Citibank, N.A. v. Hine

[Cite as CITIBANK, N.A. v. Hine, 2019-Ohio-464.]
IN THE COURT OF APPEALS OF OHIO
FOURTH APPELLATE DISTRICT
ROSS COUNTY
CITIBANK, N.A. :
:
Plaintiff-Appellee, : Case No. 17CA3624
:
vs. :
: DECISION AND JUDGMENT
KATHERINE HINE, : ENTRY
:
Defendant-Appellant. :
: Released: 02/07/19
_____________________________________________________________
APPEARANCES:
David L. Kastner, Attorney at Law, Beavercreek, Ohio, Pro Se Appellant.
Katherine Hine, Chillicothe, Ohio, Pro Se Appellant.
Robert C. Folland and David J. Dirisamer, Barnes & Thornburg LLP,
Columbus, Ohio for Appellee Citibank, N.A.
_____________________________________________________________
McFarland, J.
{¶1} Appellant Katherine Hine and interested party Appellant David
L. Kastner, Hine’s prior attorney, jointly appeal various entries of the Ross
County Court of Common Pleas. Appellants have set forth six assignments
of error challenging the propriety of the trial court’s ruling on the parties’
motions for summary judgment, Appellee Citibank, N.A.’s motion for
directed verdict, and the parties’ motions for sanctions. Upon review of the
record, we find merit to the first assignment of error. Accordingly, we
Ross App. No. 17CA3624 2
affirm in part, reverse in part, and remand the matter to the trial court for
further proceedings consistent with this opinion.
FACTUAL AND PROCEDURAL BACKGROUND
{¶2} On April 4, 2016, Citibank, N.A., successor to Citibank (South
Dakota), N.A. (hereinafter “Citibank”), filed a complaint on a credit card
account debt, alleging Katherine Hine owed the sum of $15,013.83.
Attached to the complaint was a Sears Mastercard account statement in the
name of Katherine Hine and addressed to her at 189 E. Water Street Rear,
Chillicothe, Ohio. The due date of the amount due was November 13, 2015.
The statement also reflected an interest rate of 25.24% on all regular
purchases. This appeal challenges various trial court rulings and involves a
voluminous trial court record, all of which arose from what appeared at the
outset to be a “rather straightforward collections case.”1
{¶3} On May 4, 2016, Katherine Hine filed a motion to dismiss the
complaint by and through her attorney, David L. Kastner.2 Among other
assertions, she argued that Citibank had no standing to establish its right to
collect on the Sears credit card account. Citibank filed a Brief in Opposition
to Defendant’s Motion to Dismiss. Hine filed a reply brief. The trial court
denied Hine’s motion to dismiss.
1
This comment is taken from expert witness testimony at a sanctions’ hearing in this case.
2
Hereinafter, these Appellants will be referenced as “Hine” and “Kastner.”
Ross App. No. 17CA3624 3
{¶4} Suffice it to say, there were numerous filings in the underlying
proceedings, which necessitated responsive pleadings from the adverse
party. While we set forth an outline of the proceedings here, in the interest
of brevity, we will set forth additional pleadings and dates in the body of this
opinion, where pertinent.
{¶5} On September 6, 2016, Hine filed a Jury Demand. On October
18, 2016, the court filed a pretrial conference Order which explicitly stated
at the last paragraph: “The Court directs that the attorney or attorneys who
will try this case shall be present at the pretrial.” Attorney Kastner later filed
a Motion to Convert December 2016 Pre-Trial Conference to Phone
Conference. The trial court granted Kastner’s request. Subsequent to the
telephone pre-trial conference, the court filed an entry scheduling a jury trial
date of August 3, 2017.
{¶6} Citibank filed notices of the depositions of Hine and another
person, Karen Stanley. Hine subsequently filed a “Notice Re Court’s
Scheduling.” This pleading sets forth 12 paragraphs of information for
purposes of “notice for the record.” Hine advises of the intent to appeal the
court’s orders compelling the depositions of Ms. Stanley and herself.
Several pertinent paragraphs are set forth as follows:
Ross App. No. 17CA3624 4
“3. The aforementioned orders were never sent to co-counsel
Robert Fitrakis, evidently because this court did not instruct the
clerk to do so.3
***
5. Without an extensive amount of prior notice, co-counsel has
long been unavailable for hearings on Tuesdays and Thursdays
because of his teaching responsibilities.
***
7. The court’s scheduling of May 2 was done without
consulting with co-counsel’s schedule. Co-counsel and counsel
share the representation. The undersigned generally does not
make court appearances in this case due to his responsibilities
with contract work involving the U.S. military.”
{¶7} On April 26, 2017, Hine, through Kastner, filed a Motion for
Stay to the Trial court, pending her appeal, supported by affidavits from
Stanley, Kastner, and herself. On May 4, 2017, the trial court overruled the
motion for stay.4 Hine’s appeal to this court was eventually dismissed. See
Citibank N.A. v. Hine, 2017-Ohio-5537, 93 N.E.3d 108 (4th Dist.).
{¶8} On May 8, 2017, Attorney Fitrakis filed a Motion for Leave to
Withdraw as Defendant’s Attorney. In the motion, Attorney Fitrakis advised
he was engaged “ostensibly” because Attorney Kastner was unavailable to
attend a previous hearing and that he had not been engaged for future
activity. Attorney Fitrakis attached an email from Attorney Dirisamer
3
The record does not reflect that Attorney Fitrakis ever filed a formal notice of appearance in this matter.
4
The Journal Entry was signed by Michael Ward, Judge Common Pleas Court, Ross County, Ohio, Sitting
by Assignment.
Ross App. No. 17CA3624 5
asking him to “clarify the nature of his representation,” as Karen Stanley had
advised that Kastner and Fitrakis were her attorneys and Attorney Kastner
had further advised he “would not be appearing in Ross County for any
proceedings related to this matter * * * due to the biased nature of the
Court.”
{¶9} On June 21, 2017, both Citibank and Hine filed motions for
summary judgment. On July 12, 2017, Attorney Darren L. Meade filed a
notice of appearance of co-counsel on behalf of Ms. Hine.
{¶10} On August 1, 2017, the trial court issued decisions on the
pending motions for summary judgment. The trial court found as a matter of
law that Citibank had standing to bring its action. The trial court granted
partial summary judgment to Citibank on the issue of standing and denied
Hine’s motion for summary judgment.
{¶11} On August 2, 2017, Attorney Paul N. Garinger filed a Notice of
Appearance as co-counsel on behalf of Citibank. On August 2, 2017,
Attorney Kastner filed a Motion to Withdraw as counsel. On August 3,
2017, Hine formally waived her appearance at the jury trial.
{¶12} The jury trial commenced on August 3, 2017. Steven Sabo,
assistant vice-president of Citibank, testified he is a primary custodian of
Citibank’s business records. He reviews the business records and has
Ross App. No. 17CA3624 6
reviewed the records of Katherine Hine. He testified Citibank maintains
records from accountholders, merchants, and credit bureaus. All
information is stored electronically and Sabo has access to the computer
system.
{¶13} Sabo identified Exhibit 1 as a true and accurate copy of a credit
card agreement, dated 2010, existing between Citibank and Appellant. The
card agreement, a 16-page document, governs the use of the account. Sabo
testified the document would have been sent to Appellant on or about
October 2010. Sabo testified he had verified that Appellant received the
card based on its code with a number that he cross-referenced to the actual
card product based upon Citibank’s electronic storage system. Specifically,
he testified:
“Systemically, there’s no record of ever turned down [sic]
coming back, so I would have to say yes, every payment- -
every billing statement was sent to Ms. Hine.”
{¶14} Exhibit 2 was identified as a card agreement from 2004. Sabo
testified Exhibit 2 was kept in the regular practice of Citibank. Exhibit 3
was identified as 367 pages of duplicated billing statements sent to
Appellant on a monthly basis and created by Citibank in the ordinary course
of its business. Sabo testified he maintained these records in the course of
his job duties.
Ross App. No. 17CA3624 7
{¶15} Exhibit 3, page 110, was a copy of a billing statement dated
November 16, 2010. It was addressed to Appellant. It showed a previous
balance of $49.00 and payment received of $49.00, bringing her account
balance to zero. Sabo testified that Exhibit 3 demonstrated that Appellant
used the credit card after she received the October 2010 card agreement
(Exhibit 1).
{¶16} Exhibit 4 was identified as 90 pages of copies of payments that
Citibank received throughout the years of the account. The exhibits showed
copies of a payment coupon which Citibank would prepare as part of its
monthly statement to be returned with the payment. The exhibit also
showed copies of checks Citibank received as payment. These documents
were also maintained in the ordinary course of business. Sabo explained he
had actually observed the process of Citibank’s receiving payment, making
copies of checks, and electronic storage.
{¶17} Sabo testified the last statement Appellant received on
December 17, 2014 reflected an account balance of $13,025.96. He also
identified the last billing statement sent to Appellant dated October 16, 2015,
which showed a total new balance of $15,013.83 and included interest.
{¶18} On cross-examination, Sabo admitted he does not have any
personal experience with Sears’ internal business practices. Sabo testified
Ross App. No. 17CA3624 8
that the Citibank account was branded with Sears on Citibank’s own card.
He admitted the account was not originated by Citibank so he does not know
what the application looked like or what the interest rate was. The account
was acquired by Citibank. Citibank does not have the origination records.
To his knowledge, the account with Sears was opened in August 1994.
{¶19} Sabo testified that Citibank does not have any card agreement
or other record of Appellant’s signing an agreement for a specified interest
rate or a specified rate of late fees. However, he further testified such an
agreement “does not exist within the credit card industry.”
{¶20} After Citibank presented its evidence and rested, Hine moved
for a directed verdict pursuant to Civ.R. 50. The Court overruled the
motion. Hine elected not to present evidence and rested. Citibank
subsequently moved for a directed verdict. After considering the arguments
of counsel, the trial court sustained Citibank’s motion.
{¶21} On September 8, 2017, Hine filed “Defendant’s Notice RE Pro
Se Status & Discharge of Counsel.” She explained she had discharged her
counsel and intended, for the time being, to represent herself. Underneath
the signature line, she listed the East Water Street Rear, Chillicothe address.
On the same date, Hine filed Defendant’s Response to Plaintiff’s Sanctions,
Ross App. No. 17CA3624 9
Costs & Interest Motions. The trial court scheduled a hearing on sanctions
for October 10, 2017.
{¶22} The sanctions hearing took place on October 19, 2017. Thomas
Spetnagel, an experienced litigation attorney in Ross County, testified as an
expert witness on behalf of Citibank. In his direct testimony, along with
explaining what materials and documents he had reviewed and the opinions
to which he arrived, Spetnagel commented:
“I then reviewed the court document, [sic] the court document,
to my dismay, I found that there were 172 filings with the
clerk’s office in what appeared to be a rather straight forward
collection case on a charge account, over 150 of them were
filed by counsel in the case alone. * * * In the words of one
person, a discovery nightmare, * * *. There’s nothing novel
about the underlying case and if I were given this timesheet for
a case that didn’t go off track and wasn’t a train wreck, I would
have been unwilling to come into the courtroom. * * * I don’t
think it’s the novelty of the case that’s driven anything that
comes into this—involving this case.”
{¶23} The trial court discussed the pleadings with counsel,
specifically noting problems with discovery Hine did not answer, objections
she did not fully explain, the conflicting addresses Hine gave and the attempt
to depose her, concluding: “There was a lot of time wasted, a lot of
argument wasted on getting the defendant’s deposition scheduled. * * * That
didn’t happen because of the defendant’s failure to cooperate.” The trial
court found as follows:
Ross App. No. 17CA3624 10
“All of the problems, all of the discovery issues that were
contested and were big problems in the case which warranted a
lot of time * * *. The court finds that based upon the defendant
and defense counsels, except Mr. Meade, action in this case that
the plaintiff is entitled to sanctions as a result of the plaintiffs
proceeding with the trial which was made necessary by the
actions of the defendant. The defendant didn’t appear for trial
by the way.”
