Marden Rehab. Servs., Inc. v. E. Liverpool Convalescent Ctr., Inc.

[Cite as Marden Rehab. Servs., Inc. v. E. Liverpool Convalescent Ctr., Inc., 2011-Ohio-6638.]

STATE OF OHIO, COLUMBIANA COUNTY

IN THE COURT OF APPEALS

SEVENTH DISTRICT

MARDEN REHABILITATION )
SERVICES, INC., ) CASE NO. 10 CO 24
)
PLAINTIFF-APPELLANT, )
)
- VS - ) OPINION
)
EAST LIVERPOOL CONVALESCENT )
CENTER, INC., dba ADKINS )
CARE CENTER, )
)
DEFENDANT-APPELLEE. )

CHARACTER OF PROCEEDINGS: Civil Appeal from Common Pleas
Court, Case No. 09 CV 130.

JUDGMENT: Affirmed.

APPEARANCES:
For Plaintiff-Appellant Attorney Sebastian E. Proels
Attorney Michael T. Winschel
Proels Winschel LLC
23811 Chagrin Blvd., Suite 325
Beachwood, OH 44122

For Defendant-Appellee: Attorney Timothy R. Brookes
631 Broadway
P.O. Box 15
East Liverpool, OH 43920

JUDGES:
Hon. Mary DeGenaro
Hon. Cheryl L. Waite
Hon. Joseph J. Vukovich

Dated: December 16, 2011
[Cite as Marden Rehab. Servs., Inc. v. E. Liverpool Convalescent Ctr., Inc., 2011-Ohio-6638.]
DeGenaro, J.
{¶1} Plaintiff-Appellant, Marden Rehabilitation Services, Inc. appeals the decision
of the Columbiana Court of Common Pleas in favor of Defendant-Appellee, E. Liverpool
Convalescent Center Inc. dba Adkins Care Center. The trial court found Marden was
equitably estopped from prevailing on its breach of contract claim. Marden argues that
the trial court incorrectly applied the elements of equitable estoppel and that the statute of
frauds prevents the application of equitable estoppel. Marden also argues, in the
alternative, that if equitable estoppel is proper, it is entitled to $5,000 in attorney fees.
Marden's arguments are meritless.
{¶2} First, the doctrine of equitable estoppel bars Marden's breach of contract
claim against Adkins. As part of its proposal to settle the dispute, Marden indicated that
all agreements to provide therapy services to Adkins' patients would terminate on a date
certain. The trial court correctly concluded that Adkins reasonably relied upon Marden's
representation when it contracted with a third party to provide therapy services to its
patients. Thus, it would be inequitable to award Marden damages for lost income for the
time left on the contract. Further, the statute of frauds does not prevent Adkins from
asserting the defense of equitable estoppel. Finally, because there was never a
contractual agreement between the parties for Adkins to pay Marden attorney fees, the
trial court properly rejected that claim because equitable estoppel does not create a
contract; rather, it is an equitable defense to preclude recovery pursuant to an otherwise
valid contract. Accordingly, the trial court's July 13, 2010 and September 8, 2010
decisions are affirmed.
Facts and Procedural History
{¶3} In 2004, Marden contracted with Adkins to provide rehabilitation therapy
services to two Adkins nursing home facilities, and delineated the procedure for how
Marden was to bill for its services, and how Adkins was to pay those invoices. The
starting date for the initial two-year term of the contract commenced on two dates in mid-
May 2005, when Adkins obtained appropriate licensure and Marden could then begin
treating Adkins patients. The contract also provided that after the initial contract period,
the contract automatically renewed for successive one-year terms on the anniversary
 -2-

dates of the commencement of services, unless terminated in accordance with the terms
of the contract. Although the contract set forth options available to the non-breaching
party in the event of default or breach, there was no provision for voluntary termination by
either party to prevent the automatic one year renewal. Thus, the parties appear to be
bound to a 'non-cancelable contract,' as characterized by Marden in its amended
complaint. Neither party challenged the legality of this term of the contract, nor did the
trial court address it in any fashion.
{¶4} In 2008 and early 2009 Adkins was behind in its payments to Marden.
Marden sent several notices to Adkins, informing Adkins of the substantial arrearage it
was accumulating, and threatened legal action if the breach was not cured. On February
4, 2009, Marden filed a complaint for breach of contract seeking $259,330.98 in
damages. But by April 2009, the parties entered into settlement discussions, and Adkins
had paid over $150,000.00 towards the arrearage.
{¶5} On May 27, 2009, Marden's attorney e-mailed Adkins' attorney a list of
settlement terms Marden agreed to, which included in pertinent part: " * * * 2. All
agreements for the provision of services are terminated at 5PM on June 30, 2009; * * * 8.
Marden will remove all of its equipment and records by the close of business on June 30,
2009; * * * 9. Marden will note in all patient charts that our under arrangement [sic]
services has terminated and continuing responsibility is with the Provider (Adkins); *** 10.
Adkins by August 15, 2009 will remit the sum of $5,000.00 to Marden in consideration of
attorney fees incurred; and 11. This offer is good until noon tomorrow (5-28-09) after
which time it may be withdrawn [.]" (emphasis added) Adkins did not reply in writing to
this email on May 28th. Adkins' administrator did testify that through his managerial
responsibilities for Adkins he had the impression that Marden and Adkins were agreeing
to terminate the Agreements. Adkins' owner and acting president also testified that she
received verbal notice that Marden was terminating the Agreements. It is not clear when
these conversations occurred.
{¶6} On June 4, 2009, Adkins entered into an agreement for therapy services
with Blue Sky Therapy. On June 5, 2009, Adkins made a payment of $215,000 to
 -3-

