COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 67294 67409 67894 TERRI L. WADE : : Plaintiff-Appellee : : JOURNAL ENTRY -vs- : AND : OPINION DISBROW-FISHER SAIL : COMPANY, INC. : : Defendant-Appellant : : DATE OF ANNOUNCEMENT OF DECISION: MAY 11, 1995 CHARACTER OF PROCEEDING: CIVIL APPEAL FROM THE COMMON PLEAS COURT CASE NO. CV-243342 JUDGMENT: AFFIRMED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellee: THOMAS S. HUDSON (#0005270) Hudson and Associates 1700 Terminal Tower Cleveland, Ohio 44113 For Defendant-Appellant: ALAN G. ROSS (#0011478) DEBRA G. SIMMS (#0039727) Ross Brittain & Schonberg Co., L.P.A. 6000 Freedom Square Drive, #540 Cleveland, Ohio 44131 N. LINDSEY SMITH (#0030596) Smith, Codeni & Abel Co., L.P.A. 1255 Euclid Avenue - Suite 505 Cleveland, Ohio 44115 - 2 - 2 SPELLACY, P.J.: Defendants-appellants Disbrow-Fisher Sail Company and Gary Disbrow ("appellants") appeal the settlement agreement entered into with plaintiff-appellee Terri L. Wade and reduced to judgment by the trial court. Appellants assign the following errors for review: I. THE TRIAL COURT'S JUDGMENT OF APRIL 14, 1994, VOLUME 1729, PAGE 549-550 IS NULL AND VOID SINCE THE TRIAL COURT LACKED SUBJECT MATTER JURISDICTION OVER THE PROCEEDING BECAUSE THE COMPLAINT IS PREEMPTED BY THE EMPLOYEE RETIRE- MENT INCOME SECURITY ACT OF 1974 ("ERISA"). II. THE JUDGMENT ENTRY OF AUGUST 24, 1994 DENYING APPELLANTS' MOTION TO VACATE JUDGMENT OR IN THE ALTERNATIVE SET ASIDE THE SETTLEMENT AGREEMENT IS ERRONEOUS AND SHOULD BE REVERSED SINCE THE TRIAL COURT EXCEEDED ITS AUTHORITY IN ADOPTING AND OTHERWISE ENFORCING AS ITS JUDGMENT THE SETTLEMENT AGREEMENT OF THE PARTIES IN THAT THE JUDGMENT AWARDS EXTRACONTRACTUAL DAMAGES CONTRARY TO ERISA AND OHIO LAW. III. THE TRIAL COURT ERRED IN FINDING APPELLANT- DISBROW TO BE IN CONTEMPT OF COURT ON MAY 6, 1994 BECAUSE WHERE A COURT ARGUABLY LACKS SUBJECT MATTER JURISDICTION, A COURT'S FINDING OF CONTEMPT IS UNCONSTITUTIONAL. Finding the assignments of error to lack merit, the judgment of the trial court is affirmed. I. On December 1, 1992, Terri Wade filed a complaint against appellants averring she was owed unpaid overtime. Wade later amended her complaint, deleting the original counts, and adding counts for breach of contract and fraud. Wade charged appellants breached their oral contract of employment by letting her health - 3 - 3 care coverage lapse even though contributions for the benefit were withheld from her paycheck. Because of appellants' actions, Wade was denied reimbursement for medical procedures and incurred medical bills. Appellants answered and counterclaimed for conversion of funds. Appellants stated Wade used her authority to execute checks to prepare, sign and negotiate checks in her favor. Trial commenced on April 13, 1994. Wade testified one of her conditions for accepting appellant Gary Disbrow's offer of employment was that she receive health care coverage. Upon beginning her employment in May of 1990 with appellants, Wade learned that, contrary to Disbrow's representation to her, the company's employees were not covered by health insurance. Disbrow told her to contact insurance companies to procure coverage. Wade arranged for health care coverage to begin in July. The full amount of the premiums for three months was deducted from Wade's paycheck although Disbrow had agreed to pay half the amount. Coverage was never obtained through this company. Wade was reimbursed for the premiums deducted from her paycheck. Coverage was to commence in August with a second company, Blue Cross HMO. Wade had begun to experience health problems in late spring and started treatment with Blue Cross doctors. She was scheduled to have surgery after Thanksgiving. Wade discovered a couple of days before the operation was to take place that Blue Cross had cancelled coverage for lack of payment. - 4 - 4 The next insurance carrier used was Kaiser. Coverage was maintained for a year before appellants obtained insurance through Pacific Mutual. Wade finally had her surgery on April 24, 1992. Pacific Mutual began denying benefits, including the cost of Wade's surgery, because there still were premiums owed to Kaiser. Because of the unpaid premiums, the employees were not considered a group going to a group, which was a requirement for obtaining coverage from Pacific Mutual. Shortly thereafter, Wade was terminated by Disbrow. She gave Disbrow checks to continue coverage but later discovered she was not covered. Wade was questioned about checks used by appellants' attorneys during her deposition. Those checks were altered to appear Wade had used the funds for her own use. At that point, the trial court asked to see the attorneys in his chambers to discuss the