Preview
fy dnunee
euSH
TUR
Lt» co. OF
MON }PLEAS COURT OF MONTGOMERY COUNTY, OHIO
CIVIL DIVISION
THE WHITE FAMILY COMPANIES, CASE NUMBER
INC, | 2007 CV 2759
Plaintiff,
JUDGE
JEFFREY E£, FROELICH
INVESCO, LTD., ET AL.,
Defendants.
APPENDIX
TO REPLY BRIEF OF DEFENDANTS MICHAEL KARAMAN
AND INVESCO, LTD.
IN SUPPORT OF FHEIR MOTION TO DISMISS (OHIO CIV.R 12(B)(6)) AND
ALTERNATIVE MOTION FOR SUMMARY JUDGMENT (OHIO CIV.R 56)
_—_——
Skilken Lowe & Dankof, LLC
1500 Kettering Tower
Dayton, OH 45423-1001
Ph: (937) 223-1500
Fx: (937) 224-1402
Email: Steve@SLDLawyers.comCERTIFICATE OF SERVICE
The undersigned counsel certifies that a true and accurate copy of the foregoing
Appendix to Reply Brief of Defendants Michael Karaman and Invesco Ltd. in Support
of Their Motion to Dismiss (Ohio Rule of Civil Procedure 12(B)(6) and Alternative
Motion for Summary Judgment (Ohio Rule of Civil Procedure 56), was served
November 9, 2007, via regular U.S. Mail, upon the following:
Paul Shaneyfelt
Dungan & Lefevre Co., LPA
210 West Main Street
Troy, OH 45373
Sha (EY ———
Steven K/Dankof, Sr.) =Table of Authorities
Cases Page
1. Becharas v. Cummings (1997), 292 WApp.3d 1105.02... eccccetesceeceseeeeceteneeeneeeee 2
2. Beck v. The Trane Co.(Hamilton Co. App. 1990) 1990 Ohio App. LEXIS 5614.............. 8
3. Fifth Third Bank v. Jarrell (Franklin Co. App. 2005), 2005 Ohio 1260.0... 2
4. Florian v Lenge (2005), 91 Conn.App. 268, 880 A.2d 985..
5. Hisey v. Hisey (Licking Co. App. 1939) 33 N.E.2d 40 .ccccceccssscesssesssssssessstecessvesccsseneese 10
6. Kaufman v. Broughton (1877) 31 Ohio St. 424 oo cceceeccsssssessseesssseseessseesesseesesseeesssvensasees 10
7. Kemmler Mem't. v. 691/733 East Dublin-Granville Rd. Co. (1992)
62 ORI0 SLBA AGH cece ieee ceeeerersuaneneeserennassseseesensiretieseesiiteeseserneeseieeD,
8. Lenders Collection Carp. v Harris (1995), 1995 OK CIV APP 95.
9. Metz v. Unizan Bank (N.D. Ohio 2006), 416 F.Supp.2d 568 ...esscssssseussssssssseecssssseenOy 7
10. The Parmore Group v. G & V Investments Ltd.
(Franklin Co. App., Dec. 29, 2006) 2006 Ohi0 6986 ....ccsssccssssseesscccsssseesesssssseeessssesseeseesanne 2
11. Ryan, Admx. v. Zaffiro, et al, (Hamilton Co. App., 1960) 111 Ohio App. 463... 10
12. Schmidt, Exr. v. Hicks, Admr. (Hamilton Co. App. 1928) 28 Ohio App. 413... 10
Revised Code Sections
13. R.C. 1301.02 (UCC 1-102)......
14, R.C. 1302.98 (UCC 2-725) ......
1S. R.C. 1303.16 (UCC 3-118) oe
16. R.C. 1303.35 (UCC 3-305) on. eeceeescceeceeeeeeeeneee
17. R.C. 1303.59 (UCC 3-419)
18. R.C. 1304.17 (UCC 4-207)
19. R.C, 1304.18 (UCC 4-208)
20. R.C. 2305.06....cceescssssesssosseccsssinesecesssesssueessescssssesssereassnessusessassesstsessssusesonececsanveseaveseess
21. RC. 2305.08....cssresecssessssnececensressssssessssssueecssssseteecessnvsesssssnssssssnssceessssnesacaesnseecesassnsasece 8
22. RC. 2305.18 .cceecseccscessssesececcsssesesssnesesssnnsessssnneesssssevessessnsneseesesruneesessssvenesssascessersansaneveeees 823. RC, 2305.16
Treatise
24. White James & Robert S. Summers,
Uniform Commercial Code § 16-16 (4" ed. 2006)Page |
LEXSEE 292 ILL.APP.3D 1105
GEORGE S. BECHARAS, JR., PI
intiff-A ppellant, y. THOMAS N. CUMMINGS,
Defendant-Appellee.
No. 1-96-3353
APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SIXTH DIVISION
292 IL App. 3d 1105; 687 N.E.2d 95; 1997 [Il App. LEXIS 734; 227 Ill. Dec. 172; 35
UCC. Rep. Serv. 2d (Caltaghan) 208
October [7, 1997, Filed
SUBSEQUENT HISTORY:
Publication December 5, 1997,
[**41] Released for
PRIOR HISTORY: — Appeal from the Circuit Court
of Cook County. No. 95 L 7598. Honorable Philip L.
Bronstein, Judge Presiding.
DISPOSITION: AFFIRMED.
COUNSEL: Young, Hauslinger, Rosen & Dolgin, Ltd.,
of Chicago (Norman T. Finkel and William R. Klein, of
counsel), for appellant.
Cary N. Goldberg, of Chicago, for appellee.
JUDGES: JUSTICE ZWICK delivered the opinion of
the court. THEIS, J. and QUINN, J., concur.
OPINION BY: ZWICK
OPINION
[tl106] — [**96]
the opinion of the court:
JUSTICE ZWICK delivered
Plaintiff brought this action which sought to enforce
the terms of a written promissory note executed by de-
fendant in 1985. Upon motion of defendant, the trial
court entered summary judgment in favor of defendant,
finding that the statute of limitations set forth in section
3-118 of the Uniform Commercial Code ( 810 ILCS
5/3-118(a) (West 1994)) applied retroactively to bar
plaintif's claim. Plaintiff has appealed this ruling,
Plaintiff alleged that prior to April 15, 1985, he
loaned to defendant sums of money on various occasions
totaling more than $ 20,000. On the above date, defen-
dant executed a promissory note in favor of plaintift in
the amount of $ 20,000, with interest at the rate of 10%,
compounded monthly. The promissory note provided. in
relevant part, as follows:
"One year after date, for value re-
ceived, [¥#42] the undersigned prom-
ises to pay to the order of George S. Be-
charas, Jr. Twenty Thousand and no/100
Dollars at 555 West Cornelia, Chicago, Il-
linois 60657; with interest at Ten (10%)
percent per annum *** compounded
monthly after the date of this note until
paid."