{¶24} On November 15, 2017, the trial court granted Citibank’s
motion in part.
{¶25} On December 15, 2017, Katherine Hine and David Kastner
jointly appealed the interlocutory entries and final entry of the court. Where
pertinent, additional facts will be set forth below.
ASSIGNMENTS OF ERROR
“I. THE TRIAL JUDGE’S GRANT OF PARTIAL
SUMMARY JUDGMENT AND SUBSEQUENT DIRECTED
VERDICT TO APPELLEE PLAINTIFF CBNA
ERRONEOUSLY IGNORED OHIO REV. CODE SEC.
1343.03(A) AND APPLICABLE CASE LAW
ESTABLISHING THAT INTEREST RATES CLAIMED IN
BILLING STATEMENTS DO NOT CREATE CONTRACTS
FOR SUCH INTEREST ABSENT A SIGNED WRITTEN
CONTRACT SPECIFYING THAT INTEREST RATE.
II. THE TRIAL COURT ERRED IN FINDING AT
SUMMARY JUDGMENT THAT CBNA HAD ACQUIRED
ANY CONTRACT RIGHTS FROM SEARS’ AND BY THEN
AWARDING A DIRECTED VERDICT TO CBNA THAT
INCLUDED $6,960.14 IN USURIOUS INTEREST WITHIN
THE $15,013.83 AWARD, PLUS ADDITIONAL PRE-AND
POST-JUDGMENT INTEREST AT 25.24% ON THE FULL
$15,013.83 IN THE ABSENCE OF ANY COMPETENT
EVIDENCE TRACING CBNA’S CLAIMED RIGHT TO
Ross App. No. 17CA3624 11
CHARGE USURIOUS INTEREST TO A PREDECESSOR
WHO HAD THAT RIGHT AND IN THE ABSENCE OF A
WRITTEN CONTRACT WITH HINE TO PAY SUCH
INTEREST TO CBNA OR ANY PROVEN PREDECESSOR
OF CBNA.
III. THE TRIAL COURT ERRED BY IMPOSING $18,150 IN
SANCTIONS UPON APPELLANTS ALLEGEDLY
PURSUANT TO CIVIL RULE 11 AND OHIO REV. CODE
SEC. 2323.51, FOR APPELLEE’S CLAIMED TRIAL
PREPARATION ATTORNEY FEES IN THE COMPLETE
ABSENCE OF ANY EVIDENCE THAT EITHER
APPELLANT COMMITTED ANY SANCTIONABLE ACT.
IV. THE TRIAL COURT ERRED IN IMPOSING $18,150 IN
SANCTIONS OF WHICH $6700 IN ATTORNEY FEES
WERE AWARDED TO ATTORNEY GARRINGER PURELY
BECAUSE LEAD ATTORNEY FOLLAND LACKED JURY
TRIAL EXPERIENCE.
V. THE TRIAL JUDGE ERRED BY IMPOSING $4,266.20
IN ADDITIONAL SANCTIONS FOR FAILED EFFEORTS
TO TAKE HINE’S DEPOSITION DESPITE THE ABSENCE
OF PROOF OF SANCTIONABLE MISCONDUCT, IN
DEROGATION OF HIS OWN FINDINGS LIMITING THE
NUMBER OF ATTORNEYS TO BE COMPENSATED, AND
DUE TO MATHEMATICAL ERRORS IN CALCULATING
ATTORNEY FEES.
VI. APPELLANTS WERE DEPRIVED OF DUE PROCESS
OF LAW BY THE CUMULATIVE EFFECT OF TRIAL
COURT RULINGS THAT WERE CONSISTENTLY AND
ERRONEOUSLY ADVERSE TO APPELLANTS IN
VIOLATION OF THEIR RIGHTS TO AN IMPARTIAL
TRIBUNAL AS EVIDENCED BY THE VARIOUS
GROUNDLESS DISCOVERY AND SANCTIONS RULINGS
OF BOTH TRIAL JUDGES IN WHICH THEY TOOK
ADVANTAGE OF THE INABILITY OF BOTH
APPELLANTS TO APPEAR IN PERSON.”
Ross App. No. 17CA3624 12
ASSIGNMENT OF ERROR TWO
{¶26} For ease of analysis, we begin with Hine’s second assignment
of error. Hine asserts that Citibank failed to establish standing to bring suit
because there is no evidence that Citibank acquired, through merger or
otherwise, a transfer of Hine’s original Sears credit card and any associated
contract rights. Therefore, the trial court erred in granting partial summary
judgment and later, a directed verdict in favor of Appellee. For the reasons
which follow, we disagree.
STANDARD OF REVIEW
{¶27} Appellate review of summary judgment decisions is de novo,
governed by the standards of Civ.R. 56. Vacha v. N. Ridgeville, 136 Ohio
St.3d 199, 2013–Ohio–3020, 992 N.E.2d 1126, ¶ 19. Summary judgment is
appropriate if the party moving for summary judgment establishes that (1)
there is no genuine issue of material fact, (2) reasonable minds can come to
but one conclusion, which is adverse to the party against whom the motion is
made and (3) the moving party is entitled to judgment as a matter of law.
Capital One Bank (USA) N.A. v. Rose, 4th Dist. Ross No. 18CA3628, 2018-
Ohio-2209, at ¶ 23; Civ.R. 56; New Destiny Treatment Ctr., Inc. v. Wheeler,
129 Ohio St.3d 39, 2011–Ohio–2266, 950 N.E.2d 157, ¶ 24; Chase Home
Finance, LLC v. Dunlap, 4th Dist. Ross No. 13CA3409, 2014–Ohio–3484,
Ross App. No. 17CA3624 13
¶ 26.
{¶28} The moving party has the initial burden of informing the trial
court of the basis for the motion by pointing to summary judgment evidence
and identifying parts of the record that demonstrate the absence of a genuine
issue of material fact on the pertinent claims. Dresher v. Burt, 75 Ohio St.3d
280, 293, 662 N.E.2d 264 (1996); Chase Home Finance at ¶ 27. Once the
moving party meets this initial burden, the non-moving party has the
reciprocal burden under Civ.R. 56(E) to set forth specific facts showing that
there is a genuine issue remaining for trial. Dresher at 293, 75 Ohio St.3d
280, 662 N.E.2d 264. See also Rose, supra, at 24.
LEGAL ANALYSIS
{¶29} “Because an action on an account is founded upon contract, the
plaintiff must prove the necessary elements of a contract action, and, in
addition, must prove that the contract involves a transaction that usually
forms the subject of a book account.” Chase Bank, USA v. Curren, 191 Ohio
App.3d 507, 2010-Ohio-6596, 946 N.E.2d 810, (4th Dist.) at ¶14, quoting
Crown Asset Mgt., L.L.C. v. Gaul, 4th Dist. Washington No. 08CA30, 2009-
Ohio-2167, at ¶ 10, quoting Asset Acceptance Corp. v. Proctor, 156 Ohio
App.3d 60, 2004-Ohio-623, 804 N.E.2d 975, at ¶ 12. For a creditor to
adequately plead and prove an account, the account “must show the name of
Ross App. No. 17CA3624 14
the party charged.” Id. at ¶ 12, quoting Brown v. Columbus Stamping & Mfg.
Co., 9 Ohio App.2d 123, 126, 223 N.E.2d 373 (1967). Moreover, the
account must “begin[ ] with a balance, preferably at zero, or with a sum
recited that can qualify as an account stated, but at least the balance should
be a provable sum. Following the balance, the item or items, dated and
identifiable by number or otherwise, representing charges, or debits, and
credits, should appear. Summarization is necessary showing a running or
developing balance or an arrangement which permits the calculation of the
balance claimed to be due.” Id.
1. Hine’s argument on appeal.
{¶30} In this case, Hine filed a motion for summary judgment
arguing that Citibank had not proved ownership of the account in question
and therefore had no standing to sue. Citibank also filed a motion for
summary judgment with documentation purporting to show that Appellant’s
Sears credit card account was acquired by Citibank (South Dakota) N.A.,
which eventually merged with Citibank, N.A. Citibank also pointed out that
that there was no question that Hine had used the Citibank, N.A. account.
{¶31} “It is fundamental that a party commencing litigation must have
standing to sue in order to present a justiciable controversy and invoke the
jurisdiction of the * * * court.” Absolute Resolutions X, LLC, v. Ratta, 9th
Ross App. No. 17CA3624 15
Dist. Summit No. 28414, 2018-Ohio-3661, at ¶ 15, quoting Citibank N.A. v.
Rowe, 9th Dist. Lorain No. 12CA010217, 2013-Ohio-523, ¶ 8, quoting Fed.
Home Loan Mtge. Corp v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-
5017, ¶ 41. “In an action on an account, when an assignee is attempting to
collect on an account in filing a complaint, the assignee must ‘allege and
prove the assignment.’ ” Natl. Check Bur., Inc. v. Ruth, 9th Dist. Summit
No. 24241, 2009-Ohio-4171, ¶ 6, quoting Worldwide Asset Purchasing,
L.L.C. v. Sandoval, 5th Dist. Stark No. 2007-CA-00159, 2008-Ohio-6343,
¶ 26, quoting Zwick & Zwick v. Suburban Constr. Co., 103 Ohio App. 83, 84
(8th Dist.1956). “In other words, in order to prevail, the assignee must
prove that they are the real party in interest for purposes of bringing the
action. An assignee cannot prevail on the claims assigned by another holder
without proving the existence of a valid assignment agreement.” Id. quoting
Sandoval at ¶ 26. Failure to prove the assignment of an account leaves a
hole in the chain of title and bars an alleged assignee from recovering on the
account. Id.{¶32} The trial court’s entry granting summary judgment stated as
follows:
“* * * The documentation provides that Sears National Bank
Credit Card accounts were acquired by Citibank, N.A. in 2003.
* * * Defendant’s actual signed credit card agreement was not
presented as evidence in this case. However, credit card
Ross App. No. 17CA3624 16
agreements are contracts whereby the issuance and use of a
credit card creates a legally binding agreement (internal
citations omitted.) There is no dispute that Sears issued a credit
card to Defendant and she used the card to make purchases.
* * * Accordingly, the Court finds as a matter of law that
Plaintiff has standing to bring this action. * * *”
{¶33} Citibank’s motion for summary judgment was supported by the
affidavit of Steven Sabo, Citibank’s long-time employee, who averred he
was making the affidavit based on personal knowledge and review of
business records described herein. Sabo’s affidavit is set forth in pertinent
part as follows:
1. * * * Citibank is a national bank, chartered under the laws of the
United States, and maintains its office in Sioux Falls, South Dakota.
2. On or about August 1, 1994, a Sears Mastercard branded credit card
account was opened in Defendant’s name, for Defendant’s use
* * * with the current account ending in 4036, which is the credit card
account at issue in this case (the Account).
3. Citibank USA, N.A. acquired Sears branded credit card accounts,
including the Account, in November 2003. Citibank USA, N.A.
merged into Citibank (South Dakota), N.A., which later merged into
Citibank, N.A. The Account acquisition and consummated mergers
are reflected in true and accurate copies of documents marked with
Bates stamp numbers CIT-555, 571, 502-540 and attached hereto as
Exhibit A.
4. Citibank is the owner of the Account and is owed the account balance.
5. Defendant was notified of Citibank’s acquisition of the Account. In
March 2004, Defendant was provided with a card agreement
governing the Account, a true and accurate copy of which is marked
with Bates stamp numbers CIT-524-527 (the 2004 Card Agreement).
In November 2010, Defendant was sent updated terms and conditions
Ross App. No. 17CA3624 17
governing the Account, a true and accurate copy of which is marked
with Bates stamp numbers CITT-480 to CIT-495 (the 2010 Card
Agreement). The 2004 Card Agreement and the 2010 Card
Agreement (collectively the Card Agreement) is attached as Exhibit
B.”