checks. Afterwards, appellants approached Wade with an offer to settle the case. Settlement was reached for $47,000 plus costs. $5,000 of the amount was to be paid by April 29, 1994, under penalty of contempt. The settlement was reduced to judgment by the trial court. Appellants appealed the judgment in appellate case number 67294. On April 29, 1994, Appellants filed a motion to vacate the judgment pursuant to Civ.R. 60(B)(3) and (5). Wade filed a motion to show cause on May 4, 1994, after appellants did not pay the $5,000 by the agreed upon date. A contempt hearing was held two - 5 - 5 days later. Disbrow was held to be in contempt of court and sentenced to ten days in county jail. Appellants appealed this ruling in appellate case number 67409. A hearing on appellants' motion to vacate was held before a different trial judge after appellants filed a motion to disqualify the trial judge. That judge voluntarily recused himself from the case. Appellants' motion to vacate was denied. Appellants' appealed this decision in appellate case number 67894. The three appeals were consolidated for hearing and disposition. II. In their first assignment of error, appellants contend the trial court lacked subject matter jurisdiction over the complaint because Wade's claims are preempted by the Employee's Retirement Income Security Act ("ERISA"). Therefore, a federal district court has exclusive jurisdiction over the matter. Appellants maintain the judgment of the trial court is void and unenforceable. ERISA governs the establishment, operation and administration of employee benefit plans, including those employer-established plans providing health-care benefits to employees and their beneficiaries. Section 1002(1), Title 29, U.S. Code. One of the primary purposes of the legislation was to eliminate the possibility employee benefit plans would be subject to conflicting state and local regulations. Pilot Life Ins. Co. v. Dedeaux (1987), 481 U.S. 41, 46. Therefore, the act provides a broadly - 6 - 6 worded preemption clause which states at Section 1144(a), Title 29, U.S. Code: Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan. Subsection (b) is the savings clause of the act which provides that the subchapter not be construed to exempt or relieve any person from any law of any state which regulates insurance, banking, or securities. Section 1144(b)(2)(A), Title 29, U.S. Code. ERISA's pre-emption provisions are deliberately expansive and supersede all state laws insofar as they relate to an employee benefit plan. Pilot Life, supra, 45-46. The phrase "relate to" is afforded a broad common-sense meaning such that a state law relates to a benefit plan if it has a connection with or reference to such a plan. Metropolitan Life Ins. Co. v. Massachusetts (1985), 471 U.S. 724, 739. The preemption clause is not only limited to those state laws specifically designed to affect employee benefit plans but preempts any law affecting employee benefit plans unless the affect is merely tenuous, remote, or peripheral. Shaw v. Delta Air Lines, Inc. (1983), 463 U.S. 85. In Richland Hospital, Inc. v. Ralyon (1987), 33 Ohio St.3d 87, the court held that state courts have concurrent jurisdiction with federal courts to award benefits due under the terms of an employee benefit plan adopted pursuant to ERISA. Id. paragraph one of the syllabus. The court stated: - 7 - 7 ERISA vests state and federal courts with concurrent subject matter jurisdiction of certain enumerated civil actions brought by participants or beneficiaries against an employee benefit plan. Section 1132(e)(1), Title 29, U.S. Code states: "(e) Jurisdiction "(1) Except for actions under subsection (a)(1)(B) of this section, the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter brought by the Secretary or by a participant, beneficiary, or fiduciary. State courts of competent jurisdiction and district courts of the United States shall have concur- rent jurisdiction of actions under subsection (a)(1)(B) of this section." Subsection (a)(1)(B) provides: "(a) Persons empowered to bring a civil action "A civil action may be brought - - "(1) by a participant or beneficiary -- "*** "(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." The controlling language of Section 1132(e)(1) and (a)(1)(B), Title 29 , U.S. Code, expressly limits the types of actions that may be brought against benefit plans in state courts to the recovery of benefits due under the plan, the enforcement of rights under the plan, or the clarification of rights to future benefits under the plan. Any action that is not included in subsection (a)(1)(B) falls within the exclusive subject matter jurisdiction of federal courts. The plain language of subsection (a)(1)(B) establishes