eliminate the arrearage through the parties' attorneys. Counsel also continued with
settlement discussions.
{¶7} On June 15, 2009, Marden's CEO Randall Mason contacted his attorney
regarding the lack of an executed settlement agreement and in an e-mail alleged that
Adkins was not abiding by the non-solicitation clause in the parties' 2004 contract.
{¶8} In a June 16, 2009 fax to Adkins' attorney, Marden's attorney stated that
unless he received a signed settlement agreement by June 18, 2009, that the offer was
rescinded. On June 17, 2009 Adkins's attorney faxed an unsigned settlement agreement
to Marden's attorney, with slightly different terms that had been proposed by Marden. On
June 17 and 18, 2009 Mason provided comments directly to Adkins's attorney concerning
the settlement agreement's terms.
{¶9} On June 19, 2009, Adkins' attorney faxed Marden's attorney a signed copy
of the negotiated settlement agreement, with terms pursuant to the parties' discussions, a
cognovit promissory note from Janice L Bowden (acting President and owner of Adkins)
personally guaranteeing the payment for the May, June, and July invoices, and a copy of
a letter Adkins sent to Blue Sky instructing Blue Sky not to solicit Marden's employees.
This settlement agreement contained substantially the same terms as had been
contained in Marden's May 27, 2009 offer, except that the termination date was now July
10, 2009, instead of June 30th. This agreement still provided that Marden's services
terminated, its equipment and records would be removed from the Adkins facilities on that
date, and patients' charts noted that Adkins was now responsible for therapy services.
This negotiated settlement agreement also provided that Adkins would pay Marden a
$5,000 early termination fee; there was no reference to attorney fees. Finally, the non-
solicitation clause in the parties' 2004 contract would survive the termination, and Adkins
must notify any vendors that the non-solicitation clause was in effect between Adkins and
Marden.
{¶10} On June 24, 2009, Marden sent a letter to Adkins asserting Adkins was in
continued breach of the non-solicitation clause contained in the parties' 2004 contract.
Marden further stated Adkins prematurely announced a settlement between the parties
 -4-

and that Marden considered the parties' 2004 contract to be in full force, concluding it
remained "willing to discuss a settlement with Adkins following either receipt of a
cancellation notice or written affirmation that Adkins will honor the existing Agreement
term."
{¶11} In a July 6, 2009 fax to Marden's attorney, Adkins's attorney stated that
Adkins "had continued to comply with the terms of the Settlement Agreement which was
revised numerous times to meet the demands of Marden." Adkins stated that pursuant to
their "previous agreement" it was attaching two checks totaling $31,678.58 but refused to
comply with any additional terms until it received a counter-signed copy of the settlement
agreement from Marden. The faxed communication also stated that Marden's employees
would not be allowed to enter Adkins' facilities after July 10, 2009.
{¶12} From July to November 2009, Adkins paid Marden the remainder of the
amount owed pursuant to the proposed settlement agreement, excepting the $5,000 early
termination fee.
{¶13} On January 21, 2010, Marden filed its First Amended Complaint alleging the
outstanding invoices had been paid during the litigation, as well as setting forth the terms
of the May 27, 2009 settlement proposal. However Marden was now seeking damages
for breach of contract for the balance of fees that would have been earned during the
remainder of the automatic one year renewal period from July 11, 2009, the date Marden
voluntarily ceased providing therapy services, to May, 2010. During the one day bench
trial and in post-trial briefs, Marden argued that there was not a valid settlement
agreement with Adkins and that because the 2004 contract was effective until May 17,
2010, that Adkins owed Marden for the remainder of the contract term. Adkins countered
with the affirmative defenses of accord and satisfaction and promissory estoppel, arguing
it was inequitable to enforce the contract when Adkins relied on the much negotiated
settlement agreement and acted accordingly, specifically hiring Blue Sky to provide
therapy services because Marden was terminating services. Again, neither party
challenged the validity of the 2004 contract.
{¶14} On July 13, 2010, the trial court issued an "Announcement of Decision"
 -5-

