Court of Appeals of Ohio, First District, Hamilton
FREDERIC C. WECKEL, Plaintiff-Appellee,
COLE RUSSELL ARCHITECTS, Defendant-Appellant.
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
Litigation often stirs emotions, hardens principles, and
drains the rationality from perfectly rational people.
Cost-benefit analyses can be tossed out the window, and
positions might be pursued regardless of the odds. At the end
of the day, after the court or jury declares a winner and a
loser, however, for many the bitterest pill of all to swallow
is their lawyer's bill. But absent certain recognized
exceptions, the "American rule" dictates that
parties must pay their own way in litigation. Seeing no
reason to depart from that principle in this case, we affirm
the judgment below denying an award of attorney's fees.
The underlying lawsuit here stretches back more than a
decade, concerning plaintiff-appellee Frederic C.
Weckel's termination from defendant-appellant Cole
Russell Architects ("C") in 2004. Mr. Weckel
helped C grow and expand, and he wore multiple hats at the
firm-serving as a managing principal in the firm, a member of
the board of directors, and a shareholder. The parties tried
to negotiate a severance package, but those efforts fell
through, and the matter ultimately proceeded to litigation
for wrongful discharge and breach of fiduciary duty.
After more than three years of litigation, the parties
reached a settlement agreement, set forth in a 2008
"Letter Agreement," which contemplated Mr. Weckel
selling his firm stock to the firm's employee stock
ownership plan. But the Letter Agreement was, as the title
suggests, a letter that sketched out key principles of the
deal, and that anticipated a formal "Settlement
Agreement." The entire deal was also contingent because
C needed an independent advisor to provide a professional
opinion blessing the sale of the stock. Unfortunately for
everyone involved, that contingency did not come to pass, as
the independent advisor concluded that the sale could not
proceed as formulated (for various reasons not germane to
this appeal). In the wake of that determination, C
proclaimed the Letter Agreement "null and void,"
and the litigation that the parties hoped to put to bed by
the settlement roared back to life. Mr. Weckel responded to
this volley by seeking to enforce the Letter Agreement, but
the trial court declined, pointing to the failure of the
condition precedent. In the midst of all of this, perhaps
needless to say, the parties never executed the Settlement
Agreement contemplated by the Letter Agreement.
On appeal from the trial court's denial of the motion to
enforce, we held that the trial court abused its discretion
in extinguishing discovery (thereby cutting off Mr.
Weckel's efforts to undermine the independence of the
independent advisor's conclusions), and that as a result,
it had prematurely denied the motion to enforce. Weckel
v. Cole Russell Architects, 2013-Ohio-2718, 994 N.E.2d
885 (1st Dist.) ("Weckel I "). We reversed
the trial court's denial of the motion to reopen
discovery, vacated the portion of the trial court's order
denying the motion to enforce, and remanded for discovery.
The matter then proceeded below with discovery and an
evidentiary hearing, but ultimately arrived at the same
destination, as the trial court again overruled the motion to
enforce the settlement. On an encore appeal here, we affirmed
the trial court's judgment, and the Ohio Supreme Court
declined review. Weckel v. Cole Russell
Architects, 1st Dist. Hamilton No. C-160591,
2017-Ohio-7491, appeal not allowed, 152 Ohio St.3d
1422, 2018-Ohio-923, 93 N.E.3d 1003 ("Weckel II
During the course of that convoluted procedural history, C
racked up over $400, 000 in attorney fees and expert witness
fees. Evidently frustrated with those costs for litigation
that it had prevailed upon, it moved the trial court to have
Mr. Weckel foot the bill, clinging to a provision in the
Letter Agreement that referenced a to-be-included
fee-shifting provision in the (never executed) Settlement
Agreement. The trial court denied the motion. C now appeals
the trial court's decision with a single assignment of
error contesting that determination. We review the decision
below, a question of contract law, de novo for "whether
the trial court erred as a matter of law."
Continental W. Condominium Unit Owners Assn. v. Howard E.
Ferguson, Inc., 74 Ohio St.3d 501, 502, 660 N.E.2d 431
Ohio follows the "American rule" with regard to
attorney fees: "a prevailing party in a civil action may
not recover attorney fees as a part of the costs of
litigation." (Citations omitted.) Wilborn v. Bank
One Corp., 121 Ohio St.3d 546, 2009-Ohio-306, 906 N.E.2d
396, ¶ 7. This rule is not without exception, but such
exceptions are generally limited to the presence of a
specific provision for an award of attorney fees in a statute
or contract. Id. Otherwise, a prevailing party must
"demonstrate bad faith on the part of the unsuccessful
litigant" to circumvent the American rule. (Citation
C pursues the contract path, relying on the following
Letter Agreement provision in its effort to fit into one of
5. The Settlement Agreement and a Mutual Release will also
contain a provision stating that in any lawsuit between the
parties relating to the Settlement Agreement, the prevailing
party (1) will be entitled to an award of his/its attorneys
fees and costs in prosecuting/defending the suit, and (2) in
the event the court finds that an award of additional
damages, including punitive damages, is allowed by the law,
the court may award such additional damages to the prevailing
C's reliance on this language, however, suffers from
several flaws. First, C's success in the prior appeals
was largely predicated on its argument that the Letter
Agreement, upon the failure of the independent-advisor
condition precedent, became null and void. Indeed, that is
exactly what the trial court held, a result that we affirmed
on appeal. Weckel II, 1st Dist. Hamilton No.
C-160591, 2017-Ohio-7491, at ¶ 21. We explained that if
"a condition precedent is not fulfilled, the parties are
excused from performing under the contract[, ]" and ...