
Agreement and Full Release” should be enforced, the dissent does not point to any
evidence linking those terms to the terms of any purported oral settlement agreement.
38.
have client consent: on January 27, 2017, “We do not have client consent but we at least
wanted to give you a draft to consider;” also on January 27, 2017, “I have not yet been
able to get the client on board;” and on January 30, 2017, “We do not yet have client
consent yet.” “An attorney who is without special authorization has no implied or
apparent authority, solely by virtue of his general retainer, to compromise and settle his
client’s claim or cause of action.” Morr v. Crouch, 19 Ohio St.2d 24, 249 N.E.2d 780(1969), paragraph two of the syllabus. Thus, because appellants never gave consent to
settle, Zoll & Kranz’s actions following the December 5, 2016 “Confidential Settlement
Agreement and Full Release” could not create a binding settlement agreement.8
{¶ 67} Therefore, for the above reasons, we hold that the trial court erred when it
granted appellees’ motion to enforce the December 5, 2016 “Confidential Settlement
Agreement and Full Release.”
8
In concluding otherwise, the dissent asserts that although counsel acknowledged that it
did not have client consent, it nonetheless was acting at appellants’ behest because it
presented the Medicare changes requested by appellants. We find two faults with this
logic. First, and primarily, the dissent’s conclusion reaches the curious result that
counsel’s actions, openly done without the clients’ consent, can nonetheless bind the
clients to a settlement agreement. Second, the dissent’s conclusion is based on a faulty
premise, which is that appellees agreed to all of the changes proposed by appellants. The
dissent infers from appellants’ opposition to the motion to enforce the settlement
agreement that appellants only proposed changes to the Medicare release language. In so
doing, the dissent expresses confusion as to why appellants would state that appellees
“did not agree to all the changes.” In fact, appellants proposed multiple changes to the
“Confidential Settlement Agreement and Full Release,” including a change to the amount
of the settlement, but appellants’ counsel only presented the Medicare release language
proposals to appellees. (See markups to “Confidential Settlement Agreement and Full
Release” attached to appellants’ October 10, 2017 pro se motion for stay on judgment.)
39.
{¶ 68} Accordingly, appellant’s seventh and thirteenth assignments of error are
well-taken.
{¶ 69} Because we hold that the record does not demonstrate an enforceable
settlement agreement between the parties, appellants’ remaining assignments of error are
denied as moot.
IV. Conclusion
{¶ 70} For the foregoing reasons, we find that substantial justice has not been done
the party complaining. The August 21, 2017 judgment entry granting appellees’ motion
to enforce settlement agreement, and the July 25, 2019, judgment entry dismissing the
case with prejudice, are hereby reversed and vacated, and this matter is remanded to the
trial court for further proceedings consistent with this decision. Appellees are ordered to
pay the costs of this appeal pursuant to App.R. 24.
Judgment reversed.
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.
Mark L. Pietrykowski, J. _______________________________
JUDGE
Thomas J. Osowik, J.
CONCUR. ______________________________
JUDGE
Christine E. Mayle, J.,
DISSENTS AND WRITES
SEPARATELY.
40.
MAYLE, J.
{¶ 71} Respectfully, I dissent. In my view, the record clearly demonstrates that
the parties reached a binding settlement agreement. Indeed, Frank Aceste filed a pro se
response to appellees’ motion in which he did not contest the existence of a settlement
agreement. Instead, he argued that “the settlement agreement should be voided” because
his attorneys supposedly pressured him into it while he was in pain and lacked the
capacity to contract, and because his attorneys allegedly provided inadequate advice and
poor legal representation during the pendency of his case. The record, however, is
devoid of any evidence to support such claims—which, in any event, are not a valid basis
to void a binding contract. I would therefore affirm the trial court’s August 21, 2017
order to the extent that it enforced the parties’ settlement agreement.
{¶ 72} But, I believe that the trial court erred on May 16, 2018, when it amended
its August 21, 2017 decision by adding an ambiguous statement of relief. That is—as
appellants argue in their eleventh assignment of error—the May 16, 2018 order is
ambiguous because the statement of relief does not specify which version of the
Confidential Settlement Agreement and Full Release and Joint Dismissal must be signed.
This ambiguity is problematic because “a court order cannot be enforced in contempt
unless the order was ‘clear and definite, unambiguous, and not subject to dual
interpretations.’” City of Toledo v. State, 154 Ohio St.3d 41, 2018-Ohio-2358, 110
N.E.3d 1257, ¶ 23.
41.
{¶ 73} Because the trial court dismissed the action as a sanction for appellants’
contempt of court—i.e., their failure to follow an ambiguous court order— I would find
appellants’ eleventh assignment of error well taken. I would reverse and remand this
matter to the trial court so that it could enter judgment pursuant to the terms of the
settlement agreement and dismiss the case with prejudice. That way, both parties—not
just appellees—would receive the benefit of the contract they agreed upon.
