COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 73032 JENNIE WLOSZEK : ACCELERATED DOCKET : Plaintiff-Appellee : JOURNAL ENTRY : -vs- : AND : JOSEPH WLOSZEK, ET AL. : OPINION : Defendants-Appellants : : PER CURIAM Date of Announcement of Decision: APRIL 16, 1998 Character of Proceeding: Civil appeal from Court of Common Pleas Probate Court Division Case No. 1120773 Judgment: Reversed Date of Journalization: Appearances: For Plaintiff-Appellee: For Defendants-Appellants: MATTHEW J.D. LYNCH, ESQ. JEFFREY F. SLAVIN, ESQ. Lynch & Lynch 75 Public Square, #1225 16779 Chillicothe Road Cleveland, Ohio 44111 Chagrin Falls, Ohio 44023 For Defendant-Appellee Julia Helms: JOHN T. URBAN, ESQ. 7123 Pearl Rd., #303 Middleburg Hts., Ohio 44136 PER CURIAM: -2- This appeal is before the Court on the accelerated docket pursuant to App.R. 11.1 and Loc. App.R. 25. Defendants-appellants Joseph and John Wloszek appeal from the judgment of the Probate Court in favor of their sister, plaintiff- appellee Jennie Wloszek, enforcing an in-court settlement agreement in Jennie's declaratory judgment action. Defendants contend the court's interpretation of the settlement agreement was against the manifest weight of the evidence as to what the parties agreed. We find the appeal well taken and reverse for the reasons hereinafter stated. The decedent, Cecelia Wloszek, died testate on June 22, 1992. The decedent's estate was administered by Executrix Jennie Wloszek, the plaintiff. The principal asset of the estate was a house and real property located in North Royalton where Jennie lived with her mother. The plaintiff filed a declaratory judgment action against her siblings, Joseph and John Wloszek and Julia Helms, in the Probate Court to obtain an interpretation of the Will of the decedent which read: ITEM 3. My residence property *** I give, devise and bequeath to my daughter JENNIE WLOSZEK, for and during her natural life, and the remainder to my other children, namely, JOSEPH WLOSZEK, JOHN WLOSZEK and JULIA HELMS or their heirs, equally, share and share alike; provided, however, that if my said daughter, JENNIE WLOSZEK, during her lifetime desires to move to a smaller home, she has the power to sell the entire property and obtain a smaller house which will provide equal comfort and living style which she is now used to, and the balance remaining over and above the cost of such smaller home shall be divided equally among all my children, namely, JOSEPH WLOSZEK, JENNIE WLOSZEK, JOHN WLOSZEK and JULIA HELMS. -3- On June 13, 1996, at the hearing in the action, the Magistrate met with the four Wloszek siblings without counsel to reach an agreement about the North Royalton property. After speaking to the siblings, a settlement agreement was reached. The Magistrate recited and confirmed the terms of the settlement on the record and stated: It's my understanding that the parties have agreed, and we will ask the parties to state so on the record so that we have some written remembrance of what we all agreed to, but my understanding is that the parties have agreed that we will, in effect, convert this classic life estate, as Mr. Lynch likes to call it, we will convert this into percentages of interest in the real estate. And it's my understanding that Jennie would receive 40 percent of this real estate. The other siblings, [John] and Joseph and *** * * * Julia Helms has further agreed to give her 20 percent to her sister Jennie. And when all is said and done, then Jennie would own 60 percent of the real estate. Now, as co-owners then, Jennie would have the right, and I think everyone is agreed, that Jennie would live in the house, and has agreed that she would pay the real estate taxes and the insurance to maintain the house. And they have agreed that they would not charge any rent to their sister that they may have coming under the law based on the percentage of the real estate that they would own. But there will be no rent charged. Furthermore, it is my understanding that there would be no time restriction on when Jennie would have to sell the property. The property would be listed. It could be listed tomorrow, it could be listed a year from now. That Jennie would be in charge of obtaining a real estate agent, hiring a real estate agent to obtain the best price obtainable. And she would be in charge of negotiating the sale of -4- that property. And that if, in her opinion, we can't get a good price for the property, then we may wait a while. And when a price is offered, as co-owners, you're going to have to agree that this is a fair offer. And you're all, as co-owners, going to have to agree to sell the property. Then after we pay the taxes due on the property and the real estate commission, we'll divide the pie and the net balance. We'll divide that up according to what percentages we own, 60 percent, zero, 20 and 20. (Tr. 3-5) At the hearing, all the parties, including the defendants, assented to the terms of the settlement recited before the court. (Tr. 13-14). Counsel