Opinion
Case No. 3:00cv571.
February 23, 2007
FINDINGS OF FACT; OPINION; CONCLUSIONS OF LAW; JUDGMENT TO BE ENTERED IN FAVOR OF DEFENDANT AND AGAINST PLAINTIFF; TERMINATION ENTRY
This is the second lawsuit between these parties. Previously, Defendant Richard J. Rentz ("Defendant" or "Rentz") had sued, among others, Plaintiff Dynasty Apparel Industries, Inc. ("Plaintiff" or "Dynasty"), seeking to recover a sum to which he believed he was entitled, as a result of having introduced the principals of Dynasty to Paul Warfield ("Warfield"). Rentz v. Dynasty Apparel Industries, Inc., Case No. 3:96cv205 (S.D. Ohio). The principals of Dynasty wanted such an introduction, because they hoped that a member of the NFL Hall of Fame, such as Warfield, could help them secure a license from the NFL to manufacture League approved clothing and apparel. With Warfield's assistance, Dynasty was able to secure such a license. In the earlier litigation, Rentz claimed that he had entered into a binding contract with the principals of Dynasty, under which the latter promised to pay him a certain percentage of the their profits from any license they were able to secure from the NFL, as a result of his introducing them to Warfield. The previous lawsuit resulted in a judgment in favor of Rentz, entered in May, 1999. No appeal was taken therefrom, and that judgment is now final.
On June 16, 2000, the parties and their counsel met in Cincinnati, Ohio, in order to discuss the possibility of a resolution of the dispute between them, now reduced to the above referenced judgment. According to Dynasty, they entered into an oral settlement agreement on that date. When Rentz disagreed, Dynasty brought this lawsuit, requesting specific performance of the alleged oral settlement agreement. This matter has been tried to the Court sitting as finder of facts, and the parties have filed their post-trial submissions. See Docs. ##76 and 77. In accordance with Rule 52 of the Federal Rules of Civil Procedure, the Court now sets forth its Findings of Fact separately from its Conclusions of Law.
The Court previously sustained Defendant's Motion to Supplement his Post-Trial Brief (Doc. #80) and has considered the authority set forth therein in making its Findings of Fact and Conclusions of Law.
I. Findings of Fact
The Court will initially set forth its historical factual findings, following which it will list its findings pertaining to liability.
1. Plaintiff Dynasty Apparel Industries, Inc. ("Plaintiff" or "Dynasty"), is a corporation organized under the laws of Florida, with its principal place of business located in that state.
2. Defendant Richard J. Rentz ("Defendant" or "Rentz") is a citizen of Ohio.
3. On May 27, 1999, a jury returned a verdict in favor of Rentz and against Dynasty in Rentz v. Dynasty Apparel Industries, Inc., Case No. 3:96cv205 (S.D. Ohio). In particular, the jury found that Rentz was entitled to recover damages in the sum $629,529.85, as well as 1% of the revenues which Dynasty obtained thereafter as a result of its license to manufacture NFL clothing and apparel. On that day, judgment was entered accordingly in favor of Rentz and against Dynasty. See Doc. #95 in Case No. 3:96cv205.
4. From then until mid-June, 2000, the parties engaged in regular negotiations in an effort to bring closure to their relationship. The impetus of these discussions on the part of Rentz was that Dynasty had indicated that any effort to enforce that judgment could cause it to file bankruptcy. On June 28, 1999, Rentz and Christopher Cornyn ("Cornyn"), an attorney representing Rentz, met with Michael Greene ("Greene"), counsel for Dynasty, at Cornyn's offices in Springboro, Ohio. During that meeting, they were joined by Randall Roach ("Roach"), another attorney representing Rentz. After that meeting, Cornyn wrote to Greene, stating that Rentz would settle the matter for a structured payment of $650,000, or a lump sum payment of $500,000. Dynasty rejected that offer. On September 7, 1999, Cornyn wrote to Greene and Phillip Hudson ("Hudson"), another attorney representing Dynasty, offering to settle the dispute for the lump sum payment of $430,000. In his response to Cornyn under date of October 21, 1999, Greene indicated that, although Dynasty would not accept that settlement proposal, it was willing to pay Rentz $185,000 to settle the matter. By letter dated December 15, 1999, Cornyn indicated to Hudson that Rentz would settle the matter for the payment of $250,000, plus 1% of the gross sales Dynasty generated from its license with the NFL, beginning in 1999. Once again, Dynasty did not accept that settlement proposal. On January 3, 2000, Cornyn wrote again to Hudson, setting forth another settlement proposal, i.e., that Rentz would settle the matter for the payment of $350,000, plus 1% of the gross sales Dynasty generated from its license with the NFL, beginning in 2000. That proposal was not accepted. On March 17, 2000, Cornyn wrote Hudson, increasing Rentz's settlement demand to $529,000, plus 1% of the gross sales Dynasty generated from its license with the NFL, beginning on that date. That settlement demand was also rejected by Dynasty.
