[Cite as Hudson & Keyse, L.L.C. v. Yarnevic-Rudolph, 2010-Ohio-5938.]
                          STATE OF OHIO, JEFFERSON COUNTY

                                 IN THE COURT OF APPEALS

                                      SEVENTH DISTRICT


HUDSON & KEYSE, LLC, ASSIGNEE)                           CASE NO. 09 JE 4
BENEFICIAL COMPANY, LLC      )
                             )
    PLAINTIFF-APPELLEE       )
                             )
VS.                          )                           OPINION
                             )
DEBORAH LEE YARNEVIC-RUDOLPH )
                             )
    DEFENDANT-APPELLANT      )

CHARACTER OF PROCEEDINGS:                                Civil Appeal from the County Court No. 2
                                                         of Jefferson County, Ohio
                                                         Case No. 07 CVF 361

JUDGMENT:                                                Reversed and Remanded.

APPEARANCES:

For Plaintiff-Appellee:                                  Atty. Timothy J. Hacking
                                                         Hudson & Keyse LLC
                                                         382 Blackbrook Road
                                                         Painesville, Ohio 44077

For Defendant-Appellant:                                 Atty. Casimir T. Adulewicz
                                                         Suite 409 Sinclair Building
                                                         P.O. Box 1388
                                                         Steubenville, Ohio 43952

JUDGES:

Hon. Cheryl L. Waite
Hon. Gene Donofrio
Hon. Joseph J. Vukovich
                                                         Dated: November 29, 2010
[Cite as Hudson & Keyse, L.L.C. v. Yarnevic-Rudolph, 2010-Ohio-5938.]
WAITE, J.


        {¶1}    Appellant, Deborah Lee Yarnevic-Rudolph, appeals two judgment

entries of the Jefferson County Court No. 2. The first judgment entry, dated April 28,

2008, entered summary judgment against Appellant and in favor of Appellee, Hudson

& Keyse, LLC, the purported assignee of a personal loan agreement entered into by

Appellant with Beneficial Company, LLC (“Beneficial”) on or about June 28, 2000.

The second judgment entry, dated October 2, 2008, overruled Appellant’s motion to

quash an order and notice of garnishment issued by the county court to Appellant’s

employer, Quest Diagnostics, on August 4, 2008.

        {¶2}    A complaint seeking the unpaid balance of the loan in this matter was

filed on September 4, 2007. The personal loan agreement at issue was attached to

the complaint. The complaint contains four counts relative to: payment due on an

account; quantum meruit; unjust enrichment; and breach of contract. Appellee filed a

motion for summary judgment with leave of the court on January 14, 2008.

        {¶3}    Appellee predicated its motion on an affidavit of Nancy Quere, one of

the company’s legal account managers. Quere asserted that Appellant had entered

into the personal loan agreement and that there was a balance due on the note of

$3,315.16, plus interest running at a rate of 24.99 percent from December 31, 2001.

(Quere Aff., ¶2.) The total amount owed as of April 30, 2007 was $5,167.45. (Quere

Aff., ¶2.)     Appellee attached interrogatories submitted by Appellant, in which

Appellant admitted she entered into and defaulted on the personal loan agreement.

These interrogatories and the Quere affidavit were the only attachments to the

motion for summary judgment.
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       {¶4}    With respect to the alleged assignment from Beneficial, Quere states in

her affidavit “[t]hat the said indebtedness represents the amount due and originating

from a consumer loan, which Hudson & Keyse, L.L.C. is the Assignee of Beneficial

Company Llc [sic] and that Hudson & Keyse, L.L.C., Assignee of Beneficial Company

Llc [sic], the within named Plaintiff, having purchased said debt from said assignor, is

the owner of said debt and is the proper party to bring this action.” (Quere Aff., ¶3.)

       {¶5}    On March 5, 2008, in response to a request by the trial court, Appellee

filed a copy of a document captioned, “ASSIGNMENT AND BILL OF SALE,” which

reads, in its entirety:

       {¶6}    “HSBC Consumer Lending (USA) Inc. on behalf of and as managing

company for [Beneficial] and HFC Company LLC and their respective subsidiaries

(hereinafter called ‘Seller’) has entered into an Account Purchase and Sale

Agreement dated July 26, 2006 ‘Agreement’) for the sale of accounts dated in the

initial paragraph of the Agreement thereof to Hudson & Keyse, L.L.C., (hereinafter

called ‘Purchaser’), upon the terms and conditions set forth in that Agreement.