for plaintiff was asked to prepare an entry incorporating what had been read into the record. However, plaintiff's counsel prepared an entry that, in effect, gave plaintiff a 60% interest and a life estate in the real property. The entry also reflected that plaintiff was not required to sell the real property. Defendants objected to this entry, believing that plaintiff's life estate no longer existed, having been converted into a 60% current interest. They further believed that plaintiff would be required in the near term to sell the real property at the best fair price. Defendants contend that they exchanged their 33 % remainder interest for a 20% current interest in the sale proceeds of the property when it was sold during Jennie's lifetime. Defendants believe that this bargain was contingent on plaintiff being required to sell the real property. As a result, the defendants refused to sign the entry and submitted their own entry. -5- Following two subsequent hearings, the Judgment Entry enforcing the settlement agreement that was adopted by the trial court followed plaintiff's proposal and reads as follows: Therefore it is ORDERED that the real property known as 4087 Royalton Road, North Royalton, Ohio shall be transferred by the parties as follows: 60 percent to Jennie Wloszek, 20 percent to Joseph Wloszek, and 20 percent to John Wloszek. It is further ORDERED that Jennie Wloszek shall have the exclusive right to occupy the real property during her lifetime, rent free, until such time as the property is sold. During such time as Jennie Wloszek occupies the property she shall pay all taxes, insurance, utilities, and maintenance on the property. It is further ORDERED that Jennie Wloszek shall have the exclusive right to negotiate a sale of the real property, at such time and under such terms as she may choose, provided that any proposed sale shall be for the fair market value at the time of the sale of the property. The defendants, without good cause shown, shall not prevent the consummation of such proposed sale. Jennie Wloszek shall give the defendants reasonable notice in writing of any such proposed sale. It is further ORDERED that at the time of the sale of the real property, Jennie Wloszek shall first receive the sum of $3,000 from the proceeds and the balance of the proceeds of sale shall be divided as follows: 60 percent to Jennie Wloszek, 20 percent to Joseph Wloszek, and 20 percent to John Wloszek. Defendants contend that this entry did not accurately reflect the agreement of the parties and timely objected to the decision presenting the issue on this appeal. The issue simply stated by appellee is: Is the settlement enforced by the order of the Probate Court supported by the -6- transcript of the oral settlement entered into by the parties (Appellee's Brf. at 4). This presents a matter of contract law and an interpretation of the terms of the settlement read into the record by the magistrate to which the parties all expressed agreement on the record. (Tr. 13-14).1 The standard of review for a motion to enforce a settlement agreement was set forth recently in Continental v. Ferguson, Inc. (1996), 74 Ohio St.3d 501, 502: Initially, we address the standard of review to be applied to rulings on a motion to enforce a settlement agreement. The court of appeals applied an abuse of discretion standard. However, because the issue is a question of contract law, Ohio appellate courts must determine whether the trial court's order is based on an erroneous standard or a misconstruction of the law. The standard of review is whether or not the trial court erred. See Mack v. Polson Rubber Co. (1984), 14 Ohio St.3d 34, 14 OBR 335, 470 N.E.2d 902, and Spercel v. Sterling Industries (1972), 31 Ohio St.2d 36, 60 O.O.2d 20, 285 N.E.2d 324. Accordingly, the question before us is whether the trial court erred as a matter of law in dismissing the motion to enforce the settlement agreement. It is axiomatic that a settlement agreement is a contract designed to terminate a claim by preventing or ending litigation and that such agreements are valid and enforceable by either 1 We respectfully disagree with our dissenting colleague's principal objection that we have an incomplete record on which to decide this appeal. Neither party contended that there was any additional evidence submitted at the two subsequent hearings. Both sides argue that the intent of the parties was clearly expressed in the language recited in the June 13, 1996 transcript. They merely draw contrary conclusions as to its meaning. By the parties own submission, we have an adequate record to decide the contract issue at stake on this appeal. -7- party. Continental, supra at 502; Spercel v. Sterling Industries (1972), 31 Ohio St.2d 36, 38; Bauer v. Bauer (April 2, 1981), Cuyahoga App. No. 42805, unreported. As recently stated by this Court in Hillbrook Bldg. Co. v. Corporate Wings, Inc. (Sept. 5, 1996), Cuyahoga App. No. 68619, unreported at 8: 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 