The promissory note also contained a confession of
Judgment clause and a provision for reasonable costs of
collection, including reasonable attomey's fees.
On April 12, 1995, plaintiff filed his initial com-
plaint against defendant, seeking recovery under the
note. On April 25, 1995, plaintiff obtained a judgment by
confession, and on July 28, 1995, defendant filed a mo-
tion to open the judgment by confession. Defendant also
filed a verified answer, denying that he had executed the
Promissory note or that he owed plaintiff any money. On
August 21, 1995, plaintiff filed an affidavit in Tesponse,
stating, inter ulia, that the money had been loaned to
defendant to cover business expenses and that plaintiff
had demanded payment on the note in August 1989, but
defendant had refused to satisfy the debt.
The trial court subsequently entered an order open-
ing the judgment by confession, and plaintiff thereafter
filed a [***3] first amended complaint. Defendant filed
a verified answer and counterclaim, denying that he had
executed the note.
On February 16, 1996, defendant filed a motion for
summary judgment, asserting that plaintiff's claim was
barred by the applicable statute of limitations. DefendantPage 2
292 IIL App. 3d 1105, *: 687 N.E.2d 95, #4:
1997 II. App. LEXIS 73
also filed an amended verified answer and affirmative
defense which raised the statute of Jimitations. Plaintif
thereafter denied the allegations contained in defendant's
affirmative defense and opposed the motion for summary
judgment. The trial court granted defendant's motion for
summary [*1107] judgment on August 23, 1996,
finding that section 3-118(a) of the IHlinois Commercial
Code, effective January 1, 1992, applied retroactively to
bar plaintiffs claim and that plaintiff had not filed his
action within a reasonable time of the enactment of that
statute. Defendant withdrew his counterclaim, and plain-
tiff appealed the entry of summary judgment in favor of
defendant.
On appeal, plaintiff contends that the trial count
erred in finding that his cause of action was barred. In
support of this contention, plaintiff argues that the stamte
of limitations for his claim is defined in section 13-206
of the IMinois [***4] Code of Civil Procedure, which
provides, in pertinent part, that actions on promissory
notes shall be commenced within 10 years after the cause
of action has accrued. See 735 ILCS 5/13-206 (West
1994), Plaintiff asserts that because this statute of limita-
lions was in effect when the note was executed and when
it came due, he had 10 years to file suit on the note.
Plaintiff reasons that because his claim would not have
been barred under this statute until April 15, 1996, his
compliant filed on April 12, 1995, was timely.
[**97] However, the trial court determined that
the six-year statute of limitations set forth in section
3-118(a) of the Uniform Commercial Code governed
plaintiff's claim.
Section 3-118(a), which became effective January 1,
1992, states as follows:
"Statute of limitations. (a) Except as
provided in subsection (e), an action to
enforce the obligation of a party to pay a
note payable at a definite time must be
commenced within 6 years after the due
date or dates stated in the note or, if a due
date is accelerated, within 6 years after
the accelerated due date." 810 ILCS
5/3-118(a) (West 1994).
Plaintiff asserts that the trial court erred in finding
thal this provision [***5] applied retroactively to bar
his claim. We disagree.
Whether an amendment to a statute may be deemed
to be retroactive depends generally upon whether it re-
lates to substantive rights or whether it affects merely the
remedy or a matter of procedure. Dworak v. Tempel, 17
IIL 2d 181, 187, 161 N.E.2d 258 (1959), citing Orticki v,
*, 227 I, Dee. 172
MeCarthy, 4 Ill. 2d 342, 122 N.E.2d 513 (1954), Asa
general rule, amendments rclating to substantive rights
must be applied prospectively ¢ Dworck. 17 NI 2d at
187): however, amendments relating to the remedy or a
matter of procedure are generally applied retroactively ¢
Orlicki, 4 Ml 2d at 347-48), When a change in law af-
fects only the remedy or the law of procedure, a right of
action will be enforced under the new procedure without
regard to whether it accrued before or after the change in
the law, and without regard to [*1108] whether or not
suit had been instituted. fn re Pronger, 118 Ill, 2d 512,
522, 517 N.E.2d 1076, 115 Hl. Dec. 390 (1987), citing
Ogdon v. Gianakos, 415 IM. 591, 597, 114 NEL2d 686
(1953).
It is established that statutes of limitation have his-
torically been classified as procedural in character, and
are to be applied [***6] retroactively. Orlicki, 4 Il. 2d
at 352-53. However, shortened statutes of limitations will
not be applied retroactively to instantaneously bar an
existing right of action. Moore v. Jackson Park Hospit-
al, 95 \Il. 2d 223, 230, 447 N.E.2d 408, 69 III. Dec. 191
(1983). To avoid this unjust result, courts have recog-
nized an exception which allows a plaintiff a reasonable
period of time to bring his action where a statutory
enactment has shortened a limitations period, or estab-
lished one where one did not previously exist, and where
the plaintiff's cause of action arose before the effective
date of the statute. Mega v, Holy Cross Hospital, 111
Ill. 2d 416, 420, 490 N.E.2d 665, 95 Ill. Dec. 812 (1986),
citing Hupp v. Gray, 73 ML 2d 78, 83, 382 N.E.2d 1211,
22 IIL. Dec. $13 (1978), and Mecgan v. Village of Tinley
Park, 52 Ul. 2d 334, 359, 288 N.E.2d 423 (1972). The
reasonable-period-of-time exception applies equally to a
new statute of limitations as to an amendment shortening
a prior statute. See Benton v. Vonnahmen, 288 Il. App.
3d 199, 203, 679 N.E.2d 1270, 223 Ill. Dec. 497 (1997);
In re Marriage of Ingram, \76 I. App. 34.413, 419, 531
N.E.2d 97, 125 [***7} Il. Dec, 918 (1988).