Cornyn and Roach represented Rentz in Rentz v. Dynasty Apparel Industries, Inc., Case No. 3:96cv205 (S.D. Ohio), and continued to represent him through the filing of this lawsuit.
In the interim, Dynasty had provided materials relating to its financial condition to Rentz.
In that letter, Cornyn also discussed his client's request to depose a principal of Dynasty in Florida, concerning the financial status of that corporate entity. Such a deposition did not occur.
5. In May, 2000, the parties agreed that Rentz and his counsel would meet a principal of Dynasty and its counsel in Cincinnati, in order to attempt to settle the matter.
6. Shortly after noon, on June 16, 2000, Rentz, Cornyn, Roach, Armando Mendez ("Mendez"), a principal of Dynasty, and Greene met in Cincinnati, in an effort to negotiate a settlement agreement. The initial part of the meeting, about one hour, was spent discussing what Greene described as Dynasty's deteriorating financial condition. For the next two to three hours, the parties traded offers and counter proposals. Cornyn initially asked whether Dynasty could increase its settlement offer beyond $185,000, its highest offer to date. Mendez indicated that, although he would have to discuss the matter with his factor, he believed Dynasty would be able to increase the offer by an additional $40,000. After negotiations had continued for about two more hours, those appearing on behalf of Rentz responded by reducing their demand to the lump sum payment of $350,000. Mendez and Greene left the room in which the meeting was taking place in order to caucus. While they were out of the room, Mendez and Greene were joined by Cornyn, who indicated that Rentz would be willing to accept $325,000 to settle the matter, comprised of an immediate payment of $250,000, and a note for the remaining $75,000. When Mendez and Greene returned, they told Rentz and his counsel that Dynasty could not pay that sum. After further negotiations, Greene and Mendez offered the alternative proposals of either the immediate payment of $235,000, or the immediate payment of $200,000, with a note evidencing the obligation to pay an additional $100,000, in the future. Neither of those alternatives was acceptable Rentz. Mendez indicated that Dynasty could not increase its offer. Therefore, it appeared that negotiations had come to an unsuccessful conclusion.
Brothers Armando and Ignacio Mendez were the co-owners of Dynasty.
That the meeting opened with a discussion of Dynasty's finances is hardly surprising, given that all of Rentz's previous offers of settlement had been conditioned upon his examination of its financial records so that he could satisfy himself that Dynasty would face bankruptcy, if he attempted to enforce the judgment.
A number of other issues had to be resolved before the parties could enter into a settlement agreement, such as the pending sanctions matter initiated by Warfield in Rentz v. Dynasty Apparel Industries, Inc., Case No. 3:96cv205 (S.D. Ohio), the payment of court costs and Rentz's examination of Dynasty's financial records.
The factor provided ongoing financing to Dynasty.
7. As a result of negotiations having broken down, the atmosphere became very tense, if not hostile. Greene and Mendez walked out of the room and stood in the hall next to an elevator. Cornyn and Roach packed their belongings and got on the elevator in order to exit the hotel and to retrieve their automobile, at which point Greene and Mendez reentered the room.
8. Rentz had remained in the room. While Greene was packing up his belongings, such as his computer and printer, Rentz discussed the matter further with Mendez, pointing out that the parties were only $25,000 apart. He also encouraged Mendez to work with him in an effort to bridge that relatively small gap. After looking to Greene for advice, Mendez asked Rentz whether $315,000 was acceptable. Rentz said that it was. The two agreed that, as part of a settlement, Dynasty would pay Plaintiff $210,000, no later than July 14, 2000, with the remaining $105,000 to be paid no later than July 1, 2001. The payment of $315,000 would have satisfied the entire monetary judgment entered against Dynasty, including the obligation that it pay Rentz 1% per year of its sales of NFL apparel, after the date of the jury verdict.
Greene did not offer any advice to Mendez; rather, he merely shrugged his shoulders, indicating that Mendez would have to make a business decision.