       {¶7}    “NOW, THEREFORE, for good and valuable consideration, Seller

hereby sells, assigns, and transfers to Purchaser, its successors and assigns, all of

Seller’s rights, title, and interest in each and every one of the Accounts described in

the Agreement.

       {¶8}    “Purchaser and Seller agree that the Purchase Price shall be as stated

in Section 3 of the Agreement.
                                                                                     -3-

      {¶9}      “IN WITNESS WHEREOF, Seller has signed and delivered this

instrument on the 26 day of July 2006.”

      {¶10} The assignment and bill of sale is signed on behalf of HSBC Consumer

Lending (USA) Inc., Beneficial’s managing company, by “Mushtaq Sahaf, Vice

President.” A copy of the “Agreement” referred to in the assignment and bill of sale is

not attached.

      {¶11} Inexplicably, no response to the motion for summary judgment was

filed, however, Appellant did file a motion for judgment on the pleadings on April 22,

2008. In her barebones two paragraph motion, Appellant claimed that the complaint

was not filed within the applicable statute of limitations and that Appellee was not the

real party in interest. No caselaw was cited.

      {¶12} A hearing on the motion for summary judgment was scheduled for April

10, 2008. The docket does not reflect that a hearing was held. However, according

to Appellee’s brief, a hearing was held and Appellant appeared without her counsel.

At the hearing, Appellant was unable to reach her counsel by telephone. The trial

court granted the summary judgment motion on April 28, 2008. It appears from the

judgment entry that the trial court entered summary judgment on the first count in the

complaint.

      {¶13} On June 27, 2008, Appellee sent a notice of court proceedings to

collect debt to Appellant pursuant to R.C. 2716.02. On August 4, 2008, the county

court issued an order and notice of garnishment in the case. The order was directed

to “Quest Diagnostics (Attn: Payroll/Garnishment), 1290 Wall Street, West[,]
                                                                                     -4-

Lyndhurst NJ 07071.” (Garnishment Order, p. 1.) Appellant filed her motion to quash

the order on August 22, 2008. Appellant works at a Quest Diagnostics facility in

Pittsburgh, Pennsylvania, and she argued that a Pennsylvania statute, 42 Pa.C.S.A.

8127, prohibits wage garnishment in that state.         At a hearing on the motion

conducted on October 2, 2008, the trial court overruled the motion to quash.

      {¶14} Appellant contends that this appeal was timely filed because she never

received copies of the judgment entries at issue in this appeal from the trial court.

The docket does not reflect that Appellant was served. Therefore, this appeal must

be considered timely filed. Huntington Natl. Bank v. Syroka, 6th Dist. No. L-09-1240,

2010-Ohio-1358, fn.1 (“There is nothing in the appearance docket stating that the

clerk of court served appellants with the cognovit judgment journalized on July 22,

2009. Thus, the 30-day appeal deadline under App.R. 4(A) never began to run and

appellants’ notice of appeal filed September 10, 2009, was timely.”)

      {¶15} An appellate court conducts a de novo review of a trial court’s decision

to grant summary judgment, using the same standards as the trial court as set forth

in Civ.R. 56(C). Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105, 671

N.E.2d 241.     Before summary judgment can be granted, the trial court must

determine that (1) no genuine issue as to any material fact remains to be litigated, (2)

the moving party is entitled to judgment as a matter of law, and (3) it appears from

the evidence that reasonable minds can come to but one conclusion, and viewing the

evidence most favorably in favor of the party against whom the motion for summary

judgment is made, the conclusion is adverse to that party. Temple v. Wean United,
                                                                                      -5-

Inc. (1977), 50 Ohio St.2d 317, 327, 364 N.E.2d 267. When a court considers a

motion for summary judgment, the facts must be taken in the light most favorable to

the nonmoving party. Id.

