Klever v. City of Stow

• Decision Date: 29 June 1983
• Citation: 13 Ohio App.3d 1,468 N.E.2d 58
• Parties: , 13 O.B.R. 1 KLEVER et al., Appellants, v. CITY OF STOW, Appellee. *
• Court: Ohio Court of Appeals

Page 1

13 Ohio App.3d 1

468 N.E.2d 58, 13 O.B.R. 1

KLEVER et al., Appellants, v. CITY OF STOW, Appellee. ^*

Court of Appeals of Ohio, Ninth District, Summit County.

June 29, 1983.

Syllabus by the Court

1. Absent specific authorization, an attorney has no implied or apparent authority, merely by virtue of a general retainer, to compromise and settle his client's claims, nor can a court compel settlement or by its imprimatur validate a settlement which is otherwise unenforceable. However, when the parties agree to a settlement offer, this agreement cannot be repudiated by either party, and the court has the authority to sign a journal entry reflecting the agreement and to enforce the settlement.

2. When a client agrees to the salient provisions of a settlement offer and expressly authorizes her attorney to settle the matter on her behalf, she impliedly authorizes him to agree to the ministerial details necessary to effect the salient provisions of the agreement.

Jeffrey H. Friedman and Frank A. Chenette, Cleveland, for appellants.

William P. Michaels, Akron, for appellee.

George Pappas, Akron, for amicus curiae.

Richard T. Cunningham, Akron, for amicus curiae.

MAHONEY, Presiding Judge.

Plaintiff-appellants, Brenda Klever and her parents, John and Virginia Klever, challenge a trial court order journalizing a structured settlement which the court found was reached by the parties out of the court's presence, and ordering the amount and mode of payment of appellants' attorney fees. We affirm.

Facts

Brenda Klever suffered severe injuries as a result of an automobile accident on May 30, 1980, and was rendered a quadriplegic. Brenda and her parents, John and Virginia Klever, retained attorneys George Pappas and Richard T. Cunningham to represent them in their claims against the city of Stow (the "city") for damages arising from the accident. Pappas and Cunningham brought suit against the city and eventually obtained a jury verdict awarding $5,087,625.34 to Brenda and her parents. The city appealed the judgment based on the verdict. This appellate court reversed and remanded the cause for a new trial. Following the Ohio Supreme Court's refusal to hear a further appeal, the case was set for a new trial to commence on November 30, 1982.

Settlement negotiations between the attorneys representing the parties began in July 1982. Brenda and her parents testified that Pappas and Cunningham informed them of various settlement offers made during the course of the negotiations. The record indicates that Pappas and Cunningham discussed a structured settlement offer with John and Virginia Klever on October 14, 1982. Pappas testified that during the October 14 conversation, John Klever said that the offer to settle Brenda's claim was fair and that he advised acceptance. Mr. Klever testified that he had never been in favor of Brenda's acceptance and that he and Mrs. Klever preferred a retrial. However, both parents testified that they said that Brenda should make the final decision. The record further indicates that the parents agreed to abandon their claim for medical expenses, said claim having been subrogated to Mr. Klever's insurer, in the hope that Brenda would receive a larger, unencumbered settlement amount.

Later that same evening, after discussing the matter with Mr. and Mrs. Klever, Pappas and Cunningham contacted the city's attorney, William Michaels, with further settlement suggestions. Sometime during the morning hours of October 15, 1982, Michaels telephoned Cunningham with a final offer. During this telephone conversation, Michaels indicated that this offer was contingent on the current prices for annuities which were subject to rapid change. Thus, the offer required prompt acceptance.

Pappas and Cunningham met with Brenda Klever later that same day (October 15) and informed her of the salient terms of the city's offer. The parties agree that Brenda understood the salient terms of the offered settlement. According to Pappas and Cunningham, Brenda instructed them to accept the offer on her behalf because she did not want to endure a second trial. Brenda denies this version, claiming that she told her attorneys that she wanted time to think about the offer before accepting or refusing.

Immediately following the conversation with Brenda, Cunningham telephoned Michaels to inform him that Brenda had accepted the offer and that the case was settled. After returning home, Pappas telephoned the trial judge to inform him that the case had been settled. Michaels informed his client of the acceptance, prepared a written memorandum of the agreement, purchased the annuities to fund future payments, and obtained a check for the initial lump sum payment. Cunningham approved the written memorandum of the agreement. News of the fact of settlement was obtained by the media, and an article concerning the settlement appeared in a local newspaper.