finding Marden was equitably estopped from claiming breach of contract as pled in the
Amended Complaint for damages through the end of the one year renewal period,
because "Adkins relied on the proposed and negotiated Settlement Agreement, which
included all the provisions which Marden had requested, when Adkins hired Blue Sky as
the successor to Marden." The trial court also found that Adkins had a right to rely on the
settlement negotiations, and that Marden used the "baseless allegation of solicitation to
justify its refusal to sign the negotiated Settlement Agreement as a ruse to sue for
damages covering the remainder of the contract period." The court reserved for a later
date a finding on the settlement agreement's provision concerning payment of attorney
fees.
{¶15} On July 23, 2010, Marden filed a notice of appeal, which was held in
abeyance until the trial court entered judgment on attorney fees. On September 8, 2010,
the trial court found it was inequitable to require to Adkins to pay $5,000 to Marden when
Marden had led Adkins "to believe the matter had been settled" and then filed its First
Amended Complaint. Upon entry of the second judgment, this court had jurisdiction to
proceed with the appeal. R.C. 2505.02, App.R. 4.
Equitable Estoppel
{¶16} In its sole assignment of error, Marden asserts:
{¶17} "The trial court erred in granting judgment in favor of Defendant/Appellee
finding that Plaintiff/Appellant's Actions for breach of contract was barred by the doctrine
of equitable estoppel."
{¶18} Marden asserts that the trial court improperly applied the elements of
equitable estoppel when it found Marden could not prevail on its breach of contract claim.
Specifically, Marden argues that an overall lack of evidence and the timeline of events
demonstrate that it never made a misleading factual misrepresentation upon which
Adkins could have detrimentally relied. Adkins counters that the trial court properly
applied the elements of equitable estoppel, and that this Court should defer to the trial
court's ruling because the case turns on factual determinations and credibility issues.
{¶19} This Court applies an abuse of discretion standard when reviewing a trial
 -6-

court's decision finding a breach of contract claim is barred by equitable estoppel.
Campbell v. Campbell 3d Dist. No. 1-04-11, 2004-Ohio-4294 at ¶13, citing Payne v.
Cartee (1996), 111 Ohio App.3d 580, 589, 676 N.E.2d 946. When reviewing a trial
court's decision for an abuse of discretion, we cannot simply substitute our judgment for
that of the trial court. Holcomb v. Holcomb (1989), 44 Ohio St.3d 128, 131, 541 N.E.2d
597. The term "abuse of discretion" connotes more than an error of law or judgment; it
implies that the trial court's attitude was unreasonable, arbitrary, or unconscionable.
Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219, 5 OBR 481, 450 N.E.2d 1140.
{¶20} "The defense of equitable estoppel applies when a party prosecuting a
claim for relief has induced the adverse party to believe that certain facts exist and the
adverse party changed his position in reasonable reliance thereon, to his detriment." Sky
Bank-Ohio Bank Region v. Sabbagh, 161 Ohio App. 3d 133, 2005-Ohio-2517, 829 N.E.2d
743, at ¶10, citing Ensel v. Levy (1889), 46 Ohio St. 255, 19 N.E. 597. Equitable estoppel
is a flexible doctrine that "must be determined on the particular facts of each case." In re
Election of Nov. 6, 1990 for Office of Atty. Gen. of Ohio (1991), 58 Ohio St.3d 103, 114,
569 N.E.2d 447. Courts use equitable estoppel "to prevent results contrary to good
conscience and fair dealing." Lewis & Michael Moving & Storage, Inc. v. Stofcheck
Ambulance Serv., Inc., 10th Dist. No. 05AP-662, 2006-Ohio-3810, at ¶34, quoting
Markese v. Ellis (1967), 11 Ohio App.2d 160, 163, 229 N.E.2d 70. The doctrine does not
create a new right or cause of action; it prevents a party from raising a claim it otherwise
could have. See Callander v. Callander, 10th Dist. No. 07AP-746, 2008-Ohio-2305 at
¶31.
{¶21} A prima facie case for equitable estoppel requires a party to prove: (1) that
the adverse party made a factual misrepresentation; (2) that it is misleading; (3) that it
induced actual reliance which is reasonable and in good faith; and (4) that the reliance
caused detriment to the relying party. See Helman v. EPL Prolong, Inc. (2000), 139 Ohio
App.3d 231, 246, 743 N.E.2d 484 (Seventh District); Doe v. Blue Cross/Blue Shield of
Ohio (1992), 79 Ohio App.3d 369, 379, 607 N.E.2d 492. "[T]he party asserting estoppel
must either lack knowledge of the relevant facts or at least have a lesser knowledge than
 -7-

