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Pollock v. Trustar Funding, L.L.C.

Court of Appeals of Ohio, Eighth District, Cuyahoga

August 15, 2019

SUSAN POLLOCK, ET AL., Plaintiffs-Appellants,
TRUSTAR FUNDING, L.L.C., ET AL., Defendants-Appellees.

          Civil Appeal from the Cuyahoga County Court of Common Pleas Case Nos. CV-13-819529, CV-17-884945, and CV-18-894019

          Zukerman, Daiker & Lear Co., L.P A., Larry W. Zukerman, and S. Michael Lear, for appellants.



         {¶ 1} Plaintiff-appellant Susan Pollock filed a lawsuit against Trustar Funding, L.L.C. ("Trustar" hereafter) and several individuals related to the company. The parties settled the lawsuit after reaching a settlement agreement, which set forth a five-year payment schedule, and the terms of the agreement were incorporated into a consent judgment journalized by the court. The defendants subsequently failed to make the required payments and defaulted. The defendants then proffered a new settlement agreement. The dispute in this case was whether the trial court should enforce the original settlement agreement as incorporated in the consent judgment or the new proffered settlement agreement. After a review of the record and applicable law, we affirm the trial court's judgments enforcing the terms of the original settlement agreement.


         {¶ 2} This case has a convoluted and confusing procedural history due in part to the zealous advocacy by plaintiffs attorney, Harold Pollock, who is also a party in the underlying action. In the following, we summarize, to the best of our ability, the procedural history relevant to this appeal based upon the record.

         {¶ 3} In 2010, Harold Pollock, Esq., and his wife Susan Pollock obtained a short-term loan of $170, 000 from Brookview Financial, Inc. to finance the purchase of a property. Trustar was the servicer for the loan. Trustar was a family business: Brian Stark was the president of the company, and his now ex-wife Sharon Stark and his brother Paul Stark were employees of the company. In September 2011, the Pollocks made a $75, 000 payment to Trustar as a partial payment for the loan. An employee of Trustar, allegedly Sharon Stark, misappropriated the funds and never forwarded the payment to Brookview Financial, Inc.

         The Settlement Agreement and the Subsequent Default

         {¶ 4} To recover the misappropriated funds, the Pollocks filed a complaint in 2013 (Cuyahoga C.P. No. CV-13-819529, "Pollock 1" hereafter) against Trustar, Brian Stark, Sharon Stark, Paul Stark, and other related entities. As subsequently amended, the Pollocks' complaint alleged 16 counts, including a violation of the Ohio Predatory Lending Act, breach of contract, breach of duty of good faith, request for declaratory relief, respondeat superior, conversion, promissory estoppel, fraud and misrepresentation, piercing the corporate veils, fraudulent conveyances, breach of fiduciary duty, request for specific performance, request for preliminary and permanent injunction, and violations of the Ohio Consumer Sales Practices Act.

         {¶ 5} Contentious litigation ensued soon after the Pollocks filed the amended complaint. Within weeks, the docket recorded almost 20 filings from attorney Harold Pollock, who represented himself and his wife at trial, and almost ten filings from attorney J. Norman Stark, [1] Brian and Paul's father, who acted as their counsel in this case.

         {¶ 6} The parties then reached a global settlement agreement in late April 2014. Under the agreement, the Stark defendants were to pay Susan Pollock $100, 000, with the payment amortized over five years (around $1, 854 per month) beginning with June 2014. A promissory note of $100, 000 was to be executed in her favor and secured by eight properties owned by various Stark defendants, and certain late payment interest and penalties were to be paid in the event of late payments under the note.

         {¶ 7} A consent judgment entry was journalized in May 2014 by the trial court.[2] The consent judgment stated a judgment of $100, 000 (amortized over five years) was entered in favor of Susan Pollock. It also referenced the purported note, but the note was not attached to the judgment and it is unclear whether such a note was ever executed by the defendants.[3]

         {¶ 8} Following the settlement and the consent judgment, the Stark defendants began in July 2014 to pay Susan Pollock a monthly payment of $1, 854.71, under the amortization rate provided in the settlement agreement. Three years later, after paying a total of $50, 000, the Stark defendants defaulted in March 2017.[4]

         Post-Default Litigation

         {¶ 9} After the defendants defaulted in payment, the litigation in this matter resumed in earnest. Beginning in August 2017, attorney Pollock filed a flurry of motions in this case. He also filed two foreclosure actions, Cuyahoga C.P. Nos. CV117-883959 ("Pollock 2") and CV-17-883964 ("Pollock 3") (against Sharon Stark and Paul Stark's personal residences, respectively, that were granted as security for the $100, 000 judgment as a part of the parties' settlement agreement). In addition, he filed a creditor's bill action against Paul Stark, Cuyahoga C.P. No. CV-17-884762 ("Pollock 4") and two cases claiming fraudulent conveyance (Cuyahoga C.P. Nos. CV-17-884945/"Pollock 5" and CV-18-894019/"Pollock 6") in August 2017 and March 2018, respectively, the latter against attorney Stark and his wife.

