Plalan Lake Rd. Maintenance, Inc. v. Fabian

Summary

The Ohio Eleventh District Court of Appeals affirmed enforcement of a settlement agreement resolving a dispute over the lawful trustees of a nonprofit corporation. The court held that the corporation was bound by the agreement despite not being expressly identified as a signatory and rejected arguments concerning statutory indemnification and member approval.

Holdings

1. A nonprofit corporation may be bound by a settlement agreement even when the corporation is not expressly named as a party and the individuals do not expressly sign in their representative capacities, when the circumstances show that all persons claiming authority to bind the corporation signed and the agreement addresses the corporation's affairs.
2. Ohio Revised Code 1702.12(E), which governs a corporation's indemnification of directors or trustees, did not invalidate or prevent enforcement of the settlement agreement because the agreement required plaintiffs and defendants to pay their own legal fees and did not require the corporation to indemnify any trustee.
3. The corporation's members were not required to approve the settlement agreement because the trustees were authorized to act for the corporation and the appellants identified no provision in the corporation's regulations requiring member approval for settlement agreements or similar actions.

Questions Presented

1. Whether a nonprofit corporation is bound by a settlement agreement signed by all persons who claimed or were claimed to possess authority to act as its trustees, even though the corporation was not expressly identified as a party or the individuals did not expressly sign in a representative capacity.
2. Whether Ohio Revised Code 1702.12(E), governing corporate indemnification of directors or trustees, invalidated or prevented enforcement of the settlement agreement's provisions concerning attorney fees.
3. Whether the corporation's members were required to approve the settlement agreement before the trustees could bind the corporation.

Disposition

affirmed