During the trial, Rentz testified that he did not agree to waive the 1% per year portion of the judgment and that the sum of $315,000, merely reflected a discount of the liquidated portion of the jury's verdict. Greene and Mendez testified on behalf of Dynasty that all agreed it would not be responsible for paying the 1% per year portion of the judgment. Rentz's testimony in that regard was not credible, given that Dynasty, during the post-judgment negotiations, had never suggested that it would agree to a settlement whereby it agreed to pay part of the liquidated portion of the jury verdict, while remaining liable for 1% of its future sales. Rentz, in contrast, had submitted a number of proposals in which the 1% had been waived.
9. At that point, Greene and Rentz went downstairs in order to retrieve Cornyn and Roach. After they had all returned to the room in which the negotiations had been conducted, Greene attempted to connect his computer and printer, in order to prepare the necessary settlement papers. However, a thunder storm was occurring at the time, causing Greene's computer to fail. As a consequence, Cornyn took notes, as Rentz and Mendez set forth the results of their discussions.
The day before the settlement conference, Greene had drafted a number of documents which could be used to finalize any settlement into which the parties entered.
10. Rentz and Mendez reported that they had reached a consensus, under which Dynasty would pay Rentz $315,000, with $210,000 to be paid no later than July 14, 2000, and the remaining $105,000 to be paid no later than July 1, 2001. The payment of $315,000 would satisfy the entire judgment entered against Dynasty, both its liquidated and unliquidated portions. However, three issues remained to be resolved, before a settlement agreement could be concluded.First, the parties had not resolved the issue of court costs. Mendez was unwilling to agree to pay an open-ended amount of those costs. Cornyn was assigned the task of contacting the office of the Clerk of Courts for the Southern District of Ohio to ascertain the amount of such costs. Second, the issue of Warfield's sanctions motion had not been resolved. Greene and Mendez were willing to use their best efforts to attempt to convince Warfield and his counsel, Kevin McDermott ("McDermott"), to withdraw that motion, while Cornyn, Rentz and Roach suggested that Dynasty agree to indemnify them for any sanctions imposed, in the event that Warfield did not agree to withdraw the sanctions motion. It was agreed that Mendez and Greene would feel out Warfield and McDermott about whether they would be receptive to withdrawing the sanctions motion, as a prelude to resolving the question with finality. Third, Rentz would not enter into an agreement whereby he significantly discounted the judgment he had obtained in Rentz v. Dynasty Apparel Industries, Inc., Case No. 3:96cv205 (S.D. Ohio), on the grounds that the enforcement of that judgment could cause Dynasty to go into bankruptcy, unless and until he and his accountant had reviewed Dynasty's financial records and satisfied themselves that bankruptcy was a legitimate prospect.
Mendez and his brother would owe the $105,000. That debt would be evidenced by a cognovit note executed by them.
Rentz had indicted that costs would be in the range of $25,000 to $30,000, while Cornyn expressed the opinion that they would be in the range of $2,000 to $3,000.
Warfield had filed a motion for sanctions in Rentz v. Dynasty Apparel Industries, Inc., Case No. 3:96cv205 (S.D. Ohio). This Court had previously sustained that motion and had heard two days of testimony on the amount of sanctions.
Rentz had suggested that Mendez and Greene stress to Warfield that he (Warfield) would lose the amount that Dynasty was paying him for having helped it obtain the licensing relationship with the NFL, if Dynasty went into bankruptcy, and that, therefore, it was in his interest that Rentz and Dynasty resolve the matter.
11. On June 19, 2000, Renee Meltzer ("Meltzer"), an associate of Greene's, wrote to Rentz, by way of Cornyn, setting forth the terms of the settlement into which Greene and Mendez believed Dynasty had entered. Meltzer indicated, inter alia, that the parties had agreed that Dynasty would pay Rentz $210,000, in certifiable funds, no later than July 14, 2000, that Mendez and his brother would execute a cognovit, promissory note, evidencing their promise to pay Rentz an additional $105,000, on or before July 1, 2001, that Dynasty and its counsel would make a good faith effort to convince Warfield to drop the sanctions motion, that Dynasty would pay court costs to Rentz in the sum of $150.00, that Rentz v. Dynasty Apparel Industries, Inc., Case No. 3:96cv205 (S.D. Ohio) would be dismissed with prejudice, and that the parties would execute a stipulation for settlement.
On that date, Meltzer wrote an additional letter to Cornyn, requesting information concerning the amount of "court's costs," and indicating she was in the process of drafting the documents necessary to consummate the settlement.
