Opinion
No. 23939.
Rendered on December 10, 2010.
Civil Appeal from Dayton Municipal Court, Trial Court Case No. 09-CVF-4940.
Anthony M. Sharett, Atty. Reg. #0076607, and M. Breck Valentine, Atty. Reg. #0083696, Bricker Eckler LLP, Attorney for Plaintiff-Appellant.
Delores Farley, Defendant-Appellee, pro se.
OPINION
{¶ 1} Appellant Ohio Neighborhood Finance, Inc. ("Ohio Neighborhood") appeals the decision of the Dayton Municipal Court, granting judgment against Delores Farley for the sum of $500.00, plus costs and attorneys' fees, plus post-judgment interest at 21% per annum. Ohio Neighborhood argues that the trial court improperly lowered the rate of interest from 25% to 21%, because Ohio Neighborhood and Farley agreed upon the 25% interest rate, and that amount should be enforced. Since the agreed upon interest rate in the contract was 25%, that amount should be applied to the judgment. For the following reasons, we reverse the judgment of the trial court.
I
{¶ 2} On January 20, 2009, Ohio Neighborhood made a loan to Farley for the amount of $500.00. Aside from repaying the $500.00, Farley agreed to a loan origination charge of $30.00, and a credit investigation fee of $10.00. After the fees and interest, Farley was required to pay an aggregate sum of $549.95 due February 16, 2009. In the "Promise to Pay" section of the customer agreement that Farley signed, it states in pertinent part:
{¶ 3} "You promise to pay us $500.00 (the Principal Amount on this loan) plus interest at a rate of 25% per annum on the principal outstanding for the time outstanding from the date of this Customer Agreement until paid in full."
{¶ 4} On February 16, 2009, Farley was unable to repay the loan when due. After Ohio Neighborhood demanded the amount be repaid, Farley failed to repay the amount due under the loan agreement.
{¶ 5} Ohio Neighborhood filed a complaint in the Dayton Municipal Court, seeking judgment against Farley for the amount of $584.95 plus the interest of 25% per annum beginning on the date of default, along with court costs and reasonable attorneys' fees as permitted by statute and contract. Farley failed to respond or plead to the complaint, and Ohio Neighborhood filed its motion for default judgment.
{¶ 6} On March 4, 2010, the trial court journalized the judgment entry and awarded Ohio Neighborhood $500.00, plus court costs. Instead of awarding the interest rate of 25%, the trial court awarded only 21% interest per annum on the unpaid principal from the date of judgment. The court did not explain why it was reducing the uncontested amount of $584.95 to $500.00.
II
{¶ 7} Ohio Neighborhood puts forth one assignment of error, which states as follows:
{¶ 8} "THE TRIAL COURT COMMITTED REVERSIBLE ERROR IN REDUCING TO 21% PER ANNUM, THE INTEREST RATE ON THE DEBT IN THE DEFAULT JUDGMENT GRANTED IN FAVOR OF APPELLANT OHIO NEIGHBORHOOD FINANCE, INC."
{¶ 9} Ohio Neighborhood argues that it is permitted by statute to contract a loan with an interest rate as long as that interest rate does not exceed 25%, and since both parties agreed upon that amount of interest, the trial court may not unilaterally alter the amount of interest. We agree.
{¶ 10} R.C. 1343.03(A) states, in pertinent part:
{¶ 11} "In cases other than those provided for in sections 1343.01 and 1343.02 of the Revised Code, when money becomes due and payable upon any bond, bill, note, or other instrument of writing, upon any book account, upon any settlement between parties, upon all verbal contracts entered into, and upon all judgments, decrees, and orders of any judicial tribunal for the payment of money arising out of tortious conduct or a contract or other transaction, the creditor is entitled to interest at the rate per annum determined pursuant to section 5703.47 of the Revised Code, unless a written contract provides a different rate of interest in relation to the money that becomes due and payable, in which case the creditor is entitled to interest at the rate provided in that contract."
{¶ 12} When construing R.C. 1343.03(A), if a written loan agreement contains an agreed upon interest rate, that interest rate should be applied to the judgment, as long as that rate is permitted by law. American General Finance, Inc. v. Bauer (May 4, 2001), Delaware App. No. 00CAG8023.
{¶ 13} In the present case, the agreed upon interest rate was at 25% which is permissible, and that rate should have been applied to the judgment. The court should also raise the judgment to the uncontested amount of $584.95.
{¶ 14} Ohio Neighborhood's assignment of error is sustained.
III
{¶ 15} Ohio Neighborhood's assignment of error being sustained, the judgment of the trial court is reversed and remanded for an order consistent with this opinion
DONOVAN, P.J., and FAIN, J., concur.
Copies mailed to:
Hon. John S. Pickrel