Trial court must reserve jurisdiction to enforce settlements, Ohio Supreme Court rules

The Ohio Supreme Court ruled last week that in order for a court to retain jurisdiction to enforce a settlement agreement in a civil case, the court must include language to this effect or provide the terms of the settlement agreement in a dismissal entry. The decision arose from a case out of the 6th District Court of Appeals and resolves a split among districts regarding this issue.

The 6th District case involved claims by Travelers insurance and a property management group that Infinite Security Solutions was negligent in providing security services for an apartment complex, resulting in a fire. Infinite paid a sum of money to the parties to settle the case, but there was no agreement about how the money would be divided. The trial court dismissed the case with prejudice in 2011, but then issued an order about how the settlement should be divided between the parties in October 2012, after finding that the original dismissal had been a conditional placeholder entry. The property management company appealed, and the 6th District found that because the trial court had not reserved jurisdiction to enforcement the settlement in its dismissal entry, the 2012 orders were not valid.

The 6th District found that the dismissal was "unconditional" for these reasons, but the Ohio Supreme Court clarified that there are no conditional dismissals in civil cases. The Court looked toward local rule practices that are in place in many jurisdictions, which often provide that a procedure for keeping a case open until the settlement is resolved and a dismissal can be entered, and found these practices were a good model for courts.

The Court held that in order to retain jurisdiction after a dismissal is actually entered, language specifically allowing this must be incorporated into the entry itself, or the entry must include the terms of the settlement agreement. The Court acknowledged that many parties may not want the terms of the settlement to be a part of the official court record, and so held that simple language such as, “the court hereby retains jurisdiction to enforce the settlement agreement reached between the parties,” would be adequate. The Court remanded the case to the trial court to consider Travelers' other claim that the court's dismissal of the case was not appropriate and that they were entitled to relief under Ohio Civil Rule 60(B).

Justice French wrote the opinion for the Court, joined by Justices O’Connor, Pfeifer, O’Donnell, Lanzinger, and O’Neill. Justice Kennedy dissented. For more information about this case, see this article from Court News Ohio and the online dockets, available here and here.