Thomas v. Laws , 2016 Ohio 8491 ( 2016 )

[Cite as Thomas v. Laws, 2016-Ohio-8491.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 104710
JOAN JACOBS THOMAS
PLAINTIFF-APPELLANT
vs.
BRIAN LAWS
DEFENDANT-APPELLEE
JUDGMENT:
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-16-857961
BEFORE: E.T. Gallagher, P.J., Laster Mays, J., and Celebrezze, J.
RELEASED AND JOURNALIZED: December 29, 2016
FOR APPELLANT
Joan Jacobs Thomas, pro se
31040 Lorain Road
North Olmsted, Ohio 44070
FOR APPELLEE
Brian Laws, pro se
3332 Virginia Avenue
Cleveland, Ohio 44109
EILEEN T. GALLAGHER, P.J.:
{¶1} This cause came to be heard on the accelerated calendar pursuant to App.R.
11.1 and Loc.R. 11.1. Plaintiff-appellant, Joan Jacobs Thomas, Esq. (“Thomas”),
appeals an order granting default judgment in her favor in the amount of $12,500.13.
She raises two assignments of error:
1. The decision of the trial court to not award interest on
plaintiff/appellant’s claim is against the manifest weight of the evidence
and contrary to law.
2. The decision of the trial court to award post-judgment interest at the
statutory rate as opposed to the rate specified in the written contract of the
parties was against the manifest weight of the evidence and contrary to law.
{¶2} We find some merit to the appeal, affirm the principal amount of the
judgment, but remand the case to the trial court to award post-judgment interest at the
contract rate instead of the statutory rate.
I. Facts and Procedural History
{¶3} Defendant-appellee, Brian Laws (“Laws”), retained Thomas to represent him
in custody matters in the juvenile division of the Cuyahoga County Common Pleas Court.
The parties signed an attorney fee agreement wherein Laws agreed to pay Thomas for
legal services at the rate of $250 per hour, and Laws paid a retainer of $2,500. The
attorney fee agreement also provided that “[a]ll past due charges w[ould] be charged a
1.5% per month charge on the unpaid balance.”
{¶4} Thomas later filed a complaint against Laws in the general division of the
Cuyahoga County Common Pleas Court, alleging that he breached the parties’ attorney
fee agreement by failing to pay for legal services rendered. Thomas further alleged that
Laws owed her a total of $25,201.40, including interest, pursuant to the terms of the
agreement. (Complaint ¶ 5-6.)
{¶5} Laws failed to plead or otherwise defend himself, and Thomas filed a motion
for default judgment, requesting judgment in the amount of $25,201.40, “along with
statutory interest,” as well as costs of the action. (Default Judgment at 1.) The court
called the case for a default hearing at which Thomas appeared through counsel. Laws
failed to appear even though he was properly served with process. Accordingly, the
court granted Thomas’s motion for default and entered judgment in her favor “in the
amount of $12,500.13 together with interest at the statutory rate from the date of
judgment and court costs.” (Judgment Entry.) Thomas now appeals the trial court’s
judgment.
II. Law and Analysis
A. Accrued Contract Interest
{¶6} In the first assignment of error, Thomas argues the trial court erred in failing
to award the appropriate rate of interest on her damages claim. She contends the court
erroneously failed to include interest at a rate of “1.5% per month” on the unpaid balance
as provided in the parties’ agreement.
{¶7} R.C. 1343.03, which governs interest rates on contracts and other written
instruments, provides, in relevant part:
(A) In cases * * * 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.
(Emphasis added.)
{¶8} Thus, where a contract provides an interest rate on money due and owing to a
creditor, the interest rate provided in the contract is the applicable interest rate to be
applied according to the terms of the contract. In this case, Laws agreed to pay interest
at the rate of 1.5% per month on unpaid attorney fees. Therefore, Thomas is entitled to
interest at that rate.
{¶9} Thomas attached a single unverified invoice to the complaint showing
accrued interest in the amount of $5,173.28. She provided neither an affidavit verifying
the amount of the interest nor an itemization of services performed, hours worked, or bills
sent to Laws for payment. Although a defaulting party admits liability by forfeiting a
defense to liability, the plaintiff must nevertheless establish damages. Reinbolt v. Kern,
183 Ohio App. 3d 287, 2009-Ohio-3492, 916 N.E.2d 1100, ¶ 27 (6th Dist.); McIntosh v.
Willis, 12th Dist. Butler No. CA2004-03-076, 2005-Ohio-1925, ¶ 10.