The critical period of time in such analysis is that
time between the effective date of the statute and the date
on which the preexisting cause of action would be barred
under the new statute. Benton, 288 TH. App. 3d at 203;
People ex rel. Skinner v. Graham, \70 Ill. App. 3d 417,
432, 524 N.E.2d 642, 120 Ill, Dec. 612 (1988). The fun-
damental question is whether the plaintiff filed his cause
of action within a reasonable time after the amendment.
Benson, 288 Ill. App. 3d at 204: Graham, 170 Ul. App.
3d at 433. What constitutes a reasonable period of time
in which to commence an action will depend on the facts
of each case. Benton, 288 Ill. App. 3d at 204: Sakella-
riadis v. Spanos, 163 Il. App. 3d 1084, 1089, 317
N.E.2d 324, 115 [I Dec. 122 (1987).
In the case at bar, section 3-118(a) became effective
on January 1, 1992. Plaintiff's cause of action was barred292 II. App. 3d 1105, *; 687 NLE.
Page 3
2d 95, *¥;
1997 IIL App. LEXIS 734. *#*; 227 li Dec. 172
under that section as of April 15, 1992, three and
one-half months after the statute became effective. It has
been held that if a reasonable time remains under the
new statute, the new period can be applied, without
more; if a reasonabic time would not remain, then one
[798] will be (*##8] allowed. Mega, 111 Ill, 2d at
420-421; Benton, 288 Ill. App. 3d at 204,
Although the question of whether a plaintiff has
filed his claim within a reasonable time after the enact-
ment of the statute might generally be considered a ques-
tion of fact and not appropriate for summary judgment,
where it is apparent from the undisputed facts [*1109]
that only one conclusion can be drawn, the question be-
comes one for the court. Benton, 288 II]. App. 3d at
204. Such is the case here, and the trial court specifically
found that plaintiff failed to bring his action within a
reasonable time. More than 39 months elapsed between
the effective date of section 3-118(a) and the filing of
plaintiff's complaint. We agree with the trial court that no
teasonable mind could conclude thal plaintiff filed his
complaint within a reasonable period of time after the
enactment of the new statute of limitations.
Because 39 months exceeds any reasonable period
of time required to avoid injustice and to effectuate the
purpose of the reasonable-period-of-time exception. we
hold as a matter of law that plaintiff's cause of action was
barred by application of the six-year statute of limitations
contained in section [***9] 3-118(a) of the Uniform
Commercial Code. Accordingly, we affirm the entry of
summary judgment in favor of defendant.
For the foregoing reasons, the judgment of the cir-
cuit court of Cook County is affirmed.
AFFIRMED.
THEIS, J., and QUINN, J., concur.Page |
LEXSEE 1990 OHIO APP. LEXIS 5614
JOHN BECK, and SUSAN BECK, Plaintiffs-Appellants/Cross-Appellecs, v. THE
TRANE COMPANY, Defendant-Appellee/Cross-Appellant
Nos. C-890610, C-890623
Court of Appeals of Ohio, First Appellate District, Hamilton County
1990 Ohio App. LEXIS 5614
December 19, 1990
December 19, 1990, Filed
PRIOR HISTORY: [#1] Civil Appeal From:
Hamilton County Court of Common Pleas; Trial No.
A-8806850.
DISPOSITION: Judgment Appealed From is: Af-
firmed in Part, Reversed in Part and Cause Remanded in
C-890610; Appeal Dismissed in C-890623
COUNSEL: Keating, Ritchie & Norwine, Kevin L.
Swick, Esq., and Kevin C. McDonough, Esq., Cincinnati,
Ohio, for Plaintiffs-Appellants/Cross-Appellees.
Benesch, Friedlander, Coplan & Aronoff, Donald J.
Mooney, Esq., and Jeffrey T. Lehmen, Esq., Cincinnati,
Ohio, for Defendant-Appeliee/Cross-Appellant.
JUDGES: Utz, P.J., Shannon and Hildebrandt, JJ.
OPINION BY: PER CURIAM
OPINION
DECISION.
This cause came on to be heard upon the appeal, the
transcript of the docket, journal entries and original pa-
pers from the Hamilton County Court of Common Pleas,
the transcript of the proceedings, the assignments of er-
ror, and the briefs and arguments of counsel.
This dispute arose from the sale of a Trane heating
and air-conditioning system to the appellants, John and
Susan Beck. The unit, which was purchased at a price of
$ 8,950.00, ' was installed on May [1, 1981, and the-
reafter presented the appellants with a series of [*2]
documented performance problems. The appellants filed
suit on August 19, 1988, alleging breach of both expre:
and implied warranties, as well as a violation of the
Consumer Sales Practices Act.
1 The total amount which the appellants fi-
hanced to purchase the system was $ 15,776.64,
with monthly payments of $ 164.34 for eight
years.
The trial court granted summary judgment in favor
of the appellee/cross-appeliant, the Trane Company, the
manufacturer of the unit, as to the implied-warranty
claim and the Consumer Sales Practices Act claim;
however, the trial court denied ‘Trane's motion for sum-
mary judgment on the appellants’ express-warranty
claim. Furthermore, the trial court stated in its judgment
that it found "no just cause to delay the appeal or en-
forcement of this Entry."
Although the parties have treated this case as one
involving a final appealable order, and have briefed the
issues accordingly, we are constrained to address the
Supreme Court's decision in Chef Italiano v. Kent State
University (1989), [#3] 44 Ohio St. 3d 86, 541 N.E.2d
64, as it affects this cours jurisdiction to render a deci-
sion on those issues. The lead opinion in Chef /taliano,
written by Justice Douglas, would require that we dis-
miss this appeal on the basis that finality has not attached
under R.C. 2505.02 since less than all of the appellants’
claims were dismissed by summary judgment, and there
temained one viable claim (for breach of express war-
ranty) on which the appellants could have obtained
judgment from Trane.
