COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 75447 NANCY SCHORPP : : : JOURNAL ENTRY Plaintiff-Appellee : : AND v. : : OPINION LESLIE R. DICKARD, ET AL. : : : Defendants-Appellants : DATE OF ANNOUNCEMENT OF DECISION: DECEMBER 23, 1999 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court, No. CV-344676. JUDGMENT: AFFIRMED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellee: Ellen M. Brooks, Esq. Roth, Rolf & Goffman Co., L.P.A. 350 Corporate Circle 30100 Chagrin Boulevard Cleveland, OH 44124-5707 For Defendants-Appellants: Harry J. Jacob, III, Esq. Jacob & Associates 33595 Bainbridge Road, Suite 201 Solon, OH 44139 TIMOTHY E. McMONAGLE, J.: Defendant-appellant Leslie R. Dickard appeals the decision of the Cuyahoga County Common Pleas Court granting plaintiff-appellee -2- Nancy Schorpp's Civ.R. 60(B) motion for relief from an agreed judgment entry. For the reasons that follow, we affirm. On December 4, 1997, appellee filed suit against appellant seeking to rescind the real estate contract by which she sold and transferred her home, located at 770 High Street, Bedford, Ohio, to appellant. Appellee's complaint alleged that on July 30, 1997, she and appellant executed an Offer to Purchase Real Estate agreement, whereby appellant agreed to purchase appellee's home. Pursuant to the agreement, appellant was to pay for appellee's home by paying off her credit card debts, in the amount of $21,974.80, and allowing her to live in the house rent-free for ten years, commencing August 1, 1997. Appellee's complaint alleged further that on July 30, 1997, she executed and delivered to appellant a warranty deed, which appellant recorded on October 3, 1997. Appellee's complaint set forth two causes of action against appellant. First, appellee alleged that as of December 4, 1997, appellant had not made any of the agreed upon payments and, therefore, the Offer to Purchase Real Estate agreement and warranty deed were void due to a lack of consideration. Appellee also alleged that appellant had fraudulently induced her to sign the agreement and warranty deed and sought punitive damages from appellant in the amount of $20,000. On December 24, 1997, appellant filed his answer to appellee's complaint, denying all wrongdoing and asserting various affirmative defenses. -3- On March 13, 1998, the trial court conducted a case management conference and set the case for trial on June 29, 1998. On June 3, 1998, however, the trial court dismissed the case with prejudice pursuant to an agreed judgment entry that had been signed and filed by the parties. The agreed judgment entry provided, in pertinent part: [T]hat Mr. Dickard agrees not to enter the premises at 770 High Street, Bedford, Ohio, *** other than to do needed repairs or replacements, with 24 hours notice, and to inspect the premises at reasonable times, but no more than once every six (6) months, with forty-two to seventy-two hours notice prior to such an inspection. [T]hat at the end of the period of the previously entered into purchase agreement, *** Mrs. Schorpp shall take with her all of the appliances that she has placed in the real estate. [T]hat at the end of period of the previously entered into purchase agreement Mrs. Schorpp shall take with her all of the tools in the garage, including any tools from the garage that Mr. Dickard may have in his possession. All tools Mr. Dickard removed from the subject -4- property will, upon the parties signing this entry, be immediately returned to Mrs. Schorpp. [T]hat at such time as he has obtained refinancing of the subject house, Mr. Dickard will reimburse Mrs. Schorpp for all of the funds she has paid on the accounts from the inception of the agreement to the present date. *** Total amount not to exceed $4,225.58. [T]hat during the six (6) month period of time for Mr. Dickard to obtain refinancing, if Mrs. Schorpp continues to make the payment necessary on said accounts, she will then be further reimbursed for this by Mr. Dickard immediately upon his obtaining his refinancing. [T]hat at such time as he has obtained refinancing of the subject house, Mr. Dickard will repay the full amount of the debt as originally agreed *** [in] the previously entered into purchase agreement *** total amount not to exceed $21,974.80, and that until such time as this refinancing is obtained, Mr. Dickard will pay the minimum periodic payments on all such accounts ***. [T]hat Mr. Dickard will pay up to $1,000 towards Mrs. Schorpp's legal fees at such time as he has retained refinancing of the subject property. [T]hat should Mr. Dickard not be able to resolve the debts through refinancing of the subject property in a reasonable amount of time, not to exceed 