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Smith v. Ruben8/16/2001
were not determined to be a persons "liable in tort" do not entitle appellees to a setoff.
Defendants argue that they are entitled to a setoff because plaintiff's settlement agreement with Doctors contains the following specific language indicating that any verdict obtained by plaintiff would be setoff by the $10,000 received from Doctors:
* t is understood and intended that the sum of $10,000 paid to the undersigned is accepted by the undersigned with the acknowledgement of the undersigned that any verdict obtained by the Plaintiff in a trial of the claims asserted in case number 98CVA-05-3543 shall be reduced by the amount paid in consideration of this Settlement Agreement.
Plaintiff argues that the use of the term "acknowledgement" within the foregoing paragraph renders the paragraph unenforceable because an "acknowledgement" does not constitute an agreement absent an express agreement to the contrary. Further, since an "acknowledgement" is not an agreement made for the benefit of defendants, defendants are not third-party beneficiaries to the settlement agreement and thus have no standing to enforce the "setoff" provision.
We agree with defendants' contention that the trial court erred in denying their motion for setoff. We do not accept plaintiff's contention that the use of the term "acknowledgement" in the "setoff" paragraph renders that paragraph unenforceable. The case cited by plaintiff in support of this argument, Harmon v. Philip Morris, Inc. (1997), 120 Ohio App.3d 187, is inapposite, as it is not concerned with the specific issue raised in this case. Furthermore, the term "acknowledgement" cannot be construed in isolation. It must be read within the context of the whole paragraph. Youngstown State Univ. Assoc. of Classified Employees v. Youngstown State Univ. (1994), 99 Ohio App.3d 199, 201-202. The entire paragraph expressly states that any verdict obtained by plaintiff "shall be" offset by the amount of the settlement agreement.
In addition, we do not accept plaintiff's contention that defendants are not entitled to a setoff (pursuant to the aforementioned express language of the settlement agreement) because they are not third-party beneficiaries to the contract between plaintiff and Doctors. Fidelholtz, supra, does not mention anything about third-party beneficiaries, and we decline to adopt plaintiff's suggestion that an agreement between a plaintiff and a settling defendant must appear to have been entered into directly or primarily for the non-settling defendant's benefit in order for the non-settling defendant to enforce language contained therein. Furthermore, the "setoff" paragraph may be construed to afford third-party beneficiary status to Doctors' co-defendants, as that paragraph expressly states that "any verdict obtained by the Plaintiff in the trial of the claims asserted * shall be reduced by the amount paid in consideration for the Settlement Agreement." This clause clearly provides a benefit by way of an offset for Doctors' co-defendants who are unsuccessful at trial. Accordingly, the third assignment of error is well-taken.
For the foregoing reasons, the first and second assignments of error are overruled and the third assignment of error is sustained. Accordingly, the judgment of the Franklin County Court of Common Pleas is affirmed in part, and reversed in part and this cause is remanded to that court for further proceedings in accordance with law and consistent with this opinion.
Judgment affirmed in part, reversed in part, and cause remanded.
BRYANT, P.J., and DESHLER, J., concur.
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