{¶34} Hine contends that the only evidence in support of the claim
that Citibank, N.A. acquired her Sears account in 2003 is a 2003 CRA
Decision #117 from the Office of the Comptroller of the Currency (OCC)
granting approval of the proposed acquisition and merger. Hine cites the
OCC document as being the identical document proffered in other recent
Ohio litigation involving Sears credit card accounts allegedly acquired by
Citibank. Hine directs our attention to the decision in Citibank N.A. v.
Rowe, 2013-Ohio-523, a Ninth District case in which the appellate court,
upon examination of the identical document, concluded:
“* * * CRA Decision # 117, dated November 2003, indicates
the OCC's approval of Citibank USA, N.A.'s application “to
purchase substantially all of the assets of Sears National Bank,
[N.A.]” However, the letter states that, upon receipt of the
required documents from Citibank USA, N.A., the OCC would
“issue a letter certifying consummation of the transaction.” The
letter further states that “[i]f the asset purchase is not
consummated within one year from the approval date, the
approval shall automatically terminate, unless the OCC grants
an extension of the time period.” Thus, the OCC letter does not
confirm that Citibank USA, N.A. purchased the assets of Sears
National Bank, N.A., it merely confirms that the OCC granted
approval for such a transaction to take place.”
Ross App. No. 17CA3624 18
{¶35} We agree with Hine’s argument, in part, and disagree with the
trial court’s finding that the documentation demonstrates Citibank’s actual
acquisition of Hine’s Sears account. Our examination of the “Merger
Documents” attached to Sabo’s affidavit as Exhibit A, reveals that part of
Exhibit A is CRA Decision #117, November 2003. This document reflects
that “on October 16, 2003, the OCC approved the application of Citibank
USA, National Association, Sioux Falls, South Dakota, to purchase
substantially all of the assets of Sears National Bank, National Association,
Tempe, Arizona.”5 The conclusion of the letter reiterates that the application
was approved.
{¶36} Our review of the record reflects that the singular subject of
CRA decision #117 is the application of Citibank USA National Association
to acquire Sears National Bank assets. The CRA decision references only
OCC Control Nr. 2003-ML-02-008. According to the Office of the
Comptroller, United States Department of the Treasury website, each
application (emphasis added) or notice is assigned an OCC control number
that is a unique identifier. When requesting information or discussing the
application or notice with the OCC, it is helpful to reference the control
5
This document further provides in its fourth paragraph that the application was prompted by Citibank
USA’s planned acquisition of all private label and general purpose credit card accounts held by SEARS
NB.
Ross App. No. 17CA3624 19
number. See https://www.occ.gov/topics/licensing/corporate-activities-
weekly-bulletin/index-weekly-bulletin.html.
{¶37} The next document within Exhibit A merger documents is a
letter from the OCC, captioned “Corporate Decision #2006-08,” with a date
of August 3, 2006. The beginning of the letter indicates the subject is the
“[a]pplications by Citibank, N.A., Citibank (South Dakota), N.A. and certain
affiliates to internally reorganize and consolidate certain banking and credit
card operations.” This section also lists several Application Control
Numbers, however, the above Control No. 2003-ML-02-008, as referenced
in CRA decision #117 above, is not included. This letter contains a list of
applications approved and in Paragraph 11, our attention is called to the
“Application to merge Citibank USA, National Association, 701 East 60th
Avenue, Sioux Falls, South Dakota (a national credit card bank not limited
to CEBA activities) and Citibank (Nevada) National Association (“CBNV”)
with and into Citibank (South Dakota), N.A. (2006-ML-02-0011).”
Nowhere in the August 3, 2006 letter is Control No. 2003-ML-02-008 or
Sears identified or referenced.
{¶38} While as in the Rowe decision cited above, the above
documents demonstrate that Citibank intended to acquire the credit card
accounts of Sears, and that Citibank’s application was approved, there is no
Ross App. No. 17CA3624 20
further documentation to prove that the acquisition actually took place.
Corporate Decision #2006-08, upon close scrutiny, does not provide a link
between Control No. 2003-ML-02-008, Citibank’s application to acquire the
Sears assets, and actual acquisition. Exhibit A also attaches a document
captioned “Certificate of National Bank Merger” which indicates that on
July 1, 2011, Citibank (South Dakota) National Association into Citibank
National Association. The above documents demonstrate that the
application to merge Citibank USA, National Association and Citibank
(Nevada) National Association with Citibank (South Dakota) N.A. was
approved. However, as in Rowe, there is no further documentation to
demonstrate that Sears was in actuality a part of Citibank, N.A. at the time of
the 2011 merger. Therefore, we would agree with Hine that Citibank failed
to prove acquisition of her Sears credit card account.
{¶39} However, while Citibank has failed to prove it acquired Hine’s
Sears credit card account, we conclude that Citibank, N.A. does have
standing to bring the suit against Hine by virtue of its own agreement with
Hine in 2010. We next examine Exhibit B, “The Card Agreements.” The
first document attached as Exhibit B is a 2004 card agreement identifies
Citibank USA, N.A. as the issuer of the account. The second paragraph of
Ross App. No. 17CA3624 21
the card agreement mentions Sears, Sears Roebuck and Co., “Sears
purchase,” “Sears transaction” and “Sears entity.”
{¶40} Also attached to Exhibit B is a 2010 card agreement identifying
Citibank (South Dakota), N.A. as the issuer. The body of the card
agreement does not mention Sears but the bottom of each page of the
agreement contains the words “Sears Mastercard.” In the first paragraph of
the 2010 card agreement it states: “This card agreement is your contract with
us. It governs the use of your card and your account.” The third paragraph
of the card agreement also provides:
“You must use your account in accordance with this
Agreement. * * * This Agreement is binding on you unless you
close your account within 30 days after receiving the card and
you have not used or authorized use of the card.”
{¶41} Hine also asserts that while her use of the credit card may be
evidence of some sort of agreement, there is no evidence of the terms of the
original Sears credit card. We agree that evidence of the original terms of an
agreement alleged to be between Sears and her is absent from the record.
However, it does appear that Citibank, N.A. and Hine entered an agreement
in 2010.
{¶42} After Hine received the 2010 Card Agreement from Citibank,
N.A., she subsequently used it to make charges that are the subject of this
collection action. “Credit card agreements are contracts whereby the
Ross App. No. 17CA3624 22
issuance and use of a credit card creates a legally binding agreement.”
Taylor v. First Resolution, 148 Ohio St.3d 627, 2016-Ohio-3444, 72 N.E.3d
573, at ¶ 50, quoting Bank One, Columbus, N.A. v. Palmer, 63 Ohio App.3d
491, 493, 579 N.E.2d 284 (10th Dist.1989). Dudek, 702 F.Supp.2d at 839;
Citibank N.A. v. Hyslop, 10th Dist. Franklin No. 12AP–885, 2014-Ohio-844,
at ¶ 16–17; Discover Bank v. Heinz, 10th Dist. Franklin No. 08AP–1001,
2009-Ohio-2850, at ¶ 17; Discover Bank v. Poling, 10th Dist. Franklin No.
04AP–1117, 2005-Ohio-1543, at ¶ 18.
{¶43} Based on evidence of Hine’s use of the Citibank, N.A. credit
card, we agree with the trial court’s ruling that Citibank did have standing to
pursue its action against Hine. The Card Agreement issued in 2010
identifies Citibank, N.A. as the issuer. The agreement explicitly states in the
first paragraph that “[t]his is your contract with us.” Further, the agreement
explicitly advises that Hine must close the account in 30 days or the contract
will be binding upon her. The Account Statements attached as “Exhibit C,”
and the Account Information showing payments made, attached as “Exhibit
D,” reflect activity on the account after October 2010 when the account had
actually achieved a zero balance.
{¶44} Under this assignment of error, Hine has also argued that
Ross App. No. 17CA3624 23
Citibank, N.A.’s witness Sabo, both in motion practice and at trial, was not
competent to testify. Civ.R. 56(E) states: “Supporting and opposing
affidavits shall be made on personal knowledge, shall set forth such facts as
would be admissible in evidence, and shall show affirmatively that the
affiant is competent to testify to the matters stated in the affidavit. Sworn or
certified copies of all papers or parts of papers referred to in an affidavit
shall be attached to or served with the affidavit.” “Personal knowledge” is
“ ‘[k]nowledge gained through firsthand observation or experience, as
distinguished from a belief based on what someone else has said.’ ” Curren,
supra, at ¶ 17, quoting Bonacorsi v. Wheeling & Lake Erie Ry. Co., 95 Ohio
St.3d 314, 2002-Ohio-2220, 767 N.E.2d 707, at ¶ 26, quoting Black's Law
Dictionary (7th Ed.Rev.1999) 875. It is “ ‘knowledge of factual truth which
does not depend on outside information or hearsay.’ ” Curren, supra,quoting Residential Funding Co., L.L.C. v. Thorne, 6th Dist. Lucas No. L–
09–1324, 2010-Ohio-4271, at ¶ 64, quoting Modon v. Cleveland (Dec. 22,
1999), 9th Dist. Medina No. 2945–M, 1999 WL 1260318, at *2.
Furthermore, “[f]or evidentiary material attached to a summary judgment
motion to be considered, the evidence must be admissible at trial.” Curren,
supra, at ¶ 16, quoting Civ.R. 56(E) and Pennisten v. Noel, 4th Dist. Pike
No. 01CA669, 2002 WL 254021, (Feb. 8, 2002), at *2. We review the
Ross App. No. 17CA3624 24
court's rulings on the admissibility of evidence for an abuse of discretion.
Lawson v. Y.D. Song, M.D., Inc., 4th Dist. Scioto No. 97 CA 2480, 1997 WL
596293, (Sept. 23, 1997), at *3. See State v. Sage, 31 Ohio St.3d 173, 510
N.E.2d 343, (1987), at paragraph two of the syllabus. The term “abuse of
discretion” implies that the court's attitude is unreasonable, arbitrary, or
unconscionable. State v. Adams, 62 Ohio St.2d 151, 157, 404 N.E.2d 144(1980).
{¶45} Here, the 2010 Card Agreement was in effect, according to the
date listed on the document, on October 4, 2010. Sabo’s affidavit further
provides:
6. Citibank’s records regarding the Account contain the name and
address of the Defendant, the Account number, charges made on the
Account, finance charges, fees, and other charges to the Account,
payments and credits applied to the Account, and any outstanding
account balance owed by the Defendant, all of which records are
collectively referred to as “Defendant’s Account Information.”
7. Citibank maintains records, including Defendant’s Account
information, which are kept in the ordinary course of its business,
which are made at or near the time of each event recorded by someone
with personal knowledge of the events, or from information
transmitted by someone with personal knowledge of each event, and a
business duty to set forth such information in the records.
8. According to the Defendant’s Account Information and Citibank
records, Defendant did use the Account to charge amounts to the
Account and to acquired goods and/or services. Plaintiff mailed
transaction detail to Defendant every month that there was activity on
the Account (the Account statements). The Account Statements were
sent to an address provided by the Defendant.
Ross App. No. 17CA3624 25
9. The Account Statements reflect the charges and payments on the
Account. True and accurate copies of the available Account
Statements are marked with Bates stamp numbers of CIT-001 to CIT-
367 and attached as Exhibit C.
10. The Defendant’s Account Information also includes information
regarding payments on the Account. True and accurate copies of
available payment copies made to the Account are marked with Bates
stamp numbers of CIT-386 to CIT-479 and are attached as Exhibit D.
{¶46} Nothing in evidence convinces us that Sabo, a vice-president
and 26-year employee of Citibank, was not competent to testify regarding
Hine’s Citibank, N.A. credit card account originating in 2010. Nor does it
appear that the trial court abused its discretion in admitting Sabo’s testimony
and supporting documentation into evidence. Sabo testified the account
statements were mailed to addresses provided by Hine and the account
information reflects activity in the way of both charges and payments. We
find there is no evidentiary dispute that Hine used the Citibank, N.A. credit
card. Therefore, Citibank, N.A. and Hine entered into an agreement and
Citibank, N.A. had standing to bring the suit against her.
2. Sua Sponte consideration of the account statements of the account
in question.