6 months from the date of this Entry, than (sic) the property would revert back to Mrs. Schorpp.1 On October 9, 1998, after procuring new counsel, appellee filed a motion for relief from the agreed judgment entry pursuant to Civ.R. 60(B)(3) and (5). In her brief in support of her motion, 1Although the agreed judgment entry stipulated that the action and counterclaim should be settled and dismissed, appellant never asserted a counterclaim in the action. -5- appellee argued that the judgment entry should be vacated because the judgment had been procured through fraud, misrepresentation or other misconduct by appellant, and the judgment was so unfair and inequitable as to shock the conscience. On October 23, 1998, the trial court held a hearing regarding appellee's motion. At the hearing, appellee testified that she had lived in the home at 770 High Street for approximately twenty-seven years. Appellee testified that she and her husband moved into the house in 1971 and paid off the mortgage in 1991. Appellee testified that her twenty-two-year-old son, her twenty-six-year-old daughter, and her daughter's six-year-old son live with her. Appellee admitted that she managed her financial affairs poorly after her husband died unexpectedly in 1995. According to appellant, it just all ganged up on her and she had problems meeting her credit card obligations. Appellant testified that appellant had lived across the street from her for years and had been a friend of her husband's. According to appellant, in April or May 1997, appellant began coming over every day to ask her questions about her finances. Appellee testified that appellant also asked her daughter about appellee's financial affairs. Appellee testified that appellant came up with a plan whereby he would purchase her home, pay off her debts, allow her to live in her home rent-free for ten years and then transfer her home back to her. According to appellee, appellant told her that the transaction would be beneficial to him -6- for business purposes. Appellee testified that appellant told her that he had made the same arrangement with another woman. Appellee testified that on July 30, 1997, she went to appellant's backyard and executed an agreement and the deed to her home. Appellee admitted that her signature appears on page four of the Offer to Purchase Real Estate agreement, but testified that she saw the printed agreement for the first time in December, 1997, after her lawyer had obtained a copy of it for her. According to appellee, the agreement that she signed in July 1997, was a handwritten, shorter agreement. Appellee testified that appellant did not pay her any money on July 30, 1997 when she signed the deed and agreement. Appellee testified further that appellant did not pay her any money in the ensuing months nor did he make any of the required minimum monthly payments on her credit card bills. Appellee testified that she eventually became concerned because the bill collectors were still hounding her so she hired a lawyer to get [her] house back and filed suit against appellant in December 1997. Appellee testified that she subsequently signed the agreed judgment entry because, due to advice from her lawyer, she felt [she] had no other choice. Appellant testified that he has lived at 775 High Street, across the street from appellee, for fourteen years. Appellant testified that he was a good friend of appellee's husband before he died and often watched television, played war games and worked on his house with him. According to appellant, he and appellee's husband would often borrow tools from each other's garages. -7- Appellant testified that he was initially reluctant to visit appellee after her husband died, but then began going over to her house to see if she needed anything, fix her grandson's bike or mow the lawn. According to appellant, he learned about appellee's financial problems because someone stopped at his house and asked him whether appellee was working and what her source of income was. According to appellant, some of the neighbors told him that they had received calls about appellee from various credit card companies. Appellant testified that when appellee eventually acknowledged to him that she had financial problems, he told her that she should put her home in one of her children's names and obtain financing on it. Appellee allegedly told him that she was fearful that if she did so, her children would sell the home and she would then have no place to live. According to appellant, appellee suggested putting the house in his name because she felt that she could trust him. Appellant testified that after his lawyers drafted the agreement, he offered to take appellee