Justice Dougias's lead opinion in Chef Hraliano failed
to command a majority of the Court, gamering only one
concurrence, while the other justices either concurred
separately, either in the syllabus and judgment or in the
judgment only, or dissented. Moreover, Justice Douglas'sPage 2
1990 Ohio App. LEXIS 5614, *
lead opinion is in conflict with the Ohio Supreme Court's
decision in Alexander v. Buckeye Pipe Line Co. (1977),
49 Ohio St. 2d 158, 359 N.E.2d 702, which has yet to be
overruled. * Furthermore, the interpretation Justice
Douglas in Chef /taliano gave to the meaning of the term
“action,” as it is used in R.C. 2505.02. is in conflict with
the court's conclusion that the words "claim for relief," as
used in {*4] Civ. R. 54(B), are synonomous with “cause
of action." See Noble v. Colvell (1989), 44 Ohio St. 3d
92, 540 N.E.2d 1381. For these reasons, and because we
believe that a decision on the merits of appellants’ issues
will eliminate the possibility of a duplicative trial and
thus serve the interests of justice and judicial economy
which underlie Civ. R. 54(B), ‘ we conclude that the
matter sub judice is properly before us on the basis of a
final appealable order certified under Civ. R. 54(B).
2 In Alexander, the court sanctioned the use of
Civ. R. 54(B) to render appealable the trial court’s
grant of partial summary judgment on all but one
of the plaintiffs’ eight causes of action.
3 "The general purpose of Civ, R. 54(B) is to
make a reasonable accomodation of the policy
against piecemeal appeals with the possible injus-
tice sometimes created by the delay of appeals *
**." Slexander, supra at 160, 359 N.E.2d at 703.
The appellants in their first assignment of error as-
sert that the trial court [*5] erred in granting summary
judgment on their breach-of-implied-warranty claim. The
issue presented for our review under this assignment is
whether R.C, 1302.98 effectively barred the appellants’
implied-warranty claim based upon the running of the
statute of limitations. We hold that it did.
R.C. 1302.97 provides that an action for breach of
any contract for the sale of goods must be commenced
within four years after the cause of action has accrued. In
an action for breach of an express or implied warranty, a
cause of action accrues when the breach occurs, which is
normaily when tender of delivery is made. R.C.
1302.98(B). The only exception is when the warranty
“explicitly extends to future performance of the goods,
and discovery of the breach must await the time of such
performance," in which case the cause of action does not
accrue until the breach either was, or should have been,
discovered. /d.
The general rule is that implied warranties, by their
nature, cannot "explicitly" extend to future performance.
See Standard Alliance Industries v. Black (C.A. 6, 1978),
587 F.2d 813; Annotation (1979), 93 A.L.R. 3d 690,
692-696 (citing cases). We conclude, therefore, that,
pursuant [*6] to R.C. 1302.98(B), the appellants’ cause
of action for breach of an implied warranty of fitness
accrued on May 11, 1981, the date on which the Trane
system was installed,
Moreover, we can find no authority in Ohio for the
application of the doctrine of equitable estoppel urged by
the appellants. This doctrine would toll the statute of
limitations while an innocent purchaser relies upon the
seller’s promises to repair. See Standard Alliance, supra
at 822. While we are not adverse to the doctrine in prin-
ciple, we find the wording of R.C. 1302.98(d) effectively
precludes us from adopting it here. *
4 — RC. 1302.98(d) refers expressly to R.C.
2305.15 and 2305.16, which provide for tolling
of the statute of limitations only in certain pre-
scribed circumstances: where the person is out of
state, has absconded or concealed himself, or is
suffering under a disability. None of these cir-
cumstances is evident upon this record.
Based upon the foregoing analysis, we conclude that
the statute of limitations on the appellants’ [*7] claim
for breach of an implied warranty of fitness began run-
ning on May 11, 1981. Consequently, the statute barred
the appellants’ action based on breach of an implied war-
ranty since they did not file their complaint untit August
19, 1988. The appellants’ first assignment of error is,
therefore, overruled.
The appellants in their second assignment of error
assert that the trial court erred in granting summary
judgment on Count III of their complaint. In their com-
plaint under Count III, the appellants specifically alleged
that the sale of the Trane sysiem was a “consumer trans-
action" as that term is defined under R.C. 1345.01, and
that Trane violated the Consumer Sales Practices Act by
falsely representing that the system had performance
characteristics which it did not have. See R.C. 1345.02.
The appellants also alleged that the sale of the system
was a home solicitation sale as that term is defined under
R.C, 1345.21, and that Trane violated the Home Solicita-
tion Sale Act by failing to supply a notice of cancellation
as required by R.C. 1345.22.
The issue presented for our review under this as-
signment is whether the sale of the Trane heating and
air-conditioning system is covered [*8] by the general
provisions of the Consumer Sales Practices Act as well
as the particular provisions of the Home Solicitation Sale
Act.
R.C. 1345.02, which prohibits unfair or deceptive
consumer sales practices, applies to sales falling under
the statutory definition of a "consumer transaction." A
“consumer transaction as defined in R.C. 1345.01, in-Pape 3
1990 Ohio App. LEXIS 5614, *
cludes the sale of goods to an individual “for purposes
that are primarily personal, family. or household * * *,"
The Home Solicitation Sale Act, which is a separate part
of R.C. Chapter 1345, applies to the home solicitation of
“consumer goods," which are defined in R.C. 1345,21(A)
as goods "purchased primarily for personal, family, or
household purposes * * *."
In support of its contention that the heating and
air-conditioning system in the case sub judice does not fit
within either of these definitions, Trane cites Tamur's
Inc. v. Hiltner (1977), 55 Ohio App. 2d 90, 379 N.E.2d
231, and Nagle Heating & Air Conditioning v. Suter
(June 27, 1986), Scioto App. No. 1580, unreported. Re-
lying upon provisions of the Home Solicitation Sale Act
which impose a duty upon the buyer who cancels to re-
turn the goods in “substantially as good [*9] a condition
as when received," see R.C. 1345(B)(2) and 1345.27, the
courts in Tamur and Nagle concluded that goods which
suffered a diminution in value upon installation or be-
came fixed to realty could not be considered "consumer
goods” within the definition of the Act.
Addressing this argument, we note initially that both
Tamur and Nagle relied upon provisions which are
unique to the Home Solicitation Sale Act, R.C. 1345.21
through 1345.28, and not shared by other provisions of
R.C. Chapter 1345. Therefore, even if we were to adopt
the rationale of these two cases, they provide no authori-
ty for holding that the sale of the Trane system was not a
“consumer transaction" subject to the provisions of R.C.
1345.02 regarding unfair or deceptive consumer sales
practices.