{¶47} Hine has consistently maintained that Citibank did not prove
ownership of her Sears account. The Supreme Court of Ohio has also
indicated that where a legal issue is not argued, but is nevertheless implicit
in another issue that has been presented by an appeal, it may reach that
Ross App. No. 17CA3624 26
unargued issue. In re C.W. at 14. See Belvedere Condominium Unit Owners'
Assn. v. R .E. Roark Cos. Inc., 67 Ohio St.3d 274, 279, 617 N.E.2d 1075(1993). “When an issue of law that was not argued below is implicit in
another issue that was argued and is presented by an appeal, we may
consider and resolve that implicit issue. To put it another way, if we must
resolve a legal issue that was not raised below in order to reach a legal issue
that was raised, we will do so.” Id.{¶48} Steve Sabo testified on cross-examination that Hine’s account
was a Citibank account “branded with Sears on its card.” On redirect, Sabo
explained that Citibank issues different credit cards under different brands.
He testified:
“For example, American Airlines. American Air doesn’t issue
credit cards. They go through Citibank just to have their name
on the plate. Same thing with Sears. * * * There’s fraternities,
sororities, colleges, there’s all sorts of different branding out
there.”
{¶49} Voluminous copies of account statements were submitted with
Citibank’s motion for summary judgment. Additional voluminous copies
were submitted at trial as Exhibit 3. This discussion will focus on the
account statements submitted at trial. On an Account Statement with a
Payment Due Date of December 13, 2010, and after the issuance of the
October 10, 2010 Card Member Agreement, the Account Statement reflects
Ross App. No. 17CA3624 27
the last four digits of an account ending in “9252.” However, in a later
Account Statement with Payment Due Date of December 13, 2012, the last
four digits of an account ending in “4036” are reflected on the statement. A
discrepancy as to account numbers was at issue in S.M.S. Financial 30,
L.L.C., v. Frederick D. Harris, M.D., Inc., 8th Dist. Cuyahoga No. 105710,
2018-Ohio-2064. The discrepancy was significant because the appellants
had multiple lines of credit with National City Bank, whose assets were
eventually acquired by Appellee S.M.S. The appellate court agreed with the
trial court that the account in question was the correct debt.
{¶50} The appellate court observed at paragraphs 46-48:
“Had appellants believed that SMS was collecting on the wrong
debt, they could have provided evidence demonstrating that
additional accounts existed with National City Bank. * * *
A review of the exhibits submitted at trial reveals that while the
handwritten numbers and the account number on the PNC bank
statements and Schedule of Loans do not match, what does
match and remains consistent and constant is the UCC
financing statement file number assigned by the Ohio secretary
of state. This evidence demonstrates that SMS is collecting on
the correct debt. * * *
In light of evidence that the LOC and UCC filing bears this
faxed date, contains a secretary of state file number that
remains constant throughout all the continuations filed, and the
continuations bear the account number that SMS is attempting
to collect on, the trial court's decision was not against the
manifest weight of the evidence.”
{¶51} In this case, the Account Statements demonstrate that Sears
Ross App. No. 17CA3624 28
Mastercard was at the top of each statement and toward the bottom of the
statement was a notation “This Account is issued by Citibank (South
Dakota), N.A.” The November 2010 Account Statement reflects this.
{¶52} On the August 13, 2011 Account Statement, the following is
noted underneath “Cardmember News”:
“IMPORTANT NOTICE ABOUT YOUR ACCOUNT.
Effective July 1, 2011, Citibank (South Dakota), N.A., is
merged into Citibank, N.A.”
{¶53} The September 13, 2011 Account Statement continues to reflect
the 9252 account number but instead in the middle of the statement states:
“This Account is issued by Citibank, N.A.”
{¶54} In the exhibits presented at trial, there is a gap in the account
statements between the May 13, 2012 statements and the December 2012
statements. The May 2012 statement still carried the 9252 number but the
December 2012 statement reflects the 4036 number.
{¶55} Then, the April 13, 2015 Account Statement reflects the 4036
account number and that it is issued by Citibank, N.A. What remains
consistent throughout the account statements is the fact that Sears
MasterCard is printed at the top of each account statement, and that the
payment information reflects that Karen Stanley (Hine’s personal friend,
Ross App. No. 17CA3624 29
spiritual advisor, and paralegal) continued to pay on the Sears-branded
Citibank account “4036” until after March 2015.
{¶56} In Defendant’s Second Set of Responses to Plaintiff’s First &
Second Set of Interrogatories, Requests for Production of Documents &
Requests for Admission, Hine gave these responses:
Request for Admissions No. 1: Admit that you opened an
account with Sears for an extension of credit, now owned by
Citibank.
“* * * It appears that I had several accounts with Sears’ Credit
Card Services, including the one that is the subject of this
litigation. But I deny that the account subject to this lawsuit is
‘now owned by Citibank.’”
Request for Admissions No. 4: Admit that you defaulted under
the terms and conditions of the extension of credit by failing to
pay the minimum amount due on time, in the amount stated in
the Card Statement.
“I admit that I did not authorize any payments to Sears after
March 2015.”
In Request for Production No. 7: Produce all documents
relating to and/or referencing the account.
“Other than documents Plaintiff has produced, I have no such
documents other than the attached checkbook register summary
of checks for payments to Sears written by Karen Stanley and
summarized by her for the period December 2012 through
March 2015.”
{¶57} As will be discussed more fully below, a March 30, 2015 email
Ross App. No. 17CA3624 30
between Hine and Karen Stanley demonstrates that Hine acknowledged
owing on the Sears account and directed Karen Stanley to stop making
payments on it. Despite the conflict in the actual account numbers, Hine has
not provided any evidence in the record that Citibank has attempted to
collect on the wrong account. Hine admits she once had several accounts
with Sears, including the one at issue in this case. Although she denied
Citibank’s ownership of the account, as set forth above, we have found that
Hine and Citibank had entered into an agreement, based on the October 2010
Card Member Agreement. The payment information in the record shows
payment until after March 2015. Hine’s direction to Karen Stanley
demonstrates payments ceased on the account which Citibank seeks to
collect after March 2015. Based on this evidence, we sua sponte find despite
the conflicting account numbers, Citibank is seeking to collect on the correct
“Sears branded” credit card account.
{¶58} Based on the above, we find no merit to Hine’s argument that
Citibank, N.A. had no standing to bring suit against her. Accordingly, we
overrule the second assignment of error.
ASSIGNMENT OF ERROR ONE
{¶59} At trial, Citibank requested a directed verdict based on the
Ross App. No. 17CA3624 31
amount of charges incurred by Hine, as well as the amount of interest
accrued, in the amount of $15,013.83. On appeal, Hine argues that Citibank
did not prove that the right to charge interest exceeding the statutory amount.
For the reasons which follow, we agree with Hine.
STANDARD OF REVIEW
{¶60} Under Civ.R. 50(A)(4), the court should grant a motion for
directed verdict if “the trial court, after construing the evidence most
strongly in favor of the party against whom the motion is directed, finds that
upon any determinative issue reasonable minds could come to but one
conclusion upon the evidence submitted and that conclusion is adverse to
such party.” “A motion for directed verdict does not present a question of
fact or raise factual issues, although the trial court is required to review and
consider the evidence.” Berry v. Paint Valley Supply, 4th Dist. Highland No.
16CA18, 2017-Ohio-4254, at ¶ 39, quoting Mender v. Chauncey, 2015-
Ohio-4105, 41 N.E.3d 1289, ¶ 10 (4th Dist.), citing Ruta v. Breckinridge–
Remy Co., 69 Ohio St.2d 66, 430 N.E.2d 935 (1982), paragraph one of the
syllabus. A motion for directed verdict tests the legal sufficiency of the
evidence rather than its weight or the credibility of witnesses. Mender at
¶ 10, citing Ruta, at 68–69. “Because a motion for directed verdict presents
a question of law, appellate review of a trial court's decision on the motion is
Ross App. No. 17CA3624 32
de novo.” Bennett v. Admr., Ohio Bur. of Workers' Comp., 134 Ohio St.3d
329, 2012–Ohio–5639, 982 N.E.2d 666, ¶ 14.
LEGAL ANALYSIS
{¶61} In support of Hine’s argument that Citibank was not entitled to
the amount of interest requested, she directs us to R.C. 1343.03(A). R.C.
1343.03(A) provides in pertinent part:
“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 book account, * * *, 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.”6
{¶62} For entitlement to a rate different than the statutory rate of
interest to be charged, R.C. 1343.03(A) requires that: (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. Yager
Materials, Inc. v. Marietta Indus. Ent., Inc., 116 Ohio App.3d 233, 236, 687
N.E.2d 505 (4th Dist. 1996); P. & W.F., Inc. v. C.S.U. Pizza, Inc., 91 Ohio
App.3d 724, 729, 633 N.E.2d 606, 609 (8th Dist.1993); Hobart Bros. Co. v.
6
R.C. 5703.47 (B) provides in pertinent part: “On the fifteenth day of October of each year, the tax
commissioner shall determine the federal short-term rate. For purposes of any section of the Revised Code
requiring interest to be computed at the rate per annum required by this section, the rate determined by the
commissioner under this section, rounded to the nearest whole number per cent, plus three per cent, shall be
the interest rate per annum used in making the computation for interest that accrues during the following
calendar year.”
Ross App. No. 17CA3624 33
Welding Supply Serv., Inc., 21 Ohio App.3d 142, 144, 486 N.E.2d 1229,
1231-1232 (10th Dist.1985); see also Sys. Data, Inc. v. Visi Trak Corp., 72
Ohio Misc.2d 8, 10-11, 655 N.E.2d 287, 288-289 (1995). Thus, R.C.
1343.03(A) requires a written contract before a creditor may be entitled to
interest rates higher than the 4% indicated in R.C. 5703.45.7
{¶63} Hine argues that Citibank is unable to produce a written, signed
contract evidencing the debtor’s assent to a contractual rate of interest. We
agree. We have previously determined that Citibank, N.A. held a
contractual relationship with Hine based on the October 2010 Card
Agreement. After the Citibank, N.A. credit card was issued, instead of
closing the account within 30 days, Hine continued to use the card and
incurred charges. Citibank has directed our attention to these provisions in
the 2010 Card Agreement:
Changes to This Agreement
We may change the rates, fees, and terms of this
Agreement from time to time as permitted by law. The
changes may add, replace, or remove provisions of this
Agreement. We will give you advance written notice of
the changes and a right to opt out to the extent required
by law.
7
R.C. 1343.03(A) provides in pertinent part: “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 book account,
* * *, 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.”
Ross App. No. 17CA3624 34
{¶64} Citibank further points to the following language in the 2004
Card Agreement, “Variable Annual Percentage Rate for Purchases and Cash
Access”:
“Your annual percentage rates may also vary if you default
under and Card Agreement that you have with us because you
fail to make a payment to us or any other creditor when due,
you exceed your credit line, or you make a payment to us that is
not honored. In such circumstances, we may increase y our
annual percentage rates (including any promotional rates) on all
balances to a variable default rate of 23.99% plus the applicable
U.S Prime rate.”
{¶65} Finally, Citibank cites Sabo’s trial testimony as follows:
A: This is a Citibank Account that’s branded with Sears on
its card.
***
Q: Okay, Now as we sit here today, you’re not asking for
any charges or amounts that Ms. Hine may have owed to
Sears, are you?
A: No.
Q: You’re only asking for amounts owed to Citi, am I
correct?
A: Correct.
***
Q. And does this statement disclose an interest rate?
A. Yes, it does.
Q. And what is that rate?
Ross App. No. 17CA3624 35
A. 25.24%
Q. And again, that’s the same rate that you’ve testified is on
every one of these statements.
A. That is correct, yes.
{¶66} The language of the 2004 Card Agreement is not pertinent. The
2010 Card Member Agreement does not reflect an interest rate. And, Sabo’s
testimony that the Citibank Account Statements revealed a 25.24% interest
rate, and therefore controlled the numerical calculations, is not in accordance
with the law set forth above in Yager. Yager further observed that the Tenth
District Court of Appeals in Hobart Bros. Co., supra, at 144, 486 N.E.2d at
1231-1232, also ruled that “a statement on an invoice or bill to which the
other party has not assented does not meet the requirement of R.C.
