Dix Rd. Property Mgt., L.L.C. v. Thomas , 2019 Ohio 5366 ( 2019 )

[Cite as Dix Rd. Property Mgt., L.L.C. v. Thomas, 2019-Ohio-5366.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
BUTLER COUNTY
DIX ROAD PROPERTY MANAGEMENT :
LLC,
: CASE NO. CA2019-07-126
Appellant,
: OPINION
12/30/2019
- vs - :
:
JEREMY E. THOMAS, et al.,
:
Appellees.
CIVIL APPEAL FROM HAMILTON MUNICIPAL COURT
Case No. 2019CVF00872
Joseph R. Matejkovic, 9078 Union Centre Boulevard, Suite 350, West Chester, Ohio 45069-
4879, for appellant
Jeremy E. Thomas, 401 South G Street, Hamilton, Ohio 45013-3218, appellee, pro se
Brittany A. Adams, 401 South G Street, Hamilton, Ohio 45013-3218, appellee, pro se
S. POWELL, J.
{¶ 1} Appellant, Dix Road Property Management LLC ("Dix Road"), appeals from a
judgment issued by the Hamilton Municipal Court granting it default judgment against
Butler CA2019-07-126
appellees, Jeremy E. Thomas and Brittany A. Adams.1 For the reasons outlined below, the
trial court's judgment is reversed and this matter is remanded for further proceedings.
{¶ 2} On May 24, 2017, Dix Road entered into a contract with Thomas and Adams
to lease residential rental property located in Trenton, Ohio. Pursuant to that contract, the
parties agreed that a 24% interest rate would apply to and accrue on any outstanding
balance that may be found due and payable to Dix Road. After entering into this contract,
Thomas and Adams failed to pay rent, late fees, utilities, and other charges then due and
payable to Dix Road. As a result, on March 29, 2019, Dix Road filed a complaint for breach
of contract requesting $2,670 in damages from Thomas and Adams. Dix Road also
requested prejudgment and postjudgment interest at the contracted 24% interest rate plus
court costs. Neither Thomas nor Adams filed any responsive pleading to Dix Road's
complaint.
{¶ 3} On June 12, 2019, Dix Road moved for default judgment against Thomas and
Adams. The trial court granted Dix Road's motion on June 27, 2019. However, rather than
granting Dix Road prejudgment and postjudgment interest at the contracted 24% interest
rate, the trial court instead granted Dix Road the following:
Therefore, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that Plaintiff Dix Road Property Management, LLC
is hereby granted judgment against Defendants Jeremy E.
Thomas and Brittany A. Adams, jointly and severally, in the
amount of $2,670.00 together with post-judgment interest at the
rate of 5% per year, and all costs of this action.
{¶ 4} Dix Road now appeals from the trial court's decision, raising the following
single assignment of error for review.
{¶ 5} THE TRIAL COURT ERRED TO THE PREJUDICE OF
1. Neither Thomas nor Adams filed a brief in this matter. Pursuant to App.R. 18(C), if the appellee fails to file
a brief, such as Thomas and Adams in this case, this court "may accept the appellant's statement of the facts
and issues as correct and reverse the judgment if appellant's brief reasonably appears to sustain such action."
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PLAINTIFF/APPELLANT BY GRANTING JUDGMENT WITH INTEREST AT OTHER THAN
THE CONTRACT RATE.
{¶ 6} In its single assignment of error, Dix Road argues that the trial court erred by
failing to award it prejudgment and postjudgment interest at the contracted 24% interest
rate. We agree.
{¶ 7} "The Ohio Supreme Court has held that, under R.C. 1343.03, parties can
agree by written contract to provide a higher rate of interest than the statutory maximum
rate." Marion Plaza, Inc. v. D & L Enters., 7th Dist. Mahoning No. 09-MA-207, 2010-Ohio-
6267, ¶ 12, citing Minster Farmers Coop. Exchange Co. v. Meyer, 117 Ohio St.3d 459,
2008-Ohio-1259, ¶ 25. Specifically, R.C. 1343.03(A) provides, in pertinent part, the
following:
[W]hen 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} The statute "encourages payment of money judgments resulting from tort or
contract claims" and "incentivizes one to keep financial promises or otherwise interest will
be added to the past-due amount from the date of nonpayment." Ginn v. Stonecreek Dental
Care, 12th Dist. Fayette Nos. CA2018-09-019, CA2018-09-019, and CA2018-11-022, 2019-
Ohio-3229, ¶ 16. "R.C. 1343.03(A) has been applied in awarding both prejudgment and
postjudgment interest in contract causes of action." Deerfield Twp. V. Mason, 12th Dist.