to his lawyers' office to sign it, but she refused to do so because she was taking care of several children in her home and did not want to bring them to the lawyers' office. Consequently, appellant made arrangements for his lawyers to come to his house on July 30, 1997. Appellant testified that when appellee came over to his house on July 30, 1997, he told her that he would watch her grandson while she reviewed the agreement. According to appellant, he, appellee and his lawyers were in his backyard for a good hour and -8- appellee read the agreement thoroughly. Appellant testified that appellee received copies of the agreement on July 30, 1997 but admitted that he did not pay her any money that day. Appellant denied that he had ever done this kind of deal before. Appellant testified that he obtained a mortgage in the amount of $56,550 on appellee's home on August 25, 1998. According to appellant, he planned on using part of the proceeds to pay off appellee's debts, pursuant to the agreement. He used the remainder of the proceeds to purchase a building in Macedonia, Ohio. Appellant testified that he had attempted to comply with the terms of the agreed judgment entry. On October 13, 1998, appellant tendered a check in the amount of $26,200.38 as payment in full of the sums enumerated in paragraphs five and seven of the agreed judgment entry. The check was returned, however, by appellee's counsel. Appellant testified that he had not returned the tools that he had borrowed from appellee or paid the $1,000 legal fee identified in the agreed judgment entry because he was not sure of exactly what was owed to appellee. Upon questioning by the court, appellant admitted that he recorded the deed to appellee's home on October 3, 1997, but insisted that he waited for three months after appellee signed the agreement to record the deed so she had three months to change her mind. Appellant also insisted that he was not aware when he signed the Offer to Purchase Real Estate agreement that appellee's house was unencumbered by a mortgage. Appellant stated -9- that for purposes of recording the deed, the property was valued at $70,000. On October 27, 1998, the trial court entered an order granting appellee's motion to vacate the agreed judgment entry, finding that the requirements of Civil Rule 60(B)(3) and (5) have been met by plaintiff. The court set the case for trial on November 2, 1998. Appellant timely appealed, assigning two assignments of error for our review: I. THE TRIAL COURT ABUSED ITS DISCRETION IN GRANTING PLAINTIFF-APPELLEE'S MOTION TO VACATE THE AGREED JUDGMENT ENTRY. II. THE TRIAL COURT ABUSED ITS DISCRETION IN GRANTING PLAINTIFF-APPELLEE'S MOTION TO VACATE THE AGREED JUDGMENT ENTRY PURSUANT TO CIVIL RULE 60(B)(5) AS EXTRAORDINARY RELIEF IS NOT WARRANTED OR AVAILABLE WHEN A CLAIM IS OTHERWISE ENUMERATED IN 60(B)(1)-(4). In his first assignment of error, appellant contends that the trial court abused its discretion in granting appellee's motion to vacate the agreed judgment entry. Specifically, appellant contends that an agreed judgment entry is not the proper subject of a Civ.R. 60(B) motion to vacate judgment and, even if it were, appellee failed to meet the requirements under the rule. In his second assignment of error, appellant argues that the trial court abused its discretion in granting appellee's motion to vacate the agreed judgment entry pursuant to Civ.R. 60(B)(5). Because both of appellant's assignments of error concern whether the trial court properly granted appellee's motion to vacate the agreed judgment entry, we consider them together. -10- Civ.R. 60(B) provides that a court may relieve a party from a judgment or order of the court when certain requirements are met: 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 ***; 3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party; 4) the judgment has been satisfied, release or discharged ***; or 5) any other reason justifying relief from the judgment. A trial court has discretion in determining whether to grant a Civ.R. 60(B) motion for relief from judgment. Rose Chevrolet, Inc. v. Adams (1988), 36 Ohio St.3d 17, 20. Thus, a trial court's decision regarding a Civ.R. 60(B) motion will not be reversed on appeal absent a showing of abuse of discretion. Doddridge v. Fitzpatrick (1978), 53 Ohio St.2d 9, 11. The term 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. In order to prevail on a motion for relief from judgment pursuant to Civ.R. 60(B), the movant must demonstrate that: (1) he has a meritorious claim or defense; (2) he is entitled to relief under one of the grounds stated in Civ.R. 60(B)(1) through (5); and (3) the motion is made within a reasonable time. GTE