12. On June 20, 2000, Greene wrote to Cornyn, indicating that those representing Dynasty were awaiting information concerning the amount of federal court costs that Dynasty owed, "so that we can hopefully approve and conclude this matter." See Plaintiff's Ex. 5. Therein, Greene also indicated that the requisite settlement papers had been drafted and would be forwarded to him for his review once they had information concerning such costs. In addition, Greene wrote that he and his colleagues would not contact Warfield's attorney, McDermott, until they had received information concerning costs. Finally, Greene explained that, on June 16, 2000, the parties had agreed that Dynasty was required to pay Rentz $210,000, 30 days after the parties had agreed to and executed all paper work necessary to consummate the settlement, so that this payment would not be due until July 21, 2000, if the parties were able to complete and to execute the paperwork the following day.
At some point in June, 2000, after he had written that letter, Greene contacted McDermott and explained about the negotiations that had taken place in Cincinnati, and the agreement which he (Greene) believed they had reached at the conclusion of those negotiations. Greene asked that McDermott and his client consider withdrawing the sanctions motion. McDermott indicated that he would consult Warfield about the issue. Greene contacted McDermott one other time about the withdrawal of the sanctions motion, receiving the same response. Warfield has not withdrawn that motion.
13. On June 23, 2000, Cornyn wrote to Greene, stating that he was responding to the latter's "correspondence to me concerning the status of our settlement discussion." Plaintiff's Ex. 7 at 11. He also explained that he had contacted the Clerk's Office of the United States District Court concerning costs, that the process was more complex than he had thought and that the issue of costs they had discussed had apparently not been resolved. Cornyn also included a copy of the latest version of the guidelines issued by the Office of the Clerk of Courts for the taxation of costs in the Southern District of Ohio. In addition, Cornyn indicated that Rentz had given the financial information provided by Mendez to his accountant, who, according to Cornyn, believed that Dynasty had been a profitable company the previous year, had increased its sales and had been able to afford to make a $55,000 charitable contribution. Cornyn stated that, as a consequence, Rentz was not willing to proceed with further settlement discussions, until his accountant was able to travel to Florida in order to examine Dynasty's financial records. Cornyn concluded by writing that he would like to schedule the examination as soon as possible, "so there is no further delay resolving this matter[,] if it is to resolve." Id.
14. On July 27, 2000, Greene wrote to Cornyn, responding to the latter's June 23rd letter. Greene indicated that he had not received that letter until July 7th, and expressed surprise that, "even though our parties had reached an agreement which was signed off by all parties, that men of their word seem not able to live up to the agreement made at that exhaustive meeting in Cincinnati." Plaintiff's Ex. #30 at 1. Greene also stated that Dynasty had nothing to hide and would permit Rentz's accountant to examine its books as part of a deposition in aid of execution at the offices of Greene's law firm. In addition, Greene emphasized that he believed that the parties had reached a valid, fair and binding agreement, with the only "semi-open issue" being the amount of taxable court costs. Greene indicated that, if Cornyn were not able to supply the information, he was prepared to make the necessary filings to obtain that information.
15. On September 7, 2000, Greene wrote to Cornyn again, reiterating his belief that the parties had entered into a binding settlement agreement in Cincinnati, on June 16th. He also indicated that the only "clean-up" issue had been the amount of taxable court costs, which had been resolved the week following June 16th. In addition, Greene stated that, in reliance upon the parties' settlement, he had contacted McDermott in an effort to have his client, Warfield, withdraw the sanctions motion. Additionally, Greene invited Rentz's accountant to contact him or Dynasty's accountant, if there were any questions concerning Dynasty's financial documents. Greene also included with that letter a check from Dynasty in the amount of $210,000, which was not in certifiable funds. Greene concluded by indicating that, if Rentz refused that payment, Dynasty would consider him to be in breach of the agreement reached by the parties on June 16th, and that it would initiate a specific performance action in order to enforce its rights.
In this letter, Greene states that the settlement conference occurred on June 15, 2000. His statements in that regard are in error, as it the conference took place on the following day.
On the memo line of the check the language, "[d]eposit of this check ratifies the terms of the June 15 (sic) Agreement," had been typed. See Plaintiff's Ex. 32.