Apparently, John Klever learned of the settlement from the newspaper article and telephoned Brenda for more information. Brenda testified that she was surprised by the newspaper story and immediately telephoned Pappas to protest that the case had been settled without her consent. When informed that she could not withdraw her acceptance after the agreement had been reached, Brenda terminated her relationship with Cunningham and Pappas and retained her present counsel. Brenda and her parents refused to sign the written agreement and refused to accept any settlement payments.

Upon learning of this state of affairs, the trial court ordered all the parties and the attorneys involved to appear at a hearing to determine the validity of the settlement agreement. After considering the testimony of the Klevers, Pappas, Cunningham, and Michaels, the court found that John, Virginia and Brenda Klever had expressly authorized their attorneys, Pappas and Cunningham, to accept the structured settlement offer and that Pappas and Cunningham had acted within the scope of this authority by accepting the offer, thereby creating a binding settlement agreement. The written memorandum of the agreement was journalized by the court. The order also delineated the amount and mode of payment of fees to Cunningham and Pappas in accordance with an agreement the court found was reached between the attorneys and their client.

Law and Discussion on Court's Authority

The threshold issue in this case is whether the lower court had the authority to conduct the hearing and to decide whether a settlement agreement had, in fact, been reached. Appellants raise this issue in their reply brief wherein they contend that they had a right to a jury trial on the settlement issue. At the outset we note that this issue not only was not raised in the trial court, as discussed below, but it also was not raised as error and argued in appellants' initial brief as required by App.R. 12. Rather, appellants injected this contention in their reply brief which, by definition, is limited to arguments rebutting points raised in the appellee's answer brief. App.R. 16(C). In short, appellants have failed to raise this issue in the proper vehicle and at the proper point in the appellate process. However, because appellee has had an opportunity to answer this contention and because this issue was orally argued to this court, we proceed to a determination on its merits.

In Morform Tool Corp. v. Keco Industries, Inc. (1971) 30 Ohio App.2d 207, 284 N.E.2d 191 , plaintiff filed a complaint seeking to recover monies allegedly owed by defendant on an account. Defendant denied the alleged debt, and the case proceeded to trial. During a recess, counsel for the parties agreed to a settlement. Subsequently, defendant refused to perform its obligations under the agreement contending in response to plaintiff's motion to enforce the settlement that plaintiff had failed to deliver goods which conformed to the agreed upon specifications. Defendant made a motion requesting the court to continue the trial. The lower court overruled defendant's motion and entered judgment in favor of plaintiff pursuant to the terms of the alleged compromise.

On appeal, the court stated:

"The trial court had full jurisdiction to do one of two things. It could have gone forward with the case to determine liability upon the account. Defendant might have sought to amend its answer to plead breach of warranty but there is, from the record before us, nothing from which it can be concluded that the original action was not in progress. The trial court, just as well, could have opted to proceed upon the motion to enforce the settlement agreement.

"When the latter course was chosen, however, the court was under a duty to resolve the issue of fact raised by defendant's response to the motion. Because the settlement agreement was conditioned, the court was obliged to determine whether the conditions had been met before granting a judgment upon the terms of the agreement. The court could not act summarily. It had the duty and authority to adjudicate the issues presented in its enforcement." Id. at 210, 284 N.E.2d 191.

In Noroski v. Fallet (1982), 2 Ohio St.3d 77, 442 N.E.2d 1302, plaintiff brought suit for damages resulting from an automobile accident. Defendant raised the affirmative defense of full and complete settlement of the claim. The trial court bifurcated the issues, conducted a hearing on the issue of settlement without the benefit of a jury, held that plaintiff had released all claims arising from the accident, and granted judgment to defendant on the complaint. The Supreme Court reversed. The high court did not dispute the trial court's authority to decide the fact of release but rather held that, based on the evidence before it, the trial court had made an erroneous factual determination.

Admittedly, we are aware of Ohio cases which permit the settlement issue to reach the jury. See McBennett v. Piskur (1965), 3 Ohio St.2d 8, 209 N.E.2d 138 ; Grafton Lumber &...