1. The parties agreed upon the essential elements of a contract.
{¶ 74} The “[e]ssential elements” of any contract, including settlement
agreements, include “an offer, acceptance, contractual capacity, consideration (the
bargained for legal benefit and/or detriment), a manifestation of mutual asset and legality
of object and of consideration.” 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). Oral settlement agreements are enforceable in Ohio, and the
terms of such agreements “may be determined from ‘words, deeds, acts, and silence of
the parties.’” Id. at ¶15, quoting Rutledge v. Hoffman, 81 Ohio App. 85, 75 N.E.2d 698(1st Dist.1947), paragraph one of the syllabus. As this court has recognized, “[c]omplete
clarity in every term of the agreement is unnecessary because all agreements have some
degree of indefiniteness and uncertainty.” Advantage Renovations, Inc. v. Maui Sands
Resort, Co., LLC, 6th Dist. Erie No. E-11-040, 2012-Ohio-1866, ¶ 18, citing Kostelnik at
¶ 17. Indeed, “seldom, if ever, does the evidence in proof of an oral contract present its
42.
terms in the exact words of offer and acceptance found in formal written contracts. And
no such precision is required.” Id., quoting Rutledge at 86. Courts enforce oral contracts
for one simple reason: people must be held to the promises they make. Id.{¶ 75} Acccording to the record, on or about August 11, 2016, a private mediation
session between appellees and Zoll & Kranz, legal counsel for 22 different CerviCore and
FlexiCore recipients, including Frank Aceste, resulted in a global settlement offer from
appellees for a set amount, to be allocated between the 22 claimants, in exchange for their
dismissal of claims against the appellees. The mediation was conducted by former
federal Magistrate Judge Diane M. Welch. In addition, Zoll & Kranz retained former
federal district court Judge Richard B. McQuade as a special master to determine the
allocation of the settlement monies amongst the settling claimants.
{¶ 76} On September 30, 2016, Zoll & Kranz sent an email to appellees’
counsel—with a copy to Judge Welch—indicating that appellants (among other
claimants) “have accepted the allocated offer,” and that Zoll & Kranz had received signed
forms back from some—but not all—of the claimants that had accepted. This email also
states that two of the 22 claimants rejected the offer.
{¶ 77} On November 2, 2016, Frank Aceste signed a form for his attorneys titled
“Informed Consent Acknowledgment and Consent to Settle” in which he confirms that he
agreed to settle his claim in exchange for his allocation of the settlement proceeds (which
is specified by dollar amount in the document). Although this document was intended to
be a confidential attorney-client communication (indeed, it is specifically marked as
43.
such), Frank Aceste attached the Informed Consent document to his pro se response to
appellees’ motion to enforce settlement. He did not, however, attach the accompanying
letter from his attorneys (that is referenced in the document) that outlines the terms of the
parties’ settlement agreement beyond the essential terms that are summarized in the
Informed Consent.9
{¶ 78} From there, the parties anticipated that there would be two different
versions of the written settlement agreement and release—one form would be used for
Medicare recipients, and another form would be used for non-Medicare recipients. To
that end, on November 29, 2016, Zoll & Kranz emailed appellees’ counsel with an
attached document that listed all settled individuals and their Medicare status. Frank
Aceste is on the list of settled individuals, and he is identified as a Medicare recipient. In
response to this email, appellees’ counsel asked for another list that includes “the actual
allocations to each person.”
{¶ 79} The next day, November 30, 2016, Zoll & Kranz sent appellees’ counsel
another spreadsheet, this one identifying all of the settling claimants and their allocated
9
Frank did, eventually, submit the accompanying letter from Zoll & Kranz to the trial
court, and the letter does, in fact, outline additional details of the parties’ settlement
agreement. But, as the majority recognizes, that letter was not before the trial court when
it ruled on appellees’ motion. Although that letter would have made it even easier for the
trial court to have found an enforceable settlement agreement, I agree that we should not
consider it because it was not before the trial court when it ruled on the motion.
Regardless, for reasons discussed, the record before the trial court at the time of
appellees’ motion fully supports its decision to enforce the parties’ settlement agreement.
44.
settlement amount. Once again, the spreadsheet that Zoll & Kranz sent to appellees’
counsel identified Frank Aceste as a settled individual.
{¶ 80} On December 5, 2016, appellees’ counsel emailed a written “Confidential
Settlement Agreement and Full Release” to plaintiffs’ counsel. The written agreement
identifies Frank and Rhonda Aceste as the “RELEASORS,” and the appellees as the
“RELEASEES.” Most relevant to the current dispute, the written settlement agreement
contains four separate paragraphs addressing various implications that Medicare may
have on the parties’ settlement as a matter of law, including the following:
2.12 RELEASORS understand that should the Center for Medicare
and Medicaid Services (“CMS”) find that a Medicare Set-Aside Allocation
should have been established and/or that Medicare’s interests were not
adequately protected, CMS (Medicare) may require RELEASORS to
expend up to the entire settlement amount on Medicare covered expenses
related to the injury before Medicare will provide coverage for the injury. *
**
{¶ 81} As demonstrated through the confidential attorney-client communications
that Frank Aceste attached to his pro se response to appellees’ motion, this provision
regarding a potential Medicare Set-Aside (“MSA”) prompted Frank to raise some issues
with his attorneys that were, apparently, never discussed before. Specifically, it appears
that Frank asked Zoll & Kranz whether he would need an MSA, and for how much, given
that two doctors in New York had told him that he will need explant surgery to remove
45.
the medical device. On December 28, 2016, Zoll & Kranz advised him that he “may”
need an MSA if he has future medical costs, but that they would have to do an MSA
analysis after the settlement was finalized. In response, on January 5, 2017, Frank sent
Zoll & Kranz an email that included the following:
I would think that this should have been done initially before
determining the share amount of the settlement. The people who had the
device removed are getting more money to cover the medicare payback but
I have to set aside money for future medical costs without any monetary
consideration to offset the set aside. I cannot make a decision without
knowing what the MSA will be. If you are confident that there will be no
MSA as previously stated and are willing to move ahead with the
settlement on that statement I might be able to reach a decision. I might
also consider settling if the amount was adjusted to cover an MSA in your
point system.