1343.03(A) as to the existence of a written contract between the parties.” Id.8
In Yager, supra, at 236, we held:
“The statements on appellee's invoices to the effect that an
eighteen percent service charge would be assessed on past due
balances was insufficient to establish a written contract for that
rate pursuant to R.C. 1343.03(A). There is nothing in the record
to indicate that appellant ever assented to that provision.
Moreover, as the parties stipulated, there was no written
agreement by appellant to pay any finance charge at all.
Appellee is therefore relegated to the ten percent per annum rate
8
This principle has subsequently been adopted and applied by other courts as well. See, e.g., Olander &
Brophy v. Northeastern Pools (Jan. 7, 1991), Stark App. No. CA-8219, unreported, 1991 WL 6268; Kut
Kwick Corp. v. N. Dixie Parts & Serv., Inc. (Apr. 21, 1988), Montgomery App. No. CA 10678, unreported,
1988 WL 38130.
Ross App. No. 17CA3624 36
specified in R.C. 1343.03(A) rather than the eighteen percent
per annum rate which appears to have been applied below.”
{¶67} Yager involved a suit on an account for limestone which Yager
had sold and supplied to the appellant's place of business. Yager sued to
recover sums allegedly owing on open account, and the trial court entered
judgment in favor of Yager in the amount claimed. On appeal, we held that
provision in Yager’s invoices, specifying an interest at rate of 18 percent per
annum was not sufficient to constitute a “written contract” between parties
for payment of interest at this 18 percent rate.
{¶68} The Yager analysis was applied in Capital One v. Heidebrink,
6th Dist. Ottawa No. OT08049, 2009-Ohio-2931, an action to collect on a
credit card account. Capital One argued that it proved a contract by,
amongst other evidence, mutual assent to the terms and conditions through
use of the credit card.” However, the appellate court pointed out Capital
One did not submit any evidence of the “terms and conditions” or
“IMPORTANT DISCLOSURES” to which Heidebrink allegedly assented,
or any of the terms which were “disclosed” to Heidebrink when the account
was opened. Id. at 45.
{¶69} Capital One also emphasized its “customer agreement” as
evidence of a contract. However, the appellate court reiterated that the
customer agreement did not state what the fees would be for over limit
Ross App. No. 17CA3624 37
occurrences or late payments. Instead, each relevant section of the
“customer agreement” referred to fees “disclosed” or “told to” the account
holder when the account was opened. “Capital One has submitted no
evidence of what specific fees were disclosed to Heidebrink.” Id. at 46.
{¶70} The Heidebrink court observed that “[M]onthly statements of
credit card accounts do not demonstrate the underlying contract or agreed-
upon terms.” The appellate court held at ¶ 43:
“Capital One has not submitted any evidence of the interest rate
to which Heidebrink assented. Because Capital One did not
submit proof that its claimed interest rate of 20.40 percent was
a term of an agreed-upon contract, the trial court did not abuse
its discretion in imposing the statutory rate pursuant to R.C.
1343.03(A). The same rationale and result applies to Capital
One's claimed over limit fees and late fees. Capital One has not
shown specific fees which were terms of a contract between it
and Heidebrink. The trial court did not abuse its discretion in
subtracting these fees from the amount claimed.”
{¶71} In this case, we have found that the contractual agreement
between Citibank, N.A. and Hine arose as a result of Hine’s use of her credit
card after being provided the 2010 Card Agreement. The 2010 Card
Agreement with Citibank, N.A. does not contain any section which sets forth
the interest rate applicable to the account. Sabo testified as to the interest
rate set forth on the monthly account statements sent to Appellant.
However, under Yager, monthly statements are not sufficient evidence of a
Ross App. No. 17CA3624 38
written contract. As a result, in the absence of a written contract, Citibank is
only entitled to interest at the rate provided by statute.
{¶72} For actions seeking money due on an account, the Supreme
Court of Ohio has declared that the creditor may only seek interest on the
account at the rate provided by statute, when the creditor is unable to
produce a written, signed contract evidencing the debtor's assent to a
contractual rate of interest. Discover Bank v. Schwartz, 2016-Ohio-2751, 51
N.E.3d 694 (2nd Dist.), at ¶ 22. Minster Farmers Coop. Exchange Co. v.
Meyer, 117 Ohio St.3d 459, 2008-Ohio-1259, 884 N.E.2d 1056, ¶ 29 (2008).
{¶73} Appellee has argued that South Dakota law governs the issues
herein. The 2010 Card Agreement sets forth as follows:
Governing Law and Enforcing our Rights
Governing law. Federal law and the law of South
Dakota, where we are located, govern the terms and
enforcement of this Agreement.
{74} In contractual choice-of-law situations, the law of the chosen
state is applied to resolve the substantive issues in the case, while the law of
the forum state will govern procedural matters.” Discover Bank v. Schwartz,
2016-Ohio-2751, 51 N.E.3d 694 (2nd Dist.), quoting Citibank (S. Dakota),
N.A. v. Perz, 191 Ohio App.3d 575, 2010-Ohio-5890, 947 N.E.2d 191, ¶ 28
(6th Dist.), citing Burns v. Prudential Secs., Inc., 167 Ohio App.3d 809,
Ross App. No. 17CA3624 39
2006-Ohio-3550, 857 N.E.2d 621, ¶ 16, fn. 5 (3rd Dist.); White v. Crown
Equip. Corp., 160 Ohio App.3d 503, 2005-Ohio-1785, 827 N.E.2d 859, ¶ 13
(3rd Dist.). In Discover Bank, the appellate court noted that subsequent to
the Minster Farmers decision, the Third and Sixth Appellate Districts have
applied the holding of the Supreme Court to credit card collection cases, and
have concluded that when the creditor's documents fail to demonstrate the
parties' assent to a specific interest rate and to the imposition of late fees or
over-the-limit fees, then a genuine issue of fact remains as to the balance
owed on the account. Retail Recovery Serv. of NJ v. Conley, 3rd Dist.
Mercer No. 10–09–15, 2010-Ohio-1256, 2010 WL 1173099, ¶ 20;
Heidebrink, supra, at ¶ 28. The appellate court held at ¶ 23 and ¶ 24:
“Since Discover Bank is attempting to collect on an account
applying a variable rate that may have exceeded the statutory
rate set either by Ohio or Delaware law, and applied late fees to
which the debtor may not have assented, it has not established
that it is entitled to judgment as a matter of law. Upon remand,
the trial court will need to determine whether Delaware or Ohio
law should be applied to verify the applicable interest rates. For
the reasons explained above, the documents presented by
Discover Bank in its pleadings do not establish, to any degree
of mathematical certainty, the amount of money due on the
account. Therefore, we conclude that Discover Bank has not
established that it is entitled to judgment on the pleadings.”
{¶75} Based upon the law set forth above, as well as our de novo
review of the record, we find reasonable minds could come to but one
conclusion and that is that Citibank has failed to establish that Hine assented
Ross App. No. 17CA3624 40
to any explicitly set forth interest rate over the statutory limit. As such, the
trial court erred in granting Citibank’s motion for a directed verdict as to the
precise amount of damages awarded. We sustain Hine’s second assignment
of error and remand the matter for a determination as to whether South
Dakota or Ohio law should be applied to verify the applicable interest rates.
ASSIGNMENTS OF ERROR THREE, FOUR, AND FIVE
{¶76} Because the above assignments of error all challenge the trial
court’s imposition of sanctions pursuant to Civ.R. 11 and R.C. 2323.51, we
will consider Hine and Kastner’s arguments jointly.
STANDARD OF REVIEW
{¶77} Civ.R. 11 provides that for pleadings, motions, and other
documents signed by attorneys representing parties in a case, the signature
of an attorney “constitutes a certificate by the attorney * * * that the attorney
* * * has read the document; that to the best of the attorney's * * *
knowledge, information, and belief there is good ground to support it; and
that it is not interposed for delay.” The rule further provides that “[f]or a
willful violation of this rule, an attorney * * *, upon motion of a party or
upon the court's own motion, may be subjected to appropriate action,
including an award to the opposing party of expenses and reasonable
attorney fees incurred in bringing any motion under this rule.” See Capital
Ross App. No. 17CA3624 41
One Bank v. Day, 176 Ohio App.3d 516, 2008-Ohio-2789, 892 N.E.2d 932,
at ¶ 9.
{¶78} “We will not reverse a court's decision on a Civ.R. 11 motion
for sanctions absent an abuse of discretion. State ex rel. Fant v. Sykes, 29
Ohio St.3d 65, 505 N.E.2d 966 (1987). An abuse of discretion occurs when
a decision is unreasonable, arbitrary, or unconscionable. State ex rel. Worrell
v. Ohio Police & Fire Pension Fund, 112 Ohio St.3d 116, 2006-Ohio-6513,
858 N.E.2d 380, ¶ 10.” Capital One Bank v. Day, at ¶ 8, quoting State ex rel.
Dreamer v. Mason, 115 Ohio St.3d 190, 2007-Ohio-4789, 874 N.E.2d 510,
at ¶ 18.
{¶79} “R.C. 2323.51 provides for an award of attorney fees to a party
harmed by ‘frivolous conduct’ in a civil action.” Rose v. Cochran, 4th Dist.
Ross No. 14CA3445, 2014-Ohio-4979, at ¶ 35, quoting Moss v. Bush, 105
Ohio St.3d 458, 2005–Ohio–2419, 828 N.E.2d 994, fn. 3. “The General
Assembly vests the decision whether to award sanctions, including an award
of reasonable attorney fees, in the court.” State ex rel. Striker v. Cline, 130
Ohio St.3d 214, 2011–Ohio–5350, 957 N.E.2d 19, ¶ 10; R.C. 2323.51(B)(1)
(“The court may assess and make an award to any party to the civil action or
appeal who was adversely affected by frivolous conduct”). The trial court's
Ross App. No. 17CA3624 42
decision whether to award sanctions under R.C. 2323.51 will not be reversed
absent an abuse of discretion. Striker at ¶ 11.
{¶80} When the question regarding what constitutes frivolous conduct
calls for a legal determination, such as whether a claim is warranted under
existing law, an appellate court is to review the frivolous conduct
determination de novo, without reference to the trial court's decision. Ogle v.
Greco, 4th Dist. Hocking No. 15CA2, 2015-Ohio-4841, at ¶ 30; Natl. Check
Bur. v. Patel, 2nd Dist. Montgomery No. 21051, 2005–Ohio–6679 at ¶ 10;
accord Riverview Health Inst., L.L.C. v. Kral, 2nd Dist. Montgomery No.
24931, 2012–Ohio–3502, ¶ 33.
LEGAL ANALYSIS
{¶81} “Civ.R. 11 employs a subjective bad-faith standard to invoke
sanctions by requiring that any violation must be willful. Riston v. Butler,
149 Ohio App.3d 390, 2002-Ohio-2308, 777 N.E.2d 857, (1st Dist.), at ¶ 9;
Ransom v. Ransom, 12th Dist. Warren No. 2006–03–031, 2007-Ohio-457, at
¶ 25.” Day, supra, at ¶ 10, quoting State ex rel. Dreamer, 115 Ohio St.3d
190, 2007-Ohio-4789, 874 N.E.2d 510, at ¶ 19. Thus, any violation must be
willful; negligence is insufficient to invoke Civ.R. 11 sanctions. Oakley v.
Nolan, 4th Dist. Athens No. 06CA36, 2007-Ohio-4794, at ¶ 13.
