724 N.E.2d 1227 | Ohio Ct. App. | 1999
This appeal raises the issue whether in this derivative action a non-settling defendant, appellant Kenneth Seminatore, has standing to object to the partial settlement entered into between the plaintiff policyholders of Blue Cross/Blue Shield now known as Medical Mutual of Ohio ("Blue Cross") and fourteen other defendants1 affiliated with Blue Cross. Plaintiffs sued the named defendants for alleged improprieties occurring during the pursuit of a merger between Blue Cross and Columbia/HCA Healthcare, Inc. ("Columbia").
The settlement provided for the dismissal of all of the plaintiffs' claims against all the defendants except claims for legal malpractice and breach of fiduciary duty against Seminatore. Seminatore objected to the proposed settlement, claiming that the settlement could affect his possible contribution claims against the settling defendants. However, the trial court ruled that he lacked standing to object to the settlement because the court had no plans to enter an order limiting his right to seek contribution. After a hearing, the trial court approved the settlement. This appeal followed.
Seminatore assigns the following errors for our review:
I. THE TRIAL COURT ERRED IN FINDING THAT DEFENDANT KENNETH F. SEMINATORE LACKED STANDING TO OBJECT, BECAUSE DEFENDANT SEMINATORE SUFFERED "FORMAL LEGAL PREJUDICE" WHEN THE TRIAL COURT APPROVED THE SETTLEMENT AGREEMENT.
II. THE TRIAL COURT DID NOT ADEQUATELY REVIEW THE SETTLEMENT AGREEMENT TO DETERMINE WHETHER IT WAS "FAIR, REASONABLE AND IN THE BEST EFFORTS OF ALL PARTIES AFFECTED BY IT.
III. THE TRIAL COURT ABUSED ITS DISCRETION IN RULING THAT THE SETTLING DEFENDANTS AND MEDICAL MUTUAL/BLUE CROSS ENTERED INTO THE SETTLEMENT AGREEMENT IN "GOOD FAITH" WITHIN THE MEANING OF R.C.
2307.33 , BECAUSE THAT ISSUE WAS NOT BEFORE THE TRIAL COURT.IV. THE FINDING THAT THE SETTLEMENT WAS ENTERED IN GOOD FAITH IS NOT SUPPORTED BY THE EVIDENCE.
Having reviewed the record and the legal arguments of the parties, we affirm the decision of the trial court. The apposite facts follow.
On March 28, 1997, Raymond Lesser, Seven Oaks Financial Corporation, and Norwalk Raceway Park Inc. filed a derivative action against fifteen defendants. *322 All of the plaintiffs had policies of insurance with Blue Cross. The defendants were Blue Cross executives, advisors, and legal representatives. The complaint sought to recover twenty-five million dollars ($25,000,000) expended by the defendants in the unsuccessful pursuit of a merger with Columbia, a health care conglomerate that owns hundreds of hospitals, outpatient surgical centers, and home health agencies.
In or about October 1997, a partial settlement was proposed that would dispose of all the plaintiffs' claims against all of the defendants except Seminatore. The agreement provided for payments totaling $6,807,500. Seminatore filed his objection to the proposed settlement, arguing that it would improperly bar him from seeking contribution from the other defendants in the event he was held liable to the plaintiffs. The trial court ruled that Seminatore had no standing to be heard at the hearing on the proposed settlement "because his right to contribution has not been established and appears speculative at best."
A hearing was held on the settlement on December 17, 1997. After the hearing, the trial court approved the settlement, concluding that "the plaintiffs, the settling defendants, and Medical Mutual/Blue Cross have entered into the settlement agreement in 'good faith' within the meaning of R.C.
On January 8, 1998, the plaintiffs moved to amend their complaint to add a new legal malpractice action against Seminatore arising out of the cancellation of Blue Cross' license to use the Blue Cross and Blue Shield trademarks. On January 15, 1998, Seminatore also sought leave to file a third party complaint for contribution against the attorneys, accountants, consultants, and other professionals whose opinions he relied on regarding the Columbia transaction; none of these third party defendants were parties in the derivative action. On the same date, Seminatore filed his notice of appeal challenging the trial court's decision to approve the partial settlement.
In his first assignment of error, Seminatore argues the trial court erred in finding that he lacked standing to object to the settlement agreement. "Standing refers to whether a party has a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy." In re Miamisburg Train Derailment Litigation (1993),
The burden of establishing standing falls upon appellant Seminatore. See In re School Asbestos Litigation (C.A. 3, Pa. 1990), 921 F.2d 1130, 1332. *323
Generally, only a party to a proposed settlement may object to that settlement. Zupnick v. Fogel (C.A.
In its journal entry approving the settlement between the parties, the trial court held that "[t]he Plaintiffs, the settling Defendants, and Medical Mutual/Blue Cross have entered into the Settlement Agreement in 'good faith' within the meaning of R.C.
When a release or a covenant not to sue or not to enforce judgment is given in good faith to one of two or more persons liable in tort for the same injury or loss to person or property or the same wrongful death * * * [t]he release or covenant discharges the tortfeasor to whom it is given from all liability for contribution to any other tortfeasor.
Seminatore argues he suffered formal legal prejudice because the trial court's ruling that the settlement was reached "in good faith" effectively bars him from seeking contribution from the other defendants. See Harris v. Alexander Grant Co. (1990),
Seminatore urges us to follow Eichenholtz v. Brennan (C.A.
A showing of "plain legal prejudice" is easier where the terms of the settlement or the trial court's approval order contains language purporting to bar the non-settling defendant's claim for contribution. SeeAlumax Mill Products, Inc. v. Congress Financial Corp. (1990),
Consequently, we reject Seminatore's claim that the trial court's approval of the settlement caused him to suffer formal legal prejudice. Our review of the trial court record reveals that Seminatore has not brought contribution claims against any of the settling defendants. As discussed above, neither the language of the settlement itself nor the language of the court's order approving the settlement contained any language barring Seminatore from asserting any contribution claims against the settling defendants.
Seminatore argues that the settlement in effect triggers the application of R.C.
Furthermore, it should be noted that R.C.
Having concluded that Seminatore lacked standing to object to the partial settlement, we overrule his remaining assignments of error as moot.
Judgment affirmed.
It is ordered that appellees recover of appellants their costs herein taxed.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Common Pleas Court to carry this judgment into execution.
Exceptions.
KARPINSKI, J., and ROCCO, J., CONCUR.
_________________________________ PATRICIA ANN BLACKMON, ADMINISTRATIVE JUDGE
N.B. This entry is an announcement of the court's decision. See App. R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App. R. 22(E) unless a motion for reconsideration with supporting brief, per App. R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the clerk per App. R. 22(E). See, also, S.Ct.Prac.R. II, Section 2(A)(1).
