Artisan Mech.Al Inc v. Beiser
| Decision Date | 08 November 2010 |
| Docket Number | CASE NO. CA2010-02-039 |
| Parties | ARTISAN MECHANICAL, INC., Plaintiff-Appellant, v. JAMES MICHAEL BEISER, et al. |
| Court | Ohio Court of Appeals |
CIVIL APPEAL FROM BUTLER COUNTY COURT OF COMMON PLEAS
Case No. CV2009-06-2832
Taft Stettinius & Hollister LLP, Timothy G. Pepper, for plaintiff-appellant
The Drew Law Firm Co., LPA, Anthony G. Covatta, for defendants-appellees
{¶1} Plaintiff-appellant, Artisan Mechanical, Inc., appeals a summary judgment granted by the Butler County Common Pleas Court in favor of defendants-appellees, James Michael Beiser and Chris Lay, on Artisan's claim that Beiser and Lay breached an enforceable, oral settlement agreement between the parties regarding a prior lawsuit between them. We affirm.
{¶2} Artisan is a mechanical contractor. Beiser and Lay are mechanical engineers who were employed by Artisan through approximately the third quarter of 2008. Beiser and Lay left Artisan to start their own mechanical engineering firm, Accurate Mechanical Solutions. On November 10, 2008, Artisan filed a lawsuit against Beiser and Lay in the Butler County Common Pleas Court to prevent them from misappropriating Artisan's trade secrets and business opportunities.
{¶3} On the morning of February 4, 2009, Artisan's counsel made a settlement proposal to Beiser and Lay's counsel, in which both parties were to agree not to compete with one another with respect to certain "key customers" for a period of six months. Specifically, Beiser and Lay were to agree not to submit any new bids to work on projects for two of Artisan's key customers, Fuji and Veritus Technology Group, and Artisan, in turn, was to agree not to submit any bids to work on projects for two of its other key customers, Flavor Systems and Lyons Magnus, whom Beiser and Lay wished to have as customers for AMS. That same morning at 9:44 a.m., Beiser and Lay's counsel accepted Artisan's settlement proposal on the following terms and conditions:
{¶4} "1. Both sides 'walk away' from the litigation.
{¶5} "2. Six month non-compete, commencing today, February 4, 2009, ending August 3, 2009.
{¶6} "3. Beiser, Lay and their company will initiate no new bids to Fuji or Verdis [sic].
{¶7}
{¶8} Beiser and Lay's counsel "suggest[ed]" that the parties prepare a "Mutual Release and Settlement Agreement" and offered to prepare the agreement if Artisan's counsel would "likewise prepare an Entry of Dismissal of all claims and counterclaims."
{¶9} Artisan's counsel responded by e-mail as follows:
{¶10}
{¶11} Beiser and Lay's counsel responded:
{¶12}
{¶13} The parties cancelled depositions that were scheduled for February 5-6, 2009. On February 6, 2009, Beiser and Lay's counsel sent Artisan's counsel a draft of a settlement agreement. When he had not received a response by February 16, 2009, Beiser and Lay's counsel e-mailed Artisan's counsel, asking him when he would be "ready to exchange signature pages," and Artisan's counsel replied, "I'll get back to you as quickly as I can."
{¶14} On February 19, 2009, Artisan's counsel informed the trial court that "the case had settled." The next day, the trial court issued an entry that noted that the parties had advised it that the case "has been settled" and ordered that the action be "dismissed with prejudice provided that any of the Parties may, upon good causeshown, within sixty days, request further court action if settlement is not consummated." The entry further stated that "[u]pon agreement and within sixty days, the Parties may submit a supplementary entry outlining details of the settlement."
{¶15} On March 10, 2009, Beiser and Lay's counsel sent Artisan's counsel a "Settlement Agreement and Mutual Release" that had been executed by Beiser and Lay and contained a space for Artisan's signature.1 On March 17, 2009, Artisan's counsel e-mailed Beiser and Lay's counsel, suggesting that the "confidentiality" and "non-disparagement" provisions in the proposed settlement agreement be deleted and that the "applicable law" provision be modified to make state court in Butler County, Ohio the proper venue for any future action that might arise from the agreement.
