Spalding v. Coulson

• Decision Date: 22 May 1995
• Docket Number: Nos. 64962,65185 and 66457,s. 64962
• Citation: 661 N.E.2d 197,104 Ohio App.3d 62
• Parties: SPALDING, Appellee, v. COULSON et al., Appellants.
• Court: Ohio Court of Appeals

Page 62

104 Ohio App.3d 62

661 N.E.2d 197

SPALDING, Appellee, v. COULSON et al., Appellants.

Nos. 64962, 65185 and 66457.

Court of Appeals of Ohio Eighth District, Cuyahoga County.

Decided May 22, 1995.

Arthur F. Clarke, Westlake, for appellee.

Kraus & Kraus and Gary S. Okin, Cleveland, for appellant Robert Coulson.

Don C. Iler Co., L.P.A., and Don C. Iler, Cleveland, for appellant James P. Celebrezze.

HARPER, Judge.

The Court of Common Pleas of Cuyahoga County, Domestic Relations Division, issued a judgment of divorce on February 10, 1976, case No. D-64756, as to defendant-appellant, Robert Coulson, and third-party defendant, Joan Coulson. Joan was represented by plaintiff-appellee, Walter T. Spalding, in postdecree matters. The instant appeal involves events which were a byproduct of that representation.

I

In accordance with the remand from the Supreme Court of Ohio as pronounced in Coulson v. Coulson (1983), 5 Ohio St.3d 12, 5 OBR 73, 448 N.E.2d 809, the domestic relations court entered a judgment on July 18, 1985. Robert was ordered therein to pay $31,000 plus interest to Joan in addition to $40,000 toward her attorney fees. Joan appealed this judgment, and we reversed in part and remanded the action to the domestic relations court on the issues of temporary alimony and support. See Coulson v. Coulson (Oct. 9, 1986), Cuyahoga App. No. 50771, unreported.

Meanwhile, Joan executed an assignment on October 17, 1985. ¹ The assignment reads as follows:

"I, Joan Coulson, hereby agree in consideration of services previously rendered and to be rendered by Walter T. Spalding, Jr. [to assign to] all of my right, title and interest to the cash award of $31,000.00 plus interest accrued, and the $40,000.00 award for attorney fees and expenses made by Judge John L. Maxwell in his Judgment Entry dated July 18, 1985, Case No. D-64756. This sum will be applied against the outstanding balance owed to Mr. Spalding on a series of notes, previously executed by myself, after payment of the current outstanding balance which is not secured by any note."

Spalding forwarded the assignment to Robert in July 1987 after Joan informed him that she would no longer require his legal services. Joan then retained third-party defendant/appellant, James P. Celebrezze ("J.P. Celebrezze"), his brother, Frank Celebrezze ("F. Celebrezze"), and F. Celebrezze's law firm, now Sindell, Rubenstein, Einbund, Pavlik & Novak ("S & R"), to represent her in any ensuing divorce matter, and to bring the divorce proceedings to a conclusion.

Joan, individually and as president of JACC, Inc., and Robert subsequently signed an agreement on December 28, 1987. J.P. Celebrezze signed the agreement as a witness to Joan's signatures. The agreement provided:

"WHEREAS, the parties do now desire to forever and completely settle, resolve and discharge all claims, demands and issues existing between them including, but not limited to those involved in the aforedescribed litigation and to satisfy and discharge the terms of the Judgment Entry entered on July 18, 1985 "NOW THEREFORE, in consideration of the foregoing promises, and the mutual promises and undertakings hereinafter specified, Joan, JACC and Robert agree as follows:

"1. On or before December 31, 1987, Robert shall pay to Joan the sum of One Hundred Thousand Dollars ($100,000.00) provided however, that as a result of an Assignment executed by Joan to her former attorney on October 17, 1985 (a copy of which Assignment is annexed hereto as Exhibit B), the One Hundred Thousand Dollars ($100,000.00) payment shall be made to James P. Celebrezze as Escrow Agent to secure proper payment pursuant to the Assignment. Said funds shall be held by Mr. Celebrezze in an interest-bearing account and shall be retained by him until such time as he obtains a complete written and executed release and discharge from the assignee named in the aforedescribed Assignment of all claims and demands which he may have against Robert pursuant to the Assignment and resulting from Robert's knowledge thereof. Said document of release and discharge shall be submitted to Robert and/or his attorneys for review prior to release of the escrowed funds, and such release and discharge and the form and substance shall acknowledge their approval thereof in writing prior to the release of any funds from escrow, which approval shall not be unreasonably withheld. It is understood that Robert shall have no further right or interest in the funds to be paid pursuant to this paragraph 1 other than to insure that any obligations he may have pursuant to the aforedescribed Assignment have been fully satisfied and discharged."

