PNC MORTGAGE, а division of PNC Bank National Association v. CHERYL L. GUENTHER, et al.
Appellate Case No. 25385
IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY
July 12, 2013
[Cite as PNC Mtge. v. Guenther, 2013-Ohio-3044.]
Trial Court Case No. 2010-CV-5706; (Civil Appeal from Common Pleas Court)
Rendered on the 12th day of July, 2013.
ANTHONY L. OSTERLUND, Atty. Reg. #0071086, and J.B. LIND, Atty. Reg. #0083310, Vorys, Sater, Seymour and Pease LLP, 301 East Fourth Street, Suite 3500, Great American Tower, Cincinnati, Ohio 45202
Attorneys for Plaintiff-Appellee, PNC Mortgage
WORRELL A. REID, Atty. Reg. #0059620, 6718 Loop, #2, Centerville, Ohio 45459
Attorney for Defendant-Appellants, Cheryl Guenther and Deanne Gerhardt
DOUGLAS TROUT, Atty. Reg. #0072027, Montgomery County Prosecutor‘s Office, 301 West Third Street, 5th Floor, Dayton, Ohio 45422
Attorney for Montgomery County Treasurer
{¶ 1} In this foreclosure case, the mortgage company moved to enforce a settlement agreement that was negotiated by the parties’ attorneys and reduced to writing but never signed. A magistrate held an evidentiary hearing and decided that the agreement should be enfоrced. A retired judge, sitting for the trial judge originally assigned to the case, reviewed the magistrate‘s decision and adopted it and the magistrate‘s findings of fact and conclusions of law.
{¶ 2} The property owners contend that the agreement is not enforceable because their attorney did not have the authority to entеr the agreement and because they never signed a writing of it. But they failed to file a transcript of the magistrate‘s hearing. So we must simply accept the trial court‘s factual finding that the property owners’ attorney had the necessary authority and the court‘s finding that the parties did not intend to make signing a condition precеdent to enforcement. The property owners also contend that the trial court‘s order is voidable and void because it was not decided and signed by the judge originally assigned to the case. A certificate of assignment from the chief justice of the Ohio Supreme Court establishes the retired judge‘s authority to decide and sign the order.
{¶ 3} The trial court‘s order is affirmed.
I. The Facts
{¶ 4} In July 2010, PNC Mortgage filed a complaint in foreclosure against Cheryl L. Guenther and Deanne L. Gerhardt and others.1 The parties tried to settle the case through
{¶ 5} The matter was referred to a magistrate. The magistrate held an evidentiary hearing at which Reid and Gerhardt testified. Based on the affidavits and hearing testimony, the magistrate determined that Guenther and Gerhardt‘s attorney hаd authority to settle the case on the terms in the settlement agreement. The magistrate also concluded that, despite the fact that Guenther and Gerhardt did not sign the written agreement, an enforceable settlement agreement exists between the parties. With respect to the agreement, the magistrate made these findings:
The Settlement Agreement contain[s] provisions under which (1) [PNC] would accept a reduced claim and would waive certain foreclosure related fees and costs; (2) [Guenther and Gerhardt] would acknowledge their debt and bring their mortgage current; and (3) that all claims and counterclaims would be dismissed with prejudice. The agreement was discussed in e-mails between counsel for the parties and final terms agreed upon between counsel. Mr. Reid represented that “I should have [the Agreement, as modified by their discussions] signed and mailed within 24 hours.” Mr. Osterlund[, PNC‘s attorney,] then forwarded the revised Settlement Agreement with the negotiated terms to Mr. Reid on Novembеr 9,
2011 for signature. The correspondence between counsel for the parties evidences a meeting of the minds. Mr. Reid offered that his clients would get the funds by November 15th and that the agreement “should” be signed and mailed back to Mr. Osterlund within 24 hours of receipt. The offer was accepted by [PNC], via Mr. Osterlund, on November 9, 2011, when he forwarded the revised Settlement Agreement to Mr. Reid. At this point in time both parties agreed upon the terms contained in the writing. Ms. Gerhardt acknowledged that, at this point in time, she was aware of the state of negotiations and she did plan to pay the arrearage of around $19,000.00, along with a monthly payment of $1,079.00. Accordingly, despite the fact that the document itself was not yet signed by the parties, there was a binding and enforceable settlement agreement between the parties on November 9, 2011.