Moreover, we decline to adopt the rationale of Ta-
mur and Nagle limiting the scope of the Home Solicita-
tion Sale Act since, in our opinion, the provisions relied
on by those courts, R.C. 1345.23 (B}2) and 1345.27, *
do nothing more than require the buyer who cancels to
take reasonable care of the goods before returning them.
In this regard, we note that the definitional section of the
Home Solicitation [*10] Sale Act specifically lists cat-
egories of items which the legislature did not intend to be
considered consumer goods, and nowhere is an exception
provided for goods which require installation or become
affixed to the consumer's houschold. See RC.
1345.21(F)1) through (6).
5 R.C. 1345,23(B)(2) requires that the seller in
a home solicitation sale provide the buyer with a
notice of cancellation in which the buyer is ad-
vised, inter alia, that upon cancellation the buyer
must make available to the seller any goods the
buyer received "in substantially as good condition
as when received." R.C. 1345.27 states that when
a home solicitation sale is revoked, the buyer
must make available to the seller any goods deli-
vered, and the goods "shall not have been dimi-
nished in quantity nor subjected to wnrcasonable
wear or use.”
The record clearly establishes that the heating and
air-conditioning unit sold by Trane to the appellants was
for their family household. Moreover, the parties do not
dispute that the subject sale was [*11] initiated by a
telephone solicitation. We find, therefore, no basis for
excluding the sale of the unit from either the general
provisions of the Consumer Sales Practices Act or the
Particular provisions of the Home Solicitation Sale Act.
In view of our holding that the sale in the case sub
Judice falls within the purview of R.C. Chapter 1345, the
issue arises whether the appellants’ claim was
time-barred. The applicable statute of limitations for both
a violation of the Home Solicitation Sale Act and a vi-
olation of R.C. 1345.02 is two years from the date of the
occurrence of the violation, or one year after termination
of proceedings by the attorney general with respect to the
violation, whichever is later. See R.C. 1345.10(C) and
1345.28.
In a well-reasoned decision, the Tenth District Court
of Appeals concluded that a discovery rule cannot be
read into the language of R.C. 1345.10(C). See Cypher v.
Bill Swad Leasing Co. (1987}, 36 Ohio App. 3d 200, 521
N.E.2d 1142. Thus, in the case sub judice, the only way
in which the appellants’ claim could not be time-barred is
by its filing within one year after the termination of pro-
ceedings by the attorney general.
The record establishes [*12] that the appellants.
filed a complaint with the Office of the Attomey General
on june 15, 1987, and received a reply dated July 8,
1987, from an investigator in the Consumer Protection
Division, advising them that an informal investigation
had been initiated. (T.d. 9.) Although the appellants in
their brief state that the Office of the Attorney General
terminated its investigation on April 11, 1988, there is no
evidence of this of record, In his deposition, Mr. Beck
testified that on January 14, 1989, he was not aware of
any action being taken by the attomey general at that
time. (T.d. 9, at 9.)
In sum, the record establishes only that an investiga-
tion was begun by the attorney general on July 8, 1987,
and that it concluded sometime before January 14, 1989,
Consequently, Trane has failed to effectively demon-
strate on the state of this record that the appellants' claim
filed on August 19, 1988, was time-barred because it was
filed more than one year after the termination of pro-
ceedings by the attorney general. Summary judgment in
Trane's favor was thus improperly granted since the
record does not demonstrate that it was entitled to judg-
ment as a matter of law. The appellants’ second [#13]
assignment of error is, therefore, well taken.Page 4
1990 Ohio App. LEXIS 5614, *
Iv.
In its cross-appeal, Trane asserts as its sole assign-
ment of error that the trial court erred in denying the
company's motion for summary judgment on the appel-
lants' claim for breach of an express warranty. It is well
settled that any order denying a motion for summary
judgment is not a final appealable order. See Balson v.
Dodds (1980), 62 Ohio St. 2d 287, 905 N.E.2d 293;
Overmeyer v. Walinski (1966), 8 Ohio St. 2d 23, 22
N.E.2d 312. Trane's cross-appeal is therefore dismissed
for lack of jurisdiction.
The order granting summary judgment in favor of
Trane on the claim of breach of implied warranty is af-
firmed; the order granting summary judgment in favor of
Trane for violation of the Ohio Consumer Sales Practices
Act and Home Solicitation Sale Act is reversed; and
Trane's cross-appeal is dismissed. Accordingly, this case
is remanded to the trial court for further proceedings.Page |
LEXSEE 2005 OHIO 1260
Fifth Third Bank (Central Ohio), Plaintiff-Appellee, v. Craig A. Jarrell et al., De-
fendants-Appellants, Pell Bostwick, Inc. et al., Defendants-Appellees.
No. O4AP-358
COURT OF APPEALS OF OHIO, TENTH APPELLATE DISTRICT, FRANKLIN
COUNTY
2005 Ohio 1260; 2005 Ohio App. LEXIS 1235
March 22, 2005, Rendered
PRIOR HISTORY: (**1]) APPEAL from the
Franklin County Court of Common Pleas. (C.P.C. No.
03CVH04-4525),
DISPOSITION:
Pleas affirmed.
Judgment of the Court of Common
COUNSEL: Kemp. Schaefer, Rowe & Lardiere Co.,
LPA, Michael N. Schaefler and Richard G. Murray, II,
for appellee Fifth Third Bank.
Cooper & Elliott, LLC, Rex H. Elliott, Charles H. Coop-
er, Jr., and Aaron D. Epstein, for appellants.
JUDGES: BROWN, P.J. LAZARUS and SADLER, JJ.,
concur.
OPINION BY: BROWN
OPINION
(REGULAR CALENDAR)
BROWN, P.J.
[*P1] This is an appeal by defendants-appellants,
Craig A. Jarrell and John L. Snyder (collectively “appel-
lants"), from a judgment of the Franklin County Court of
Common Pleas, denying appellants’ Civ.R. 60(B) mo-
tions for relief from a cognovit judgment.
[*P2] On May 1, 1998, Pell Bostwick, Inc. ("Pell
Bosiwick") and_plaintiff-appellee, Fifth Third Bank
("Fifth Third"), entered into a loan agreement whereby
Fifth Third agreed to make available a revolving bine of
credit in the principal amount of $ 225,000. Chip Regis,
the owner of Pell Bostwick, and appellants, who were
then officers of the corporation, signed the agreement on
behalf of Pell Bostwick. Contemporancously, the parties
signed a security agreement as well as a certificate [*#2]
of deposit assignment. Also on May 1, 1998, Regis and
appellants all signed separate “unlimited payment" gua-
ranties.
