Opinion
No. 92DV000160.
Decided August 3, 1993.
Jeffrey L. Robinson, for plaintiff.
Richard A. Fisher, for defendant.
Defendant's Motion to Enforce Settlement Agreement, filed June 24, 1993, came on for hearing July 26, 1993. Defendant Randal Lee May appeared with his attorney, Richard A. Fisher, and plaintiff Nora May appeared with her attorney, Jeffrey L. Robinson. The parties were sworn and testified, and exhibits were entered into evidence.
Plaintiff was called as "on cross" and admitted under oath she had orally agreed to accept the salient terms of a settlement proposal which was presented to her orally by her attorney on April 22, 1993 at the courthouse. She orally communicated this acceptance to defendant's attorney through her own attorney, and the ostensible settlement was then memorialized some days later in a writing which was prepared by defendant's attorney. She refused to sign the "Separation and Property Settlement Agreement," and it was then presented unsigned to the court, being designated at hearing as "Defendant's Exhibit A." She further testified she had contacted her husband on the evening of April 22, the same day as negotiations had been held, and verbally revoked her acceptance of the oral agreement at that time. She informed her attorney of such fact the next morning, and such fact was then communicated to defendant's attorney that same day.
Plaintiff testified she had developed a severe migraine headache one hour into the negotiations on April 22, that she could not focus on the issues because of such infirmity, that she had informed her attorney of such fact, but had decided to proceed with the negotiations to get them over with, and that upon reflection, several hours later, the agreement appeared to her to be "coerced," "not voluntarily made," made under "duress," and consequently not "fair or equitable." She then expressed her rejection to her husband, and her expressed perception of and dissatisfaction with the agreement continues through today.
When asked what parts of the agreement she objected to, she answered, "child support and alimony."
Defendant testified he had accepted the ostensible agreement some three or four hours after negotiations had been held at the courthouse on April 22, 1993. He further testified his wife called him later that night and informed him she was withdrawing from the agreement because she had been ill, and she was no longer satisfied with it.
The alleged agreement of April 22 was reached only after the parties had engaged in some three or four hours of negotiations at the courthouse. Due to the fact that the agreement was ostensibly reached after the courthouse hours had concluded, it was not placed on the record, or acknowledged by the parties under oath, or presented to the judge for his consideration at that time. Plaintiff now contends she should not be bound by this agreement.
At first blush it would appear defendant's motion has merit. As stated in 15 Ohio Jurisprudence 3d (1979), Compromise, Accord, and Release, Section 17: "Agreements of compromise and settlement are highly favored in law." See, also, Mack v. Polson Rubber Co. (1984), 14 Ohio St.3d 34, 14 OBR 335, 470 N.E.2d 902, and Klever v. Stow (1983), 13 Ohio App.3d 1, 13 OBR 1, 468 N.E.2d 58.
The Mack case involved enforcement of an accord reached in a workers' compensation case, a hybrid area of the law involving commercial, tort, and insurance law, areas of the law commonly associated with "law" rather than "equity."
The Klever case involved enforcement of a settlement agreement reached in a "personal injury" action, again a "tort" action, associated with "law" rather than "equity." Klever also dealt with peripheral issues of the "apparent authority" of an attorney to settle a case, and a litigant's right to a "trial by jury."
The court is well aware of the fact that legal distinctions as to form, between actions "at law" and suits "in equity," have been abolished in Ohio since the 1853 enactment of the "Code of Civil Procedure." 51 Ohio Laws 57, Section 3. However, former R.C. 2307.02 further provided that such merger did "not affect any substantial right or liability, legal or equitable." See 41 Ohio Jurisprudence 3d (1983), Equity, Section 3. It is apparent that the substantive distinction between the two areas of law survives.
Domestic relations cases are normally governed by "equitable" considerations, as specifically delineated in R.C. 3105.011. The current controversy has arisen in a divorce action. It is consequently governed by equitable principles. The court is not aware of any reported Ohio appellate decision dealing specifically with enforcement of oral agreements in a domestic relations setting. However, the court is aware of a Virginia case where such an issue has been dealt with. See Richardson v. Richardson (1990), 10 Va. App. 391, 392 S.E.2d 688. The major issue in the Virginia case appeared to be how to get around the "Statute of Frauds" problem. In a well-reasoned opinion, the Virginia Court of Appeals upheld the enforceability of an oral separation agreement, because it recognized as a distinguishing feature the fact that the agreement had been read into the record, and the parties had acknowledged the agreement in open court, on the record, and in response to questioning by the judge.
Common Pleas Judge Schmenk, in the case of Bockerman v. Bockerman (1993), Henry C.P. No. 92DR54, unreported, recently ruled in favor of enforcing an oral settlement agreement in a divorce action where the same distinction had been made, i.e., the agreement had been acknowledged by the parties "on the record" and in response to "judicial inquiry."
"On the record" is important because there is consequently a memorialization of exactly what the parties agreed to, the same purpose being addressed by and underlying Ohio's Statute of Frauds, R.C. 1335.05. Such a practice also underscores finality and judicial endorsement of such an agreement, with the court's finding that it is fair and equitable.
The problem presented by Ohio's Statute of Frauds appears to be more than merely academic in the present controversy. The court notes that such issue was briefly touched upon in the Klever case, supra, but was sidestepped by the court under the principle of "waiver," the court having reasoned as follows:
"The Statute of Frauds (R.C. 1335.05) is an affirmative defense. By failing either to plead the defense or to object to the admission of the contract terms at the hearing below, appellants have waived the defense. Thus, the agreement can be enforced as though it satisfied the statute. This issue cannot now be raised for our review." Id., 13 Ohio App.3d at 5, 13 OBR at 6, 468 N.E.2d at 62-63.
The Statute of Frauds problem aside, plaintiff claims the court should not enjoin or enforce the alleged agreement for the following reasons:
1. Plaintiff's assent was not voluntary, and was the product of coercion and duress;
2. There was no meeting of the minds;
3. There are no facts or figures before the court upon which the court can base an independent finding that the agreement is fair and equitable;
4. Defendant has not been unduly prejudiced because plaintiff informed defendant of her (attempted) revocation of assent the same day as the alleged agreement, and before the agreement was reduced to writing;
5. The provisions of R.C. Chapter 3105 seem to contemplate the existence of a written separation agreement, and not an oral agreement;
6. In analogizing the issue to a dissolution proceeding, under R.C. 3105.65, a consensual agreement may be withdrawn at any time up to and including final hearing, and, by extending such analogy, the same right should apply to consensual agreements in divorce situations;
7. Domestic relations courts are courts of equity, and they should not be bound to or ruled by strict application of legal (contract) doctrine, but should be guided by resort to discretion as justice would indicate.
In consideration of the facts and circumstances, and plaintiff's sworn testimony wherein she acknowledged she had agreed to be bound by all parts of the agreement other than child support and alimony, it would appear that defendant's motion with regard to all parts of the agreement, other than child support and alimony, should be GRANTED; and
It further appears to the court that as to the sole and reserved issues of child support, child health care costs, and alimony, and the attendant issues of assessing tax liability and the costs of child care, defendant's motion should and ought to be DENIED.
IT IS SO ORDERED.
Final hearing herein on the reserved issues is scheduled for October 15, 1993, at 9:00 a.m.
So ordered.