that state courts clearly have jurisdiction concurrent with that of the federal courts to award - 8 - 8 benefits due under the terms of a self-insured employee benefit plan adopted pursuant to ERISA. Id., at 89-90. State courts have subject matter jurisdiction to hear cases in which the recovery of benefits due under an ERISA plan is sought. In Mt. Carmel Medical Ctr. v. Auddino (1988), 53 Ohio App.3d 62, Auddino alleged his employer agreed to provide him with health insurance upon his acceptance of employment but failed to do so. The court determined the claim fell under ERISA but that the state court had concurrent jurisdiction with United States district courts over civil actions brought by a participant to enforce rights under a plan. In the instant case, Wade is seeking to recover benefits due under an employee benefit plan. Appellants are correct in their assertion that Wade's claims are preempted by ERISA. Even though Wade's claim is preempted, it does not follow that the trial court lacked subject matter jurisdiction over the case. The trial court had concurrent subject matter jurisdiction because Wade sought recovery of benefits due her under an employee benefit plan. This case was resolved by a consent judgment. The trial court did not apply Ohio law to decide the matter as the parties reached a settlement. Because of the settlement agreement, there is no need to remand the case for application of federal law. Appellants' first assignment of error is overruled. III. - 9 - 9 In their second assignment of error, appellants argue the trial court erred in denying their motion to vacate. Appellants' position is that the settlement agreement was memorialized in the trial court's journal entry and was made a part of the judgment of the court and was not a private contract which was not subject to attack. Appellants also maintain the judgment was for extracontractual damages as the award was for pain and suffering. Appellants urge the application of the plain error doctrine as the result is a miscarriage of justice. Civ.R. 60(B) provides: On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable neglect, (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(B); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party; (4) the judgment has been satisfied, released or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (5) any other reason justifying relief from judgment. The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order or proceeding was entered or taken. A motion under this subdivision (B) does not affect the finality of a judgment or suspend its operation. Generally, to prevail on a motion brought under Civ.R. 60(B), it must be demonstrated that: - 10 - (1) the party has a meritorious defense or claim to present if relief is granted, (2) the party is entitled to relief under one of the grounds stated in Civ.R. 60(B)(1) through (5), (3) the motion is made within a reasonable time, and, where the grounds of relief are Civ.R. 60(B)(1), (2), or (3), not more than one year after the judgment, order or proceeding was entered or taken. GTE Automatic Electric v. ARC Industries Inc. (1976), 47 Ohio St.2d 146. If any one of these three requirements set forth in GTE Automatic Electric is not met, the motion should be overruled. Svoboda v. Brunswick (1983), 6 Ohio St.3d 348. The question of whether relief should be granted is addressed to the sound discretion of the trial court. Griffey v. Rajan (1987), 33 Ohio St.3d 75, 77. Appellants' motion was timely filed so the third requirement is met. Appellants argue they have a meritorious defense as the judgment is void and extracontractual damages were awarded. Appellants assert they are entitled to relief under Civ.R. 60(B)(5) for "any other reason justifying relief from judgment." As determined in the disposition of appellants' first assign- ment of error, the trial court had subject matter jurisdiction over the matter and its judgment is not void. Appellants' argument regarding whether the settlement agreement is a judgment of the court or a private contract is inapposite. As appellants point out in their brief, the settlement agreement became the judgment of the - 11 - trial court. The trial court could then enforce its judgment through a contempt proceeding. Appellants next assert the judgment should be vacated because it awarded extracontractual damages which are not permitted pursuant to ERISA. Richland Hospital, supra, at paragraph three of the syllabus. However, in the court in Miller-Finocchioli v. Mentor Landscapes (1993), 90 Ohio App.3d 815, stated: A court of general jurisdiction is not necessarily barred from entering judgment on a consent decree merely because the decree provides broader relief than the