       {¶16} “[T]he moving party bears the initial responsibility of informing the trial

court of the basis for the motion, and identifying those portions of the record which

demonstrate the absence of a genuine issue of fact on a material element of the

nonmoving party's claim.” (Emphasis sic.) Dresher v. Burt (1996), 75 Ohio St.3d

280, 296, 662 N.E.2d 264. If the moving party carries its burden, the nonmoving

party has the reciprocal burden of setting forth specific facts showing that there is a

genuine issue for trial. Id. at 293, 662 N.E.2d 264. In other words, in the face of a

properly supported motion for summary judgment, the nonmoving party must produce

some evidence that suggests that a reasonable factfinder could rule in that party’s

favor. Brewer v. Cleveland Bd. of Edn. (1997), 122 Ohio App.3d 378, 386, 701

N.E.2d 1023.

       {¶17} In her first and second assignments of error, Appellant contends that

Appellee is not the real party in interest with respect to the personal loan agreement.

In her third assignment, she argues that the interest rate on the loan violates Ohio’s

usury statute. In her fourth assignment, she asserts that the trial court erred in

overruling her motion to quash the garnishment order.

       {¶18} Based on the record, there remains a genuine issue of material fact as

to whether Appellee is the real party in interest in this case. Thus, the decision of the

trial court granting summary judgment to Appellee is reversed. Because we must
                                                                                      -6-

remand this matter to the trial court, we also note that the interest rate on the note

must be adjusted to reflect a statutory rate of eight percent. Appellant’s remaining

assignments of error are moot.

                               ASSIGNMENT OF ERROR NO. 1

       {¶19} “The lower Court erred in not ruling that the action was not brought by

the real party in interest.”

       {¶20} In her first assignment of error, Appellant argues that “the Plaintiff’s law

firm, Hudson & Keyse, LLC” was not the real party in interest when the case was filed

on September 4, 2007. (Appellant’s Brf., p. 4.)

       {¶21} 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.” Zwick & Zwick v. Suburban Constr. Co. (1956), 103 Ohio App. 83, 84,

134 N.E.2d 733. In other words, in order to prevail, the assignee must prove that it is

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. Natl. Check Bur., Inc. v. Cody, 8th Dist. No. 84208,

2005-Ohio-283, citing Zwick, supra.

       {¶22} In Washington Mut. Bank, F.A. v. Green, 156 Ohio App.3d 461, 2004-

Ohio-1555, 806 N.E.2d 604, we held that the affidavit of Washington Mutual’s vice

president did not establish that the note and mortgage in that case had been

assigned to the bank. First, the affidavit did not contain an unequivocal statement

that Washington Mutual was the holder of the note and mortgage. Second, “[t]he
                                                                                      -7-

affidavit did not mention how, when, or whether Washington Mutual was assigned the

mortgage and note.” Id. at ¶32; see also Everhome Mtge. Co. v. Rowland, 10th Dist.

No. 07AP-615, 2008-Ohio-1282, ¶15 (“Without evidence demonstrating the

circumstances under which it received an interest in the note and mortgage, [the

plaintiff] cannot establish itself as the holder”).

       {¶23} The trial court in Washington Mutual also denied the defendant’s Rule

19 motion to join a second lender that was asserting a right to payment under that

note and mortgage. In addition to reversing the summary judgment, we instructed

the appellant to re-raise the Rule 19 issue upon remand. Otherwise, the appellant

would not be protected from multiple judgments on the same subject matter, and may

be precluded from raising various counterclaims due to the judgment. Id., ¶32.

       {¶24} Here, the affidavit contains an unequivocal statement by Quere that

Appellee is the assignee of Beneficial’s interest in the personal loan agreement.

However, the “how and when” requirement articulated in Washington Mutual are not

met. The assignment and bill of sale is evidence that Appellee is the assignee of

Beneficial’s interest in some unidentified accounts, however, due to the fact that the

agreement referred to in the assignment and bill of sale is not attached, it is not clear

that Appellant’s account is among the assigned accounts. To the extent that there is

no evidence that Appellant’s personal loan agreement was among the accounts

assigned to Appellee by Beneficial, the trial court erred as a matter of law when it

entered summary judgment.
                                                                                       -8-

       {¶25} In addition to her real party in interest challenge, Appellant also

contends that the claim is barred by the statute of limitations governing negotiable

instruments. Appellant argues that, “[t]he claim is dated June 28, 2000, and is barred

by the statute of limitations of six years, as noted in O.R.C. 1303.16.” (Appellant’s

Brf., p. 4.) That statute reads, in pertinent part:

       {¶26} “(A) Except as provided in division (E) of this section, an action to

enforce the obligation of a party to pay a note payable at a definite time shall be

brought within six years after the due date or dates stated in the note or, if a due date

is accelerated, within six years after the accelerated due date.”