Automatic Electric, Inc. v. ARC Industries (1976), 47 Ohio St.2d 146, paragraph two of the syllabus. If any of these three requirements -11- is not met, the motion should be overruled. Svoboda v. Brunswick (1983), 6 Ohio St.3d 348, 351. If the movant files a motion for relief from judgment and it contains allegations of operative facts which would warrant relief under Civ.R. 60(B), the trial court should grant a hearing to take evidence and verify these facts before it rules on the motion. Kay, et al. v. Glassman (1996), 76 Ohio St.3d 18, 19, citing Coulson v. Coulson (1983), 5 Ohio St.3d 12, 16. As an initial matter, we address appellant's argument that the trial court erred in granting appellee's motion to vacate the agreed judgment entry because an agreed judgment entry is not the proper subject of a motion to vacate under Civ.R. 60(B). Appellant contends that the agreed judgment entry is, in actuality, a settlement agreement between the parties and, accordingly, is not reviewable by way of a Civ.R. 60(B) motion. Appellant relies on Boster v. C & M Serv., Inc. (1994), 93 Ohio App.3d 523, and the cases cited therein, for this proposition. In Boster, the parties entered into a settlement agreement regarding a debt collection claim and the trial court dismissed the case with prejudice. When the debtor later discovered that his account had been placed with a credit reporting agency prior to settlement, he filed a Civ.R. 60(B) motion for an order setting aside the previously filed dismissal entry and mutual release and settlement agreement, claiming that he would not have settled the case had he known of this fact. The trial court denied the debtor's Civ.R. 60(B) motion for relief from judgment. -12- The Tenth District Court of Appeals affirmed the decision of the trial court on appeal. The Appeals Court stated: It is highly questionable that Civ.R. 60(B) can be used to obtain relief from a judgment based upon a settlement agreement entered into by the parties to the action. The settlement agreement terminates the rights that parties may have and the judgment entry of the trial court ordinarily only clears up the court records. Id. at 525, quoting Bond v. BancOhio Natl. Bank (Aug. 27, 1992), Franklin App. No. 92AP-536, unreported. The Appeals Court found that a settlement agreement differs from a judgment, decision or order entered by the court and, consequently, Civ.R. 60(B) is not the proper vehicle to rescind a settlement agreement. Id. at 526. Accordingly, because the trial court's only function was to dismiss the case for the record, the Court of Appeals affirmed the decision of the trial court denying the debtor's Civ.R. 60(B) motion for relief from judgment. This case, however, is different from Boster. Here, although the parties entered into an extrajudicial settlement agreement, the parties submitted the agreement to the court for its approval as an agreed judgment entry. Being apprised of its contents, the trial judge then signed the agreed judgment entry and entered an order dismissing the case with prejudice. Accordingly, in this case, the trial court did more than merely clear up the court records. It approved the parties' settlement agreement and incorporated the agreement into its order dismissing the case. Thus, the agreed judgment entry was a judicial act from which relief could be granted according to Civ.R. 60(B). -13- Appellant contends, however, that even if the agreed judgment entry were the proper subject of a Civ.R. 60(B) motion for relief from judgment, appellee did not meet the first and second prongs of the GTE Automatic test, i.e., she did not demonstrate that she has a meritorious claim and that she is entitled to relief under one of the grounds stated in Civ.R. 60(B)(1) through (5).2 Appellant contends that appellee did not demonstrate that she has a meritorious claim to present if the judgment were vacated because there was no evidence that appellee was incompetent to enter into a contract regarding the sale of her home. Moreover, appellant contends, appellee was represented by counsel at the time she entered into the agreed judgment entry. Accordingly, appellant argues, there is no evidence that appellee was forced to sign the judgment entry or did not understand its ramifications and, therefore, vacation of the judgment is not proper. Appellant argues further that appellee is not entitled to relief under Civ.R. 60(B)(3), which provides that a court may vacate a judgment due to fraud, misrepresentation or other misconduct of an adverse party. Appellant contends that because he performed his obligations under the judgment entry prior to the hearing, any claimed fraud regarding his intention to perform is