         {¶ 10} The court held a hearing in October 2017, one of the six hearings the court held in this post-judgment matter. The court and the parties discussed the possibility of consolidating the August 2017 fraudulent conveyance case with the instant case. After hearing, the court issued an entry stating, "[f]or purposes of consolidation, this case is hereby reinstated." Subsequently, both fraudulent conveyance cases were transferred to the trial court's docket for consolidation with the instant case (Pollock 1).

         Attempt for a New Settlement

         {¶ 11} On April 20, 2018, by way of email communication, attorney Stark proposed a new payment schedule to cure the defendants' default. The proffered settlement called for a payment of $62, 000, to be paid by an initial lump sum payment of $11, 000, followed by an accelerated payment schedule consisting of alternating monthly payments of $5, 000 and $1, 000, which would conclude in August 2019. As reflected by the response time on attorney Pollock's email reply to attorney Stark, the proffer was immediately rejected.

         {¶ 12} Three days later, on April 23, 2018, attorney Pollock sent an email to the staff attorney for the trial court. In the email, he claimed that Stark defendants should be precluded from seeking to enforce the original settlement agreement because they were in default. He maintained that in order to allow the Stark defendants to resume payments under the 2014 settlement agreement, they would have to pay the "$27, 000 amount in which they are in arrears." He also informed the court that attorney Stark had proffered a new settlement but he and his wife "do not believe the Stark Defendants would or could make these payments."[5]

         Dueling Motions to Enforce the Settlement Agreement, the Hearings, and Subsequent Judgment Entries

         {¶ 13} On April 27, 2018, attorney Pollock filed a motion to enforce the 2014 settlement agreement. In conjunction, he filed a motion to show cause, asking the defendants to be held in contempt for violating the settlement agreement. Three days later, attorney Norman Stark filed the defendants' own motion to enforce the 2014 settlement agreement. The defendants acknowledged their default but asked the court to permit them to resume payments under the 2014 settlement agreement.

         {¶ 14} On May 21, 2018, the trial court held a hearing on the dueling motions to enforce the settlement agreement. Brian Stark testified that his ex-wife Sharon and his brother Paul had left the company and he alone carried the burden of paying for the amount owed under the 2014 settlement agreement. Attorney Pollock asked that the defendants be required to make up for the missed payments now for the 14 months between the default in March 2017 and the present time, plus penalties for the late payments.

         {¶ 15} The trial court inquired as to the circumstances surrounding the 2014 settlement and the new settlement proffered by attorney Stark in April 2017. At one point, the court stated "I'm going to enforce the settlement that they have offered," referring to the proffered settlement, to which attorney Pollock responded "okay." It is unclear what "okay" means in the context of the exchange.

         {¶ 16} While the trial court appeared to show an intention to enforce the proffered settlement, which attorney Pollock had previously rejected, the court issued a judgment entry the next day, enforcing the 2014 settlement agreement instead. The May 22, 2018 entry stated:

Defendants' motion to enforce settlement agreement is granted. All remaining claims are hereby dismissed as moot. Related foreclosure actions shall be held in abeyance until plaintiff is made whole. Plaintiff shall not engage in any further unnecessary litigation on this matter.

         {¶ 17} A few weeks later, on June 12, 2018, the trial court journalized an "Order Enforcing Original Global Settlement Agreement." It clarified the previous order, adding that the 2014 settlement agreement was to be resumed as if the default had not occurred. The order stated:

The Defendant[s] having moved to enforce the Global Settlement Agreement entered into between Trustar and Plaintiff on June 13, 2014, and the motion having come to be heard and granted May 21, 2018;
Now, on considering the Motion to Enforce Settlement, and on the testimony and evidence introduced at the hearing had on May 21, 2018, it is hereby Ordered that the Global Settlement Agreement be resumed ...

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