16. On September 22, 2000, Cornyn responded to Greene, reiterating that Rentz was of the opinion that the parties had merely agreed to keep working toward an agreement on June 16th, rather than having reached a settlement. Rentz did concede that the discussions on the 16th narrowed the areas of disagreement. Cornyn also indicated that, until Rentz and his accountant had the opportunity to review Dynasty's financial records, a settlement agreement would be uncertain. To that end, Cornyn wrote that Rentz and his accountant proposed coming to Florida the next month, and requested specific dates upon which that could accomplished. Cornyn also pointed out that, if the parties had indeed reached an agreement on June 16th, Dynasty was in breach of same, since the check which had accompanied Greene's September 7th letter was dated September 5, 2000, rather than having been presented to Rentz the previous July. In addition, Cornyn indicated that he had contacted the bank upon which the non-certified check had been drawn, which indicated that there were not sufficient funds in the account to cover that check. Rentz has not negotiated that check.
17. On September 27, 2000, Greene wrote to Cornyn, reiterating that Rentz's accountant could contact Dynasty's accountant, if the former had any questions. In addition, Greene offered three options to Rentz. Under the first option, Rentz would be permitted to inspect Dynasty's books, if Rentz agreed to forego the affirmative defenses of waiver and estoppel in any action for breach or specific performance of the settlement agreement initiated by Dynasty. Rentz would be given until October 20, 2000, to inspect Dynasty's books. Dynasty would file suit for breach of the settlement agreement and/or specific performance, within five days of the inspection, if Rentz had not deposited the settlement check. Under the second option, if Rentz did not inform Dynasty by 5:00 p.m., on October 6th that he accepted the first option, he would be given until that time on October 11th in which to deposit the check, or Dynasty would initiate such a suit. Under the third option, Rentz could deposit the check, and the parties would complete all the paperwork necessary to complete the settlement.
18. On September 29, 2000, Greene wrote once again to Cornyn. This letter was an express response to Cornyn's September 22nd letter. In that letter, Greene stated that, if he were not informed in writing by 5:00 p.m., on October 5th, of which of the options Rentz had selected, then Dynasty would initiate an action for specific performance and/or breach of the settlement agreement. In addition, Greene denied that Dynasty had lacked funds to pay the check in the amount of $210,000, and threatened suit for defamation and tortious interference with Dynasty's contractual relationship with its bank.
In his September 29th letter, Greene stated that he had not received Cornyn's September 22nd letter until that day.
19. On October 4, 2000, Cornyn wrote to Greene, stating that Rentz would not accept any of the options set forth in the letter to Cornyn of September 27th. Cornyn explained that, without restriction-free disclosure of Dynasty's financial records, a settlement was not possible. In addition, he expressed his surprise and anger at Greene's assertions that Rentz and/or his counsel had committed defamation.
20. From that point, until late in December, 2000, Cornyn corresponded and spoke with Raymond Miller ("Miller"), a partner of Greene's, concerning the possible settlement of Rentz's judgment. Throughout their interaction, Miller insisted that the parties had settled the matter on June 16th, while Cornyn insisted that settlement was not possible, unless Rentz were able to review all of Dynasty's financial records. Although Miller furnished Dynasty's corporate income tax return from 1999, those documents did not satisfy Cornyn's requests for financial records. The interaction between Miller and Cornyn did not result in a settlement. Dynasty initiated this litigation on December 4, 2000.
That return had not been available when the parties met on June 16th in Cincinnati.
21. The parties did not enter into a final settlement agreement on June 16th; rather, they merely narrowed their areas of disagreement. They mutually agreed on the amount Dynasty would pay Rentz, if a settlement were reached; however, Mendez was not willing to enter into a binding settlement, without knowing the amount of court costs for which Dynasty would be liable. The parties have not reached an agreement on that amount. Moreover, any settlement was to be contingent upon the examination of Dynasty's financial records by Rentz and his accountant, so that Mendez's assertions concerning the Dynasty's impending bankruptcy could be confirmed. Rentz and his accountant were never given an unrestricted right to examine those records. In addition, they had not yet agreed upon how Warfield's sanctions motion would be resolved in a settlement agreement.
II. Opinion
In its Post-Trial Brief, Dynasty contends that it is entitled to a decree of specific performance, requiring that Rentz perform in accordance with the terms of the oral settlement agreement, into which the parties entered on June 16, 2000, in Cincinnati.See Doc. #77. In support of that contention, Dynasty sets forth three separate propositions, to wit: 1) that the parties entered into a settlement agreement in Cincinnati on June 16, 2000, under which Rentz agreed to accept $210,000 in certifiable funds, on or before July 14, 2000, a cognovit note for $105,000, court costs and the assistance of Mendez and his counsel in attempting to convince Warfield to withdraw his sanctions motion; 2) that it (Dynasty) did not breach the settlement agreement by failing to pay Rentz $210,000 in certifiable funds, on or before July 14, 2000, because Rentz had previously repudiated the agreement, thus relieving Dynasty of its obligation to perform; and 3) that none of Rentz's affirmative defenses prevent it from prevailing. Rentz has taken the opposite point of view on each of those propositions. See Doc. #76. Above, this Court has found, as a matter of fact, that Rentz and Dynasty merely narrowed their areas of disagreement on June 16, 2000, rather entering into a settlement agreement. Therefore, there is no contract which this Court can order Rentz to specifically perform. The Court now explains its factual finding that the parties did not enter into a settlement agreement on June 16th, beginning by reviewing the applicable principles of Ohio law.