F. Celebrezze forwarded the agreement, which was signed by Joan, to Robert's counsel, Gary S. Okin, on December 28, 1987. F. Celebrezze advised Okin to obtain Robert's signature on the agreement and to return an executed copy of it along with "the initial payment in the sum of $100,000.00 payable to James P. Celebrezze, Escrow Agent."

Robert signed the agreement and issued a check dated December 29, 1987 for $100,000. The payee on the check was "James Celebrezze, Escrow Agent," in accordance with the agreement. The check further contained the notation "Payment to Joan Coulson pursuant to Agreement dated December 28, 1987."

J.P. Celebrezze endorsed the check and deposited it in an account at TransOhio Savings Bank ("TransOhio"). TransOhio records reveal that the $100,000 was deposited in an account entitled "JAMES CELEBREZZE TR FOR JOAN COULSON" ("the escrow account"), on December 29, 1987. They also reveal that a check was written the following day, December 30, 1987, on the escrow account, naming an S & R escrow account as the payee of $20,000. According to both J.P. and F. Celebrezze, $10,000 of the $20,000 was later deposited in a second account. TransOhio records confirm that by February 16, 1988, the remainder of the original $100,000 was depleted, having been distributed to either Joan or her creditors.

Robert learned of the disbursement of the funds subsequent to his payment of an additional $110,000 to Joan pursuant to paragraphs 2a-2k of the agreement. Joan agreed to convey all of her interest in a Mr. Hero restaurant in exchange for the payment.

Finally, on June 6, 1988, the domestic relations court signed a judgment entry that declared satisfaction of its July 1985 judgment. The entry was approved by both Joan and Robert.

II

Spalding commenced this action solely against Robert in the Court of Common Pleas of Cuyahoga County, CV-157071, on September 19, 1988. Spalding asserted that notwithstanding Robert's knowledge of the assignment, Robert had entered into the agreement with Joan in satisfaction of the July 1985 judgment without notifying Spalding of the satisfaction. Robert's actions were allegedly intentional and malicious, and deprived Spalding of his rights. Moreover, Spalding averred, Robert next approved of the domestic relations court's judgment of June 6, 1988, wherein the satisfaction of judgment was journalized, in the absence of Robert's obtaining a release from Spalding. Spalding alleged that the judgment entry was wrongful by virtue of the assignment.

Robert responded to Spalding's claims by filing a third-party complaint against Joan, JACC, Inc., and J.P. Celebrezze. The basis for the third-party complaint was the claim that Joan had breached the agreement and that J.P. Celebrezze had breached his fiduciary duty, these actions entitling Robert to indemnification and contribution pursuant to R.C. 2307.21 and 2307.32. ²

Spalding thereafter filed a motion for summary judgment against Robert on August 12, 1991, to which Robert responded on September 13, 1991. Robert filed a motion for summary judgment on March 23, 1992 against Joan on the breach of contract claim, and against J.P. Celebrezze on the breach of fiduciary duty claim. J.P. Celebrezze responded to the motion, but Joan did not file a brief in opposition.

The trial court granted Robert's motion for summary judgment on July 7, 1992 against Joan and J.P. Celebrezze, except on the claim for punitive damages against the latter party. Spalding's motion for summary judgment was also granted against Robert. ³ The trial court's judgment reads in part:

"Plaintiff Spalding's motion for summary judgment contains an affidavit establishing the validity of the 'assignment' agreement between plaintiff and Joan Coulson. Further, Spalding has established that Robert Coulson had knowledge of such agreement by means of his answer and response to requests for production of documents. Because defendant, third-party plaintiff Robert Coulson has failed to respond to the motion with affidavits or other evidence described in Civ.R. 56(C), plaintiff Spalding's affidavit and supporting documents must be taken as true. Marymount Hospital v. Porozynski (Dec. 19, 1991), Cuyahoga App. No. 59670, unreported. As a result, the Court finds that no genuine issue of material fact remains to be litigated and that summary judgment should be granted in favor of plaintiff Spalding and against defendant, third-party plaintiff Robert Coulson.

"The third-party defendants Joan Coulson and James Celebrezze's response to the third-party plaintiff Robert Coulson's properly filed and supported motion for summary judgment is equally lacking in evidentiary support sufficient to satisfy Rule 56(C). The allegations in Robert Coulson's motion for summary judgment were properly supported by excerpts of depositions and documents filed with the Court. In response, third-party defendant Celebrezze submitted only an unsworn memorandum containing no documentary evidence to counter the evidence of third-party plaintiff Robert Coulson. Third-party defendant Joan Coulson failed to submit a response. As a result, the evidence submitted by third-party plaintiff Robert Coulson must be accepted as true. Marymount Hospital, supra.

"Taking the properly supported allegations in Robert Coulson...