the party to be estopped." Heskett v. Paulig (1999), 131 Ohio App.3d 221, 227, 722
N.E.2d 142. Thus, "the party claiming estoppel is required to use reasonable diligence to
obtain knowledge of the relevant facts." Id. (citations omitted). We will review each
element in turn.
{¶22} Marden asserts that it never made a factual misrepresentation, specifically,
that it was going to terminate the Agreement. Marden argues that it never stated that the
"settlement was final" and that negotiations were ongoing when it decided not to settle.
Marden further claims it did not mislead Adkins into believing Marden was willing to settle
when it never intended to, or that it used solicitation of Marden employees by Blue Sky as
an excuse not to settle. Instead, Marden argues it represented to Adkins that it was open
to negotiating a settlement, which could include terminating the parties' 2004 contract.
However, there is evidence in the record to support a finding that Marden indicated it was
going to settle and terminate the parties' 2004 contract when it in fact had no intention of
doing so.
{¶23} The May 27, 2009 settlement proposed by Mason on behalf of Marden,
which, significantly, is quoted in Marden's First Amended Complaint as well as attached
as an exhibit, provides that: "2. All agreements for the provision of services are
terminated at 5PM on June 30, 2009; * * * 8. Marden will remove all of its equipment and
records by the close of business on June 30, 2009; * * * 9. Marden will note in all patient
charts that our under arrangement [sic] services has terminated and continuing
responsibility is with the Provider (Adkins);" This admission of fact by Marden is
significant. "The Ohio Supreme Court has upheld the notion of judicial admissions
through pleadings: '[A] party who has alleged and has the burden of proving a material
fact need not offer any evidence to prove that fact if it is judicially admitted by the
pleadings of the adverse party.' Gerrick v. Gorsuch (1961), 172 Ohio St. 417, 178
N.E.2d 140. Intermediate appellate courts have acknowledged this principle. As the Ninth
Appellate District has explained, 'It is the general rule that a statement of fact by a party in
his pleading is an admission that the fact exists as stated, and, as such, is admissible
against him in favor of his adversary.' Teagle v. Lint (Apr. 1, 1998), 9th Dist. No. 18425.
 -8-

Therefore, as long as the statement of fact in the complaint is distinct and unequivocal, it
can be accepted as a judicial admission in that case. Id.; see, also, Dombelek v. Ohio
Bur. of Workers' Comp., 154 Ohio App.3d 338, 2003-Ohio-5151, 797 N.E.2d 144, at
¶22." Haney v. Law, 1st Dist No. C-070313, 2008-Ohio-1843, at ¶8.
{¶24} Further, Adkins' administrator testified that Adkins would not have
contracted with Blue Sky absent an understanding from Marden that the parties were
agreeing to terminate their agreements. Bowden also testified that when she authorized
Adkins to contract with Blue Sky it was her understanding that the parties had agreed to
terminate the 2004 contract, and had received verbal notice that Marden would be
terminating services.
{¶25} The trial court found that Marden made a factual misrepresentation to
Adkins that it would settle, that Marden never intended to settle, and misled Adkins when
it indicated it was willing to do so. The trial court based these findings upon credibility
determinations it made regarding all the witnesses. Because this court is not in a position
to observe the demeanor of the witnesses, we must defer to the trial court's credibility
determinations. Significantly, Marden admitted in its Amended Complaint that on May 27
that it stated to Adkins that the agreement to provide services to Adkins terminated on
June 30, Marden's equipment and records would be removed on that date and the
patients' charts noted that thereafter Adkins was responsible for providing therapy
services. Thus, the trial court did not abuse its discretion in determining that Marden
made a factual misrepresentation and misled Adkins.
{¶26} The minority contends that our use of the settlement agreement "nullifies
Evid.R. 408." While Evid.R. 408 prohibits the admission of settlement proposals "to prove
liability for or invalidity of the claim or its amount," the rule does not require exclusion
when evidence of a settlement is offered for other purposes. Evid.R. 408. Here the
settlement proposal is not used to establish or negate liability, but rather to show those
terms to which Marden agreed, including that it would terminate its service contract on
June 30, 2009. Moreover, this is not the only evidence of Marden's factual
misrepresentation. As discussed, Adkins' administrator testified it was her understanding
 -9-