Given that the Court has found that Rentz and Dynasty did not enter into a settlement agreement on June 16th, it is not necessary to address the parties' arguments concerning the question of whether Plaintiff's failure to pay the $210,000 by July 14th was excused, because Rentz was in default. Nor does the Court address any of the Defendant's affirmative defenses.
Plaintiff has invoked this Court's diversity jurisdiction; therefore, it must apply Ohio's choice-of-law principles. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941). In their memoranda, the parties have cited and relied upon the law of Ohio. Although Rentz is a citizen of Ohio and the crucial events underlying Plaintiff's request for specific performance occurred in Cincinnati on June 16th, Plaintiff is a citizen of Florida. Consequently, one might argue that, under Ohio's choice-of-law principles, the substantive law of Florida must be applied in this litigation. However, since the parties have not raised that argument and, further, given that they have relied upon the law of Ohio, this Court will apply the law of this state. See Echo Inc. v. Whitson Co., Inc., 52 F.3d 702, 707 (7th Cir. 1995) ("Where neither party argues that the forum state's choice-of-law rules require the court to apply the substantive law of another state, the court should apply the forum state's substantive law").
In Episcopal Retirement Homes, Inc. v Ohio Dept. of Industrial Relations, 61 Ohio St.3d 366, 575 N.E.2d 134 (1991), the Ohio Supreme Court restated the familiar definition of a contract:
The Restatement of the Law 2d, Contracts (1981) 5, Section 1, defines a "contract" as "[a] promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty."Id. at 369, 575 N.E.2d at 137. The "[e]ssential elements of a contract include an offer, acceptance, contractual capacity, consideration (the bargained for legal benefit and/or detriment), a manifestation of mutual assent and legality of object and of consideration." Kostelnik v. Helper, 96 Ohio St.3d 1, 3, 770 N.E.2d 58, 61 (2002) (internal quotation marks and citation omitted). Accord Lake Land Emp. Group of Akron, LLC v. Columber, 101 Ohio St.3d 242, 247, 804 N.E.2d 27, 31 (2004); Snyder v. Snyder, 2007 WL 92873 (Ohio App. 2007). There must also be a meeting of the minds of both parties and the contract must be definite and certain. Episcopal Retirement Homes, 61 Ohio St.3d at 369, 575 N.E.2d at 137. A meeting of the minds entails a manifestation of the parties' mutual assent to be bound by their promises.Cuyahoga County Hosps. v. Price, 64 Ohio App.3d 410, 415, 581 N.E.2d 1125, 1128 (1989). In Stoops v. Miller, 97 Ohio App.3d 265, 646 N.E.2d 552 (1994), the court reiterated that:
See also, Nilavar v. Osborn, 127 Ohio App.3d 1, 11, 711 N.E.2d 726, 732 (1998) (noting that to prove the existence of a contract, a plaintiff must show the elements of mutual assent and consideration, that there was a meeting of the minds and that the contract was definite as to its essential terms).
"Evidence of the exact words of offer and acceptance in proof of an oral contract is not essential. It is sufficient if the words, deeds, acts, and silence of the parties disclose the intent to contract and the terms of the agreement." Rutledge v. Hoffman (1947), 81 Ohio App. 85, 36 O.O. 405, 75 N.E.2d 608, paragraph one of the syllabus.Id. at 267, 646 N.E.2d at 553. See also, Kostelnik, 96 Ohio St.3d at 3, 770 N.E.2d at 61 (noting that the "[t]erms of an oral contract may be determined from words, deeds, acts, and silence of the parties") (internal quotation marks and citation omitted). Of course, resolution of the question of the existence of an oral contract is a question of fact to be resolved by the trier of facts. Blessing v. Bowerstock, 2000 WL 1808359 (Ohio App. 2000);Murray v. Brown-Graves Co., 1 Ohio Law Abs. 167 (Ohio App. 1922).