{¶ 82} On January 6, 2017, Zoll & Kranz responded via email, telling him that the
allocation was done by a neutral third party (retired Judge McQuade) and that they could
not change his settlement allocation. His attorney also stated:
[Y]ou are right that I didn’t know of the need for the MSA until you
brought up that 2 doctors in NY told you that you needed the explant
surgery. I had reviewed all your medical records before talking to you and
did not see any indication that a neurosurgeon was recommending the
46.
surgery, so I saw no need for the MSA. Once you told me that, though, I
realized we do need the independent analysis. Normally I would have seen
this situation coming much sooner, but, please remember that we didn’t
order the medical records from these doctors based on your request that we
do not order them.
{¶ 83} Zoll & Kranz went on to explain that if he decides to “opt out” of the
settlement, then the defendants could possibly approach him about settling on other
terms, but they could also “refuse any more settlement talks and we’ll prepare for trial
over the next 18-24 months.”
{¶ 84} In response, Frank told his attorneys on January 11, 2017, that “I have
decided to opt out of the settlement agreement and to continue litigation.” His attorney at
Zoll & Kranz responded that day, stating that “you had said ‘yes’ to the settlement when
our estimated proceeds were [x].10 That hasn’t changed, right? I mean, if the MSA was
zero, you would be signing everything, right?” In that same email, his attorney suggested
that they get the MSA done at a certain percentage that he could live with, and that he is
“still pushing for zero, and if not zero, then 5% or 8% or 10%...etc.” The next day—
January 12, 2017—Frank responded by stating:
The MSA, which was brought to light with the final settlement docs,
has raised some issues I had not thought of earlier.
10
The specific dollar amount of appellants’ settlement proceeds has been omitted for
confidentiality purposes.
47.
This settlement is unacceptable regardless of MSA and I will take
my chances.
Stryker should have disclosed the full settlement details from the
start.
Notably, Frank Aceste did not submit any correspondence that he may have had with his
attorneys after January 12, 2017.
{¶ 85} Appellees, however, submitted an email from Zoll & Kranz to appellees’
counsel that was sent 15 days later—on January 27, 2017—that attached a revised
version of the written settlement agreement and release between the parties. The
proposed revisions from Zoll & Kranz deleted the four paragraphs that had addressed
potential Medicare-related issues, including the possibility of an MSA. In addition, Zoll
& Kranz provided a letter stating that they had “provided Frank with an opinion letter
that a Medicare Set Aside (“MSA”) is not required in his case” and explaining why, in
their opinion, an MSA would not be required for Frank Aceste. The letter further advises
appellees that Zoll & Kranz would directly hold harmless and indemnify appellees from
any potential Medicare-related liability in connection with Frank Aceste.
{¶ 86} On January 30, 2017, appellees’ counsel accepted the opinion letter, along
with the proposed edits to the written agreement, and proposed the addition of one
“clarifying edit” to specify that the Release releases future claims as well as present
claims. On February 3, 2017, Zoll & Kranz e-mailed appellees’ counsel “a copy of the
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final release” that incorporated the proposed edits of January 27, as well as the additional
edit that appellees’ counsel had sent on January 30.
{¶ 87} Although the Zoll & Kranz email dated January 27, 2017, stated that “[w]e
do not have client consent but we at least wanted to give you a draft to consider,” and the
Zoll & Kranz email dated February 3, 2017, stated “[w]e still have not heard from the
client but we are going to overnight this document to him along with a copy of the
opinion letter,” the record suggests that counsel’s negotiations regarding the language of
the written settlement agreement and release was, in fact, done at Frank Aceste’s behest.
That is, Frank Aceste states in his pro se response to appellees’ motion:
I relayed my concerns with respect to the final settlement agreement.
The agreement contained language prohibiting the use of Medicare which is
my only source of medical coverage. I told them I would be committing
fraud if I signed the statement as it was. There were also issues regarding
the potential need for a Medicare set aside, which also, were never
disclosed or discussed until this point. (Exhibit 3). After much back and
forth, the partner, requested my edits and finally agreed to present them
to Stryker. The partner relayed that Stryker agreed to the changes, but
when the final settlement agreement was sent, it did not reflect all the
changes. I was then told that Stryker did not agree to all the changes.
49.
