[Cite as Auto Site v. Matthews, 2017-Ohio-8441.]


                                   IN THE COURT OF APPEALS

                               ELEVENTH APPELLATE DISTRICT

                                     PORTAGE COUNTY, OHIO


AUTO SITE,                                         :   OPINION

                 Plaintiff-Appellee,               :
                                                       CASE NO. 2017-P-0019
        - vs -                                     :

MYKA VANAE MATTHEWS,                               :

                 Defendant-Appellant.              :


Civil Appeal from the Portage County Municipal Court, Ravenna Division, Case No.
2016 CVF 1695R.

Judgment: Affirmed.


Aaron A. Schwartz, 409 South Prospect Street, Ravenna, OH 44266 (For Plaintiff-
Appellee).

Myka Vanae Matthews, pro se, 1284 Rowe Street, Akron, OH 44306 (Defendant-
Appellant).


DIANE V. GRENDELL, J.

        {¶1}     Defendant-appellant, Myka Vanae Matthews, appeals the judgment of the

Ravenna Municipal Court, in favor of plaintiff-appellee, Auto Site, in the amount of

$10,102. The issues before this court are whether the repossession of collateral in a

secured transaction based on claims of fraud in the application for credit ipso facto

terminates a sales agreement despite the secured party’s willingness to continue the

contract and whether a secured creditor forfeits his right to a deficiency judgment for

failing to demonstrate compliance with the notice statutes before disposing of the
collateral where the debtor has not put compliance in issue. For the following reasons,

we affirm the decision of the court below.

      {¶2}    On June 21, 2016, Auto Site filed a Complaint in Ravenna Municipal Court

against Matthews for breach of a sales contract.        The case was tried before a

magistrate.

      {¶3}    On March 27, 2017, the magistrate issued his Decision, which the

municipal court adopted on the same day. Matthews filed Objections to the Magistrate’s

Findings which the court overruled as untimely.

      {¶4}    On June 19, 2017, the municipal court issued an Order and Judgment

Entry in which the following findings and conclusions were made:

              1.    Plaintiff and Defendant entered into an agreement for
              Defendant to purchase a 2006 BMW 750L[i] * * *;

              2.    The parties[’] agreement was signed September 12, 2015;

              3.     The purchase price of the vehicle was $11,990; Defendant
              paid $2,000 at the outset of the agreement; Plaintiff charged $100
              for preparing documents leaving a total of $10[,]090 with a contract
              interest rate of 18%;

              4.    The contract called for thirty-six (36) payments of $364.78
              due on the 12th of each month beginning November 12th, 2015;

              5.    The contract called for the payment of sales tax with two
              payments; the tax payments were to be made on September 26,
              2015 and October 10, 2015;

              6.      The two (2) tax payments were not paid as scheduled; the
              first tax payment was made on October 19, 2015[,] and the second
              tax payment was made with a loan payment on November 5, 2015;

              7.    A payment of $300 was made by Defendant on December
              22, 2015;

              8.    Plaintiff repossessed the vehicle on December 30, 2015;




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             9.      Defendant regained possession of the vehicle by paying
             Plaintiff $930 on January 12, 2016; $500 of the payment was the
             repossession fee, $364.78 related to a regular monthly payment,
             and the balance of $65.22 attributable to the approximate balance
             of the December 22nd[,] 2015 payment (due on December 12th);

             10.     Approximately January 23, 2016[,] a representative
             contacted Defendant indicating she needed GAP insurance; (in
             relatively common parlance “GAP” is intended as an acronym for
             “guaranteed auto protection” or “guaranteed asset protection” and
             is frequently required by lenders when a loan exceeds the value of
             the car”);

             11.    On January 23, 2016[,] Defendant told Plaintiff to come pick
             up the car;

             12.   Defendant remained in possession of the vehicle until April
             25, 2016; while in Defendant’s possession, the vehicle sustained
             substantial damage; the damage occurred February 16 or 17 of
             2016;

             13.    Plaintiff repaired the vehicle and sent Defendant a letter
             indicating a total balance due of $14,977; Plaintiff sought the
             aforementioned amount based on a contract balance of $10,617,
             plus repossession fee of $500 and costs to prepare for auction of
             $3,860;

             14.    Plaintiff’s Exhibit “H” showed proceeds to Plaintiff from the
             sale of the vehicle of $4,875;

             15.    Plaintiff is entitled to damages of $10,102 determined by
             reducing the total amount owed of $14,977 by the amount received
             from the auction of $4,875.