36, 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. Contracts are to be interpreted to carry out the intent of the parties, as that intent is evidenced by the contractual language to which they agreed. Aultman Hosp. Assn. v. Community Mutual Ins. Co. (1989), 46 Ohio St.3d 51, 53. In the instant case, the Judgment Entry adopted by the trial court does not accurately reflect the settlement agreement of the parties stated in the hearing transcript. During the hearing, the Magistrate clearly recited that it was the intent of the parties to convert the life estate possessed by plaintiff into percentages of interest in the real estate. (Tr. 3). However, the Judgment Entry reads that Jennie Wloszek shall have -8- the exclusive right to occupy the real property during her lifetime, rent free, until such time as the property is sold. This language essentially gives plaintiff another life estate in the property. Nowhere in the recitation by the Magistrate of the agreement that was assented to by the defendants did it state that plaintiff would retain her life estate. In fact, it clearly stated that the life estate was to be converted into percentages of ownership. If Jennie continued to have an unrestricted life estate in the property, there would have been no reason to provide that her occupancy would be rent free. A life tenant does not owe the remainderman rent. The transcript goes on to state that there would be no restriction on when Jennie would have to sell the property. The property would be listed. Plaintiff argues that, based on this language, she could remain on the property indefinitely as if she held a life estate. Defendants argue that their intent and willingness to enter into the settlement was to exchange a percentage of their remainder ownership (33 %) for a smaller percentage (20%) of the current sale price of the home rather than await their share after plaintiff passed away. They argue that the exchange was made with the agreement from all parties that the property would be sold at a fair market price with each sibling taking his or her share of the agreed proceeds. Based on the language in the transcript, it is evident that the parties intended the property to be sold in the near future. Immediately following the no time restriction language, the -9- transcript states: The property would be listed. It could be listed tomorrow, it could be listed a year from now. The rest of the transcript goes on to describe the restrictions and conditions upon which the property would be sold. It is evident from this language that a sale of the property would be forthcoming. Furthermore, in the agreement, Jennie accepted $3,000 as her fee as executrix which would be paid from the proceeds of the sale of the property. (Tr. 9). This obviously contemplated a sale during Jennie's lifetime. The Court, by including the words during her lifetime in the Judgment Entry, misinterpreted the express terms of the settlement and reinstated plaintiff's life estate. The intent of the parties clearly was to convert the life estate into percentages of ownership in the property. If we were to follow the terms contained in the Judgment Entry, the defendant brothers would have each given up 13 percent of their remainder ownership for nothing in return. They were actually worse off than before; they would still have to wait until Jennie's death to get 20% not 33 %. On the other hand, plaintiff, while maintaining her life estate, gained 26 percent ownership without giving up anything. If plaintiff were to remain on the property for her lifetime, upon her death her estate would then own 60%, when, prior to the settlement, it had no such interest under the Will. Furthermore, the defendants, who previously each owned 1/3 of the remainder, would now own only 20% each. -10- Accordingly, we find that the trial court erred in adopting the erroneous Findings and Conclusion of the Magistrate. The Judgment Entry is reversed and the case is remanded to carry out the true intent of the parties consistent with this opinion. Judgment reversed. -11- It is ordered that appellants recover of appellee 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 Court of Common Pleas, Probate Court Division 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. JAMES M. PORTER, PRESIDING JUDGE ANN DYKE, JUDGE KENNETH A. ROCCO, JUDGE (DISSENTING WITH ATTACHED OPINION) 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. 