{¶82} “The United States Supreme Court has observed that the
Ross App. No. 17CA3624 43
purpose of Fed.R.Civ.P. 11, which is analogous to Civ.R. 11, is to curb
abuse of the judicial system because ‘[b]aseless filing puts the machinery of
justice in motion, burdening courts and individuals alike with needless
expense and delay.’ Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 398,
110 S.Ct. 2447 (1990). The court noted that the specter of Rule 11 sanctions
encourages civil litigants to ‘ “stop, think and investigate more carefully
before serving and filing papers.” ’ Day, supra, at ¶ 11, quoting
Amendments to Federal Rules of Civil Procedure (1983), 97 F.R.D. 165,
192 (March 9, 1982 letter from Judge Walter Mansfield, Chairman,
Advisory Committee on Civil Rules).” Moss v. Bush, 105 Ohio St.3d 458,
2005-Ohio-2419, 828 N.E.2d 994, at ¶ 21.
{¶83} Frivolous conduct implicated by R.C. 2323.51(A)(2)(ii)
involves proceeding on a legal theory which is wholly unwarranted in law.
Ogle, supra, at ¶ 29; State Auto Mut. Ins. Co. v. Tatone, 2nd Dist.
Montgomery No. 21753, 2007–Ohio–4726, ¶ 8. “Whether a claim is
warranted under existing law is an objective consideration.” (Citations
omitted.) Hickman v. Murray, 2nd Dist. Montgomery No. CA 15030, 1996
WL 125916, *5 (Mar. 22, 1996). The test is “whether no reasonable lawyer
would have brought the action in light of the existing law. In other words, a
claim is frivolous if it is absolutely clear under the existing law that no
Ross App. No. 17CA3624 44
reasonable lawyer could argue the claim.” Id. Frivolous conduct subject to
sanctions includes conduct by a party's counsel that “obviously serves to
harass or maliciously injure another party to the civil action or appeal or is
for another improper purpose, including, but not limited to, causing
unnecessary delay or a needless increase in the cost of litigation” or “is not
warranted under existing law, cannot be supported by a good faith argument
for an extension, modification, or reversal of existing law, or cannot be
supported by a good faith argument for the establishment of new law.” R.C.
2323.51(A)(2)(a)(i) and (ii).
{¶84} In this case, on February 1, 2017, Citibank filed notices of
deposition of Karen L. Stanley and Katherine Hine, to be conducted in the
Ross County Law Library. On February 21, 2017, Hine, through her
counsel, filed a Motion of Defendant & Karen L. Stanley for Protective
Order. The motion was supported by the Affidavit of Karen L. Stanley. The
motion advised that Ms. Stanley had served as a paralegal under Attorney
Kastner in Hine’s case and argued that Ms. Stanley was bound by attorney-
client privilege as follows:
“Besides being on defendant’s legal defense team, Ms. Stanley
is a friend of the defendant and sometime spiritual advisor. Ms.
Stanley appears to have been targeted because she has signed
some checks which referenced a different account than the one
alleged in the Complaint or checks that referenced an alleged
account that there is no reason to believe was ever owned by
Ross App. No. 17CA3624 45
plaintiff. Her affidavit makes it clear that she has never had
communication with plaintiff Citibank, as its attorney claims to
want to discover. The only possible purposes of this subpoena
are harassment of non-party Stanley and defendant, or a fishing
expedition that the non-party, Ms. Stanley, should not have to
fund. * * * Non-party Stanley should not have to review
multiple years’ worth of e-mails, notes, or other documents, in
order to determine when she communicated with plaintiff and
the degree to which any such communication came within the
attorney-client or clergy privilege. Non-party witness Stanley
is a minister ordained by the State of Ohio.”
{¶85} On April 10, 2017, Hine, Motion to Strike & Reply to
Plaintiff’s 3/7/17 Opposition to Protective Order Motion & to its Motion to
Compel. This pleading was supported by Hine’s affidavit which set forth as
follows:
“2. I have been physically present and legally residing
excluding in the Country of Uruguay since my arrival here in
March, 2009. I have never departed from the Country of
Uruguay since my arrival, not to visit the United States nor any
other country- not ever. Although I remain loyal to America, I
have no plans to ever return. * * *
3. I have also continued to maintain a U.S. mailing address, 189
E. Water Street Rear, Chillicothe, Ohio, which is an actual
physical address. I did not object to the venue of this action
being in Ross County for that reason. The statements I have
made in response to the plaintiff’s interrogatories and
documents requests are true and accurate. I do not have the
financial ability to leave my home in Uruguay and do not
believe that given the ongoing political situation and level of
violence in the U.S. currently that it would be physically safe
for me to do so. I can be made available by SKYPE if
plaintiff’s attorneys wish to grill me on my lack of knowledge
about the facts in this case.”
Ross App. No. 17CA3624 46
{¶86} On April 12, 2017, the trial court granted Citibank’s motion to
compel. The order explicitly stated:
“Defendant Katherine Hine is ordered to sit for a deposition, to
be taken via electronic means to be selected by Plaintiff’s
counsel, but not to include SKYPE, at Plaintiff’s costs, on or
before May 31, 2017. If Ms. Hine fails to appear for a
deposition to be taken by electronic means on or before May
31, 2017, she must appear in person at the Ross County Law
Enforcement Complex * * * on or before June 30, 2017,
pursuant to notice from Plaintiff’s counsel, for an in-person
deposition.
Non-party Karen Stanley is ordered to appear for a deposition at
the Ross county Law Enforcement Complex, * * *, on or before
May 2, 2017. If Ms. Stanley is unable to appear for a
deposition on May 2, 2017, she must so inform Plaintiff’s
counsel by April 17, 2017. If Ms. Stanley so notifies Plaintiff’s
counsel, she shall instead appear for a deposition on May 3,
2017,* * *.”
{¶87} On May 15, 2017, Plaintiff’s counsel filed a Motion for
Sanctions for Failure to Comply with Court Order, and attached supporting
documentation. In it, counsel argued that while Karen Stanley appeared for
her deposition, Attorneys Kastner and Fitrakis failed to appear on her behalf,
in violation of the court’s previous April 12, 2017 order granting Plaintiff’s
Motion to Compel. On May 22, 2017, Attorney Kastner filed a “Motion to
Strike Plaintiff’s Motion for Sanctions & Objections to False Statements &
Innuendoes in the Record.”
Ross App. No. 17CA3624 47
{¶88} On June 7, 2017, Citibank, again noticed the deposition of
Karen L. Stanley, to be conducted on July 12, 2017 and also noticed the
deposition of Hine, to be conducted on June 16, 2017 in Ross County.
{¶89} On June 26, 2017, Plaintiff filed “Citibank’s Supplemental
Motion for Sanctions for Failure to Comply with Court Order.” This motion
was based on Hine’s failure to appear for her deposition in violation of the
April 12 court order. On September 1, 2017, Plaintiff filed “Citibank’s
Second Supplemental Motion for Sanctions.” The trial court eventually
scheduled October 19, 2017 as the date to hear all motions for sanctions.
{¶90} At the October 19, 2017 sanctions’ hearing, Plaintiff’s counsel,
Robert C. Folland and David J. Dirisamer, attended in person and presented
arguments on behalf of Plaintiff. No other attorneys or parties attended the
hearing. Ms. Hine called the Court and reiterated a previous written request
to participate by phone. Her request was denied. However, the record
reflects she was allowed to listen to the proceedings via the cell phone of a
personal representative, Debra McCabe. Additionally, Plaintiff presented
the testimony of Attorney Thomas M. Spetnagel, Sr., a local Chillicothe
practitioner, as to the reasonableness of the hours spent on the matter by
Plaintiff’s counsel and as to the reasonableness of the hourly rate charged by
Plaintiff’s counsel.
Ross App. No. 17CA3624 48
{¶91} Attorney Spetnagel testified he is licensed in the State of Ohio,
U.S. District Court for the Southern District, Sixth Circuit Court of Appeals,
and the U.S. Supreme Court. He has practiced law for nearly 42 years in
Ross County. He testified his review of the court docket indicated there
were 172 filings in what appeared to be a “rather straightforward collections
case.” He also reviewed Ohio R. Prof Conduct 1.5, R.C. 2323.51, and
related case law.9
1. Sanction award for claimed trial preparation expenses.
{¶92} The trial court awarded Citibank $18,150.00 for trial
preparation expenses. Hine argues there is no evidence that either Attorney
Kastner or she committed sanctionable conduct. Hine asserts they have been
sanctioned due to: (1) Appellant’s exercising her right to a jury trial; (2)
unfounded accusations of “name-calling”; and, (3) unfounded accusations
that Hine and her attorney created needless delay in this matter. For the
reasons which follow, we disagree with Hine’s arguments.
{¶93} Attached as Exhibit A to Citibank’s Second Supplemental
Motion for Sanctions is an email from Katherine Hine to Karen Stanley.
When Ms. Stanley’s deposition took place, she confirmed receipt of the
9
Ohio R.Prof Con. 1.5(a) fees and expenses, provides that a lawyer shall not make an agreement for,
charge, or collect an illegal or clearly excessive fee.
Ross App. No. 17CA3624 49
email from Hine. The March 30, 2015 email reads in pertinent part as
follows:
“Hey, Karen: I wanted to let you know that we may as well stop
paying the Sears’ charge card. I just cancelled it. * * * As far as I’m
concerned, we can stop paying the idiots. Yes- I know my credit
rating will be shot-but-you know-it probably already is. Eventually I
think I may make a deal with them on the balance after (if) we sell
116. * * * Maybe now we could pay down the other card a little bit
more if need be. Yes-eventually they will sue me, but that’s o.k. I
should be able to find a way to defend it or at least stall until 116
hopefully sells. They may try to contact you, but you have my
permission to hang up on them. * * *.”
{¶94} On the hearing date, Attorney Folland presented the court with
an affidavit which had previously been attached to the Second Supplemental
Motion for Sanctions. The affidavit states in pertinent part:
44. I spent 45.8 hours preparing for and attending trial,
including pre-trial filings such as a trial brief, jury instructions,
witness and exhibit lists, a motion in limine and motions to
quash.
***
48. Mr. Garinger spent 26.8 hours preparing for and attending
trial, including pre-trial filings such as a trial brief, jury
instructions, witness and exhibit lists, a motion in limine and
motion to quash.
{¶95} The trial court’s entry states as follows:
“Plaintiff is granted attorney fees of $18,150.00 incurred in
preparation for, and for attending, the trial of this matter.
Plaintiff’s costs of trial preparation and appearance at trial were
increased by the action of Ms. Hine and Defendant’s counsel
Davis [sic] Kastner, to obstruct and delay this matter, including
Ross App. No. 17CA3624 50
actions in discovery and in failing to attend Court hearings and
the trial in this matter, in violation of Civil Rule 11 and Ohio
Revised Code 2323.51. The Court awards Plaintiff attorney
fees only for the two attorneys who attended the trial, Robert C.
Folland and Paul N. Garinger. Darren Meade is not liable for
amounts awarded herein. The Court finds that time spent by
Mr. Folland and Mr. Garinger preparing for and attending trial
was reasonable. Thus, the Court awards Plaintiff attorney fees
for the 45.8 hours spent preparing for, and participating in, trial
by Mr. Folland and the 26.9 hours spent preparing for, and
participating in, trial by Mr. Garinger. The Court awards
Plaintiff attorney fees for both time spent by Mr. Folland and
Mr. Garinger at Mr. Garinger’s charged rate in this matter of
$250.00 per hour. Thus, Plaintiff is awarded $11, 450.00 in
attorney fees for Mr. Folland’s time in preparing and
participating in trial. * * *”
{¶96} Attorney Spetnagel testified that he had reviewed the time
expended and charges for trial preparation, as set forth in paragraphs 44-53
of the affidavit. He found the time and attorney fees to be reasonable.
Having reviewed the entire record in this matter, we do not find the trial
court’s award of $18,150.00 in sanctions against Appellant and Attorney
Kastner for attorneys’ fees to be an abuse of discretion.
{¶97} Paragraph 54 of the First Amended Complaint alleges that Hine
made payments until March 2015. The March 30, 2015 email in which Hine
advised Karen Stanley to stop paying on the credit card, verified by Karen
Stanley in her brief deposition, essentially constitutes an admission that
Appellant owed the debt herein to Citibank. To thereafter deny she owed
the debt caused unnecessary delay, needless increase in the cost of
Ross App. No. 17CA3624 51
Citibank’s litigation, and was not supported by a good faith argument. We
find Appellant’s defense to be frivolous conduct under R.C. 2323.51.