As to the question of the burden of proof, in some circumstances, Ohio courts have held that the party seeking to establish an oral contract must prove its existence with clear and convincing evidence. See Geiger v. Geiger, 1993 WL 467247 (Ohio App. 1993); Wallace v. Wallace, 1982 WL 6672 (Ohio App. 1983). Those decisions, however, arose in the context of allegations by the plaintiff that the defendant had entered into an oral contract to convey land to him. In decisions arising out of alleged oral contracts not involving a promise to convey land, Ohio courts have merely required that the proponent of the contract prove its existence by the preponderance of the evidence. See e.g., Eagle Title Agency, Inc. v. Affiliated Mortgage Co., 1996 WL 362051 (Ohio App. 1996); Carter v. Fogle, 1992 WL 223731 (Ohio App. 1992). Since this litigation does not stem from an alleged oral contract which involved a promise to convey land, this Court concludes that Plaintiff need only prove the existence of that contract by the preponderance or greater weight of the evidence.
Under Ohio law, "[c]lear and convincing evidence is that measure or degree of proof which is more than a mere `preponderance of the evidence,' but not to the extent of such certainty as is required `beyond a reasonable doubt' in criminal cases, and which will produce in the mind of the trier of facts a firm belief or conviction as to the facts sought to be established." Cross v. Ledford, 161 Ohio St. 469, 120 N.E.2d 118, 119-20 (1954) (¶ 3 of the syllabus).
Parenthetically, utilizing the preponderance of the evidence standard of proof, this Court has found that Plaintiff failed to prove that it and Rentz entered into an oral contract on June 16th. Therefore, requiring that Plaintiff comply with the more rigorous clear and convincing evidence standard of proof would not have affected this Court's factual findings, i.e., the failure to meet a lesser standard certainly establishes the failure to meet a greater such.
In its ¶ 11 of its Complaint, Plaintiff set forth the terms of the contract into which it alleged the parties had entered:
11. After a full day of negotiations, the parties agreed to settlement terms. The settlement agreement specifically provided that:
A. Rentz and [Dynasty] would settle all claims by Rentz against Dynasty for a total of $315,000 payable as follows:
i. [Dynasty] would pay Rentz the sum of $210,000 in certifiable funds within thirty (30) days or no later than July 14, 2000;
ii. . . . the remaining balance of $105,000 would be paid to Rentz pursuant to a promissory note payable by Ignacio Mendez and Armando Mendez, on or before July 1, 2001.
B. Upon receipt of such payment[,] Rentz was to file a Stipulation of Dismissal with Prejudice and deliver to [Dynasty] a complete Release and Satisfaction of Judgment, upon which the parties agreed that [Dynasty] would bear no further liability in the matter.
C. In addition, Dynasty was to use its best efforts to have Paul Warfield withdraw or dismiss his motion for sanctions against [Cornyn, Roach] and Rentz, as such motion was then pending in the Court's docket (sic).
D. Dynasty agreed to pay Rentz's federal court costs.
Doc. #1 at ¶ 11. Defendant contends that Plaintiff has failed to prove that the parties into an oral contract (i.e., the alleged settlement agreement) on June 16th, because the evidence does not support a finding that the parties entered into a contract containing the provisions alleged by Plaintiff, given that issues remained to be resolved at the conclusion of negotiations on that date. This Court agrees and, thus, has found as a matter of fact that the parties did not enter into a settlement agreement on June 16th. The evidence supports, at best, that the parties entered into an agreement to agree if certain conditions precedent were met, none of which were resolved. In particular, three issues remained to be resolved at the conclusion of the negotiation on June 16th, all of which prevent this Court from finding that the parties entered into a settlement agreement on that date.
First, as this Court has found above, the parties did not resolve the issue of court costs on June 16th. Given the disparity between Rentz's statement that costs would be in the range of $25,000 to $30,000, and Cornyn's opinion that they would be in the range of $2,000 to $3,000, Mendez was unwilling to agree to pay an open-ended amount of court costs. As a consequence, Cornyn was assigned the task of contacting the office of the Clerk of Courts for the Southern District of Ohio. Indeed, Greene confirms the Court's finding in this regard within his letter to Cornyn under date of June 20, 2000, written only four days after the parties had met in Cincinnati. Therein, Greene wrote, inter alia, that "[w]e are at this time waiting for you to provide us with federal court `costs,' if any, for [Rentz v. Dynasty Apparel Industries, Inc., Case No. 3:96cv205 (S.D. Ohio)] so that we can hopefully approve and conclude this matter." Plaintiff's Ex. 5 (emphasis added). The emphasized language demonstrates to this Court that Dynasty's counsel did not believe, four days after the parties had conducted the negotiations which Plaintiff alleges resulted in their entering into a settlement agreement, that his client had agreed to pay Rentz's court costs, regardless of the sum. Accordingly, the parties had not agreed that "Dynasty agreed to pay Rentz's federal court costs," as alleged in ¶ 11 D of Plaintiff's Complaint, and the issue of costs remained to be resolved.