{¶10} Thomas requested damages in the amount of $25,201.40 plus interest. The
trial court awarded $12,500.13, plus “interest at the statutory rate from the date of
judgment and court costs.” The trial court did not make any findings regarding the
damages in the record.1 Although the docket shows the court held a default hearing,
there is no transcript of the hearing in the record from which we can evaluate the trial
court’s calculations. The record is also devoid of any dates on which services were
rendered or on which bills were sent to Laws in order to determine the accuracy of the
amount of claimed interest.
{¶11} The appellant bears the burden of demonstrating error on appeal by
reference to the record of the proceedings below. Knapp v. Edwards Laboratories, 61
Ohio St. 2d 197, 199, 400 N.E.2d 384 (1980); see also Stancik v. Hersch, 8th Dist.
Cuyahoga No. 97501, 2012-Ohio-1955. In the absence of a complete and adequate
record, a reviewing court must presume the regularity of the trial court proceedings and
the presence of sufficient evidence to support the trial court’s decision. Tisco Trading
USA, Inc. v. Cleveland Metal Exchange, Ltd., 8th Dist. Cuyahoga No. 97446,
2012-Ohio-1646, ¶ 6.
{¶12} We find no evidence in the record demonstrating that the trial court’s
damages determination was against the manifest weight of the evidence because there
exists no evidence in the record apart from the parties’ fee agreement and an unverified
invoice that does not even show an itemized break down of the charges and interest.
{¶13} Accordingly, the first assignment of error is overruled.
A trial court rendering a default judgment pursuant to Civ.R. 55 is not required to support
1
its damages award with findings. Henry v. Richardson, 193 Ohio App. 3d 375, 2011-Ohio-2098, 951
N.E.2d 1123, ¶ 9 (12th Dist.). Civ.R. 52, which governs findings of the court, states that “[f]indings
of fact and conclusions of law required by this rule and by Rule 41(B)(2) are unnecessary upon all
other motions including those pursuant to Rule 12, Rule 55 and Rule 56.”
B. Post-judgment Interest
{¶14} In the second assignment of error, Thomas argues the trial court erred in
awarding post-judgment interest at the statutory rate as opposed to the rate specified in
the parties’ contract. She contends the court’s order charging interest at the statutory rate
is contrary to law.
{¶15} Where two parties have contractually agreed to a percentage of interest to be
paid on money due and payable under a contract, that percentage is also applicable to any
interest accruing on a judgment arising from the underlying transaction. Shelly
Materials, Inc. v. Great Lakes Crushing, Ltd., 11th Dist. Portage No. 2013-P-0016,
2013-Ohio-5654, ¶ 59; see also Hobart Bros. Co. v. Welding Supply Serv., Inc., 21 Ohio
App.3d 142, 144, 486 N.E.2d 1229 (10th Dist.1985). Thus, “a judgment creditor is
entitled to an interest rate in excess of the statutory rate when (1) the parties have a
written contract, and (2) that contract provides an interest rate for money that becomes
due and payable.” Shelly Materials, Inc., citing Ohio Neighborhood Fin. Inc. v. Massey,
10th Dist. Franklin Nos. 10AP-1020 and 10AP-1121, 2011-Ohio-2165, ¶ 19.
{¶16} The trial court’s journal entry granting the default judgment ordered interest
on the judgment at the statutory rate instead of the rate provided in the parties’ agreement.
This mistake is contrary to law. We therefore sustain the second assignment of error.
III. Conclusion
{¶17} The trial court’s award of $12,500.13 is not against the manifest weight of
the evidence even though the parties’ agreement provided a monthly interest rate of 1.5
percent on any delinquent attorney fee bills. Although the trial court held a default
hearing, there is no transcript of the hearing in the record, and the record contains no
verified evidence on which to evaluate the trial court’s calculations. We must, therefore,
presume regularity. Tisco Trading USA, Inc., 8th Dist. Cuyahoga No. 97446,
2012-Ohio-1646, at ¶ 6.
{¶18} The trial court erred, however, in awarding post-judgment interest at the
statutory rate instead of the interest rate agreed to by the parties as provided in the parties’
agreement.
{¶19} Accordingly, we affirm that trial court’s award of $12,500.13, reverse the
court’s award of interest at the statutory rate, and remand the case to the trial court to
award post-judgment interest at the rate of 1.5 percent per month as provided in the
parties’ attorney fee agreement.
It is ordered that appellee and appellant share costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into
execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
EILEEN T. GALLAGHER, PRESIDING JUDGE
ANITA LASTER MAYS, J., and
FRANK D. CELEBREZZE, JR., J., CONCUR