Additionally, the email shows her intent to deliberately “stall” the
proceedings, i.e. “sanctionable conduct.”
{¶98} Attorney Kastner’s duty under Civ.R. 11 was to sign all
pleadings, motions, and documents in the case, certifying good ground to
support Appellant’s defense and certifying the case filings were not
interposed for delay. If Appellant did not absolutely direct her attorney to
“stall” the proceedings, as of the time she provided the email in discovery,
Attorney Kastner certainly knew or should have known her defense was
meritless and she was using counsel to file unnecessary pleadings for
purposes of delay. In this case, the record reveals, until his discharge by
Appellant, Attorney Kastner signed all pertinent pleadings.
{¶99} Given the amount of the judgment for money’s owed on Hine’s
credit card in this matter, the fees awarded for purposes of sanction are
extraordinary. However, given this record, the expert testimony as to the
reasonableness of the hours spent and fees charged, and the court’s findings,
we do not find the court abused its discretion. We find no merit to the
argument that there was no evidence of sanctionable conduct justifying the
fee award for trial preparation.
Ross App. No. 17CA3624 52
2. Fee awarded for Attorney Garinger’s participation at trial.
{¶100} A portion of the attorney fee award, $6,700.00, was in
conjunction with Attorney Paul Garinger’s participation at trial. Hine argues
Attorney Garinger participated due to the “lead attorney’s lack of
experience.” Hine points out that sanctions are intended for sincere ethical
breaches and are not to be used as punitive measures. She concludes that
this portion of the award against her is an abuse of the court’s discretion.
Again, we disagree with Hine’s argument.
{¶101} The October 19, 2017 sanctions hearing transcript reveals
Attorney Folland addressed the issue of Attorney Garinger’s participation as
follows:
“* * * Your Honor, with respect to that * * * after the first trial
had ended, I had mentioned to you that this was the first time I
had ever been in front of a jury and kind of enjoyed the process.
The fact of the matter is I’m in court probably three or four
days a week. The reality of a commercial litigation practice is
it’s very rare that you would have a jury with respect to that.
* * * the aspect that was novel for me would have been the jury
aspect of it. Everything else is something I’ve done many,
many, many times, including the examination of the witnesses
and the like, and what that - - the net result of that was asking
Mr. Garinger to attend trial with me. I think it certainly
justified having two attorneys present for the matter with the
jury. * * * Mr. Garinger, for example, did the voir dire and
assisted with all issues relating to jury instructions and the like,
and that’s why I asked him to get involved because those are
areas where I don’t’ have the same expertise that he does
* * *.”
Ross App. No. 17CA3624 53
The Court: You mentioned that this was a jury trial. I’ve
reviewed the file and it appears that the defendants requested
the jury, is that your understanding?
Mr. Folland: Yes, it is, your honor. Plaintiff did not request a
jury in this case.
{¶102} Thereafter, the trial court’s entry on sanctions further stated:
“Plaintiff is awarded $6,700.00 for Mr. Garinger’s time in
preparing for and participating in trial. Plaintiff is not awarded
any additional costs or expenses incurred in preparing for, and
participating in trial.”
{¶103} Again, based on our thorough review of the record, we find
the trial court did not abuse its discretion with regard to the portion of the
sanctions award which was directed to Attorney Garinger’s $6,700.00 fee.
Attorney Spetnagel testified as to the reasonableness of the time spent and
hours charged in this matter. We do not view the sanction as a punitive
measure directed at Appellant’s exercising her right to a jury trial. Appellant
Hine, herself, is an attorney. Rather, both Attorney Kastner and Ms. Hine
knew or should have known of the risk of interposing unnecessary delays in
court proceedings involving a debt she apparently knew she owed. Again,
we find no merit to Hine’s argument as to the portion of the award for
Attorney Garinger’s preparation and participation at trial.
3. Sanction awarded as a result of the failure to take Hine’s
deposition.
Ross App. No. 17CA3624 54
{¶104} Hine also argues the trial court abused its discretion as a result
of failed efforts to take her deposition, and in the absence of any
sanctionable conduct on her part. For the reasons which follow, we
disagree. The “failed efforts to take Hine’s deposition,” is more aptly
characterized as Hine’s repeated failure to comply with court orders. Again,
based on the entire record of pleadings and transcripts which wholly
demonstrate in and of themselves a successful effort to thwart and delay
these proceedings, the March 2015 email provided in discovery succinctly
summarizes the entire delay tactic.
{¶105} As indicated above, in the email, Hine acknowledged the debt
she owed, in addition to an admitting that she intended to “stall” the
proceedings. Attorney Folland’s affidavit attached to his motion for
sanctions sets forth in pertinent part:
34. Ms. Hine failed to appear for her deposition on June 16,
2017.
35. I spent a total of 3.9 hours working on matters related to
Ms. Hine’s scheduled June 16, 2017 deposition and the
subsequent Supplemental Motion for Sanctions.
36. Mr. Dirisamer spent a total of 10.9 hours working on
matters related to Ms. Hine’s scheduled June 16, 2017
deposition and the subsequent Supplemental Motion for
Sanctions.
***
Ross App. No. 17CA3624 55
38. Thus, the total amount incurred by Citibank for attorneys’
fees and costs related to Ms. Hine’s failure appear for her
deposition on June 16, 2017, as ordered by the Court’s April
12, 2017 order, is $4,318.63.”
{¶106} Citibank also requested charges related to mileage costs, court
reporter costs, and transcript of Ms. Hine’s June 16, 2017 deposition.
Attorney Spetnagel testified he had reviewed the firm billing as related to
the attempt to depose Katherine Hine, and based on the amount of time set
forth in Folland’s affidavit, paragraphs 33-39, he found the amount of time
expended was reasonable and the charges were reasonable. Factually, the
trial court found as follows as relates to Hine’s efforts to avoid deposition:
“Plaintiff is granted attorney fees of $4,266.20 for the failure of
Ms. Hine to attend her deposition on June 16, 2017. Ms. Hine’s
deposition was noticed in accord with the Court’s April 12,
2017 Order Granting Plaintiff’s Motion to Compel. That order
required Ms. Hine to sit for an electronic deposition, in a
manner selected by Plaintiff, in Uruguay in May, 2017. If Ms.
Hine did not sit for an electronic deposition in Uruguay in May,
2017, Ms. Hine was required to appear for a deposition in June,
2017 in Chillicothe, Ohio, at a time selected by Plaintiff. Ms.
Hine did not sit for an electronic deposition in Uruguay in May,
2017, and did not appear for her noticed deposition in
Chillicothe, Ohio, on June 16, 2017. The amount awarded to
Plaintiff represents only the attorney fees incurred by Plaintiff,
and does not include any other costs or expenses incurred by
Plaintiff.”
{¶107} We find no merit to Hine’s argument that she did not commit
sanctionable conduct. We further find the trial court did not abuse its
discretion with regard to the fee awarded as sanction for Hine’s failure to
Ross App. No. 17CA3624 56
comply with the trial court’s orders and allow Citibank to depose her in
either in Uruguay or Ross County, Ohio.
{¶108} Based on the foregoing, we hereby overrule Hine’s third,
fourth, and fifth assignments of error.
ASSIGNMENT OF ERROR SIX
{¶109} We have already addressed the propriety of the trial court’s
sanctions awards above. Under this assignment of error, Hine generally
argues that: (1) she was denied her right of due process to an impartial finder
of fact; (2) she and her attorney were the subject of disparate treatment from
the Plaintiff attorneys; and (3) the record in this matter shows evidence of
bias. Hine cites Judge Nusbaum’s rulings and comments from 8/1/17;
8/3/17; 8/8/17;10/19/17; 11/8/17; and 11/15/17, arguing that the rulings
“cast new light on the degree to which appellants could have reasonably ever
expected unbiased rulings based on the merits rather than Nusbaum’s clearly
growing dislike of appellants and their criticism.” She further cites the
“savage nature” of Judge Nusbaum’s rulings which reasonably give the
appearance of judicial bias. Hine asserts: “[T]he circumstances of what the
public would certainly see as judicial bias may or may not have anything to
do with Nusbaum’s ties to Matthew Schmidt, as explained in the Affidavit of
Disqualification.” Hine concludes: “Whatever the reason, Due Process was
Ross App. No. 17CA3624 57
seriously undercut.” For the reasons which follow, we find no merit to these
contentions.
1. Due Process
{¶110} A fair trial in an impartial tribunal is a basic requirement of
due process. In re Murchison, 349 U.S. 133, 136, 75 S.Ct. 623 (1955).
Cooke v. United Dairy Farmers, 10th Dist. Franklin No. 05AP-1307, 2006
WL 4365, at ¶ 42. Both our state and federal Constitutional due process
rights provide for notice and the opportunity to be heard. O’Rourke v.
O’Rourke, 4th Dist. Athens No. 17CA37, 2018-Ohio-4031, at ¶ 42. See Fifth
Third Mtge., Co. v. Rankin, 4th Dist. No. 11CA8, 2012–Ohio–2806, at ¶ 14;
Columbia Gas Transm., L.L.C. v. Ogle, 4th Dist. Hocking No. 10CA11,
2012–Ohio–1483, at ¶ 12. Appellant contends the trial court frustrated her
reasonable and repeated efforts to be heard.
{¶111} Appellant has directed us by date to various rulings of the trial
court, while making sweeping and unsubstantiated accusations of the
court’s unfairness. “ ‘If an argument exists that can support [an] assignment
of error, it is not this court's duty to root it out.’ ” Watson v. Highland Ridge
Water and Sewer Assn., Inc., 4th Dist. Highland No. 12CA12, 2013-Ohio-
1640, at ¶ 18, quoting Thomas v. Harmon, 4th Dist. No. 08CA17, 2009–
Ohio–3299, ¶ 14, quoting State v. Carmen, 8th Dist. No. 90512, 2008–
Ross App. No. 17CA3624 58
Ohio–4368, ¶ 31. “ ‘It is not the function of this court to construct a
foundation for [an appellant's] claims.
{¶112} We have thoroughly reviewed the trial court’s rulings and
pronouncements on the dates Hine has cited. In the interest of brevity, we
set forth the following dates and our conclusions in summary form as
follows:
- The August 1, 2017 ruling granting Citibank partial summary
judgment on the issue of standing and denying Hine’s motion for
summary judgment is a decision setting forth legal conclusions.
- The August 3 jury trial transcript is 208 pages long and Hine does
not direct us to specific portions of the transcript evidencing denial of
due process, disparate treatment, or judicial bias.
- The August 8, 2017, journal entry granting directed verdict
and judgment to plaintiff in the amount of $15,013.83 and the
court’s pronouncement in open court sets forth nothing other
than legal conclusions.
- The October 19, 2017 hearing transcript on all motions for
sanctions filed by both plaintiff and defendant and Hine does
not direct us to any certain portions of the hearing transcript.
{¶113} Hine also directs our attention to the November 8, 2017 ruling
as a result of the sanctions hearing captioned “Order and Judgment.” The
trial court found in pertinent part:
“Plaintiff’s costs of trial preparation and appearance at trial
were increased by the action of Ms. Hine and Defendant’s
counsel, Davis [sic] Kastner, to obstruct and delay this matter,
including actions in discovery and in failing to attend Court
Ross App. No. 17CA3624 59
hearings and the trial in this matter, in violation of Civil Rule
11 and Ohio Revised Code 2323.51.”
{¶114} Finally, Hine directs our attention to the November 15, 2017
entry captioned “ORDER AND SUPPLEMENTAL JUDGMENT
GRANTING IN PART PLAINTIFF CITIBANK, N.A.’S MOTION FOR
COSTS AS A PREVAILING PARTY. This entry sets forth the court’s
ruling as to costs for the filing fees for the complaint, the first amended
complaint, and the witness fee for the deposition subpoena to Karen Stanley.