112, Section 2(A)(1). COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 73032 JENNIE WLOSZEK : : Plaintiff-appellee : DISSENTING : vs. : OPINION : JOSEPH WLOSZEK, et al. : : Defendant-appellants : DATE: APRIL 16, 1998 KENNETH A. ROCCO, J. DISSENTING: I respectfully dissent from the majority opinion because I believe it is fundamentally flawed in two respects. First, it treats as insignificant the absence of two crucial transcripts in the record on appeal. As the court stated in In re Adoption of Foster (1985), 22 Ohio App.3d 129 at 131: It is basic to appellate review that for the appellant to prevail the record before the appellate court must portray the errors assigned, and when the issue is that a verdict or findings is against the weight of the evi- dence, it must appear that all of the evidence on the issue is before the court of appeals. Thus, App.R. 9(B) prescribes in part: "*** If the appellant intends to urge on appeal that a finding or conclusion is unsupported by the evidence or is contrary to the weight of the evidence, he shall include in the record a tran- script of all evidence relevant to such findings or conclusion ***." -2- If the evidence contained in a partial record does not itself conclusively support the finding or conclusion, and it does not affir- matively appear that omitted evidence has no bearing on such finding or conclusion, it will be presumed that the omitted evidence supports the finding or conclusion. (Emphasis supplied.) Since appellants' assignment of error in this case is specifically directed to the weight of the evidence, it is com- pletely improper for this court to merely ignore the fact that the trial court held two hearings subsequent to the only one that appears in the record. Under such circumstances, this court cannot simply assume no additional factual matters were presented to the trial court at the other hearings, especially when the supreme court mandatessuch additional hearings prior to the enforcement of a settlement agreement where the terms are disputed. Rulli v. Fan Co. (1997), 79 Ohio St.3d 374. In other words, this court is required to presume the lower court's judgment was correct in the absence of an adequate record of the proceedings below rather than to presume the opposite. Helton v. Helton (1994), 102 Ohio App.3d 733; Baker v. Cuyahoga Cty. Court of Common Pleas (1989), 61 Ohio App.3d 59 at 62-63; Pappenhagen v. Payne (1988), 48 Ohio App.3d 176. Therefore, I cannot agree with the majority opinion's disposition of this appeal on this ground. Second, the majority opinion fails to give deference to the notion that settlement agreements are highly favored in the law." Continental W. Condominium Unit Owners Assn. v. Howard E. Ferguson, -3- Inc. (1996 ), 74 Ohio St.3d 501 at 502. Instead, it relies on another misplaced assumption, viz., that, even though the record on appeal is incomplete, the settlement agreement set forth by the trial court does not accurately reflect the "intent" of the par- ties. While I sympathize with the majority's desire to be fair, there are other ways to interpret the intent of the parties when they entered into the settlement agreement set forth by the trial court. A review of the record reveals appellants sought originally to prevent appellee's sale of the property since they could not ascertain the interest each sibling retained in the mother's property upon that contingency. In instituting this action, appellee asserted that by the terms of the will, she did not have merely a life estate but, rather, she essentially had a fee simple interest in her mother's property since she was permitted to sell it, buy another house, and only then distribute any extra proceeds in twenty-five percent shares to her siblings. Appellants, understandably, were reluctant to interpret the will in this manner, so they opposed appellee's assertion. Pur- suant to the settlement agreement ultimately reached, a scenario was presented whereby if the property were sold (and it need not be), each sibling would obtain a current percentage of interest in the money realized by the sale. Perceived in this manner, the agreement was supported by consideration. -4- It is important to note in this connection two documents in the record: 1) appellants' proposed settlement agreement, filed subsequent to the original hearing, which contained terms com- pletely outside those originally stated by the magistrate; and 2) appellee's motion to enforce settlement, which contained terms substantially the same as those set forth by the trial court in its ultimate journal entry and which was signed by not only by appellee and her counsel but also by appellee's sister and the sister's counsel. To me, it seems odd that other parties present at the trial court hearings believed the trial court's interpretation of the intent of the parties was accurately set forth but the majority opinion does not. The majority opinion's interference in this mat- ter appears antithetical to a settlement agreement's favored status in law. At any event, it is not the province of this court to reinterpret the intent of the parties on the basis of an incomplete record, especially when the trial court was in the better position to make the interpretation after two additional hearings on the matter. Rulli v. Fan Co., supra; Spercel v. Sterling Industries (1972), 31 Ohio St.2d 36; cf., Continental W. Condominiums Unit Owners Assn. v. Howard E. Ferguson, Inc., supra; Bolen v. Young (1982), 8 Ohio App.3d 36. Simply put, the record on appeal is insufficient to justify .