[*P3] On February 15, 1999, Pell Bostwick ex-
ecuted a renewal note in the amount of $ 225,000. The
note referenced the May 1, 1998 guaranties, and further
stated that it was supplemented by the May 1, 1998 loan
agreement. Pell Bostwick executed another renewal note
in the amount of $ 225,000 on April 15, 1999. On June
15, 1999, Pell Bostwick exccuted a “renewal/decrease"
note in the amount of $ 125,000. The note referenced the
May 1, 1998 unlimited guaranties of Regis and appel-
lants.
[*#P4] On June 15, 2000, Pell Bostwick again ex-
ecuted a renewal note in the amount of $ 125,000. That
note referenced the May 1, 1998 guaranties of Regis and
appellant Jarrell, and contained a provision stating it was
supplemented by the loan agreement dated June 15,
1999. Pell Bostwick executed a similar renewal note in
the amount of $ 125,000 on September 15, 2000. On
September 15, 2001, Pell Bostwick executed another
renewal note in the amount of $ 125,000, whereby Pell
Bostwick was required to make monthly payments to
Fifth Third on the 15th day of each month. The note re-
ferenced [**3] an unlimited payment guaranty of Regis,
dated September 15, 2001, and further provided it was
supplemented by the loan agreement dated June 15,
1999,
[*P5} On April 22, 2003, Fifth Third filed a com-
plaint for judgment on a cognovit note, naming as de-
fendants Pell Bostwick, PB Technologies, LLC ("PB
Technologies"), and appellants. The complaint alleged
that Pell Bostwick and PB Technologies defaulted in
payment on the September 15. 2001 note, and that the
sum of $ 111,299.38, plus interest, was due. The com-
plaint further alleged that Fifth Third had demandedPage 2
2005 Ohio 1260, *; 2005 Ohio App. LEXIS 1235, **
Payment of the entire balance of the note from appel-
lants, based upon the unlimited payment guaranties they
signed on May 1, 1998, but that appellants had failed to
Pay.
[*P6} By judgment entry filed on April 23, 2003,
the trial court ordered that Fifth Third recover the sum of
$ 111,299.38, plus interest, on its first claim against de-
fendants Pell Bostwick and PB Technologies. The trial
court further ordered that Fifth Third recover, on its
second and third claims, the sum of $ 111,299.38 against
appellants, jointly and severally.
[*P7] On April 15, 2004, appellant Jarrell filed a
motion to vacate the cognovit [**4] judgment, asserting
that he was neither a signor nor a guarantor of the Sep-
tember 15, 2001 cognovit note. Jarrell argued that, al-
though he signed a different cognovit note, dated May [,
1998, Fifth Third failed to inform the court that it re-
leased him from liability under the 1998 note as part of
the transaction that resulted in the execution of the 2001
note. On May 23, 2003, the trial court filed a decision
and entry granting appellant Jarrell's motion to vacate the
judgment.
[*P8] On June 3, 2003, Fifth Third filed a memo-
randum in opposition to appellant Jarrell's motion for
relief from judgment. Appellant Jarrell filed an answer
on June 6, 2003. On June 30, 2003, appellant Snyder
filed a motion to vacate the cognovit judgment. On De-
cember 11, 2003. an agreed entry was filed vacating the
trial court's May 23, 2003 decision and entry. By deci-
sion and entry filed on March 9, 2004, the trial court
denied the motions of both appellants to vacate the cog-
novit judgment.
(*P9] On appeal, appellants set forth the following
two assignments of error for review:
{L] The Trial Court erred when it de-
nied the motion to vacate the cognovit
judgment against —_defendant-appeltant
[**5] Craig A. Jarrell.
(L] The Trial Court erred when it
denied the motion to vacate the cognovit
judgment against defendant-appellant
John L. Snyder.
[*P10] Appellants’ assignments of errors are in-
terretated and will be considered together. Appellants
contend that the trial court decided the motion to vacate
under the wrong standard of review, and that the court
erred in its conclusion that the guaranties could only be
cancelled by written notice from appellants.
[*P11] In order to prevail on a motion brought
pursuant to Civ.R. 60(B), a movant must demonstrate:
“() the party has a meritorious defense or claim to
present if relief js granted; (2) the party is entitled to re-
lief under one of the grounds stated in Civ.R. 60(BX(1)
through (5); and (3) the motion is made within a reason-
able time * * *." GTE Automatic Electric v. ARC Indus-
tries (1976), 47 Ohio St.2d 146, 351 N.E.2d 113, para-
graph two of the syllabus. Where the judgment sought to
be vacated is a cognovit judgment, the standard as set
forth in GTE is modified, and the party filing a Civ.R.
60(B) motion need only assert that the motion [**6]
was timely made and that there is a meritorious defense
available. Fifth Third Bank of Columbus v. Margolis
(Oct. 30, 1997), Franklin App. No. 97APE04-468, 1997
Ohio App. LEXIS 4828. See, also, G.W.D. Ent., Inc. v.
Down River Specialties, Inc. (May 24, 2001), Cuyahoga
App. No. 78291, 2001 Ohio App. LEXIS 2313. Howev-
er, despite this modified standard, the movant is required
“to allege operative facts with enough specificity to al-
low the trial court to decide whether a meritorious de-
fense exists." Advanced Clinical Mgmt,, Inc. v. Salem
Chiropractic Ctr. Inc., Stark App. No. 2003CA00108,
2004 Ohio 120, at PIS.
(*P12] In general, "[a] guarantor is one who, by
definition, promises to be responsible for the debt of
another," and "where the note’s maker defaults on its
obligations the guarantor steps into the maker's shoes."
Rice v. Montgomery, Franklin App. No. 02AP-1261,
2003 Ohio 5577, at P19. Courts construe guaranty
agreements in the same manner as contracts, and a court
need not go beyond the plain language of the agreement
to determine the parties' rights and obligations if the con-
tract is clear and unambiguous. Maines Paper & Food
Serv., Inc. v. Eanes (Sept. 28, 2000), Cuyahoga App.No.