      {¶5}   On appeal, Matthews raises the following assignments of error:

      {¶6}   “[1.] The trial court committed error by granting the Plaintiff $10,102 plus

cost and interest at the contract rate of 10% per annum on a contract that was

terminated as of December 30th, 2015 by the Plaintiff for ‘false misrepresentation’ on the

application used to enter the contract signed on September 12th, 2015.”




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       {¶7}   “[2.] The trial court committed prejudicial error in granting Plaintiff’s-

appellees’ [sic] motion for summary judgment, finding that the facts do not support a

commercially reasonable manner of disposition of the automobile R.C[.] 1309.610.

Defendant testified that Plaintiff did not notify her of the action.”

       {¶8}   “A magistrate’s decision is not effective unless adopted by the court.”

Civ.R. 53(D)(4)(a). “If no timely objections are filed, the court may adopt a magistrate’s

decision, unless it determines that there is an error of law or other defect evident on the

face of the magistrate’s decision.” Civ.R. 53(D)(4)(c).

       {¶9}   The standard of review generally applied to a trial court’s adoption of a

magistrate’s decision is abuse of discretion. In re L.L.S., 11th Dist. Portage No. 2016-P-

0068, 2017-Ohio-7450, ¶ 20 (cases cited).

       {¶10} Where the appellant has failed to file timely objections to the magistrate’s

decision, however, the appellate court’s review is more limited.         The failure to file

objections to a magistrate’s decision compromises the appellant’s ability to challenge

the trial court’s factual findings and legal conclusions: “Except for a claim of plain error,

a party shall not assign as error on appeal the court’s adoption of any factual finding or

legal conclusion * * * unless the party has objected to that finding or conclusion as

required by Civ.R. 53(D)(3)(b).” Civ.R. 53(D)(3)(b)(iv). “In appeals of civil cases, the

plain error doctrine is not favored and may be applied only in the extremely rare case

involving exceptional circumstances where error, to which no objection was made at the

trial court, seriously affects the basic fairness, integrity, or public reputation of the

judicial process, thereby challenging the legitimacy of the underlying judicial process

itself.” Goldfuss v. Davidson, 79 Ohio St.3d 116, 679 N.E.2d 1099 (1997), syllabus.




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       {¶11} Essentially, we must determine whether the municipal court committed

plain error in its determination that there were no errors of law or other defects evident

on the face of the magistrate’s decision.

       {¶12} In her first assignment of error, Matthews contends the municipal court

erred in awarding damages for breach of contract since there was no legally binding

contract in effect. According to Matthews, Auto Site’s decision to repossess the vehicle

on December 30, 2015, “due to fraud or misrepresentation on the original application

signed September 12, 2015,” effectively terminated the contract thereby discharging all

executory obligations under the agreement. Upon regaining possession of the vehicle

on January 12, 2016, Matthews maintains she only signed a new customer application

which act “does not qualify as acceptance to enter into a new contract.” Appellant’s

brief at 4-5.

       {¶13} Matthews’ argument is unavailing. It is well-established in Ohio law that

the right to rescind or cancel a contract procured by fraud is waivable. Baltimore & Ohio

RR. Co. v. Jolly Bros. & Co., 71 Ohio St. 92, 72 N.E. 888 (1904), paragraph two of the

syllabus (“[a] party to an executory contract procured by false representations, who,

after knowledge that the representations are false and fraudulent, performs, or, without

necessity, completes performance, of the contract, and accepts payment according to

its terms, thereby waives the fraud”); English v. Natl. Cas. Co., 138 Ohio St. 166, 169,

34 N.E.2d 31 (1941) (“[a] party to a contract who, after discovery or knowledge of facts

which would entitle him to rescind, treats the contract as a subsisting obligation and

leads the other party to believe the contract is still in effect, waives his right to rescind”).




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       {¶14} Here, Auto Site demonstrated its intention to waive the right to rescind by

restoring possession of the vehicle to Matthews and receiving payment from her under

the terms of the sales contract. Such waiver by Auto Site is expressly sanctioned by the

sales contract: “Seller may waive any default before or after the same has been

declared without impairing its right to declare a subsequent default hereunder, this right

being a continuing one.”