that Marden had agreed to terminate services; and Adkins' owner and acting president
testified she had received verbal notice that Marden was terminating the Agreements.
The trial court's determination that Marden made a factual misrepresentation is therefore
supported by competent, credible evidence.
{¶27} Marden next argues that given the timeline of events, Adkins could not have
relied on Marden's actions when it contracted with Blue Sky because the parties had not
yet entered into serious settlement negotiations. Adkins does not specifically respond to
this argument.
{¶28} In order for a court to find reliance for equitable estoppel purposes, the
reliance must have been reasonable. Ohio State Bd. of Pharmacy v. Frantz (1990), 51
Ohio St.3d 143, 145, 555 N.E.2d 630. A party cannot claim the benefit of an estoppel
from words or conduct that did not come to his knowledge until after he had finally acted
or taken his position. See 42 Ohio Jurisprudence 3d (2011) Estoppel and Waiver,
Section 62, citing Joseph Turk Mfg. Co. v. Singer Steel Co. (N.D.Ohio 1951), 111 F.
Supp. 485; Martin v. Steinke (1925), 22 Ohio App. 156, 154 N.E. 47.
{¶29} The trial court explicitly found Adkins relied on Marden's conduct: "The
evidence is clear that Adkins relied on the proposed and negotiated Settlement
Agreement, which included all the provisions which Marden had requested, when Adkins
hired Blue Sky as the successor to Marden." But Marden correctly points out that the trial
court based its finding that the reliance element had been met upon facts and
circumstances which occurred after June 4, 2009, the date Adkins contracted with Blue
Sky. Thus, the trial court's finding of reliance based on facts subsequent to June 4 was
erroneous.
{¶30} However, the court of appeals must affirm a trial court's judgment if it is
legally correct on other grounds, because such error is not prejudicial. Reynolds v.
Budzik (1999), 134 Ohio App. 3d 844, 846, 732 N.E.2d 485, fn. 3, citing Newcomb v.
Dredge (1957), 105 Ohio App. 417, 424, 6 O.O.2d 178, 152 N.E.2d 801; State v. Payton
(1997), 124 Ohio App.3d 552, 557, 706 N.E.2d 842. "It has long been the law in Ohio
that where the judgment is correct, a reviewing court is not authorized to reverse such
 - 10 -

judgment merely because erroneous reasons were assigned as the basis thereof."
Reynolds, at fn. 3, (citations omitted).
{¶31} The record contains evidence of Marden's conduct before June 4th, which
Adkins relied on before it decided to contract with Blue Sky. First, settlement discussions
between the two parties began in April 2009. Second, Adkins' administrator and owner
testified that Adkins would not have signed a new contract with Blue Sky but for Marden's
representations concerning terminating services. Finally, Marden stated in its Amended
Complaint that the May 27, 2009 email sent to Adkins' counsel stated that the parties'
2004 contract terminated June 30, 2009, Marden would remove its equipment and
records that day, and would note in each patient's chart that thereafter Adkins was
responsible for providing therapy services. Thus, Marden admitted that before June 4 it
told Adkins the agreements to provide services terminated June 30th. Gerrick, Teagle,
Haney. Therefore, the trial court's error of relying on evidence after June 4 to support its
finding that the reliance element was met is harmless.
{¶32} The next issue is whether Adkins' reliance was reasonable. As a matter of
law the statements made in Marden's May 27 email and those made in the parties'
settlement discussions starting in April through June 3, 2009 are the only statements that
can be relied upon. The narrow question for us is whether it was reasonable for Adkins to
rely upon those statements when it entered into the contract with Blue Sky on June 4. A
review of the May 27 email reveals that Marden was unequivocal regarding the pertinent
issue in this case: termination of its services. June 30, 2009 was: the termination date of
the parties' 2004 contract; the date each party released the other from any further
obligations under the contract, except for the non-solicitation clause and for "continuing
payment obligations incurred by Adkins to Marden for May 2009 and June 2009;" and, the
date all Marden equipment and records would be removed and patients' charts noted that
thereafter Adkins was responsible for providing therapy services. This left Adkins with the
reasonable impression that it had thirty days to find another company to provide therapy
services for its patients.
{¶33} The fact that Adkins did not respond to the email by noon on May 28th has
 - 11 -

little impact on this analysis, primarily because Marden's email stated that the offer may
be withdrawn. Moreover, had Adkins accepted on that date, the doctrine of equitable
estoppel would be inapplicable. Rather, had both parties signed the settlement
agreement and not just Adkins, an enforceable contract would have been created and
subject to enforcement. On the other hand, had Adkins verbally accepted the May 27
email but one or both parties did not sign a settlement agreement, the doctrine of
promissory estoppel would have applied to enforce the terms of the May 27 email. But as
the trial court correctly found, that doctrine does not apply here because there was not an
unambiguous promise by Marden to Adkins. If that had been the case, Marden could
have used promissory estoppel as a sword to require Adkins to pay damages pursuant to
that May 27 email. Here, Adkins properly used equitable estoppel as a shield to prevent
Marden from collecting damages for breach of the 2004 contract.
{¶34} Finally, courts have considerable discretion in fashioning equitable
remedies. See, e.g., Allason v. Gailey, 189 Ohio App.3d 491, 2010-Ohio-4952, 939
N.E.2d 206. Thus, we are mindful that our standard of review is an abuse of discretion.
Marden admitted that it made those statements to Adkins on May 27. Adkins personnel
testified that they would not have signed a contract with Blue Sky but for the relationship
with Marden being terminated. The trial court made a credibility determination as the trier
of fact that the witnesses for Adkins were more credible. Thus, the trial court did not
abuse its discretion when it found that it was reasonable for Adkins to rely upon the
statements Marden made in the May 27 email, and enter into a contract on June 4 with
Blue Sky to provide therapy services.
{¶35} Marden finally argues that there is no evidence that Adkins suffered any
detriment because of Marden's behavior; because there was no reliance, there can be no
detriment. The trial court did not abuse its discretion when it found: "when Adkins hired
Blue Sky as the successor to Marden * * * Adkins was in the untenable position of having
signed a new contract with Blue Sky." The detriment to Adkins is that, because of
Marden's conduct, specifically, misrepresenting to Adkins that it was terminating services
on June 30, and Adkins reasonably relying upon those representations, Adkins was
 - 12 -