       {¶27} Appellee counters that this matter involves a breach of contract action.

Hence, the fifteen year statute of limitations applicable to breach of contract actions

found in R.C. 2305.06 applies.

       {¶28} Assuming that this action is governed by the statute of limitations set

forth in R.C. 1303.16, Appellee seeks damages accruing from December of 2001.

The personal loan agreement contains an acceleration clause in the event of a

default. Based on the acceleration clause in the Agreement, the complaint, filed on

September 4, 2007, was filed within six years of the accelerated due date. Thus, this

action was timely filed even if the negotiable instruments statute of limitations applies.

       {¶29} Next, Appellant contends that the trial court did not rule on her motion

for judgment on the pleadings.         However, in granting the motion for summary

judgment, the trial court overruled the motion for judgment on the pleadings.
                                                                                    -9-

       {¶30} Accordingly, the first assignment of error is sustained in part, because

there remains a genuine issue of material fact concerning the real party in interest,

here. Her first assignment of error is overruled with respect to the remaining issues

raised. Because we sustain Appellant’s first assignment of error in part, her second

and fourth assignments are moot.

                          ASSIGNMENT OF ERROR NO. 3

       {¶31} “The lower Court erred in granting a Judgment with usurious interest

and an award of attorney fees.”

       {¶32} Appellant contends that R.C. 1343.01, captioned “Maximum rate of

interest; exceptions,” governs the interest chargeable on the note in this case. R.C.

1343.01 reads, in pertinent part:

       {¶33} “(A) The parties to a bond, bill, promissory note, or other instrument of

writing for the forbearance or payment of money at any future time, may stipulate

therein for the payment of interest upon the amount thereof at any rate not exceeding

eight per cent per annum payable annually, except as authorized in division (B) of

this section.”

       {¶34} As with many general rules, however, several exceptions exist. A party

may agree to pay a rate higher than eight percent if (1) the principal indebtedness

exceeds $100,000; (2) the payment is to a broker or dealer registered under the

“Securities Exchange Act of 1934”; (3) the loan is secured by a mortgage or deed or

trust and the loan is federally insured; (4) the loan is secured by a mortgage, deed of

trust, or land installment contract; (5) the contract is payable on demand and is not
                                                                                  -10-

secured by household or other goods used for personal or family purposes; or (6) the

instrument represents a business loan. R.C. 1343.01(B).

      {¶35} The personal loan agreement in the case sub judice states that

Appellant provided a security interest in personal property, although the personal

property is not identified.   It does not appear that Appellant provided a security

interest in an automobile, because the agreement requests a “make/model” and a

serial number, but neither is provided.

      {¶36} Based on the record before this Court, it appears that none of the

exceptions to R.C. 1343.01(A) apply in this case, and that any interest on an amount

due and owing should be calculated at eight percent pursuant to the usury statute. In

its brief, Appellee summarily states that R.C. 1343.01(A) does not apply to this

action, however, “assuming this Section applies, then the judgment is not invalid, the

interest rate would simply need to be adjusted to the proper rate.” (Appellee’s Brf. p.

9.) Appellee does not cite any facts or caselaw to support its assertion that the

statute does not apply. Accordingly, Appellant’s third assignment of error is

sustained.

      {¶37} In summary, Appellee did not establish that it is the assignee of the

personal loan agreement at issue in this case. As a rule, courts have required proof

of an assignment sufficient to protect a promissor from multiple claims. Therefore,

Appellant’s first assignment of error is sustained on this issue, and the summary

judgment entry is reversed. Likewise, the third assignment of error is sustained, and,

in the event judgment is again entered below, the rate of interest on the personal
                                                                             -11-

loan agreement appears limited to eight percent. Based on our decision as to the

first assignment of error, appellant’s second and fourth assignments of error are

rendered moot.

      {¶38} This matter is remanded to the trial court for further proceedings

consistent with our Opinion.