Warren No. CA2011-12-138, 2013-Ohio-779, ¶ 28, citing Hance v. Allstate Ins. Co., 12th
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Dist. No. CA2008-10-094, 2009-Ohio-2809, ¶ 5.
{¶ 9} "The statutory rate set forth in R.C. 1343.03(A) is a default rate that is applied
unless the parties have otherwise agreed on a different rate of interest in writing."
Midwestern Auto Sales, Inc. v. Lattimore, 12th Dist. Butler Nos. CA2014-02-029 thru
CA2014-02-032, CA2014-03-067, CA2014-03-068, CA2014-04-086, and CA2014-04-087,
2015-Ohio-53, ¶ 25, citing Realty Income Corp. v. Garb-Ko, Inc., 10th Dist. Franklin No.
13AP-35, 2013-Ohio-4932, ¶ 33. In order for there to be a deviation from the statutory rate
of interest, two prerequisites must be met: "(1) there must be a written contract between the
parties; and (2) the contract must provide a rate of interest with respect to money that
becomes due and payable." Chappell Door Co. v. Roberts Group, Inc., 12th Dist. Fayette
No. CA90-09-013, 1991 Ohio App. LEXIS 2081, *10-11 (May 6, 1991), citing Hobart Bros.
Co. v. Welding Supply Serv., Inc., 21 Ohio App.3d 142, 144 (10th Dist.1985). "Once a
judgment is rendered, the interest rate in the contract * * * will continue to govern until the
amount due is paid." Id., citing First Bank of Ohio v. Wigfield, 10th Dist. Franklin Nos. 07AP-
561 and 07AP-562, 2008-Ohio-1278, ¶ 20.
{¶ 10} Both prerequisites are met in this case; (1) there is a written contract between
the Dix Road, Thomas, and Adams that (2) sets forth a 24% interest rate with respect to
money that becomes due and payable to Dix Road. By failing to file any responsive
pleading to Dix Road's complaint, Thomas and Adams admitted the same and assented to
the contracted 24% interest rate. "[A] party receiving a default judgment in its favor is
entitled to the interest rate specified in the written contract." Marion Plaza, 2010-Ohio-6267,
¶ 13. Therefore, rather than the default statutory interest rate set forth in R.C. 1343.03(A)
and 5703.47, the contracted 24% interest rate applies to all money due and payable to Dix
Road. Accordingly, Dix Road's claim that the trial court erred by failing to apply the
contracted 24% interest rate to its award of postjudgment interest has merit.
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{¶ 11} Dix Road's claim that the trial court erred by failing to award it prejudgment
interest at that same contracted 24% interest rate also has merit. "Once a plaintiff receives
judgment on a contract claim, the trial court has no discretion but to award prejudgment
interest under R.C. 1343.03(A)." Textiles, Inc. v. Design Wise, Inc., 12th Dist. Madison Nos.
CA2009-08-015 and CA2009-08-018, 2010-Ohio-1524, ¶ 49; Deerfield Twp., 2013-Ohio-7at ¶ 28 (awarding "prejudgment interest is mandatory" in contract cases under R.C.
1343.03[A]). The record in this case indicates that prejudgment interest, at the contracted
rate of 24%, began accruing the date that Thomas and Adams breached their contract with
Dix Road in February 2019. See, e.g., Midwestern Auto Sales, 2015-Ohio-53 at ¶ 33
(appellant entitled to prejudgment interest from date of default on retail installment sales
contract). Therefore, because the trial court erred by failing to apply the contracted 24%
interest rate rather than the default statutory interest rate set forth in R.C. 1343.03(A) and
5703.47, Dix Road's single assignment of error is sustained, the trial court's judgment is
reversed, and this matter is remanded to the trial court for further proceedings.
{¶ 12} Judgment reversed and remanded.
HENDRICKSON, P.J., and RINGLAND, J., concur.
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