January-Report - page 8

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January 2013 CBA REPORT
feature article
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By Joel M. Frederic
after finding that the parties had never
actually reached a settlement agreement.
Therefore, nothing in
Rulli
required the
trial court to hold an evidentiary hear-
ing before entering summary judgment
[denying enforcement].”
Artisan moved to certify a conflict
to the Ohio Supreme Court, and the
Twelfth Appellate District sustained
the motion holding that its decision in
Artisan
conflicted with
Michelle M.S.
v. Eduardo H.T
.
4
The Twelfth District
certified the following question of law:
“When there is a factual dispute between
the parties over the existence of a valid
settlement agreement, is the trial court
required to conduct an evidentiary hear-
ing regardless of whether it enforces or
denies enforcement of the agreement and
enters judgment pursuant to the Ohio
Supreme Court decision in
Rulli?”
5
The Ohio Supreme Court accepted
jurisdiction but after oral argument
dismissed the case as having been im-
providently granted. Because the Ohio
Supreme Court dismissed the appeal
without opinion, the question remains:
In Ohio is the trial court required to con-
duct an evidentiary hearing regardless
whether it enforces or denies the enforce-
ment of a disputed agreement and enters
judgment?
As noted previously, under
Artisan
,
the law in the Twelfth Appellate District
is that trial courts are not required to
conduct an evidentiary hearing when
it denies the enforcement of a disputed
settlement agreement and enters judg-
ment.
6
But, see,
Myatt v. Myatt
, where the
Ninth Appellate District impliedly ruled
that an evidentiary hearing is required
whether the trial court
upholds or denies
the motion to enforce: “It is necessary for
the trial court to conduct an evidentiary
hearing prior to
ruling on
the motion to
enforce the settlement agreement.”
7
It is unclear how the First Appellate
District might rule upon the question
whether a
Rulli
hearing is required before
a trial court denies the enforcement of
a disputed settlement agreement and
enters judgment. I would submit that the
Twelfth Appellate District got it right in
Artisan
and is the best and most efficient
approach. A
Rulli
hearing is not required
if a court enters summary judgement
denying enforcement of a disputed agree-
ment because (1) the law disfavors the
enforcement of ambiguous contracts par-
ticularly those that aim to memorialize
a settlement agreement between adver-
sarial litigants, (2) a settlement upon
which final judgment has been entered
eliminates the right to adjudication by
trial, (3) when a court denies the enforce-
ment of a disputed settlement agreement
it is not binding the parties to perform
under ambiguous and/or disputed terms
to which they may not have agreed, and
(4) trial courts should retain discretion to
rule on discovery issues as they see fit.
8
The question whether an evidentiary
hearing is mandatory when the court
refuses
to enforce a disputed settlement
agreement and enters judgment is one
that necessarily implicates two distinct
legal concepts, the first dealing with
discovery, which is generally a matter of
trial-court discretion, and the second is
the entry of summary judgment, which
is a matter of law. In the first instance a
trial court’s discretion to refuse to hold a
B
efore a trial court enters judgment
enforcing a disputed settlement
agreement, it is required to hold
an evidentiary hearing, a “
Rulli
hear-
ing,” first.
1
Indeed, it is reversible error
to enforce a disputed settlement agree-
ment without first holding an evidentiary
hearing.
2
But is an evidentiary hearing
mandatory if the court refuses to enforce
a disputed settlement agreement and
enters judgment?
In the lawsuit underlying the
settlement agreement, a former em-
ployer (“Artisan”) sued former employees
alleging that they had breached a non-
compete agreement. The case was
conditionally dismissed as the parties
agreed to negotiate the terms of a settle-
ment agreement. In a separate lawsuit,
Artisan later sued to enforce the settle-
ment agreement, and without a
Rulli
hearing and without one having been
requested the trial court entered summa-
ry judgment against Artisan, concluding
that no settlement agreement existed.
Artisan appealed and argued, among
other things, that the trial court failed to
hold a
Rulli
hearing before entering judg-
ment denying enforcement.
3
The Twelfth Appellate District af-
firmed the entry of summary judgment
holding that though the parties had
engaged in negotiations no meeting of
the minds occurred and that the case
was distinguishable from the line of
Rulli
cases.” Judge Powell, writing for
the majority, specifically noted, “unlike
the situation in
Rulli
, the trial court in
this case
refused to enforce
what Artisan
purported to be an enforceable, oral set-
tlement agreement between the parties,
Disputed Settlement Agreements —
When is an Evidentiary Hearing Required?
1,2,3,4,5,6,7 9,10,11,12,13,14,15,16,17,18,...36
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