COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 68619 HILLBROOK BUILDING : COMPANY, ET AL. : : Plaintiffs-appellees : : JOURNAL ENTRY -vs- : AND : OPINION CORPORATE WINGS, INC., ET AL. : : Defendants-appellants : : DATE OF ANNOUNCEMENT : OF DECISION : SEPT. 5, 1996 CHARACTER OF PROCEEDING : Civil appeal from Court of Common Pleas : Case No. 242497 JUDGMENT : Affirmed. DATE OF JOURNALIZATION : APPEARANCES: FOR PLAINTIFF-APPELLEE FOR DEFENDANT-APPELLANT: LAICO, INC. CORPORATE WINGS, INC. & KENNETH RICCI: Robert J. Valerian, Esq. Tower of Erieview Plaza Mark B. Cohn, Esq. Suite 2600 Jeffrey A. Huth, Esq. Cleveland, Ohio 44114 McCarthy, Lebit, Crystal & Haiman Co., L.P.A. 1800 Midland Bldg. 101 Prospect Avenue W. Cleveland, Ohio 44114-1824 -2- HARPER, P.J.: This is an appeal from a judgment entered by the Cuyahoga County Court of Common Pleas which ordered defendants-appellants, Corporate Wings, Inc. and Kenneth Ricci ("appellants"), to comply with the terms of a settlement agreement which they entered into with plaintiff-appellee, LaiCo, Inc. ("LaiCo"). For the reasons that follow, we affirm the decision of the lower court. I. The following apposite facts are adduced from the record below: On November 13, 1992, appellants were sued by Hillbrook Building Co. ("Hillbrook") for: (1) breach of contract; (2) breach of fiduciary duty; (3) fraud; and (4) for an accounting relating to improprieties alleged to have occurred in appellants' management of an aircraft owned by Hillbrook. In this appeal, Hillbrook is not a party. On September 9, 1993, LaiCo filed an amended complaint which sued appellants for breach of contract, breach of fiduciary duty, fraud, violation of the Ohio Corrupt Activity Act and for an accounting relating to the conduct of appellants in managing an aircraft owned by LaiCo. On December 27, 1993, appellants answered LaiCo's amended complaint denying liability to LaiCo and asserting counterclaims against LaiCo for breach of contract. -3- On October 3, 1994, a pretrial was scheduled between appellants and LaiCo. No journal entry or other record was made of the parties' discussion at the time. On October 25, 1994, LaiCo's counsel sent to appellants' counsel a proposed settlement agreement and release. The proposed settlement agreement contained a confidentiality provision which stipulated that LaiCo would not disclose the terms of the lawsuit to any of the parties or attorneys involved in one particular lawsuit, a provision for summary enforcement on its breach, and a one hundred thousand dollar cash payment ($100,000) to be paid within ten days of the execution of the agreement. On November 3, 1994, appellants' counsel proposed a revision of the confidentiality provision, extending its coverage to anyone who was not a party to this lawsuit. LaiCo did not respond on November 3, 1994 to this proposed revision of the confidentiality provision. On November 4, 1994, appellants' counsel informed LaiCo that they were unable to carry out the settlement agreement due to undisclosed financial difficulties. On November 10, 1994, appellants' counsel proposed that the $100,000 be paid over a three-year period, instead of the ten-day period due to undisclosed financial considerations. On November 11, 1994, counsel for LaiCo rejected that proposal. On December 13, 1994, LaiCo filed a motion to enforce the settlement agreement with appellants and requested the court to enter judgment on the purported settlement agreement in the amount -4- of $100,000. In support of LaiCo's motion to enforce the settlement agreement, LaiCo attached the following materials: (1) a letter from LaiCo's counsel regarding the settlement payment as Exhibit "A"; (2) a letter from LaiCo's counsel requesting appellants' counsel to review the proposed settlement agreement as Exhibit "B"; (3) a copy of the settlement agreement and mutual release as Exhibit "C"; (4) a red-lined version of the settlement agreement; (5) an order of dismissal from the trial court; (6) a letter from appellants' counsel regarding the proposed change in the settlement offer; and (7) a letter from LaiCo's counsel rejecting appellant's revision. On February 23, 1995, another pre-trial hearing was scheduled, of which there is no record. On February 27, 1995, the trial court entered judgment in favor of LaiCo against appellants Kenneth Ricci and Corporate Wings, jointly and severally, in the amount of $100,000, incorporating the terms of the previously agreed upon settlement agreement. The Order of Dismissal from the trial court reads: The court being advised that LaiCo, Inc., Corporate Wings, Inc. and Kenneth C. Ricci have reached a settlement of the claims and counterclaims each has asserted against the other in this action; IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the claims asserted by LaiCo, Inc. in Counts II, IV, VI, VII, and IX of the Amended Complaint, and the counterclaims asserted by Corporate Wings, Inc. in Counts VI, VII, and VIII of the counterclaims are hereby dismissed, with prejudice, each party to bear its own costs. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, in accordance with agreement of the parties, LaiCo, Inc., shall not, either directly, indirectly, or through any of -5- its owners, representatives, officers, directors, shareholders, agents, servants, employees, subsidiaries, affiliates, or attorneys, disclose the terms of the parties' settlement to anyone not a party to this action, except as provided in that agreement. Any violation of this order shall be punishable as a contempt of Court, in an amount to be determined by the Court. The judgment order from the trial court reads: This matter came before the Court pursuant to the Motion of Plaintiff LaiCo, Inc. to Enforce Settlement Agreement and to Summarily Enter judgment Against Defendants Corporate Wings, Inc. and Kenneth C. Ricci, with supporting Affidavit of Robert J. Valerian and the Response of Defendants-Counterclaim-Plaintiffs Corporate Wings, Inc. and Kenneth C. Ricci with supporting Affidavit of Kenneth C. Ricci. Based upon the evidence presented, the Court finds that a Settlement Agreement was entered into on October 3, 1994 between LaiCo on the one hand and Defendants Corporate Wings, Inc. and Kenneth C. Ricci on the other, for the payment of $100,000 cash within ten days; and that Defendants have refused to carry out the terms of the Settlement Agreement; and that the only reason proffered for the non-performance of the Settlement Agreement was an unspecified financial difficulty of Defendant Corporate Wings, Inc. It is hereby ORDERED, ADJUDGED and DECREED that judgment be entered in favor of Plaintiff, LaiCo, Inc. and against defendants Corporate Wings, Inc. and Kenneth C. Ricci jointly and severally in the sum of $100,000, together with interest from November 14, 1994 at the statutory rate of ten percent (10%) per annum. It is further ORDERED, ADJUDGED and DECREED that LaiCo shall not directly, indirectly, or through any of its owners, representatives, officers, directors, shareholders, agents, servants, employees, subsidiaries, affiliates or attorneys disclose the terms of this Judgment to anyone not a party to the lawsuit, except with the written consent of the Defendants, or unless ordered to do so by a court of competent jurisdiction; provided, however, that nothing contained herein shall prohibit any party hereto from disclosing the terms of this Judgment to its legal counsel, accountants, auditors or affiliated companies. -6- It is further ORDERED, ADJUDGED and DECREED that all claims and counterclaims between LaiCo on the one hand and Corporate Wings and Ricci on the other, are dismissed with prejudice. Although this judgment does not determine all of the claims of all of the parties hereto, the Court expressly determines, pursuant to Rule 54(B), Ohio Rules of Civil Procedure, that this is a final judgment as to the claims between LaiCo and Corporate Wings and Kenneth C. Ricci and that there is no just reason for delay of the entry of this final order. Costs to be paid by Corporate Wings, Inc. and Kenneth C. Ricci. IT IS SO ORDERED. /S/ JUDGE DANIEL GAUL Appellants timely appeal. Appellants raise the following two assignments of error: I. THE TRIAL COURT ERRED IN ENTERING JUDGMENT ON THE PURPORTED SETTLEMENT AGREEMENT WHERE THERE WAS NO AGREEMENT REACHED ON MATERIAL TERMS OF THAT SETTLEMENT. II. THE TRIAL COURT ERRED IN ENTERING JUDGMENT ON THE SETTLEMENT AGREEMENT WITHOUT HOLDING AN EVIDENTIARY HEARING TO DETERMINE THE EXISTENCE AND TERMS OF THE AGREEMENT. II. A. At the outset of our analysis, we note that "the term an 'abuse of discretion' connotes more than an error of law or judgment; it implies that the court's attitude is unreasonable, arbitrary, or unconscionable." Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219. Moreover, it is a seminal point of law that, judgment of lower courts are presumed valid upon review unless -7- error affirmatively appears on the face of the record. Makranczy v. Gelfand (1924), 109 Ohio St. 325. The trial court is presumed to have rightly determined issues. Ohio Fuel Gas Co. v. City of Mount Vernon (1930), 37 Ohio App.159. A trial court may exercise its sound discretion in ruling upon motions. Adomeit v. Baltimore (1974), 39 Ohio App.2d 97. In reviewing a court's decision, such as a ruling upon a motion, an appellate court's review is limited to the issue of whether the lower court abused its discretion. Rock v. Cabral (1993), 67 Ohio St.3d 108. Finally, it is a general rule of law that an appellate court may not substitute its judgment for that of the lower court's in the absence of abuse of discretion by the lower court. Tracy v. Merrell Dow Pharmaceutical, Inc. (1991), 58 Ohio St.3d 147. B. As a general rule of law, a settlement agreement is a compromise achieved by the adverse parties in a civil action before final judgment whereby they agree between themselves upon their respective rights and obligations, thus eliminating the necessity of judicial resolution of the controversy. The court has explained a settlement agreement, in pertinent part: Reduced to its simplest terms, a settlement agreement is a contract. The party asserting the contract (settlement agreement) must prove by a preponderance of the evidence the existence of the elements of the contract, including an offer, acceptance and consideration as to the existence of the contract and as to its terms. *** -8- Ohio State Tie & Timber, Inc. v. Paris Lumber Co. (1982), 8 Ohio App.3d 236. Where the parties to an action voluntarily enter into a settlement agreement in the presence of the trial court, the agreement is a binding and enforceable contract. Spercel v. Sterling Industries (1972), 31 Ohio St.2d 176, paragraph one of the syllabus. An oral settlement agreement requires no more formality and no greater particularity than appears in the law for the formation of a binding contract. Sperling, supra; Rodgers v. Rodgers (May 7, 1987), Cuyahoga App. No. 52015, unreported. In the event that a party fails to make a good faith attempt to agree on the language, the trial judge may hold a hearing to determine the terms and construct a reasonable journal entry outlining the agreement. Tepper v. Heck (Dec. 10, 1992), Cuyahoga App. No. 61061, unreported. In the case sub judice, appellants charge in their first assignment that the trial court erred when it granted LaiCo's motion to enforce the settlement agreement. Specifically, appellants submit that the parties failed to reach an agreement concerning two essential terms of the purported settlement agreement: the confidentiality provision and the assignment of liability among the defendants. First, appellants assert that the parties failed to reach an agreement concerning the scope of the confidentiality provision incorporated into the settlement agreement. According to appellants, the draft of the settlement agreement prepared by LaiCo -9- and forwarded to appellants' counsel contained a confidentiality provision that stipulated LaiCo would not disclose the terms of the settlement agreement to any of the parties involved in one particular pending lawsuit. Appellants rejected LaiCo's confidentiality provision, and in turn proposed a revision to the confidentiality provision, extending its coverage to anyone who was not a party to the lawsuit. LaiCo, on the other hand, contends that the inclusion of the confidentiality provision was always part of the settlement agreement, and that the only discrepancy was the actual language of the provision. Moreover, LaiCo asserts that appellants' argument lacks merit because the trial court's dismissal order specified the terms and the scope of the confidentiality provision. The record before this court does not indicate that appellants' counsel referred to the actual language of the confidentiality provision as appellants' reason for repudiating the settlement agreement. Consequently, appellants' contention that the trial court erred when it enforced the settlement agreement because the parties disputed the terms of the confidentiality provision is not well- taken. Next appellants charge the trial court erred when it granted LaiCo's motion to enforce the purported settlement agreement, because the parties disputed the settlement agreement terms which assigned appellant Ricci personal liability for the corporate payment. LaiCo, on the other hand, asserts that the trial court did not err when it granted its motion to enforce the settlement -10- agreement, because neither appellant Ricci nor his counsel ever objected to the terms of the settlement agreement which assigned liability to appellant Ricci as well as to appellant Corporate Wings. Upon review of the record, we are not persuaded by appellant Ricci's contention that: (1) the purported settlement agreement did not assign personal liability to him; or (2) the parties failed to reach an