Second, as the Court has found above, the parties did not resolve the issue of Warfield's sanctions motion. Although Greene and Mendez were willing to use their best efforts in an attempt to convince Warfield and McDermott to withdraw that motion, Cornyn, Rentz and Roach wanted Dynasty to agree to indemnify them for any sanctions imposed, in the event that Warfield did not agree to withdraw the sanctions motion. The parties had not been able to agree on this point; accordingly, it was agreed that Mendez and Greene would feel out Warfield and McDermott about whether they would be receptive to withdrawing the sanctions motion, as a first step toward resolving the sanctions issue with finality. Those good faith efforts, should they be proven unsuccessful, which they were, were not agreed to as being sufficient to settle the condition precedent of resolving the sanctions issue. Rentz was unwilling to settle his dispute with Dynasty, by significantly discounting the judgment he had obtained, with the open-ended request for sanctions filed by Warfield pending against him and his counsel. Therefore, this Court finds that Plaintiff failed to prove by the preponderance or greater weight of the evidence that the parties had agreed on June 16th that the condition precedent of "Dynasty [using] its best efforts to have Paul Warfield withdraw or dismiss his motion for sanctions against [Cornyn, Roach] and Rentz, [a motion which was then pending on] the Court's docket," as alleged in ¶ 11 C of Plaintiff's Complaint, was sufficient to resolve this issue.
Third, as of May 27, 1999, Rentz had an enforceable judgment entered by this Court in the sum $629,529.85, plus 1% of the revenues which Dynasty obtained thereafter as a result of its license to manufacture NFL clothing and apparel. Rentz was willing to attempt to enter into an agreement with Dynasty, whereby he would reduce the amount of the judgment entered in his favor in Rentz v. Dynasty Apparel Industries, Inc., Case No. 3:96cv205 (S.D. Ohio), so that enforcement of that judgment did not force Dynasty into bankruptcy. However, throughout the negotiations with Dynasty, Rentz insisted that he and his accountant review Dynasty's financial records in order to satisfy themselves that its bankruptcy could legitimately occur, if he were to enforce that judgment. Thus, this Court has found above that such an examination was a condition precedent to Rentz to entering into such a settlement agreement. The absence of such an examination is another reason why this Court has found that the parties did not enter into a settlement agreement on June 16th.
Finally, the Court's factual finding in that regard derives additional support from the letter Greene sent to Cornyn on June 20, 2000, just four days after the parties had entered into the alleged settlement agreement. As indicated, Plaintiff has alleged that a term of that agreement required it to pay "the sum of $210,000 in certifiable funds within thirty (30) days or no later than July 14, 2000." Plaintiff's Complaint at ¶ 11 A(i). In that letter, however, Greene explained that "Dynasty's payment to Dick Rentz will be due 30 days from when we have everything agreed upon and signed off," so that executing all the necessary documents the next day, June 21st, would mean that Dynasty's payment would be due on July 21, 2000. See Plaintiff's Ex. 5. Quite simply, Greene's statements in that regard, statements by Plaintiff's own counsel, are completely in contradiction to the position that the parties had entered into the settlement agreement alleged by Plaintiff in its Complaint on June 16th.
Accordingly, the Court has found that the parties did not enter into a contract or settlement agreement on June 16th. Therefore, there is no contract, the specific performance of which this Court can order.
III. Conclusions of Law
1. This Court exercises subject matter jurisdiction over this matter in accordance with 28 U.S.C. § 1332.
2. The parties, as a matter of law, did not enter into a binding contract or settlement agreement, given that the Court has found, as a matter of fact, that they did not agree to all the essential terms of such an agreement.
3. Since the Court has found that the parties did not enter into a settlement agreement, there is no basis for ordering specific performance of such an agreement.
Based upon the foregoing, the Court directs that judgment be entered in favor of Defendant and against Plaintiff.
The captioned cause is hereby ordered terminated upon the docket records of the United States District Court for the Southern District of Ohio, Western Division, at Dayton.