{¶16} On April 16, 2009, Artisan's counsel e-mailed Beiser and Lay's counsel and requested an update as to where matters stood regarding the lawsuit, and Beiser and Lay's counsel indicated in response that the parties had agreed to drop the "confidentiality" and "non-disparagement" provisions and modify the venue provision in the proposed settlement agreement. He then encouraged Artisan's counsel to "get your clients to sign [the proposed agreement] and then [he] would get his boys [Beiser and Lay] to sign as well."
{¶17} The parties did not send any further messages to each other. On April 21, 2009, the 60-day period set forth in the trial court's February 20, 2009 conditional dismissal order lapsed, without either party having ever requested the trial court totake further action in the lawsuit or without the parties submitting a supplemental entry outlining the details of any settlement agreement they reached.
{¶18} In June 2009, Artisan learned that Beiser and Lay were performing work for Fuji. When Artisan's counsel requested an explanation, Beiser and Lay's counsel acknowledged that his clients had submitted a new bid to perform work for Fuji, but rejected any claim that their actions constituted a breach of a settlement agreement, because Artisan had failed to execute the proposed settlement agreement that Beiser and Lay had tendered and thus there was no settlement agreement between the parties that Beiser and Lay could have breached.
{¶19} On June 29, 2009, Artisan filed another lawsuit against Beiser and Lay in the Butler County Common Pleas Court, which forms the basis of the current appeal. Artisan alleged in its complaint that, even though the parties failed to execute a formal written contract, they reached an enforceable, oral settlement agreement on February 4, 2009 and that Beiser and Lay breached that agreement by making a bid to Fuji. On January 29, 2010, the trial court granted summary judgment to Beiser and Lay on the ground that the parties never reached a "meeting of the minds" on the "essential terms and details of the settlement agreement."
{¶20} Artisan now appeals, assigning the following as error:
{¶21} Assignment of Error No. 1:
{¶22} "THE TRIAL COURT ERRED IN GRANTING BEISER AND LAY'S MOTION FOR SUMMARY JUDGMENT AND FINDING THAT THERE WAS NO ENFORCEABLE SETTLEMENT AGREEMENT BETWEEN THE PARTIES."
{¶23} Artisan argues the trial court erred in finding that there was no enforceable settlement agreement between the parties, and consequently grantingsummary judgment to Beiser and Lay because they accepted all the essential terms of the settlement agreement on February 4, 2009 and the parties' counsel agreed on all remaining terms of the agreement by April 16, 2009. Artisan also contends that even though the parties intended to but did not reduce their agreement to a formal written document, their February 4, 2009 oral settlement agreement was still enforceable since its terms can be determined with "sufficient particularity" and "the parties' deal was not contingent on it being reduced to writing." We disagree with these arguments.
{¶24} Summary judgment is appropriate under Civ.R. 56 when "(1) there is no genuine issue of material fact, (2) the moving party is entitled to judgment as a matter of law, and (3) reasonable minds can come to but one conclusion and that conclusion is adverse to the nonmoving party, said party being entitled to have the evidence construed most strongly in his favor." Zivich v. Mentor Soccer Club, Inc., 82 Ohio St.3d 367, 369-370, 1998-Ohio-389. "[A] party seeking summary judgment, on the ground that the nonmoving party cannot prove its case, bears the initial burden of informing the trial court of the basis for the motion, and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact on the essential element(s) of the nonmoving party's claims." Dresher v. Burt, 75 Ohio St.3d 280, 293, 1996-Ohio-107. If the moving party satisfies its initial burden, "the nonmoving party then has a reciprocal burden outlined in Civ.R. 56(E) to set forth specific facts showing that there is a genuine issue for trial and, if the nonmovant does not so respond, summary judgment, if appropriate, shall be entered against the nonmoving party." Id.
{¶25} "[A] settlement agreement is a contract designed to terminate a claimby preventing or ending litigation[.]" Continental W. Condominium Unit Owners Assn. v. Howard E. Ferguson, Inc., 74 Ohio St.3d 501, 502, 1996-Ohio-158. While "[i]t is preferable that a settlement agreement be memorialized in writing[,] an oral settlement agreement may be enforceable if there is sufficient particularity to form a binding contract." Kostelnik v. Helper, 96 Ohio St.3d 1, 3-4, 2002-Ohio-2985, ¶15. "Terms of an oral contract may be determined from 'words, deeds, acts, and silence of the parties.'" Id., quoting Rutledge v. Hoffman (1947), 81 Ohio App. 85, paragraph one of the syllabus.
{¶26} "...
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