77301, 2000 Ohio App. LEXIS 4480. [**7] A gua-
rantor is bound only by the precise words of his or her
contract, but this rule does not entitle the guarantor "to
demand an unfair and strained interpretation of those
words" in order that the guarantor may be released from
the obligation that was assumed. Morgan vy. Boyer
(1883), 39 Ohio St. 324, 326. This court has previously
held that, “by definition, a cognovit provision in a prom-
issory note cuts off every defense, except payment,
which the maker of the note may have against enforce-
ment of the note." Tinnes v. Immobilaire, Lid. (Feb. 13,
2001), Franklin App. No. QOAP-87, 2001 Ohio App.
LEXIS 505.
(*P13] Appellants initially contend that the trial
court applied the wrong standard of review in deciding
the motions to vacate. However, we do not find that the
trial court's failure to specifically recite the GTE standard
constitutes a basis to conclude that it applied the wrong
standard, We note that the parties, in their filings beforePage 3
2005 Ohio 1260, *: 2005 Ohio App. LEXIS 1235, **
the trial court, submitted the appropriate standard, and,
absent affirmative language in the court's decision sug-
gesting it's application of an incorrect standard, we will
presume regularity.
{*P14] Turning to the guaranty’s [**8] terms.
both appellants signed, on May |. 1998, a separate “un-
limited payment guaranty." The pertinent language of
each guaranty states in part as follows:
1, GUARANTY: In consideration of
an extension of a loan, credit or other fi-
nancial accommodations given or to be
given from time to time pursuant to a note
or notes, lease, agreement, or other evi-
dence of indebtedness or given pursuant
to any extensions or renewals thereof, or
pursuant to any other agreements to ex-
tend credit of any kind or nature to Bor-
rower, each Guarantor, jointly and sever-
ally, guarantees the prompt payment when
due of all indebtedness and liabilities of
Borrower of every kind, nature, and cha-
racter including principal and interest and
all renewals, extensions, and modifica-
tions thereof now existing or which he-
reafter may be incurred by Borrower to
Bank * * *. The liability of Guarantor he-
reunder shail be unconditional * * *,
2. LIMITATION BY GUARAN-
TOR: Upon Guarantor's written request to
Bank, this payment guaranty shall termi-
nate as to any future new Obligation of
Borrower arising after ninety (90) calen-
dar days subsequent to the date of Bank's
written acknowledgement to Guarantor of
reccipt of the request. [**9] * * *
3. RELEASE OF GUARANTOR:
Without affecting the liability of any of
the undersigned not released, Bank may.
without notice to the undersigned, release
and discharge from liability to it any of
the undersigned, if there be more than
one, or any other guarantor of, or surety
for, the payment of any Obligation of
Borrower to Bank.
4. WAIVER OF NOTICE: Guarantor
hereby waives notice of any change in the
Obligation, including without imitation
renewals, extensions or moditications of
any Obligation of Borrower and hereby
waives presentment, demand, protest, no-
tice of non-payment and notice of disho-
nor. * * * Guarantor agrees that Bank may
accept, surrender, or exchange collateral
or security, if any, without notice to Gua-
rantor, Guarantor consents to any im-
pairment of collateral, including without
limitation release of the collateral to a
third party or failure to perfect any secu-
rity interest.
5. WAIVER OF IMPAIRMENT OF
COLLATERAL: No Guarantor shall be
released or discharged, either in whole or
in pan, by Bank's failure or delay to per-
fect or continue the perfection of any se-
curity interest in any property which se-
cures the obligations of the Borrower or
any of the Guarantors [**10] to Bank, or
lo protect the property covered by such
security interest.
[*PtS] In his motion for relief from judgment,
appellant Jarrell argued that Fifth Third released him
from liability when it modified the September 15, 2001
note to accept new security without asking him to sign
the new note or incorporating the old note by reference.
Appellant Snyder made a similar argument in his motion
to vacate the judgment,
[*P16] The unambiguous terms of the guaranties,
however, do not support appellants’ position. As quoted
above, the unlimited payment guaranties executed by
appellants state that “each Guarantor, jointly and sever-
ally, guarantees the prompt payment when due of all
indebtedness and liabil. of Borrower of every kind,
nature, and character including principal and interest and
all renewals, extensions, and modifications thereof now
existing or which hereafter may be incurred by Borrower
to Bank.” Thus, appellants guaranteed in advance to all
renewals, extensions and modifications of the val
indebtedness, and also waived “notice of any change in
the Obligation, including without limitation renewals,
extensions or modifications of any Obligation." Under
[**11] Ohio law, a guarantor, by consenting to such
extensions, “can preclude his own discharge." ¥.F., Inc.
v. Hamilton (May 9, 1980), Lucas App. No. L 79-256,
1980 Ohio App. LEXIS 9785. Further, Ohio courts have
held that a continuing, unlimited guaranty is a separate
and distinct agreement from loan agreements. Natl. City
Bank v. Concorde Controls, Ine, Lake App. No.
2001-L-113, 2002 Ohio 6578, citing Huntington Natl.
Bank v. Martin (Mar. 12, 1999), Lake App. No.
98-L-082, 1999 Ohio App. LEXIS 936. In the instant
case, under the broad language of the unlimited payment
guaranty agreements, appellants remained obligated for
renewal debt regardless of whether they signed, or were
listed on, subsequent renewal notes as guarantors.Page 4
2005 Ohio 1260, *; 2005 Ohio App. LEXIS 1235, **
[*Pt7] Although not dispositive, we note that the
September 15, 200] loan agreement contains language
stating it is "supplemented by the terms and conditions of
a loan agreement dated June 15, 1999." As previously
noted, the June 15, 1999 loan agreement specifically
included, by reference, the "unlimited payment guaran-
ties of Craig A. Jarrell. John L. Snyder, and George Re-
gis all dated May 1, 1998."
[*P18] During oral argument, appellants advanced
the contention that, during negotiations [**12] leading
to the subsequent loan agreements, Fifth T! made
overt oral representations to appellants releasing them
from their obligations under the unlimited guaranties.
The record in this case, however, contains no operative
facts by appellants indicating that Fifth Third made such
oral representations to them in conjunction with negotia-
tions concerning the later loan documents. As appellants
failed to allege sufficient operative facts showing the
existence of a meritorious defense, the trial court did not
abuse its discretion in denying the requested relief.