agreement concerning appellant Ricci's assigned liability for the corporate payment. The draft of the Settlement Agreement and Mutual Release prepared by LaiCo's counsel and sent to appellant Ricci's counsel recited the following, at paragraph 1: 1. Defendants shall pay to LaiCo $100,000.00 in cash within ten (10) days of the execution of the Agreement. Appellant Ricci's counsel received the initial paragraph of the Settlement Agreement and Mutual Release which specifically defined the term "defendant". It reads as follows: This Settlement Agreement and Mutual Release has been entered into at Cleveland, Ohio on the date set forth below by and between Corporate Wings, Inc. ("Corporate Wings"), Kenneth C. Ricci ("Ricci"), Corporate Wings and Ricci being hereinafter collectively referred to as "Defendants"). *** The record of the case sub judice demonstrates that neither appellant Ricci nor his counsel altered or edited paragraph one which specified the scope of appellant Ricci's liability. Moreover, the edited version of the settlement and mutual release does not contain a revision by appellant Ricci or his counsel to the term "Defendants", or a substitution of defendants. Given the -11- foregoing, the trial court did not err when it entered judgment on the purported settlement agreement. Accordingly, appellants' assignment of error is overruled. In the second assignment of error, appellants contend the trial court erred when it enforced the purported settlement agreement without holding an evidentiary hearing to determine the existence and terms of the settlement agreement. Appellants specifically submit the trial court should have granted their motion and conducted an evidentiary hearing because the parties contested the terms of the settlement agreement. LaiCo, on the other hand, contends appellants' assignment of error lacks merit, because the trial court arrived at a factual determination that appellants Ricci and Corporate Wings had arrived at a settlement agreement. Appellants rely on Bolen v. Young (1982), 8 Ohio App.3d 36, in support of their proposition that before an out-of-court settlement agreement can be enforced, the party disputing the agreement is entitled to an evidentiary hearing to determine if an agreement exists, and if so, upon what terms. The Bolen Court, in pertinent part, stated: [W]here an agreement is purportedly arrived at in the presence of the trial judge and approved by the parties but its terms are not memorialized on the record and one of the parties later disputes the terms of the agreement by refusing to approve an entry journalizing the agreement, the trial judge may not adopt the terms of the agreement as he recalls and understands them in the form of a judgment entry. Instead, the party disputing the agreement is entitled to an evidentiary hearing before another judge (see Code of Judicial Conduct, Cannon 3 C[1][b]) -- in which the trial judge may be called as a -12- witness to testify as to his recollection and understanding of the terms of the agreement -- and if the court concludes that the parties entered into a binding contract, the settlement may be enforced. Id. at 37. We disagree with appellant's reliance on Bolen, as Bolen, is readily distinguishable from the facts of the case sub judice. In the case sub judice, appellants maintain the trial court abused its discretion when it denied appellants' motion for an evidentiary hearing. Appellants argue an enforceable settlement agreement did not exist between the parties because the parties failed to reach an agreement. However, we disagree with appellants' argument. Here, the record contains sufficient evidence that the trial court was aware that a settlement agreement existed between LaiCo and appellants Ricci and Corporate Wings. The evidence in the record supports the trial court's decision that an evidentiary hearing was not required because an enforceable settlement agreement had been reached by the parties. See, C.E. Morris v. Foley Construction Co. (1978), 54 Ohio St.2d 279. Finally, it is the position of this court that it will presume regularity rather than irregularity in the trial court's proceedings, absent an indication to the contrary. Accordingly, appellants' assignment of error is overruled. Judgment affirmed. -13- It is ordered that appellants recover of appellee its 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 Cuyahoga County 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 TERRENCE O'DONNELL, J., CONCUR PRESIDING JUDGE SARA J. HARPER N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 25(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 .