The entry denied Citibank’s motion for costs for preparation of deposition
transcripts. The entry also clarified that the court’s judgment was subject to
pre-judgment and post-judgment interest and set forth the pertinent accrual
dates. The entry is set forth in specific legal terms and does not contain
commentary from the trial judge. We see no way in which this entry
demonstrates any denial of due process, disparate treatment, or judicial bias
as relates to Appellants.
{¶115} Based on our resolution of assignments of error three, four,
and five above, finding propriety with regard to the trial court’s award of
various sanctions, we again do not find evidence of disparate treatment,
judicial bias, or a lack of due process directed at Appellant and her counsel.
2. Disparate Treatment
{¶116} Black’s Law Dictionary, Abridged Sixth Edition, defines
Ross App. No. 17CA3624 60
“disparate treatment” as “Differential treatment of employees or applicants
on the basis of their race, color, religion, sex, national origin, handicap, or
veteran’s status. The Equal Protection Clause does not tolerate disparate
treatment of defendants based solely on their economic status. State v.
Bailey, 4th Dist. Highland No. 16CA1, 2016-Ohio-7249, at ¶ 13. See Griffin
v. Illinois, 351 U.S. 12, 76 S.Ct. 585 (1956). And, discrimination suits fall
into two general types, those based on disparate treatment of one or more
individuals based on discriminatory policies, and those based on facially
neutral policies which have a disparate impact on protected classes.
Goodyear Atomic Corp. v. Tanner, 4th Dist. Scioto No. 385, 1985 WL 8300,
(Aug. 20, 1985), at *2.
{¶117} Hine argues Judge Nusbaum was unusually preoccupied with
the nature of Kastner’s representation of Hine “to the point where it had to
be made clear to him by Kastner’s affidavit that trial counsel was to be
Robert Fitrakis as he informed Nusbaum * * * because Kastner is not able to
make court appearances due to crucial defense contract work in which he is
involved during the day.” Hine argues Judge Nusbaum never applied
similar scrutiny to the roles of the “various Javitch Block attorneys.” As
evidence, Hine asserts that Nusbaum’s sanctioning Kastner was designed to
force Hine to incur additional expense in retaining an attorney which would
Ross App. No. 17CA3624 61
pass muster with Judge Nusbaum and be willing to deal with the
“atmosphere of judicial terrorism created in this case.”
{¶118} Hine’s argument has no merit. The Complaint was filed in
April 2016. Attorney Kastner signed the Motion to Dismiss filed in
response on May 4, 2016. The Answer to Plaintiff’s First Amended
Complaint was filed on April 10, 2017. Although not signed by hand, the
Answer was submitted by Attorney Fitrakis and Attorney Kastner, with
Attorney Fitrakis’ name noted on the certificate of service.
{¶119} Attorney Fitrakis appeared at the April 2017 motions hearing.
Judge Nusbaum noted that his hearing notice dated March 1, 2017 stated
“trial counsel shall appear at the hearing.” Judge Nusbaum inquired as to
whether Attorney Fitrakis was going to try the case. Attorney Fitrakis
stated: “At this point, I can’t make that clear statement. I thought I was
filling in.”
{¶120} Attorney Folland further attempted to clarify the matter:
“Could I be heard with respect to that? I had met Mr. Fitrakis
before approximately five minutes ago. When I inquired as to
where Mr. Kastner was or why he did not appear, he said he did
not know. He said he had just received a call this morning to
come.”
{¶121} On April 26, 2017, Appellant filed a pleading captioned:
Ross App. No. 17CA3624 62
Notice Re Court’s Scheduling.” In Paragraph 7, Appellant informed that
Attorney Kastner does not make court appearances in this case due to his
responsibilities with contract work involving the U.S. military.” The Local
Rules of the Ross County Court of Common Pleas, “Rule 9: Trial Attorney”
provides as follows:
“9.01 Unless otherwise ordered, * * * all parties not appearing
IN PROPRIA PERSONAL shall be represented of record by a
“trial attorney.” Unless such designation is changed, the trial
attorney shall attend all hearings, conferences, and the trial
itself unless otherwise excused.”
{¶122} Because of Attorney Kastner’s inability to make court
appearances, it is unfortunate that he chose to undertake representation of
Hine. In Dayton v. Baker, 86 Ohio St.3d 1999-Ohio-345, 711 N.E.2d 66, the
court observed:
“Before they enter full-time practice, lawyers need to
understand their duties as ‘officers of the court.’ They need to
learn to care about the law, about their clients, and about their
own image as professionals. * * * Respondent put himself at a
disadvantage at the outset by not being properly prepared to
manage a professional law practice.”
{¶123} We think it reasonable that given Attorney Kastner had
entered an appearance in the case since shortly after its commencement, had
not requested permission to withdraw from the case, failed to attend a
motions hearing to decide significant pretrial issues, and apparently failed to
apprise the attorney covering the motions hearing for him of the full extent
Ross App. No. 17CA3624 63
of the substitute attorney’s representations, it was not in any way unexpected
or shocking that the trial court would inquire as to the nature and scope of
Attorney Kastner’s representation in the matter. The trial court’s inquiry
was reasonable in light of the circumstances. The record is devoid of
evidence or indication that the trial court treated Hine and her attorney in
any manner disparate to that of which he treated Citibank’s counsel.
3. Judicial Bias
{¶124} “ ‘Judicial bias has been described as “a hostile feeling or
spirit of ill will or undue friendship or favoritism toward one of the litigants
or his attorney, with the formation of a fixed anticipatory judgment on the
part of the judge, as contradistinguished from an open state of mind which
will be governed by the law and the facts.” State v. Gerald, 4th Dist. Scioto
No. 12CA3519, 2014-Ohio-3629, at ¶ 51, quoting State ex rel. Pratt v.
Weygandt, 164 Ohio St. 463, 132 N.E.2d 191 (1956), paragraph four of the
syllabus. In Liteky v. United States, 510 U.S. 540, 555, 114 S.Ct. 1147(1994), the Supreme Court held that “opinions formed by the judge on the
basis of facts introduced or events occurring in the course of the current
proceedings, or of prior proceedings, do not constitute a basis for a bias or
partiality motion unless they display a deep-seated favoritism or antagonism
that would make fair judgment impossible. Thus, judicial remarks during
Ross App. No. 17CA3624 64
the course of a trial that are critical or disapproving of, or even hostile to,
counsel, the parties, or their cases, ordinarily do not support a bias or
partiality challenge.” On the other hand, “[t]hey may do so [support a bias
challenge] if they reveal an opinion that derives from an extrajudicial source;
and they will do so if they reveal such a high degree of favoritism or
antagonism as to make fair judgment impossible.” (Emphasis sic.) Id. Culp
v. Olukoga, 2013–Ohio–5211, 3 N.E.3d 724 (4th Dist.), at ¶ 55; quoting
State v. Dean, 127 Ohio St.3d 140, 2010–Ohio–5070, 937 N.E.2d 97, ¶¶ 47–
48.
{¶125} Further, as we noted in Culp at ¶ 55: “ ‘A trial judge is
presumed not to be biased or prejudiced, and the party alleging bias or
prejudice must set forth evidence to overcome the presumption of integrity.
Corradi v. Emmco Corp. (Feb. 15, 1996), 8th Dist. Cuyahoga No. 67407,
1996 WL 65822 [at 3] citing State v. Wagner, 80 Ohio App.3d 88, 93, 608
N.E.2d 852 (12th Dist. 1992); citing State v. Richard, 8th Dist. Cuyahoga
No. 61524, 1991 WL 261331 (Dec. 5, 1991). Bias against a party is
difficult to question unless the judge specifically verbalizes personal bias or
prejudice toward a party. In re Adoption of Reams, 52 Ohio App.3d 52, 59,
557 N.E.2d 159 (10th Dist. 1989).’ Frank Novak & Sons, Inc. v. Brantley,
Inc., 8th Dist. Cuyahoga No. 77823, 2001 WL 303716 (Mar. 29, 2001)[.]”
Ross App. No. 17CA3624 65
{¶126} As Hine is aware, the Supreme Court of Ohio has held that
an appellate court has no jurisdiction to vacate a trial court's judgment based
on a claim of judicial bias. Cooke v. United Dairy Farmers, 10th Dist.
Franklin No. 05AP-1307, 2006-Ohio-4365, at ¶ 45, citing Beer v. Griffith,
54 Ohio St.2d 440, 441-442, 377 N.E.2d 775 (1978). The remedy for
suspected judicial bias is to file an affidavit of prejudice with the clerk of the
Supreme Court of Ohio. Polivka v. Cox, 10th Dist. Franklin No. 02AP-1364,
2003-Ohio-4371. R.C. 2701.03 “provides the exclusive means by which a
litigant may claim that a common pleas judge is biased and prejudiced.”
Jones v. Billingham, 105 Ohio App.3d 8, 11, 663 N.E.2d 657 (2nd
Dist.1995). Only the Chief Justice of the Supreme Court of Ohio or his
designee has the authority to determine a claim that a common pleas court
judge is biased or prejudiced. Beer, supra, 377 N.E.2d 775. Thus, an
appellate court is without authority to pass upon issues of disqualification or
to void a judgment on the basis that a judge should be disqualified for bias or
prejudice. Id.; State v. Ramos, 88 Ohio App.3d 394, 398, 623 N.E.2d 1336(11th Dist.1993).
{¶127} In this case, on July 19, 2017, Hine filed “Defendant’s Notice
Re Proposed Judicial Disqualification.” On July 27, 2017, Attorney Kastner
filed an affidavit of disqualification in the Supreme Court of Ohio, setting
Ross App. No. 17CA3624 66
forth alleged judicial bias on the part of Judge Michael Ward and Judge
Nusbaum. On August 3, 2017, the Supreme Court of Ohio denied Kastner’s
affidavit to disqualify Judge Nusbaum.
{¶128} As indicated above, Appellant alleges bias in the “savage
nature” of the trial court’s rulings. “ ‘The existence of prejudice or bias
against a party is a matter that is particularly within the knowledge and
reflection of each individual judge and is difficult to question unless the
judge specifically verbalizes personal bias or prejudice toward a party.’ ”
Cooke, supra, at ¶ 46 (Internal citations omitted.)
{¶129} However, Hine has cited only the various rulings as evidence
of the trial court’s prejudice against her cause. A judge's rulings of law are
legal issues, subject to appeal, and are not by themselves evidence of bias or
prejudice. Cooke, supra, citing Okocha v. Fehrenbacher, 101 Ohio App.3d
309, 322, 655 N.E.2d 744 (8th Dist.1995). Judge Nusbaum’s rulings
throughout this case do not constitute evidence that the trial court was
prejudiced or biased.
{¶130} For all the above reasons, we find no merit to Appellant’s
contention that she was denied due process of law, was treated disparately
from other person, and was subjected to judicial bias. Accordingly, the
sixth assignment of error is hereby overruled.
Ross App. No. 17CA3624 67
{¶131} Having reviewed the record, we find no merit to Appellant’s
second, third, fourth, fifth, and sixth assignments of error. Accordingly,
those assignments of error have been overruled. However, in the first
assignment of error, Hine asserted that Citibank did not prove that the right
to charge interest on her account exceeded the statutory amount. We found
merit to this argument. Therefore, we affirm in part, reverse in part, and
remand the matter to the trial court for further proceedings consistent with
this opinion.
JUDGMENT AFFIRMED IN
PART, REVERSED IN PART,
AND REMANDED FOR
FURTHER PROCEEDINGS
CONSISTENT WITH THIS
OPINION.
Ross App. No. 17CA3624 68
JUDGMENT ENTRY
It is ordered that the JUDGMENT BE AFFIRMED IN PART,
REVERSED IN PART, AND REMANDED FOR FURTHER
PROCEEDINGS CONSISTENT WITH THIS OPINION. Costs shall be
divided equally between the parties.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing
the Ross County Common Pleas 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.
Harsha, J. & Hoover, J.: Concur in Judgment Only.
For the Court,
BY: __________________________________
Matthew W. McFarland, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final
judgment entry and the time period for further appeal commences from
the date of filing with the clerk.