a moot issue. Moreover, appellant argues, appellee is not entitled to relief under Civ.R. 60(B)(5), the catch-all provision which allows 2Appellant concedes that appellee's Civ.R. 60(B) motion was timely filed. -14- relief from judgment for any other reason justifying relief, because a party may not use Civ.R. 60(B)(5) to gain relief when the party's claim is covered by the provisions of Civ.R. 60(B)(1) through (4). Appellant contends that appellee's motion for relief from judgment made a single claim--fraud in the inducement--that is covered by Civ.R. 60(B)(3). Accordingly, appellant contends, the trial court erred in finding that appellee was entitled to relief under Civ.R. 60(B)(5). Finally, appellant contends that a lack of proper legal representation does not constitute a ground for relief under Civ.R. 60(B). Therefore, even if appellee were dissatisfied with her counsel's representation, she is not entitled to relief from judgment on this basis. Appellant's arguments are without merit. First, appellee did not argue that she was entitled to relief from judgment either because she lacked capacity or was dissatisfied with her lawyer. Rather, appellee argued that she had a meritorious claim to present should the judgment be vacated because the underlying agreement was procured through fraud. She also argued that she was entitled to relief pursuant to Civ.R. 60(B)(3) because appellant obviously had no intention of performing the obligations contained in the judgment entry and, therefore, the judgment entry was procured through fraud. Finally, appellee argued that she was entitled to relief pursuant to Civ.R. 60(B)(5) because hers is an extraordinary and unusual case--in short, a swindle--in which the interest of justice would be better served if relief were granted. -15- At the hearing, appellee presented evidence regarding appellant's fraudulent conduct in procuring the underlying agreement. She testified that the document that she signed in July 1997 regarding the transfer of her home was different than the verbal understanding that she had with appellant. Most importantly, she testified that the agreement did not provide for the ultimate return of the property to her after ten years, as she had been led to believe would happen. Appellee also presented evidence that appellant did not make any payments to her after she signed the Offer to Purchase Real Estate agreement nor did he make any of the required minimum monthly payments on her credit card bills as set forth in the agreement, even though he recorded the deed in October, 1997. Moreover, appellee presented evidence that even though the agreed judgment entry was signed and filed in June 1998 and appellant secured a mortgage on appellee's property in the amount of $56,550 in August 1998, he did not tender any payment to appellee until October 1998, after appellee had filed her Civ.R. 60(B) motion for relief from judgment. Accordingly, appellee presented sufficient evidence from which the trial court could have properly concluded that the underlying agreement and agreed judgment entry were procured by appellant's fraudulent conduct. In addition to presenting facts relating to appellant's fraudulent conduct in procuring the underlying agreement and agreed judgment entry, appellee also presented evidence that the agreed judgment entry was so deceptive, unfair and inequitable as to -16- warrant relief under Civ.R. 60(B)(5). For example, appellee presented evidence that the agreed judgment entry deceptively references a refinance of appellee's property, when, in actuality, a first mortgage was contemplated. Furthermore, it does not require that appellant give back clear and unencumbered title to appellee in the event that he cannot obtain refinancing of the property. Appellee also presented evidence that when appellant obtained the mortgage on the property, he misrepresented to the lender that he would occupy the property as his principal residence, even though he had no intention of doing so, thereby exposing the real estate to a potential foreclosure action. Based on this evidence, we conclude that the trial court did not abuse its discretion in concluding that appellee has a meritorious defense to present and that she was entitled to relief pursuant to Civ.R. 60(B)(3) and 60(B)(5). Appellant's first and second assignments of error are overruled and the judgment of the trial court is affirmed. -17- It is ordered that appellee recover of appellant 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. TIMOTHY E. McMONAGLE JUDGE O'DONNELL, P.J. and KARPINSKI, J., CONCUR. 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. 22. 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 .