(Magistrate‘s Decision, 9-10). The magistrate believed that, “after entering into the agreement through counsel, [Guenther and Gerhardt] experienced financial diffiсulties (due to unexpected medical expenses) and had a change of heart regarding the agreement.” (Id. at 10).
{¶ 6} Guenther and Gerhardt filed objections to the magistrate‘s decision with the judge originally assigned to the case, Judge Price. But in September 2012, it was Judge Wolff, a retired judge, who overruled their objections and adoрted the magistrate‘s decision and findings of fact and conclusions of law, sustaining PNC‘s motion to enforce.
{¶ 7} Guenther and Gerhardt appealed.
II. The Enforceability of the Settlement Agreement
{¶ 8} The first assignment of error alleges that the trial court erred in enforcing the
A. The absent transcript
{¶ 9} There is a preliminary issue here that we must address first.
{¶ 10} The record before us does not contain a transcript of the proceedings before the mаgistrate or either of the transcript substitutes. For this reason, we cannot review any challenges
B. The attorney‘s authority
{¶ 11} Guenther and Gerhardt contend that their attorney did not have the authority to bind them to the settlеment agreement. Rather, they say, the role of their attorney was merely to help them in reaching an agreement.
{¶ 12} “Absent specific authorization, an attorney has no implied or apparent authority to compromise and settle his client‘s claims.” Schalmo Builders, Inc. v. Zama, 8th Dist. Cuyahoga No. 90782, 2008-Ohio-5879, ¶ 17, quoting Garrison v. Daytonian Hotel, 105 Ohio App.3d 322, 326, 663 N.E.2d 1316 (2d Dist. 1995). Merely retaining an attorney does not give the attorney settlеment authority. Id. “[A]ttorneys who enter into settlement agreements must have actual authority to enter into the agreement.” (Citation omitted.) Berry Network, Inc. v. United Propane Gas, Inc., 2d Dist. Montgomery No. 22875, 2009-Ohio-2537, ¶ 29. “Whether a party authorized the attorney to settle the case on certain terms is a question of fact * * *.”
{¶ 13} The magistrate here concluded that Guenther and Gerhardt‘s attorney, Mr. Reid, had bоth actual and apparent authority to settle the case. On the issue of actual authority:
The Magistrate d[oes] not find Ms. Gerhardt‘s or Mr. Reid‘s testimony convincing on the issue of whether Mr. Reid had authority to negotiate and reach a settlement on behalf of [Guenther and Gerhardt]. Throughout the negotiations process, Mr. Reid failed to indicate that his authority was limited or that he needed to obtain the approval of his clients before agreeing to the terms of the deal. * * * Accordingly, the Magistrate finds it more likely than not that Mr. Reid had actual authority to negotiate a settlement and to bind [the appellants] to its terms.
(Magistrate‘s Decision, 11-12). On the issue of apparent authority:
Assuming, arguendo, that Mr. Reid did not have actual authority to bind his clients, he certainly had apparent authority to do so and [Guenther and Gerhardt] are bound by his actions. * * *
* * * [Guenther and Gerhardt] and Mr. Reid represented to [PNC]‘s counsel by their actions that Mr. Reid had the authority to act on [Guenther and Gerhardt‘s] behalf, inсluding negotiating a binding settlement agreement. It would be unjust to [PNC] to allow [Guenther and Gerhardt] to circumvent the settlement agreement after [PNC] relied upon the representations that Mr. Reid had the authority to enter into the agreement. [Guenther and Gerhardt] must accept the actions of their attorney and abide by the terms of thе settlement agreement. If [Guenther and Gerhardt] believe that Mr. Reid overstepped his authority by
entering into the binding settlement agreement on their behalf, as the Lepole Court stated, their “remedy lies elsewhere.” [Lepole v. Long John Silver‘s, 11th Dist. Portage No. 2003-P-0020, 2003-Ohio-7198, ¶ 16.]