contractually obligated to two parties for therapy services from July 10 through May 17,
2010.
{¶36} The parties agreed, as characterized by Marden, to enter into a 'non-
cancellable contract',' the legality of which is suspect, but an issue we cannot address;
because it was raised neither with the trial court nor this court, and thus it is waived. Had
Adkins accepted the terms of Marden's May 27th email, we would either be reviewing an
executed, enforceable contract, or applying the doctrine of promissory estoppel because
the parties exchanged unambiguous promises that are enforceable. But we have been
presented with neither situation. Instead, Adkins is seeking equitable relief, "to prevent
results contrary to good conscience and fair dealing." Lewis & Michael Moving &
Storage, Inc., at ¶34. By asserting this defense, Adkins is conceding it has breached the
contract with Marden, and asks this court to prevent Marden from raising a claim it
otherwise could have. Callander at ¶31.
{¶37} Regardless of how inartfully the 2004 contract was drafted, the record
reveals that the parties intended to terminate their contract. It bears repeating that the
Ohio Supreme Court has held equitable estoppel is a flexible doctrine that "must be
determined on the particular facts of each case." In re Election of Nov. 6, 1990 for Office
of Atty. Gen. of Ohio, at *114, and made for cases such as this. When a legal remedy is
impossible or incomplete, courts may look to equity to fashion a remedy. It is a long-
standing maxim that "equity regards and treats that as done which in good conscience
ought to be done[.]" Geiger v. Bitzer (1909), 80 Ohio St. 65, 73-74, 88 N.E. 134.
{¶38} Given the facts of this case, the parties' dispute cannot be resolved using
conventional theories of contract. We disagree with the minority that the settlement
agreement constitutes an enforceable contract; thus the only way to resolve this dispute
is to apply equity. Adkins breached the 2004 contract by failing to timely pay Marden for
its services, which resulted in the instant lawsuit. After the lawsuit was filed, the parties
began negotiating the dispute, and Marden told Adkins it would terminate services June
30, 2009. As a result of this statement, Adkins found another company to provide therapy
services. Adkins is now asking that, out of a sense of fairness and fair dealing, that
 - 13 -

Marden be prohibited from collecting damages for July 11, 2009 through May 17, 2010.
Because the record demonstrates that all the elements were met, the trial court properly
found that Marden's claim for breach of the 2004 contract was barred by equitable
estoppel. Thus, Marden's arguments to the contrary are meritless.
Statute of Frauds
{¶39} Marden also argues that allowing the defense of equitable estoppel would
undermine the purpose of the statute of frauds. Adkins counters that the cases Marden
cites are distinguishable because Marden never stated that the drafts of the settlement it
was sending were for "discussion purposes only."
{¶40} Marden's reliance upon Olympic Holding Co., L.L.C. v. Ace Ltd., 122 Ohio
St. 3d 89, 2009-Ohio-2057, 909 N.E.2d 93, for the proposition that the statute of frauds
prevents the application of equitable estoppel is misplaced because that case involved
promissory estoppel. However, Marden argues that, like promissory estoppel, equitable
estoppel should not bar the application of the statute of frauds. But unlike promissory
estoppel, equitable estoppel does not create a cause of action; instead "it precludes a
person from denying his own acts or admissions that were expressly designed to
influence the conduct of another, and did so influence such conduct, when such a denial
will operate to injure another." Kessler v. Totus Tuus L.L.C., 185 Ohio App.3d 240, 2009-
Ohio-6376, 923 N.E.2d 1160, at ¶15. The trial court did not enforce the negotiated
settlement agreement, it estopped Marden from claiming breach of the 2004 contract for
the additional contract year. In fact, Adkins argued in its post-trial brief that promissory
estoppel applied, and the trial court correctly rejected this argument; it specifically found
that promissory estoppel did not apply here because there was no evidence of a definite
promise by Marden to Adkins. The trial court correctly found that equitable estoppel
applied, and barred Marden from recovering damages for the balance of the automatic
renewal year pursuant to the parties' 2004 contract. Equitable estoppel was used in this
case defensively to prevent Marden from prevailing on its breach of contract claim based
upon the 2004 contract. The trial court did not use promissory estoppel to enforce a
settlement agreement, because none existed. Thus, the Statute of Frauds does not
 - 14 -