[*P19] Finally, the record supports the trial court's
finding that appellants did not allege they provided Fifth
Third with a written request secking to limit any future
obligation (nor is there any evidence of such notifica-
tion). Therefore, the court did not err in finding, in the
absence of such a request, that the 1998 guaranties re-
mained in effect at the time of the execution of the Sep-
tember 2001 promissory note.
{*P20] Based upon the foregoing, appellants’ two
assignments of error are without merit and are overruled,
and the judgment of the Franklin County Court of Com-
mon Pleas is hereby affirmed.
Judgment (**13] affirmed.
LAZARUS and SADLER, JJ., concur.PRIOR HISTORY:
LEXSEE 91 CONN.APP 268
DAVID W. FLORIAN, SR. v. FRANK LENGE.
AC 25064
APPELLATE COURT OF CONNECTICUT
91 Conn. App. 268; 880 A.2d 985; 2005 Conn. App. LEXIS 395; 58 U.C.C. Rep. Serv.
2d (Callaghan) 898
April 28, 2005, Argued
September 13, 2005, Officially Released
Page 1
[***1] Appeal from Superior to him, (3) awarded attorney's fees and (4) restricted
Court, judicial district of New Britain, Murray, J.; Hon.
Julius J. Kremski, judge trial referee. Action to recover
on a promissory note, and for other relief, brought to the
Superior Court in the judicial district of New Britain,
where the defendant filed a counterclaim; thereafter, the
court, Murray, J.. denied the defendant's motion for
summary judgment; subsequently, the matter was tried to
the court, Hon. Julius J. Kremski, judge trial referec;
judgment for the plaintiff on the complaint and on the
counterclaim, from which the defendant appealed to this
court.
Florian v. Lenge, 2004 Conn. Super. LEXIS 145 (Conn.
Super. Ct, Jan. 6, 2004)
DISPOSITION: Affirmed.
COUNSEL: Thomas J. Mullins, with whom, on the
brief, was Frank Lenge, Pro se. for the appellant (defen-
dant),
Bridget C. Gallagher, with whom, on the brief, was
Andrew J. Denorfia, for the appellee (plaintiff).
JUDGES: Lavery, C. J., and Schaller and Gruendel, Js.
In this opinion the other judges concurred.
OPINION BY: LAVERY
OPINION
[**988] [*269] LAVERY, C. J. The pro se de-
fendant, Frank Lenge, appeals from the judgment of the
trial court rendered in favor of the plaintiff, David W.
Florian, Sr., in this [*270] action on a promissory
nate. The defendant claims that the court improperly (1)
applied the law governing promissory [***2] _ notes
under the Uniform Commercial Code rather than contract
law, (2) held that the defense of laches was unavailable
cross-examination at trial, ' We affirm the judgment of
the trial court.
1 In his brief, it appears that the defendant also
asks this court to review the denial of his motion
for summary judgment. Generally, the denial of a
motion for summary judgment is not reviewable
afler a full trial, "Our courts have held that the
denial of a motion for summary judgment is gen-
erally not appealable where a full trial on the me-
rits produces a verdict against the moving party. .
.. The rationale for the rule . . . is that a decision
based on more evidence should preclude review
of a decision based on less evidence." (Citations
omitted.) Heritage Village Master Aysn., Inc. v.
Heritage Village Water Co., 30 Conn. App. 693,
697, 622 A.2d 578 (1993); see also Bank of
America, FSB v. Hanlon, 65 Conn. App. 577, 578
n.2, 783 A.2d 88 (2001). We therefore decline to
review the denial of the motion for summary
judgment. To the extent that the defendant
through his claim is contesting the appropriate
statute of limitations, we address that issue in part
L
[***3] The following facts and procedural history
are relevant to our resolution of the issues on appeal. On
July 17, 1991, the defendant executed a promissory note
in favor of the plaintiff, in the original principal amount
of $ 15,000. The promissory note provided that the de-
fendant was to pay to the plaintiff, or his order, the sum
of $ 15,000 with interest and costs of collection, includ-
ing attorney's fees, incurred in [**989] any action
brought to collect sums due on the note. The defendant
was to pay the plaintiff in specified monthly sums until
the outstanding balance of the principal was paid in full
on September 1, 1998. If the defendant were to default
on any monthly payment, for a period of fifteen days
after the payment was due, the entire balance of the notePage 2
91 Conn. App. 268, *; 880 A.2d 985, **;
2005 Conn. App. LEXIS 395, ***; 58 U.C.C. Rep. Serv. 2d (Callaghan) 898
could become immediately due and payable at the option
of the holder.
The defendant made two payments on the note, with
the last payment on September |, 1992, and thereafter
(*271] was in default on the note. The plaintiff did not
exercise his option to accelerate the note. On September
1, 1998, the note matured without further payment by the
defendant, leaving an outstanding principal balance of $
14,753.46 due. On January 11, 2002, the [***4] piain-
tiff brought this action to recover the amount due under
the promissory note. In response to the complaint, the
defendant denied the claims and raised ten special de-
fenses and a five count counterclaim. Among the special
defenses he raised were that the action was barred by the
statute of limitations and laches. Subsequently, the de-
fendant filed a motion for summary judgment on those
grounds. The defendant argued that the plaintiff's action
was barred by the six year statute of limitations pursuant
to General Statutes § 52-576 (a) ? because the cause of
action arose on September 1, 1992, the date on which
payments on the note ceased, causing a breach of con-
tract. The defendant also argued that the doctrine of
laches barred the claim because the plaintiff's delay in
bringing the action was unreasonable and resulted in
prejudice.
2 General Statutes § 52-576 (a) provides in re-
levant part: "No action for an account, or on any
simple or implied contract, or on any contract in
writing, shall be brought but within six years after
the right of action accrues... .”
[***5] The court issued a memorandum of deci-
sion on November 5, 2003, denying the defendant's mo-
tion for summary judgment. The court concluded that the
note was a negotiable instrument under General Statutes
§ 42a-3-104, * which is part of our Uniform Commercial
[#272] Code. The court, therefore, determined that the
applicable statute of limitations was the six year statute
of limitations provided in General Statutes § 42a-3-118 +
for negotiable instruments and not § 52-576 (a), which is
applicable to simple contracts. Consequently, under §
42a-3-118, the action was timely because it was com-
menced within six years of the maturity date of the note,
September 1, 1998. In a