[Cite as Natl. City Bank v. Herak, 2011-Ohio-2286.]


          Court of Appeals of Ohio
                                EIGHTH APPELLATE DISTRICT
                                   COUNTY OF CUYAHOGA



                             JOURNAL ENTRY AND OPINION
                                      No. 95540


                             NATIONAL CITY BANK
                                                  PLAINTIFF-APPELLANT

                                                      vs.

                             JAYNE HERAK, ET AL.
                                                  DEFENDANTS-APPELLEES




                                          JUDGMENT:
                                           AFFIRMED


                                  Civil Appeal from the
                         Cuyahoga County Court of Common Pleas
                                  Case No. CV-701583

        BEFORE:            Sweeney, J., Stewart, P.J., and Jones, J.

        RELEASED AND JOURNALIZED:                           May 12, 2011
ATTORNEY FOR APPELLANT

Robert B. Weltman, Esq.
Weltman, Weinberg & Reis Co.
Lakeside Place, Suite 200
323 W. Lakeside Avenue
Cleveland, Ohio 44113

ATTORNEY FOR APPELLEES

David M. Lynch, Esq.
29311 Euclid Avenue, Suite 200
Wickliffe, Ohio 44092




JAMES J. SWEENEY, J.:

       {¶ 1} Plaintiff-appellant National City Bank (“NCB”) appeals the court’s judgment in

favor of defendants-appellees Jayne Herak, Christopher Herak, and Richard Rohlke

(“defendants”) in this action to collect on an account.   After reviewing the facts of the case

and pertinent law, we affirm.

       {¶ 2} On January 10, 2005, defendants, on behalf of RPH and Associates, Inc.,

(“RPH”) applied for a small business line of credit with NCB, which was granted in the

amount of $10,000.

       {¶ 3} On August 14, 2009, NCB filed a complaint against defendants, alleging that

the account was in default and attempting to collect $9,272.46 plus interest.     The disputed

issue in this case is whether defendants were personal guarantors for the loan.
       {¶ 4} A bench trial was held and on July 14, 2010, the court entered judgment for

defendants, making the following findings of fact: RHP defaulted on the loan and is liable to

NCB. Before executing loan documents, all three defendants expressed to NCB “the

requirement that any loan made to RPH * * * be made without a personal guarantee by any of

the individual defendants.” An NCB agent assured defendants that RHP “could obtain a loan

without a personal guarantee.”    All three defendants left blank a box stating “I intend to

apply as a guarantor of the obligations of a business, including sole proprietors” in Section 4

of the application when they signed the RPH loan documents. However, the RPH loan

documents that NCB submitted into evidence included a check-mark in the aforementioned

box in Section 4 next to each defendant’s name. At one time, NCB applied funds from

defendant Rohlke’s personal account as payment on the RHP loan; Rohlke contacted NCB,

explained that he was not personally liable for the RHP loan, and NCB reversed the charges,

crediting Rohlke’s personal account.   NCB’s sole witness was not involved in the execution

of the RHP loan documents and could not testify as to who checked the Section 4 boxes.

       {¶ 5} The court entered judgment in favor of defendants.       NCB appeals and raises

two assignments of error for our review.

       {¶ 6} “I.   The trial court committed reversible error by considering parol evidence

and giving new meaning to clear and unambiguous contract terms.”
       {¶ 7} “II.    The trial court committed reversible error by finding that the addition of a

checked box on the small business credit application constituted a material alteration.”

       {¶ 8} If the terms of a contract are clear and unambiguous, then its interpretation must

be discerned from the four corners of the contract as a matter of law. Davis v. Loopco

Industries, Inc. (1993), 66 Ohio St.3d 64, 609 N.E.2d 144.          “However, where there is

ambiguity in a contract, parol evidence may be admitted to explain such ambiguities.”

Kelley v. Ferraro, 188 Ohio App.3d 734, 2010-Ohio-2771,¶28, 936 N.E.2d 986.            It is well

settled law that ambiguities in a contract “will be construed most strongly against the party

who prepared it.”    Franck v. Railway Exp. Agency (1953), 159 Ohio St. 343, 345-356, 112

N.E.2d 381.

       {¶ 9} We review questions of law under a de novo standard, although “a trial court’s

interpretation of an ambiguous term within a contract ordinarily is entitled to deference.”

Short v. Greenfield Meadows Assoc., Highland App. No. 07CA14, 2008-Ohio-3311, ¶26.

       {¶ 10} In the instant case, NCB argues that its small business credit application is clear

and unambiguous, and that by signing it, defendants personally guaranteed the loan.

According to NCB, whether the Section 4 box in question was checked when defendants

signed the document is irrelevant, because the language in the box “simply re-enforced the

plain language of the rest of the application.”   Therefore, NCB argues that extrinsic evidence
that NCB’s agent told defendants that they would not be personally liable on the loan was

prohibited.

       {¶ 11} Defendants, on the other hand, argue that the contract is ambiguous in light of

the evidence that the Section 4 box stating “I intend to apply as a guarantor of the obligations

of a business, including sole proprietors” was unchecked.          According to defendants, this

ambiguity allowed the court to look at evidence surrounding contract negotiations to better

understand the intent of the parties.      The evidence in the record shows that all three

defendants agreed to the loan with the understanding that they would not be personally liable

in the event of a default.     NCB presented no evidence to contradict this, other than the

agreement, which the court found ambiguous.

       {¶ 12} Additionally, NCB presented no evidence to contradict all three defendants’

testimony that they did not check the Section 4 box in question.     In fact, when NCB deducted

a payment for the RHP loan from one of the defendant’s personal accounts, it was deemed a

mistake and the money was credited back to the personal account.

       {¶ 13} Given this evidence, we cannot say that the court erred in finding the agreement

ambiguous, and thus allowing defendants to present extrinsic evidence.       We find no error in

the court’s holding that NCB failed to establish that defendants entered into the loan

agreement as guarantors.     NCB’s assignments of error are overruled.

       Judgment affirmed.
     It is ordered that appellees recover from appellant costs herein taxed.

     The court finds there were reasonable grounds for this appeal.

     It is ordered that a special mandate be sent to said court to carry this

judgment into execution.

     A certified copy of this entry shall constitute the mandate pursuant to

Rule 27 of the Rules of Appellate Procedure.




JAMES J. SWEENEY, JUDGE

MELODY J. STEWART, P.J., and
LARRY A. JONES, J., CONCUR