apply, and Marden's argument is meritless.
Attorney Fees
{¶41} Marden alternatively argues that if this Court finds that the trial court
properly applied equitable estoppel, then the trial court should have awarded it $5,000 for
attorney's fees, which it asserts was a term in the proposed settlement agreement.
{¶42} Had the parties actually executed a settlement agreement, Marden's
argument would be meritorious. "Under Ohio law, contractual provisions awarding
attorney fees are enforceable and not void as against public policy so long as the fees
awarded are fair, just, and reasonable as determined by the trial court upon full
consideration of all the circumstances of the case. Northwoods Condominium Owners'
Assn. v. Arnold, 147 Ohio App.3d 343, 2002-Ohio-41, 770 N.E.2d 627, at ¶16, citing
Nottingdale Homeowners' Assn., Inc. v. Darby (1987), 33 Ohio St.3d 32, 514 N.E.2d 702;
Gaul v. Olympia Fitness Ctr. (1993), 88 Ohio App.3d 310, 623 N.E.2d 1281.
{¶43} However, there is no binding contract providing for fees in this case. The
trial court ruled that based upon Marden's conduct during the settlement negotiations,
Marden was equitably estopped from pursuing the additional contract damages it alleged
in its Amended Complaint. Contrary to Marden's assertions, this ruling does not have the
effect of transforming the proposed settlement agreement into a binding contract.
{¶44} Given the absence of a contractual obligation, there was no basis for an
attorney fee award. Accordingly the trial court's decision not to award Marden attorney
fees was proper.
{¶45} In sum, Marden's assignment of error is meritless. The doctrine of equitable
estoppel bars Marden's breach of contract claim against Adkins, and any error committed
by the trial court in its application of the doctrine is harmless. Further, the statute of
frauds does not prevent Adkins from asserting the defense of equitable estoppel. Finally,
because there was never a contractual agreement between the parties for Adkins to pay
Marden attorney fees, the trial court properly rejected that claim. Equitable estoppel does
not create a contract; rather, it is an equitable defense to preclude recovery pursuant to
an otherwise valid contract. Accordingly, the trial court's July 13, 2010 and September 8,
 - 15 -

2010 judgments are affirmed.
Waite, P.J., concurs in judgment only with concurring opinion.
Vukovich, J., concurs in judgment only.

Waite, P.J., concurring in judgment only.

{¶46} I agree with the majority that the judgment of the trial court should be

affirmed, but I have considerable disagreement with the reasoning used and with the

implications of that reasoning for future cases. In my review of the record I find that the

parties entered into an enforceable settlement. The main purposes of this settlement

were to terminate the 2004 contract between Appellant Marden Rehabilitation Services

Inc. (“Marden”) and Appellee East Liverpool Convalescent Center, Inc. dba Adkins Care

Centers (“Adkins”), and pay arrearages owed on the contract. The record contains a

number of offers and counteroffers by both parties, culminating in a written agreement

signed and returned by Adkins on June 19, 2009. The agreement contained all the

provisions proposed by Marden and was signed by the party to be charged, i.e., Adkins.

Due to the fact that there is an enforceable settlement agreement in the record, it is

inaccurate to rely on the doctrine of equitable estoppel.

{¶47} Because of the convoluted nature of the parties’ dealings, I can initially see

that a question might exist regarding the enforceability of the June 19, 2009, settlement

due to a possible statute of frauds problem. The statute of frauds is codified in R.C.

Chapter 1335. One of the divisions of the statute of frauds involves agreements that

cannot be performed within one year. R.C. 1335.05. To be enforceable, an agreement
 - 16 -

that cannot be performed within one year must be in writing and signed by the party “to be

charged therewith”. In this case, the June 19, 2009, settlement is a writing that contains

all the provisions of Marden’s counteroffer, and is signed only by Janice Bowden both as

vice president of Adkins and in an individual capacity. Under the usual rules of contract

interpretation, this document satisfies the requirements of being a contract: offer,

acceptance, mutual assent to the terms, consideration, legal subject matter, legal

capacity. Kostelnik v. Helper, 96 Ohio St.3d 1, 2002-Ohio-2985, 770 N.E.2d 58, ¶16.

The existence of the signatures of both of the parties helps clearly establish assent to the

terms, but is not completely determinative of whether or not a contract exists. 17 Ohio

Jurisprudence Contracts Section 72. Signatures are important in a statute of frauds

analysis, though. The June 19, 2009, settlement is not signed by any representative from

Marden, which may raise a question as to whether it can be enforced against Marden if it

falls under the requirements of the statute of frauds.

{¶48} The “not to be performed within one year” provision of the statute of frauds

is interpreted very narrowly: “For over a century, the ‘not to be performed within one year’

provision of the Statute of Frauds, in Ohio and elsewhere, has been given a literal and

narrow construction. The provision applies only to agreements which, by their terms,

cannot be fully performed within a year; and not to agreements which may possibly be

performed within a year.” Sherman v. Haines (1995), 73 Ohio St.3d 125, 127, 652 N.E.2d

698.

