Cohara v. Consolidated Rail Corporation

Terrence O’Donnell, Judge. ¶ 1 Joseph Cohara appeals from a judgment of the common pleas court which awarded him prejudgment interest from August 25, 1999 to May 26, 2000 in connection with his breach-of-settlement claim against Consolidated Rail Corporation. On appeal, Cohara claims that the court should have calculated interest from August 25, 1999 to March 8, 2001, because, he asserts, Consolidated failed to provide him with an appropriate release or a settlement check until the latter date. In a second appeal, which we consolidated for purposes of review, Cohara separately asserts that the trial court erred in denying his motion for relief from that judgment. ¶ 2 Consolidated cross-appeals from the court’s award of interest, arguing that Cohara breached the settlement agreement by failing to sign a release; it therefore maintains that Cohara is not entitled to interest on the settlement. ¶ 3 After reviewing these arguments, we have concluded that the court erred in denying Consolidated’s motion for summary judgment and in awarding interest to Cohara. Accordingly, we reverse the judgment of the trial court and remand the case for further proceedings consistent with this opinion. ¶ 4 In this case, counsel stipulated to the pertinent facts, which are that on August 29, 1997, Cohara filed a complaint (case No. 339635) against Consolidated Rail Corporation, his employer, alleging violations of the Federal Employers’ Liability Act and the Federal Safety Appliance Act. ¶ 5 Conrail, Inc. is the sole owner of Consolidated Rail Corporation. In 1998, Norfolk Southern Railway Company and CSX Transportation, Inc. purchased Conrail. In the stipulations, the parties describe the relationship of these entities as follows: ¶ 6 “Since June 1, 1999, portions of Conrail’s assets have been separately operated by subsidiaries of Norfolk Southern Corporation and CSX Corporation. *155 That portion of Conrail assets not separately operated by Norfolk Southern Railway Company and CSX Transportation, Inc. is operated by Conrail on behalf of its owners, Norfolk Southern Corporation and CSX Corporation. On or about March 1, 1999, Norfolk Southern Corporation and CSX Transportation, Inc. assumed administrative responsibility for Conrail FELA claims and lawsuits.” ¶ 7 On May 9, 1999, the parties settled case No. 339635 for $150,000, and Consolidated prepared a release and submitted it to Cohara on May 13, 1999, in furtherance of the settlement. This release stated in relevant part that Cohara would “* * * release and forever discharge the said CONSOLIDATED RAIL CORPORATION, its predecessor, parent, affiliated and subsidiary companies or corporations and any and all other parties, associations and corporations jointly or severally liable * * (Emphasis added.) ¶ 8 Cohara, however, expressed “misgivings about the settlement” and subsequently decided to reject it. Accordingly, on May 20, 1999, he filed a motion to reinstate case No. 339635. Consolidated opposed his motion and, in addition, filed a motion to enforce the settlement agreement. On June 10, 1999, the court denied Cohara’s motion to reinstate and, after conducting a hearing, granted Consolidated’s motion to enforce the settlement. ¶ 9 Thereafter, on August 25,1999, Consolidated prepared a second release, which stated in part that Cohara would “* * * release and forever discharge Norfolk Southern Railway Company, CSX Transportation, Inc. and Consolidated Rail Corporation, and * * * to the same extent as if expressly named, their respective parents, subsidiaries and affiliated companies, their leased and operated lines, and all other persons, firms and corporations, all of the respective predecessors, successors, assignees, lessors, officers, directors, agents and employees of the aforesaid released parties, past and present, as well as their heirs and legal representatives * * ¶ 10 Cohara refused to sign this release on the basis that Norfolk Southern Railway Company and CSX Transportation, Inc. were not parties to his settlement agreement with Consolidated Rail Corporation and that he did not want to sign a release naming his current employer, CSX Transportation, Inc. Consolidated, in turn, refused to deliver the settlement check without a signed release. ¶ 11 Subsequently, on May 26, 2000, Consolidated agreed to remove Norfolk Southern Railway Company and CSX Transportation, Inc. from the release. At that point, Cohara demanded interest on the settlement and, on July 21, 2000, filed a second lawsuit (case No. 413549) against Consolidated Rail Corporation, claiming that Consolidated breached the original settlement agreement and praying for $150,000 plus prejudgment interest at 10 percent per annum. *156 {¶ 12} The parties filed cross-motions for summary judgment on Cohara’s prejudgment interest claim. ¶ 13 On March 8, 2001, after briefing the issues, Consolidated issued another