Court of Appeals of Ohio, First District, Hamilton
FREDERIC C. WECKEL, Plaintiff-Appellant,
COLE RUSSELL ARCHITECTS, Defendant-Appellee.
Appeal From: Hamilton County Court of Common Pleas Trial No.
Tobias, Torchia & Simon and David Torchia, for
Keating Muething & Klekamp PLL and Kasey L. Bond, for
Plaintiff-appellant Frederic C. Weckel appeals the decision
of the Hamilton County Court of Common Pleas denying his
motion to enforce a settlement agreement between him and
defendant-appellee Cole Russell Architects ("Cole
Russell"). We find no merit in Weckel's sole
assignment of error, and we affirm the trial court's
Facts and Procedure
A Settlement Agreement
The record shows that Weckel had been a managing principal of
Cole Russell, a national architectural practice located in
Cincinnati. In March 2004, Cole Russell terminated
Weckel's employment. Weckel brought suit against his
former employer for breach of fiduciary duty and wrongful
termination. In January 2008, the parties entered into a
Under the terms of that agreement, Weckel was to sell his
shares of Cole Russell stock to the firm's employee
stock ownership plan ("ESOP"), rather than
redeeming them as provided for in the shareholder agreement.
In exchange, Weckel agreed to end his lawsuit against Cole
The agreement further provided: "The ESOP purchase of
Weckel's stock is contingent on the professional opinion
of an independent adviser who must approve the ESOP's
purchase of Weckel's shares." The purpose of this
provision was to protect the ESOP trustee. The trustee was
David Arends, who was also the president and chief executive
officer of Cole Russell. An independent adviser was
necessary because of the potential of a conflict of interest,
although the parties did not anticipate any problems
Potts Appointed Independent Advisor
Cole Russell hired Thomas Potts to serve as the independent
advisor. Potts then retained attorney Ben Wells to advise him
in his role as independent fiduciary. Arends had previously
hired Wells to represent him in his capacity as the ESOP
trustee. Potts also hired ComStock Valuation Advisers
("ComStock") to review the sale of Weckel's
stock to the ESOP and to determine the value of that stock.
Cole Russell cooperated with Potts and ComStock and
provided requested documents and information.
ComStock sent Potts a "draft fairness opinion" in
which it determined that the "consideration to be paid
by the ESOP" for Weckel's shares of stock was
appropriate and that the transaction was "fair and
reasonable to the ESOP from a financial point of view."
The transaction appeared to be moving forward and the parties
exchanged various drafts and revisions of the settlement
agreement. Potts stated that most of his work was completed
as of late April 2008.
Cole Russell Learns About Licensing Issues Related to the
On April 17, 2008, Arends and Joe Stephens, Cole
Russell's chief financial officer, attended a conference
about ESOPs. They were surprised to learn that having an ESOP
violated the licensing requirements for architects in some
states. Neither of them had been on the board of directors at
the time the ESOP was implemented. At that time, the board
had only determined that the ESOP would not violate Ohio law.
Wells, who was the attorney for Cole Russell's ESOP,
researched the licensing issue. His research confirmed that
the ESOP presented licensing issues in some states for two
reasons. First, several states did not permit an
architectural firm to be a general business corporation (as
opposed to a professional corporation), and Cole Russell
needed to be a general corporation to have an ESOP. Second,
several states required that a certain percentage of the
shares of an architectural firm must have been held by a
licensed architect, and Cole Russell's ESOP held ...