It is unclear why Frank Aceste argued that appellees “did not agree to all the changes”
because, from the record before the court, appellees accepted all of the proposed edits
that they received from plaintiffs’ counsel.11
{¶ 88} Regardless, it is abundantly clear from the record that the essential
elements of a settlement agreement existed—i.e., the parties had expressed their mutual
assent to settle the litigation for an agreed-upon sum of money—thereby forming a valid
settlement agreement. That is, the record demonstrates that, at the mediation session
before Judge Welch, the appellees made an offer to settle with all 22 claimants for a
global sum, which was to be allocated between those 22 claimants by special master
Judge McQuade. This offer was accepted by Frank Aceste, as communicated to
11
The majority maintains that appellees did not agree to all of Frank’s changes, and
references a handwritten markup of the Confidential Settlement Agreement and Full
Release that Frank sent to his attorneys on January 19, 2017. That communication,
however, was not before the trial court when it decided the appellees’ motion and,
therefore, that document should not be considered by this court. And, we do not know
what attorney-client communications transpired between January 19, the date of that
document, and January 27, when Zoll & Kranz emailed appellees with proposed edits on
the written contract. Regardless, as the majority points out, the major edit that Frank
proposed in that January 19 document—other than the deletion of the Medicare-related
provisions—was an upward adjustment of his settlement allocation (by more than 75%)
because, as he writes in the margin, “I have been told by a physician that device needs to
be removed.” But, as I discuss further below, Frank had already agreed to accept his
settlement allocation—which was an essential element of the parties’ agreement—and, as
evidenced by the attorney-client communications that Frank did attach to his response to
appellee’s motion, Zoll & Kranz had already properly advised him that “[w]e cannot
change the allocation; that’s set now.”
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appellees through his attorneys’ emails dated September 30, 2016, November 29, 2016,
and November 30, 2016, and as he confirmed in writing to his attorneys on November 2,
2016.
{¶ 89} Moreover, in my view, the back-and-forth communications between Frank
Aceste and Zoll & Kranz also confirm that Frank agreed to settle his claims for his
allocated share of settlement funds. That is, once the possibility of an MSA was brought
to light through the language of the proposed settlement agreement and release, Frank
Aceste wanted to undo the settlement because he feared that an MSA would eviscerate
his ultimate recovery of settlement proceeds. Indeed, Frank did not correct his attorney
when he stated “you had said ‘yes’ to the settlement when our estimated proceeds were
[x].” Instead, Frank responded by stating that “[t]he MSA, which was brought to light
with the final settlement docs, has raised some issues I had not thought of earlier.” The
settlement agreement is not any less enforceable just because Frank Aceste may have
believed, in hindsight, that he made a bad deal.
{¶ 90} In fact, Frank Aceste’s own representations to the trial court are perhaps the
strongest evidence of a binding contract. In his pro se response to appellees’ motion,
Frank did not dispute that he accepted the offer and did not dispute the existence of a
settlement agreement. Rather, he argued that “the settlement agreement should be
voided” and “relay[ed] the reasons [he] believe[d] the settlement should not be enforced.”
He claimed that he agreed to the settlement “under extreme pressure, while in a
depressive state, without my full and complete knowledge of both what I was agreeing to
51.
and the ramifications of the agreement.” That is, he argued that the parties’ settlement
agreement should be voided because (1) he lacked capacity to contract, (2) he was under
undue influence from his attorneys to settle, and (3) his attorneys had advised him that he
could change his mind after reviewing the written settlement agreement.12 The trial court
properly rejected these arguments.
{¶ 91} First, the record is devoid of any evidence—let alone clear and convincing
evidence—that Frank Aceste lacked the capacity to contract. In re Estate of Flowers,
2017-Ohio-1310, 88 N.E.3d 539, ¶ 84 (6th Dist.) (lack of mental capacity must be
established by clear and convincing evidence). Although Frank claimed that he did not
understand that he was entering a binding contract, there is no evidence that any mental
illness affected his mind to such a degree that he was incapable of understanding that he
was entering a binding contract. Miller v. Miller, 9th Dist. Summit No. 21770, 2004-
Ohio-1989, ¶ 16 (a party lacks capacity to contract where his mind was so affected “as to
destroy [his] ability to understand the nature of the act in which he [wa]s engaged, its
scope and effect or its nature and consequences.”).
12
Frank also argued in his pro se response that his wife and co-plaintiff, Rhonda Aceste,
“was never involved in any of the discussions nor agreed to any part of the settlement.”
Rhonda, however, did not sign the pro se filing, and Frank could not make any arguments
on Rhonda’s behalf because he is not a licensed attorney. Regardless, Rhonda’s claim is
derivative of Frank’s claims and, accordingly, could not stand on its own after Frank
settled his claims with appellees. Wagner v. Westfield Cos., 6th Dist. Fulton No. F-02-
013, 2002-Ohio-6367, ¶ 21 (if the main claim is dismissed, “the derivative claim fails as
well.”) It is notable, however, that while Frank argued that Rhonda did not agree to the
settlement, he never argued that he did not agree to the settlement.
52.
{¶ 92} Second, regarding Frank’s claims of undue influence, “[t]o 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.” (Emphasis added.) Patton v.
Wood Cty Humane Soc., 157 Ohio App.3d 670, 2003-Ohio-5200, 798 N.E.3d 676, ¶ 27
(6th Dist.), quoting Blodgett v. Blodgett, 49 Ohio St.3d 243, 551 N.E.2d 1249 (1990),
syllabus. Frank did not allege any undue influence by appellees.