{¶49} Thus, bearing this in mind, the statute of frauds does not appear to apply to

either the 2004 contract or the 2009 settlement agreement. Both contained a non-
 - 17 -

compete clause (section 12) that lasted for one year after the contract terminated.

Appellant interprets that the non-compete clause serves as a trigger for the statute of

frauds. I disagree with this interpretation. The 2004 contract contains provisions that

could terminate the contract immediately (section 8), even as early as the date on which

the contract was executed. If this occurred, then the one-year non-compete clause would

be immediately triggered, thus enabling the contract to be performed within one year and

taking it out of the realm of the statute of frauds. The one-year non-compete clause in

the 2009 settlement agreement was triggered when Adkins’ signed and returned the

agreement. Without question, it would also be performed within one year.

{¶50} Even if the statute of frauds was construed to apply to one or both

agreements, “[i]t is well established in Ohio that courts of equity may bar application of the

statute of frauds.” McCarthy, Lebit, Crystal & Haiman Co., L.P.A. v. First Union Mgt., Inc.

(1993), 87 Ohio App.3d 613, 623, 622 N.E.2d 1093. This approach has been taken by

the majority with respect to the statute of frauds issue, and to that extent I agree with the

majority.

{¶51} My primary disagreement with the majority opinion is in its use of a

proposed settlement agreement to establish the facts necessary to support equitable

estoppel. The majority uses the doctrine of judicial admissions to treat the terms of the

May 27, 2009, proposed settlement as though they were established facts. The majority

has determined that the terms of the proposed settlement become factual admissions

because Appellant attached this settlement offer to its amended complaint. The one term

of the proposed settlement that particularly stands out is that, under the proposal, all prior
 - 18 -

agreements for the provision of services would be terminated on June 30, 2009. The

majority adopts this provision as a factual admission by Marden that the 2004 contract

was terminated on June 30, 3009. I disagree with the use of the concept of judicial

admissions as applied to this document. If we hold, as the majority urges, that proposed

settlement terms can be later used as factual admissions, this action would dramatically

alter how settlement negotiations take place in this appellate district and elsewhere. No

party to a dispute, contractual or otherwise, would put into writing a possible settlement

agreement or proposed term of settlement if he or she was aware that this mere

settlement proposal was subject to later use as an established fact. The majority’s

approach also nullifies Evid.R. 408, which prohibits the admission of evidence of

settlement proposals, along with evidence of any statements or conduct taking placing

during settlement, for the purpose of proving the validity or invalidity of a claim. A

proposed term of settlement is just that: a proposal, not a fact. The attachment of the

settlement proposal to the amended complaint might be an admission that the parties

were involved in settlement negotiations, but that is the extent of its usefulness.

{¶52} If the statute of frauds is not a factor in this case, and I do not believe that it

is, then the following evidence in the record establishes that the June 19, 2009,

settlement is a valid contract that served to terminate the 2004 contract:

{¶53} a. On 9/23/04 the first contract is executed. It terminates on May 17, 2005,

for Adkins’ building 1, and May 19, 2005, for Adkins’ building 2.

{¶54} b. Adkins was behind in its payments in 2008 and early 2009.

{¶55} c. Marden threatens legal action if arrearage is not paid.
 - 19 -

{¶56} d. Marden files lawsuit on February 4, 2009.

{¶57} e. Parties enter into settlement negotiations.

{¶58} f. May 27, 2009, Marden sends a written settlement offer in an email to

Adkins. The settlement may be withdrawn at 12:01pm on May 28, 2009. There is no

indication that it is withdrawn.

{¶59} g. June 16, 2009, Marden extends the settlement offer to June 18, 2009.

{¶60} h. June 17, 2009, Adkins delivers a counteroffer to Marden that incorporates

the May 27, 2009, settlement terms.

{¶61} i. June 17, 2009, Marden responds to Adkins’ counteroffer by faxing a new

counteroffer to Adkins with a few additional terms. No time limit is placed on this

counteroffer.

{¶62} j. June 18, 2009, Marden faxes yet an additional counteroffer by adding a

few more terms to the June 17, 2009, counteroffer. No time limit is placed on this

counteroffer.

{¶63} k. June 19, 2009, Adkins faxes the signed counteroffer to Marden, with all

the corrections requested by Marden in its May 27th email along with the June 17th and

18th faxes.

{¶64} Based on this record, Marden made a counteroffer on June 18, 2009, there

was no expiration date on the counteroffer, and Adkins accepted the counteroffer on June

19, 2009. This Court should simply enforce the settlement as agreed to by the parties.

One of the terms of the settlement was that Marden would dismiss its complaint. This is

what the trial court did, and thus, I would affirm the trial court’s judgment.