Continental West Condominium Unit Owners Ass'n v. Howard E. Ferguson, Inc.

Cook, J. This court must decide whether a party to a settlement agreement who becomes obligated thereby to perform, can insist that the obligee accept such performance despite the filing of a satisfaction of judgment. We hold that unless the language employed in the agreed judgment incorporating a settlement specifically requires the obligee to accept the obligor’s performance, the obligee need not accept the performance, but need only conclude the litigation. I 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. II 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 party. Spercel v. Sterling Industries (1972), 31 Ohio St.2d 36, 38, 60 O.O.2d 20, 21, 285 N.E.2d 324, 325; see, also, 15 Ohio Jurisprudence 3d (1979) 511, 516, Compromise, Accord, and Release, Sections 1 and 3; and Bolen v. Young (1982), 8 Ohio App.3d 36, 8 OBR 39, 455 N.E.2d 1316. Further, settlement agreements are highly favored in the law. State ex rel. Wright v. Weyandt (1977), 50 Ohio St.2d 194, 4 O.O.3d 383, 363 N.E.2d 1387; Spercel, 31 Ohio St.2d at 38, 60 O.O.2d at 21, 285 N.E.2d at 325. With these policies in mind, we look to the terms of the settlement agreement to decide whether Continental agreed, as part of the settlement, to engage Airko to replace the roof. The agreement states, in pertinent part, that “[djefendant, Airko, Inc., will for the sum of $73,000 provide a new roof for the large garage on the premises of Continental West Condominium * * This language obligated Airko to perform, but did not obligate Continental to accept such performance. Because the agreement incorporated into the judgment signed by the judge and the parties was designed to establish the terms by which the litigation would [503] conclude, Continental’s only obligation was to end the litigation under the terms of the settlement agreement. Continental fulfilled this obligation by filing the satisfaction of the judgment. The agreed judgment was not a separate contract for services between Airko and Continental, but instead was the means for Airko to remedy Continental’s complaint against it. The satisfaction of judgment relieved Airko of its duty to repair the roof. Thus, there was nothing for Airko to enforce and, accordingly, the motion to enforce the settlement agreement was correctly denied by the trial court. For the foregoing reasons, the decision of the court of appeals is reversed, and the judgment of the trial court denying the motion to enforce the agreed judgment is reinstated. Judgment reversed. Moyer, C.J., Douglas, Wright, F.E. Sweeney and Pfeifer, JJ., concur. Resnick, J., dissents.