{¶ 93} Finally, Frank argued that his attorneys advised him that “[he] would still
have a right to decline the settlement once the full terms were disclosed.” That, however,
is not a valid basis to unravel an otherwise valid settlement agreement. “In spite of the
ignorance as to the language they speak and write, with resulting error and
misunderstanding, people must be held to the promises they make.” Kostelnik, 96 Ohio
St.3d 1, 2002-Ohio-2985, 770 N.E.2d 58, at ¶ 17. The majority maintains that “Frank’s
belief that he could still decline the settlement goes to whether there was a true meeting
of the minds.” To the contrary,
[i]f one person does not intend to be bound by an agreement he has
made, and the other person is not aware of that lack of intention, there is no
‘meeting of the minds’ as a layman might understand the phrase.
Nevertheless, unless there is a mutual mistake or some like occurrence, the
law is only interested in objective manifestations of intent. * * *
Expressions of assent are generally sufficient to show a meeting of the
53.
minds. Thus, one person’s unexpressed reservation does not prevent there
being a meeting of the minds as that term is recognized in law.
Rudd v. Online Res., Inc., 2d Dist. Montgomery No. 17500, 1999 WL 397351, *5 (June
18, 1999), citing Nilavar v. Osborn, 127 Ohio App.3d 1, 711 N.E.2d 726 (2d Dist.1998).
Indeed, as this court has recognized, “a contracting party is bound by the apparent
intention he outwardly manifests to the other contracting party. To the extent that his
real, secret intention differs therefrom, it is entirely immaterial.” Bulger v. Bulkowski,
6th Dist. Sandusky No. S-83-3, 1983 WL 6799, *2 (May 20, 1983), quoting Perlmuter
Printing Co. 436 F.Supp. at 415. Here, because Frank’s outward manifestations are
sufficient to show a meeting of the minds, there is a binding agreement even though
Frank may have believed—for whatever reason—that he could change his mind later.
{¶ 94} Moreover, even if it is assumed—for purposes of argument only—that
Frank received poor advice or inadequate legal representation from his attorneys, “[a]
party cannot attempt to repudiate a settlement agreement by simply asserting a change of
heart or an assertion of poor legal advice.” Kerwin v. Kerwin, 6th Dist. Lucas No. L-04-
1002, 2004-Ohio-4676, ¶ 7. Indeed, much of Frank Aceste’s pro se response to
appellees’ motion is devoted to complaints about his attorneys. For example, he argues
the settlement agreement should be undone because “[n]o discovery was ever requested,”
“[c]ounsel did not research my case at all,” and because his attorneys failed to solicit “all
of [his] doctors * * * for information and records about my condition.” Any such issues
54.
between Frank and his attorneys have no bearing on the enforceability of the parties’
settlement agreement.
{¶ 95} For all these reasons, I believe that the essential elements of a settlement
agreement exists between the parties.
2. The majority’s view of offer and acceptance is too narrow.
{¶ 96} The majority, however, finds that the evidence does not support the
existence of an offer and acceptance because (1) the original offer required all 22
claimants to accept and two claimants rejected the offer, which means that the Zoll &
Kranz email on September 30, 2016, was actually a counteroffer to settle with less than
all claimants, which rejected the initial offer, and (2) the December 5, 2016 email from
appellees’ counsel, attaching the initial draft of the Confidential Settlement Agreement
and Full Release, constituted yet another counteroffer that the appellants rejected. I
disagree.
{¶ 97} First, it is true that appellees’ initial settlement offer required all 22
claimants to accept, and the September 30, 2016 email from plaintiffs’ counsel stated that
20 claimants (including appellants) accepted the offer but two claimants had rejected.
The majority reasons that the September 30 email was actually a counteroffer that
“constituted a rejection of the original offer, and therefore appellants’ purported
acceptance of the original offer as evidenced by Frank’s November 2, 2016 signing of the
informed consent form was ineffective to create a binding settlement agreement.”
55.
{¶ 98} But even if the September 30, 2016 email from plaintiffs’ counsel was a
counteroffer that rejected appellees’ original offer, it was necessarily a counteroffer from
the 20 claimants that wished to dismiss their claims for their allocated share of the
settlement funds—including Frank Aceste. And appellees accepted that counteroffer
from Frank, as demonstrated by their counsel’s December 5, 2016 email that forwarded a
draft agreement and release to memorialize the parties’ settlement. Kostelnik, 96 Ohio
St.3d 1, 2002-Ohio-2985, 770 N.E.2d 58, at ¶ 16 (a contract may be determined from the
“words, deeds, acts, and silence of the parties”). Indeed, as plaintiffs’ counsel confirmed
in an email to Frank’s sister on December 13, 2016, appellees “said they would go
forward with the 20 of 22”—i.e., they accepted Frank’s counteroffer.
{¶ 99} In my view, the majority errs by focusing on the date that Frank signed the
Informed Consent document as if that document is the only evidence that Frank accepted
appellees’ settlement offer—which, in turn, leads the majority to conclude that Frank’s
acceptance must have occurred on November 2, 2016, or not at all. While that document
is certainly the clearest indication of Frank’s acceptance—it states “I accept,” specifies
the amount of his settlement allocation, and includes his signature at the bottom—it is not
the only evidence that Frank agreed to accept his allocated share to dismiss his case.13 As
13
For these same reasons, appellants’ reliance upon an unexecuted “Revised” Informed
Consent document, dated December 6, 2016, is misplaced. It is unclear when, or why,
Zoll & Kranz sent that document to appellants for their signature, and that document was
not before the trial court when it ruled on the motion to enforce settlement agreement.