release, which discharged “CONSOLIDATED RAIL CORPORATION, its predecessors, parent, affiliated and subsidiary companies or corporations and any and all other parties, associations and corporations jointly or severally liable * * (Emphasis added.) Cohara signed this release, which expressly left pending his claim for interest; with that understanding, Consolidated tendered the settlement check to him. ¶ 14 On March 14, 2001, the court denied Consolidated’s motion for summary judgment and awarded Cohara interest from August 25, 1999, the date of the second release, until May 26, 2000, the date Consolidated agreed to remove the names of its parent companies from the release. ¶ 15 On March 22, 2001, Cohara filed a motion for relief from judgment, urging that interest should have been calculated through March 8, 2001, when Consolidated sent the final release. On April 6, 2001, with his Civ.R. 60(B) motion still pending, Cohara filed a notice of appeal. Consolidated filed a cross-appeal on April 12, 2001. Our court remanded this case to the trial court for its ruling on Cohara’s motion for relief from judgment, which the court denied on June 14, 2001, returning Cohara’s first appeal and Consolidated’s cross-appeal to our court. Subsequently, Cohara filed a second appeal from the denial of his motion for relief from judgment, and we consolidated these appeals for purposes of review. ¶ 16 On appeal, Cohara raises two assignments of error for review. They state: ¶ 17 “I. The trial court committed reversible error when it failed to award plaintiff interest on the settlement between the parties through March 8, 2001. ¶ 18 “II. The trial court committed reversible error when it failed to rule on plaintiffs motion for relief from judgment.” ¶ 19 In its cross-appeal, Consolidated Rail Corporation raises one assignment of error for review. It states: ¶ 20 “The trial court committed reversible error when it denied Conrail’s motion for summary judgment and ruled that plaintiff was entitled to interest on the $150,000 settlement amount from August 25, 1999 until May 26, 2000.” ¶ 21 We shall consider Consolidated’s cross-appeal first because it is determinative of this case. On appeal, Consolidated argues that Cohara breached the settlement agreement by refusing to sign the original releases, that a court then had to order him to honor the agreement, that the releases it prepared subse *157 quent to the order to enforce the agreement were appropriate, and that it is therefore entitled to summary judgment on Cohara’s claim for interest. Cohara does not explain his refusal to sign the first release but rejected the second one because it included two “non-parties” to the settlement agreement and urges that he did not receive an appropriate release from Consolidated Rail until March 8, 2001. ¶ 22 In Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327, 4 O.O.3d 466, 364 N.E.2d 267, the court set forth the following standard for summary judgment under Civ.R. 56(C): ¶ 23 “Civ.R. 56(C) specifically provides that before summary judgment may be granted, it must be determined that: (1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party.” ¶ 24 Here, we are called upon to consider whether the trial court properly granted summary judgment to Cohara, whether it properly calculated interest, and whether it properly denied Consolidated’s motion for summary judgment. Based on stipulation, no genuine issues of material fact exist; therefore, the only question before us is whether either party is entitled to judgment as a matter of law. ¶ 25 R.C. 1343.03(A) 1 governs prejudgment interest for breach of contract claims and states: ¶ 26 “In cases other than those provided for in sections 1343.01 and 1343.02 of the Revised Code, when money becomes due and payable upon any bond, bill, note, or other instrument of writing, upon any book account, upon any settlement between parties, upon all verbal contracts entered into, and upon all judgments, decrees, and orders of any judicial tribunal for the payment of money arising out of tortious conduct or a contract or other transaction, the creditor is entitled to interest at the rate of ten per cent per annum, and no more, unless a written contract provides a different rate of interest in relation to the money that becomes due and payable, in which ease the creditor is entitled to interest at the rate provided in that contract.” *158 {¶ 27} The purpose of prejudgment interest under this statute is to make the nonbreaching party whole by compensating him for the period of time between the breach and judgment. See Royal Elec. Constr. Corp. v. Ohio State Univ. (1995), 73 Ohio St.3d 110, 117, 652 N.E.2d 687. It follows that a breaching party is not entitled to prejudgment interest; nor is a nonbreaching party liable for it. ¶ 28 In this case, Cohara breached the settlement agreement when he refused to sign the May 13, 1999 release of Consolidated Rail