(Id. at 12).
{¶ 14} Because the authority of Guenther and Gerhardt‘s attorney is a question of fact, we accept the magistrate‘s finding—adopted by the trial court—that the attorney had the authority to settle the case on the terms in the agreement.
C. The existence of a contract
{¶ 15} Guenther and Gerhardt contend that the settlement agreement also is not binding because signing a writing of the agreement is a condition precedent to enforcement and they did not sign anything. A signed writing is not necеssary to a settlement contract:
“An agreement to make a written agreement, the terms of which are mutually understood and agreed upon, is in all respects as valid and obligatory as the written contract itself would be if executed. The mere fact that parties who have reached a verbal agreement also have agreed to reduce their contract to writing does not prevent the agreement from being a contract if the writing is not made.”
Union Sav. Bank v. White Family Cos., Inc., 183 Ohio App.3d 174, 2009-Ohio-2075, 916 N.E.2d 816, ¶ 26 (2d Dist.), quoting 17 Ohio Jurisprudence 3d, Contracts, Section 68. It is only “‘where the parties intend that there be no contract until the agreement is reduced to writing and signed, or that the contract is to be reduced to writing and signed before the agreement is finally consummated‘” that “‘no contract exists when the written agreement is neither signed nor approved by one of the parties.‘” Id., quoting 17 Ohio Jurisprudence 3d, Contracts, Section 68;
{¶ 16} The magistrate here found no such intent:
[T]he Magistrate finds that the parties had agreed on all terms of the settlement agreement no later than November 9, 2011 and that there was a meeting of the minds regarding the terms. Nothing in the writing itself states that the agrеement is not enforceable unless it is signed by the parties. Additionally, nothing during the course of settlement negotiations between Mr. Reid and Mr. Osterlund indicates that counsel contemplated that signatures were required to make the agreement enforceable. Additionally, the Magistrate notes that [Guenther and Gerhardt] had made рreparations to carry out the terms of the agreement, obtaining the approximately $19,000.00 to bring the loan current.
(Magistrate‘s Decision, at 10).
{¶ 17} The question of the parties’ intent is also one of fact. See Union Sav. Bank at ¶ 27 (saying that where there are “questions regarding the intentions of the parties concerning the
{¶ 18} Given the facts, the trial court correctly concluded that the settlement agreement is enforceable.
{¶ 19} The first assignment of error is overruled.
III. The Judge‘s Authority
{¶ 20} The second assignment of error alleges that the order adopting the mаgistrate‘s decision and sustaining PNC‘s motion to enforce is voidable because it was not prepared and signed by the trial judge originally assigned to the case. Guenther and Gerhardt contend that Judge Wolff‘s signing the entry violated
{¶ 21} “It is well settled that the act of appointing a visiting judge to hear a case is not unconstitutional.” Seaford v. Norfolk S. Ry. Co., 159 Ohio App.3d 374, 2004-Ohio-6849, 824 N.E.2d 94, ¶ 15 (8th Dist.), rev‘d on other grounds, 106 Ohio St.3d 430, 2005-Ohio-5407, 835 N.E.2d 717, citing Pocker v. Brown, 819 F.2d 148, 149 (6th Cir. 1987) (finding no
{¶ 22} Here, the administrative and presiding judge of the Montgomery County Common Pleas Court asked the chief justice of the Ohio Supreme Court to assign another judge to active duty. The chief justice assigned Judge Wolff, a retired judge, to serve in the court from September to November 2012. The assignment information is available on the Supreme Court‘s website.2 A copy of the certificate of assignment is attached tо PNC‘s brief, and we sua sponte add it to the record,
{¶ 24} The trial court‘s order is affirmed.
DONOVAN and WELBAUM, JJ., concur.
Copies mailed to:
Anthony L. Osterlund
J.B. Lind
Worrell A. Reid
Douglas Trout
Hon. Michael Krumholtz