Regardless, as explained above, there is still a great deal of evidence in the record that
56.
this court has recognized, such formal precision in terms of “I offer” and “I accept” is not
required when dealing with oral contracts because “seldom, if ever, does the evidence in
proof of an oral contract present its terms in the exact words of offer and acceptance
found in formal written contracts.” Advantage Renovations, 6th Dist. Erie No. E-11-040,
2012-Ohio-1866, at ¶ 18, quoting Rutledge, 81 Ohio App. at 86, 75 N.E.2d 608.
{¶ 100} Here, the September 30, 2016 email from plaintiffs’ counsel indicated that
20 claimants “have accepted the allocated offer,” but they were still waiting for signed
forms from a few of the claimants—which demonstrates that Frank Aceste had already
accepted the offer as of September 30, and then subsequently confirmed his acceptance
by signing the Informed Consent for his attorneys.14 Frank’s acceptance is further
confirmed through his back-and-forth discussions with his attorneys—which, in my view,
show that he did, in fact, accept the allocated offer but had a change of heart after
realizing that his case could require an MSA. Indeed, the Medicare-related provisions of
the written agreement were the only terms of the written settlement agreement that he
disputed in those privileged communications with his attorneys—further demonstrating
his prior acceptance of the essential elements of the contract. Finally—and most
crucially, in my opinion—Frank Aceste recognizes the existence of a settlement
demonstrates Frank’s acceptance of appellees’ offer to settle—including but not limited
to Frank Aceste’s own statements to the trial court.
14
If the September 30 email is more properly viewed as a counteroffer, then Frank
Aceste confirmed his counteroffer to settle for his allocated share when he signed the
Informed Consent on November 2.
57.
agreement, repeatedly, and in his own words, throughout his pro se response to appellees’
motion. The majority ignores those admissions, but in my view, those admissions
demonstrate that the essential elements of the settlement agreement were undisputed.
{¶ 101} I also disagree with the majority’s view that the December 5, 2016 email
from appellees’ counsel, attaching the initial draft of the Confidential Settlement
Agreement and Full Release, “constituted yet another counteroffer that the appellants
rejected.” To the contrary, “[t]he mere fact that parties who have reached a verbal
agreement have agreed to reduce their contract to writing does not prevent the agreement
from being a contract if the writing is not made.” Santomauro v. Sumss Prop. Mgmt.,
2019-Ohio-4335, 134 N.E.3d 1250, ¶ 37 (9th Dist.), quoting PNC Mtge. v. Guenther, 2d
Dist. Montgomery No. 25385, 2013-Ohio-3044, ¶ 15. “It is only where the parties intend
that there will be no contract until the agreement is fully reduced to writing and executed
that no settlement exists unless the final, written settlement agreement is signed by all of
the parties.” Id., quoting Rayco Mfg., Inc. v. Murphy, Rogers, Sloss & Gambel, 2019-
Ohio-3756, 142 N.E.3d 1267, ¶ 69 (8th Dist.), appeal allowed by, 157 Ohio St.3d 1535,
2020-Ohio-122, 137 N.E.3d 1207 (2020). Here, there is no evidence in the record to
suggest that the parties intended that there would be no contract until the anticipated
written document was formally executed. And, as discussed further below, the record
demonstrates that the parties agreed to all of the terms of that written contract other than
the Medicare-related provisions.
58.
3. The parties agreed to the terms of the Confidential Settlement
Agreement and Full Release, minus the Medicare-related provisions.
{¶ 102} I disagree with the majority’s position that appellants “rejected” the
Confidential Settlement Agreement and Full Release. In my view, the back-and-forth
correspondence in the record—including the correspondence between Frank Aceste and
his attorneys at Zoll & Kranz, as well as the correspondence between Zoll & Kranz and
appellees—shows that the parties agreed upon all of the terms of the Confidential
Settlement Agreement and Full Release except the Medicare-related provisions.
{¶ 103} This case is similar to Apple v. Hyundai Motor America, 2d Dist.
Montgomery No. 23218, 2010-Ohio-949. In that case, the Apples sued Hyundai for
violations of the Ohio Lemon Law, R.C. 1345.72, after experiencing numerous problems
with their vehicle. The Apples orally agreed to settle their lawsuit in return for a
$7,021.19 payment from Hyundai. Counsel for Hyundai then sent counsel for the Apples
“a copy of a standard form of release that Hyundai has used when settling litigation.” Id.
at ¶ 3.
{¶ 104} Regarding the terms of parties’ agreement, the Apples took issue with
only two provisions—one that provided for non-disclosure, and one that provided for
indemnification of third-party claims. Id. at ¶ 4. Counsel for the Apples relayed these
concerns to Hyundai. Before Hyundai responded, the Apples had a change of heart and
decided they no longer wished to settle. Hyundai filed a motion to enforce settlement
agreement, seeking to enforce the written contract minus the two provisions to which the
59.