and instead expressed “misgivings” about the settlement and sought to have the court reinstate his FELA complaint. ¶ 29 After the court ordered Cohara to honor the settlement agreement on August 3, 1999, Consolidated sent him a second release, which he again refused to sign, purportedly because it named Norfolk Southern Railway Company and CSX Transportation, Inc. In particular, Cohara complained that this release would have discharged his then-current employer, CSX, “from any and all known or unknown claims which had accrued since the day Appellant became an employee of CSX.” However, Consolidated expressly limited this release to injuries arising from accidents which occurred “at or near Erie, Pennsylvania on or about September 4, 1994,” “at or near Brookpark, Ohio on or about November 8, 1994,” and “all other accidents to date.” (Emphasis added.) There is no evidence in the record that Cohara suffered any other injuries prior to August 25, 1999. ¶ 30 Subsequently, according to the stipulations, Consolidated offered to remove CSX from the release, but Cohara refused to proceed with settlement. On May 26, 2000, Consolidated proposed that Cohara “line out” the names Norfolk and CSX from the release, but Cohara still refused to sign or settle the matter. Then Consolidated offered to provide a new release, listing only Consolidated as the releasee, but Cohara again refused to execute such a release or to accept payment without Consolidated’s agreement to pay interest on the settlement. ¶ 31 Consolidated contends that Cohara unreasonably rejected the second release naming Norfolk and CSX because these entities are its parent companies, having assumed administrative responsibility for Consolidated’s FELA claims on March 1, 1999, and because they were ultimately discharged by the inclusion of the language “parent * * * companies or corporations” in the release that Cohara eventually signed on March 8, 2001. Consolidated maintains that it did not breach the settlement agreement and that it would have delivered the settlement check if Cohara had signed a release. Consolidated contends that Cohara breached the agreement, stalled payment, and should not profit from the delay he induced; therefore, Consolidated urges that he is not entitled to any *159 prejudgment interest, and it argues that the court erred in denying its motion for summary judgment. ¶ 32 We agree with Consolidated’s position. Cohara caused the delay in receiving his settlement check by attempting to have the agreement vacated, by objecting to naming Consolidated’s parent companies in the release, and by unreasonably refusing to resolve the case. Because Norfolk and CSX assumed responsibility for FELA claims against Consolidated on March 1, 1999, and because Consolidated limited the release to accidents occurring prior to that date, Cohara has not satisfactorily explained his objection to including these entities in the release. Significantly, the release document that Cohara eventually signed released “CONSOLIDATED RAIL CORPORATION, its predecessors, parent, affiliated and subsidiary companies or corporations” and therefore effectively released Consolidated’s parent companies, Norfolk Southern Railway Company and CSX Transportation, Inc., even though not expressly named. ¶ 33 According to the stipulations filed in this case, the only issue regarding Cohara’s failure to sign a release concerned the inclusion of Norfolk and CSX. This delayed settlement, but because Cohara eventually signed a release of Consolidated and parent entities, no material difference existed between the release as originally submitted and the one he ultimately signed. Contrary to the dissenting view, no dispute ever existed regarding the term “accident,” and Cohara did not raise concerns about the possible release of an “occupational disease” as his basis for forestalling settlement and signing a release. This court is limited to the record on appeal and should not create issues not raised by the parties below. ¶ 34 Based on the foregoing, Consolidated did not breach the settlement agreement; rather, Cohara induced the delay and is not therefore entitled to prejudgment interest during this period. Accordingly, the trial court erred when it denied Consolidated’s motion for summary judgment on Cohara’s claim for interest, and we reverse that judgment. ¶ 35 Our disposition of Consolidated’s cross-appeal renders Cohara’s assignments of error moot, and pursuant to App.R. 12(A)(1)(c), we decline to address them. Judgment reversed and case remanded. Patricia A. Blackmon, P.J., concurs. Anne L. Kilbane, J., dissents. Footnotes [1] Cohara quotes the post-H.B. 350 version of this statute. However, the Supreme Court found that version to be unconstitutional in State ex rel. Ohio Academy of Trial Lawyers v. Sheward (1999), 86 Ohio St.3d 451, 715 N.E.2d 1062. Therefore, the pre-H.B. 350 version of R.C. 1343.03(A) applies to this case.