court could have awarded after trial. See Local No. 93, Internatl. Assn. of Firefighters, AFL-CIO C.L.C. v. Cleveland (1986), 478 U.S. 501, 526, 106 S.Ct. 3063, 3077, 92 L.Ed.2d 405, 426. This is true because, in addition to the law which forms the basis of the claim, it is the parties' consent which animates the legal force of the consent decree. Id. Id. 818-819. It was appellants who approached Wade with the offer of settlement. In exchange for appellants' promise, Wade terminated the litigation and it was understood by the parties that she would not pursue any claims in future litigation pertaining to the altered checks. The parties were free to negotiate the terms, conditions and amount of their agreement. Although Wade may not have been able to recover extracontractual damages under ERISA, the terms of the settlement agreement could go beyond the limits set forth pursuant to ERISA. Appellants consented to the agreement and cannot now attempt to evade its promise to perform by relying on what relief would be permitted had the trial been resolved by a determination by the jury as to liability and damages. Appellants - 12 - have not demonstrated a meritorious defense as required by the first prong of GTE Automatic Electric. Appellants stated they satisfied the second requirement of GTE Automatic as they were entitled to relief under Civ.R. 60(B)(5). This provision was intended as a catch-all provision reflecting the inherent power of a court to relieve a person from the unjust operation of a judgment. However, the grounds for invoking the provision should be substantial. Adomeit v. Baltimore (1974), 39 Ohio App.2d 97, 105. There is nothing in the record reflecting the judgment of the trial court was unjust. Appellants have not satisfied the second requirement of GTE Automatic Electric either. Appellants also urge the application of the plain error doctrine because extracontractual damages were awarded. A "plain error" is obvious and prejudicial although neither objected to nor affirmatively waived which, if permitted, would have a material adverse affect on the character and public confidence in judicial proceedings. Schade v. Carnegie Body Co. (1982), 70 Ohio St.2d 207, 209. Although usually applicable to criminal actions, it is also valid in a civil case. Id. The doctrine is to be applied with utmost caution under exceptional circumstances to prevent a manifest miscarriage of justice. Reichert v. Ingersoll (1985), 18 Ohio St.3d 220. Appellants' arguments relating to the extracontractual damages were discussed above. There was no manifest miscarriage of justice in the instant case requiring the application of the plain error doctrine. - 13 - Appellants' second assignment of error lacks merit. IV. In their third assignment of error, appellants contend Disbrow's due process rights were violated by his conviction for contempt before he could establish the court lacked subject matter jurisdiction over the matter. R.C. 2705.02(A) allows a person to be punished for contempt if he disobeys a judgment of a court. The court also has inherent powers to punish the disobedience of its lawful orders with contempt proceedings. Zakany v. Zakany (1984), 9 Ohio St.3d 192. This is a power necessary to the exercise of judicial functions. Denovchek v. Bd. of Trumbull Cty. Commrs. (1988), 36 Ohio St.3d 14, 15. A trial court's authority to enforce in-court settlement agreements is discretionary. Kelly v. Kelly (1991), 76 Ohio App.3d 505. The trial court had concurrent jurisdiction to hear the instant case. A trial court may enforce an order through contempt proceedings over which it has both subject matter and personal jurisdiction. Miller-Finocchioli, supra, at 818. The trial court held a hearing at which appellants stipulated Wade did not receive the $5,000 by the date called for under the consent judgment. The trial court enforced the judgment through contempt proceedings over which it had subject matter jurisdiction. Appellants assert Disbrow should not have been guilty of contempt as he relinquished control over the required $5,000 to his - 14 - attorney. The funds were at that point beyond his control. However, the agreement called for $5,000 to be given to Wade's attorney by Noon on April 29, 1994, under penalty of contempt. Appellants did not comply with the agreement and were subject to contempt proceedings. Appellants' third assignment of error is overruled. Judgment affirmed. - 15 - It is ordered that appellee recover of appellants her 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. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. DAVID T. MATIA, J. and DIANE KARPINSKI, J. CONCUR. LEO M. SPELLACY PRESIDING JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time .