Apples had objected. The trial court enforced the settlement, and that decision was
affirmed on appeal, wherein the appellate court stated:
Hyundai could not use the written settlement document to impose
additional duties on the Apples to which they had not agreed. However,
neither could the Apples repudiate their performance promised in the oral
agreement when Hyundai agreed to remove the offending two paragraphs
from the written settlement document, restoring the status quo ante. Absent
the two paragraphs to which the Apples did not agree, the oral settlement
agreement remains enforceable. Id. at ¶ 10.
{¶ 105} Similarly here, Frank never disputed any provision of the written contract
other than the Medicare-related provisions. Ultimately, appellees agreed to delete those
provisions, including the provision regarding an MSA. Like the agreement at issue in
Apple, the written settlement agreement remains enforceable—minus those Medicare-
related provisions. As the trial court properly concluded, Frank signaled his acceptance
of the remainder of the written provisions through his “words, deeds, acts, and silence.”
Kostelnik, 96 Ohio St.3d 1, 2002-Ohio-2985, 770 N.E.2d 58, at ¶ 15.
{¶ 106} The majority, however, wholly discards the trial court’s interpretation
because Zoll & Kranz stated that they “do not have client consent” when they proposed
edits to the settlement agreement that deleted the Medicare-related provisions but left the
rest of the agreement untouched. But despite counsel’s statements in those emails, there
is still sufficient evidence in the record to support the trial court’s conclusion that Zoll &
60.
Kranz did act with Frank Aceste’s authority when it sent those edits. Most importantly,
Frank Aceste makes an express representation in his pro se response to appellees’ motion
that he relayed his “concerns” with the language in the written agreement—which was
limited to the Medicare provisions—to his attorneys, and “[a]fter much back and forth,
the partner, requested my edits and finally agreed to present them to Stryker.” Notably,
Frank made those representations after reading appellees’ motion—which attaches and
relies upon those edits that Zoll & Kranz actually presented to Stryker—and Frank did
not claim that his attorneys lacked the authority to present those edits to Stryker on his
behalf.
{¶ 107} Moreover, this statement is largely consistent with the back-and-forth
attorney-client communications that Frank attached to his pro se filing. Although Frank
did not attach any attorney-client communications after January 12, 2017—when he told
his attorneys that the “settlement is unacceptable”—the record contains sufficient
evidence that subsequent attorney-client communications occurred (although not
submitted for review) and likely culminated in the Zoll & Kranz opinion letter regarding
an MSA and corresponding revisions to the settlement agreement that deleted the
Medicare provisions. Again, Frank’s own words are the strongest evidence of this.
{¶ 108} It is true that the trial court should have held a hearing on the appellees’
motion. Not only was a hearing required under Rulli v. Fan Co., 79 Ohio St.3d 374, 683
N.E.2d 337 (1997), a hearing would have placed the trial court in a much better position
to make the required credibility determinations regarding what Frank authorized (or
61.
didn’t authorize) Zoll & Kranz to do on his behalf. Unfortunately, neither appellants nor
appellees requested a hearing, and appellants did not raise the trial court’s failure to hold
a hearing as an assignment of error on appeal. In these situations, appellate courts review
the evidentiary record that was before the trial court when it ruled on the motion to
enforce settlement agreement. See, e.g., Turoczy Bonding Co. v. Mitchell, 2018-Ohio-
3173, 118 N.E.3d 439 (8th Dist.) (where there was no hearing and no assignment of error
relating to the lack of a hearing, the appellate court reviewed the record before the trial
court—consisting of various correspondence between the parties—to determine whether
the trial court erred by granting motion to enforce settlement); Cugini & Capoccia
Builders, Inc. v. Tolani, 5th Dist. Delaware No. 15 CAE 10 0086, 2016-Ohio-418 (same).
{¶ 109} In this case, although no hearing was held, the record nonetheless contains
express representations from Frank Aceste to the trial court—in which he expressly
recognizes the existence of a settlement agreement, and states that his attorney presented
“his edits” on the written document to appellees. In my view, although there are some
inconsistencies in the evidence before the trial court (which should have been addressed
at a hearing), Frank’s own admissions to the trial court are more than sufficient to support
the trial court’s conclusion that counsel’s actions were done with Frank Aceste’s consent
and, consequently, there is a binding settlement agreement between the parties. Indeed,
all of Frank’s objective and outward manifestations of assent—i.e., his words, acts,
deeds, and silence (as I discuss at length above)—demonstrate that the parties had
reached a settlement agreement, which Frank wished to “void” because he wanted more
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money given the possibility of an MSA. In other words, this is nothing more than a case
of “buyer’s remorse.” Because the record before the trial court firmly demonstrates the
existence of a binding settlement agreement, I would affirm the trial court’s enforcement
of that agreement.
4. The May 16, 2018 order is ambiguous and cannot be enforced in contempt.
{¶ 110} Although the trial court enforced the parties’ settlement agreement on
August 21, 2017, its order did not include a statement of relief or dismiss the appellants’
claims. For those reasons, this court dismissed the appellants’ initial appeal on December
6, 2017, so that the trial court could add a statement of relief that “set forth the parties’
rights and obligations under the agreement” and dismiss the appellants’ claims with
prejudice.
