from Putnam County Common Pleas Court Trial Court No. 17 CV
Richard M. Kerger and Kimberly A. Conklin for Appellant
Comly French for Appellees
Defendant-appellant, David Fanning ("Fanning"),
appeals the October 24, 2018 judgment of the Putnam County
Court of Common Pleas. For the reasons that follow, we
This case stems from a business dispute between
plaintiffs-appellees, Ted and Rick Horstman ("Ted"
and "Rick") (collectively the
"Horstmans"), Fanning, and a fourth individual,
Vincent Snell ("Snell"). Ted, Rick, Fanning, and
Snell were members of Ultimate Systems, Ltd. ("Ultimate
Systems"), an Ohio limited liability company that
produced colorized rubber materials and end-user products
such as rubber flooring. (See Doc. No. 48,
Snell's Sept. 13, 2018 Depo., Ex. B). Each held a 25
percent member interest in Ultimate Systems. (Id.).
In 2013, a plan was devised to "freeze" Snell out
of Ultimate Systems. (See Oct. 19, 2018 Tr. at 8).
Robert Honigford ("Honigford"), Ultimate
Systems's chief financial officer and corporate attorney,
was the "mouthpiece" of the scheme to acquire
Snell's interest in Ultimate Systems. (Id. at
8-9). In late 2013, Snell's 25 percent interest in
Ultimate Systems was "eliminated in exchange for a
payment of $525, 000" based upon a valuation provided by
an accounting firm hired by Honigford. (Doc. No. 48,
Snell's Sept. 13, 2018 Depo., Ex. B). The acquisition of
Snell's interest in Ultimate Systems was accomplished in
conjunction with a merger between Ultimate Systems and RDT
Manufacturing, LLC ("RDT"), an entity owned equally
by Ted, Rick, and Fanning, with RDT as the surviving entity.
(Id.). In 2014, the assets of RDT, along with the
assets of other entities owned by the Horstmans and Fanning,
were sold to a subsidiary of Accella Performance Materials,
Inc. ("Accella") for $40 million. (Id.);
(Doc. No. 19, Ted's Jan. 25, 2018 Depo. at 8-9).
Soon after the Accella transaction was consummated, Snell,
through Lynx Services, Ltd. ("Lynx"), a company he
had previously formed to hold his interest in Ultimate
Systems, filed a complaint against the Horstmans and Fanning
in the United States District Court for the Northern District
of Ohio alleging that the plan to freeze him out of Ultimate
Systems violated Ohio law. (See Oct. 19, 2018 Tr. at
8-9); (See Doc. No. 28, Ex. A). Honigford was later
added as a defendant to the federal lawsuit. (See
Doc. No. 28, Ex. A).
In late September 2016, Snell was subjected to deposition in
Columbus, Ohio. The Horstmans and Fanning were present at
Snell's deposition; Honigford was not. (See Oct.
19, 2018 Tr. at 11, 37). On September 30, 2016, the second
day of Snell's deposition, Snell, Fanning, and the
Horstmans met privately to discuss the possibility of
settling the federal lawsuit. (Id. at 11).
(See Sept. 30, 2016 Tr. at 3). Eventually, Snell,
Fanning, and the Horstmans agreed that Lynx would dismiss the
federal lawsuit in exchange for $4.5 million. (Oct. 19, 2018
Tr. at 11, 37). That day, the parties recited the general
terms of their settlement agreement into the record. (Sept.
30, 2016 Tr. at 3-5). Later, the parties executed a
"Global Settlement Agreement and General Release"
providing that Lynx would dismiss the federal lawsuit with
prejudice in exchange for $4.5 million, $3 million of which
was due on or before November 15, 2016 and $1.5 million of
which was due on or before April 30, 2017. (Doc. No. 21, Ex.
G). Neither the settlement agreement as recited into the
record nor the written settlement agreement specify who was
responsible for paying what percentage of the $4.5 million.
According to the Horstmans and Snell, the Horstmans were to
be responsible for paying $1.5 million each, Fanning was to
pay $1.5 million, and Honigford was not to pay any part of
the $4.5 million. (See Doc. No. 21, Ex. E);
(See Oct. 19, 2018 Tr. at 13-14, 21-23). According
to Fanning, however, he never agreed to contribute a specific
sum toward the $4.5 million settlement, and he did not agree
that Honigford should not have to pay at all. (See
Fanning Affidavit at 4).
After the parties adopted the written settlement agreement,
the Horstmans each paid $1.5 million to Lynx. Subsequently, on
or about April 22, 2017, Fanning advised the Horstmans that
he did not intend to pay Lynx the remaining $1.5 million.
(Doc. Nos. 1, 7). As a result, the Horstmans decided to split
the remaining $1.5 million payment evenly, with Ted and Rick
each paying Lynx an additional $750, 000. (Oct. 19, 2018 Tr.
On June 22, 2017, the Horstmans filed a complaint in the
trial court against Fanning requesting a judgment for $1,
501, 748.73 plus interest. (Doc. No. 1). On August 4, 2017,
Fanning filed his answer to the Horstmans' complaint.
(Doc. No. 7).
On March 26, 2018, the Horstmans filed a motion for summary
judgment. (Doc. No. 21). On April 24, 2018, Fanning filed a
memorandum in opposition to the Horstmans' motion for
summary judgment as well as a cross-motion for summary
judgment. (Doc. No. 28). On May 7, 2018, the Horstmans filed
a memorandum in opposition to Fanning's cross-motion for
summary judgment. (Doc. No. 29). On May 9, 2018, Fanning
filed a brief in reply to the Horstmans' memorandum in
opposition to his cross-motion for summary judgment. (Doc.
Following a May 10, 2018 hearing on the motions for summary
judgment, the trial court partially granted the
Horstmans' motion for summary judgment. (Doc. No. 33).
First, the trial court found that the Horstmans and Fanning
"agreed to the settlement amount and incorporated that
agreement on the record and as a future written settlement
agreement" but that "[t]he settlement agreement was
silent as to the contribution amounts as it would pertain to
any of the parties." (Id.). The trial court
concluded that the Horstmans had established that "an
agreement to pay a settlement in the Federal case does
exist." (Id.). In essence, the trial court
concluded that the only issue in dispute was the precise
amount of money Fanning would be required to pay toward the
$4.5 million settlement. (See id.). Consequently,
the trial court denied the Horstmans' motion for summary
judgment in part so that the parties could "be heard on
the matter as to contribution." (Id.). Finally,
the trial court denied Fanning's cross-motion for summary
judgment in its entirety. (Id.).
On October 19, 2018, a bench trial was held to determine the
sole "remaining issue before the Court" which was
"the allocation of contribution on [the Horstmans']
Complaint for Money Damages." (Doc. No. 56). On October
24, 2018, the trial court entered judgment for the Horstmans
in the amount of $1.5 million. (Id.).
Fanning filed a notice of appeal on November 21, 2018. (Doc.
No. 64). He raises one assignment of error for our review.
trial court's judgment is against the manifest weight of