       {¶15} Matthews also contests the award of damages on the grounds that Auto

Site submitted an estimate of auto repairs1 rather than “a receipt or an invoice showing

that it was paid.” The repair estimate coupled with the testimony of Davood Haghighi,

Auto Site’s owner, that such an amount was spent in order to make the car sellable is

sufficient evidence to sustain the damage award. Stevers v. McClure, 6th Dist. Wood

No. WD-04-078, 2005-Ohio-5032, ¶ 29 (“appellant fails to cite, and this court’s research

has failed to find, any caselaw in support of appellant’s assertion that damages cannot

be established with estimated costs for repairs and, instead, must be established with

amounts actually spent on repairs”).

       {¶16} The first assignment of error is without merit.

       {¶17} In the second assignment of error, Matthews argues that the auction of the

vehicle was not conducted in a “commercially reasonable” manner as required by R.C.

1309.610(A) and/or R.C. 1317.16(B).

       {¶18} A secured party may dispose of collateral after default “only as authorized”

by R.C. 1317.16. R.C. 1317.16(A).

               At least ten days prior to sale the secured party shall send
               notification of the time and place of such sale and of the minimum

1. Only the claim for repairs in the amount of $3,500 by AJ’s Auto & Accessories was evidenced by an
estimate. Other damage claims were established by receipts.


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                price for which such collateral will be sold, together with a
                statement that the debtor may be held liable for any deficiency
                resulting from such sale, by certified mail, return receipt requested,
                to the debtor at the debtor’s last address known to the secured
                party, and to any persons known by the secured party to have an
                interest in the collateral. In addition, the secured party shall cause
                to be published, at least ten days prior to the sale, a notice of such
                sale listing the items to be sold, in a newspaper of general
                circulation in the county where the sale is to be held.

R.C. 1317.16(B).

        {¶19} “In an action arising from a transaction in which the amount of a deficiency

or surplus is in issue, * * * [a] secured party is not required to prove compliance with [the

notice provisions] of the Revised Code relating to * * * disposition * * * unless the debtor

* * * places the secured party’s compliance in issue.” R.C. 1309.626(A).2

        {¶20} In the present case, Matthew’s Notice of Answer did not raise the issue of

notice. At trial, she argued that she did not receive actual notice, but did not otherwise

contest Auto Site’s compliance with the notice statutes.3 The magistrate made the

following finding with respect to Auto Site’s notice of sale of the collateral at auction:

“Prior to auction Plaintiff sent Defendant a letter indicating a balance due of $14,977: A

copy of said letter was admitted into evidence as Exhibit ‘G’. Plaintiff’s Exhibit ‘G’ also

indicated the date and time as well as the location.”



2. R.C. 1309.626(A) expressly refers to “sections 1309.601 to 1309.628 of the Revised Code.” In turn,
R.C. 1317.16(C) incorporates several of these sections by providing that “sections 1309.610, 1309.611,
1309.615, 1309.617, and 1309.624 of the Revised Code govern disposition of collateral by the secured
party.” Construing these provisions in pari materia, it must be concluded that R.C. 1309.626(A)’s
requirement that the debtor raise the issue of the secured party’s compliance with notice provisions
before the secured party must prove compliance applies to requirements of R.C. 1317.16(B). See
DaimlerChrysler Servs. N. Am. v. Lennington, 9th Dist. Wayne No. 05CA0055, 2006-Ohio-1546, ¶ 10;
Columbus Mtge., Inc. v. Morton, 10th Dist. Franklin No. 06AP-723, 2007-Ohio-3057, ¶ 40 (“[c]ompliance
with R.C. 1309.610 is a condition precedent to recovery of a deficiency judgment and a creditor’s failure
to comply with the statute’s requirements is an absolute bar to the recovery of a deficiency judgment”).
3. Failure to receive actual notice does not bear on the secured party’s compliance with the notice
statutes. Ford Motor Credit Co. v. Potts, 47 Ohio St.3d 97, 99, 548 N.E.2d 223 (1989) (“no statute or
controlling case law specifies that the debtor must actually sign the notice, indicating actual receipt”).


                                                    7
      {¶21} While the magistrate’s findings fail to demonstrate that Auto Site fully

complied with R.C. 1317.16(B), Matthews did not put compliance in issue and,

therefore, Auto Site was not required to prove compliance.

      {¶22} The second assignment of error is without merit.

      {¶23} For the foregoing reasons, the judgment of the Ravenna Municipal Court

in favor of Auto Site in the amount of $10,102, is affirmed. Costs to be taxed against

appellant.



CYNTHIA WESTCOTT RICE, P.J.,

THOMAS R. WRIGHT, J.,

concur.




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