{¶ 111} The trial court, however, did not do that. Instead, on May 16, 2018, the
trial court amended its August 21, 2017 order by adding a statement of relief that ordered
the parties to execute the “Confidential Settlement Agreement and Full Release and Joint
Dismissal,” to undertake their respective obligations in that document, and provide the
court with a stipulated dismissal with prejudice by June 1, 2018. The order did not
clearly and unambiguously state which version of the settlement agreement should be
executed.
{¶ 112} The appellants then filed a second appeal, which we dismissed on July 19,
2018, for lack of a final, appealable order. Thereafter, on November 8, 2018, the trial
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court ordered the parties to “execute the Confidential Settlement Agreement and Full
Release and Joint Dismissal” within 21 days.
{¶ 113} The appellants filed a third appeal instead. The third appeal was
dismissed on December 20, 2018, for lack of a final, appealable order.
{¶ 114} Thereafter, on January 4, 2019, the trial court ordered the parties to
execute the Confidential Settlement Agreement and Full Release and Joint Dismissal
within ten days. When appellants did not sign, the trial court issued an order on May 1,
2019, stating “this is Plaintiffs [sic] final advisement: If they do not execute the
settlement agreement with Defendants within twenty days of the filing of this judgment
entry with the clerk of courts, the Court will dismiss this case upon a proper motion by
Defendants.” The appellants did not sign, appellees filed a motion to dismiss, and the
trial court dismissed appellants’ claims, with prejudice, on July 25, 2019.
{¶ 115} In my view, this chain of events is problematic for several reasons. First
and foremost, as appellants argue in their eleventh assignment of error, the May 16, 2018
order—which amended the August 21, 2017 order that enforced the parties’ settlement
agreement—is ambiguous because the statement of relief does not specify which version
of the Confidential Settlement Agreement and Full Release and Joint Dismissal must be
signed. “[A] court order cannot be enforced in contempt unless the order was ‘clear and
definite, unambiguous, and not subject to dual interpretations.’” City of Toledo v. State,
154 Ohio St.3d 41, 2018-Ohio-2358, 110 N.E.3d 1257, ¶ 23. Because the trial court’s
order was ambiguous, it could not be enforced in contempt.
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{¶ 116} Moreover, even if the trial court had specified which version of the
Confidential Settlement Agreement and Full Release and Joint Dismissal must be signed,
I would still have serious concerns regarding an order that merely compels the parties to
sign the settlement agreement. In that situation, a party that disputes the existence or
terms of the settlement agreement is forced to either (1) obey the order by signing the
settlement agreement, thereby waiving its right to appeal the existence or terms of that
agreement, or (2) disobey the order, thereby suffering the imposition of sanctions (here,
dismissal with prejudice) or an order of contempt.
{¶ 117} In my view, trial courts should enforce settlement agreements by entering
judgment that incorporates the terms of the settlement agreement. Not only does such an
order preserve the parties’ appellate rights, it also avoids any guesswork on appeal
regarding what, exactly, the trial court found the parties had agreed upon. See Spercel v.
Sterling Indus., Inc., 31 Ohio St.2d 36, 39, 285 N.E.2d 324 (1972), quoting Herndon v.
Herndon, 183 S.E.2d 386, 388 (Ga.1971) (when enforcing a settlement agreement
between the parties, “it is the duty of the court to make the agreement the judgment of the
court and thereby terminate the litigation.”).
{¶ 118} For example, in Campbell v. Buzzelli, 9th Dist. Medina No. 07CA0048-
M, 2008-Ohio-425, years after the parties’ divorce, Buzzelli filed a motion to modify
parental rights and responsibilities, child support, and tax exemptions. The parties settled
their dispute at a hearing before the court, and agreed to draft an entry representing the
parties’ agreement. When Campbell refused to sign the entry, Buzzelli filed a motion to
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enforce settlement agreement. The trial court ordered the parties to submit an agreed
entry by January 19, 2017, or all pending motions would be dismissed. The parties never
filed an agreed entry, and the trial court dismissed all pending motions, including the
motion to enforce settlement agreement.
{¶ 119} The appellate court found this was error. It concluded that the trial court
should have incorporated the parties’ settlement agreement into a judgment of the court.
The court stated “[w]hile we understand the trial court’s frustration with the parties’
inability to file an agreed upon entry, such inaction by the parties does not grant the trial
court authority to ignore their settlement agreement.” Id. at ¶ 11.
{¶ 120} Similarly here, I certainly understand the trial court’s frustration with
appellants. By all accounts, the trial court was very accommodating and bent over
backwards to give appellants enough time and leeway to resolve this dispute themselves.
But in doing so, the trial court never issued a final, appealable order that actually
enforced the parties’ settlement agreement and preserved the rights and obligations of
both parties under that agreement.
{¶ 121} For all of these reasons, I respectfully dissent. I would affirm the trial
court’s August 21, 2017 order to the extent that it concluded that the parties have a
binding settlement agreement. I would, however, find appellants’ eleventh assignment of
error well taken, and reverse and remand this matter to the trial court to issue a final
judgment pursuant to the parties’ settlement agreement that includes dismissal with
prejudice.
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This decision is subject to further editing by the Supreme Court of
Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
version are advised to visit the Ohio Supreme Court’s web site at:
http://www.supremecourt.ohio.gov/ROD/docs/.
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