[Cite as Midwestern Auto Sales, Inc. v. Lattimore, 2015-Ohio-53.]



                                     IN THE COURT OF APPEALS

                            TWELFTH APPELLATE DISTRICT OF OHIO

                                            BUTLER COUNTY




MIDWESTERN AUTO SALES, INC.,                            :           CASE NOS. CA2014-02-029
                                                                              CA2014-02-030
        Plaintiff-Appellant,                            :                     CA2014-02-031
                                                                              CA2014-02-032
                                                        :                     CA2014-03-067
    - vs -                                                                    CA2014-03-068
                                                        :                     CA2014-04-086
                                                                              CA2014-04-087
KRISTI LATTIMORE, et al.,                               ;
                                                                         OPINION
        Defendants-Appellees.                           :                 1/12/2015



             CIVIL APPEAL FROM MIDDLETOWN MUNICIPAL COURT
Case Nos. 13 CVF 01566, 13 CVF 00260, 13 CVF 01289, 12 CVF 02782, 13 CVF 01290,
                   13 CVF 00921, 13 CVF 02501, 13 CVF 02502



Thomas G. Eagle, 3386 North State Route 123, Lebanon, Ohio 45036, for plaintiff-appellant

Kristi Lattimore and Oshae Martin, 416 Weaver Avenue, Middletown, Ohio 45044,
defendants-appellees, pro se

Donna J. and Scott A. Lee, 3127 Madison Avenue, Hamilton, Ohio 45015, defendants-
appellees, pro se

King D. Bussie and Karen K. Brown, 3239 Wilbraham Road, Middletown, Ohio 45042,
defendants-appellees, pro se

Kathrin Cleary, 943 Foxcroft Place, Trenton, Ohio 45067, defendant-appellee, pro se

Bonnie Ferrell, 1221 Jackson Lane, Middletown, Ohio 45044, defendant-appellee, pro se

Cathy Engel and Braun Combs, 2102 Pearl Street, Middletown, Ohio 45044, defendants-
appellees, pro se

Chelsea Harrison and Joshua Vitek, 212 Rosemarie Drive, Lebanon, Ohio 45036,
defendants-appellees, pro se
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       HENDRICKSON, J.

       {¶ 1} Plaintiff-appellant, Midwestern Auto Sales, Inc., appeals from multiple

judgments of the Middletown Municipal Court, challenging the court's award of damages.

Midwestern brought suit against defendants-appellees, Kristi Lattimore and Oshae Martin

(Case No. CA 2014-02-029), Donna J. Lee and Scott A. Lee (Case No. CA2014-02-030),

King D. Bussie and Karen K. Brown (Case No. CA2014-02-031), Kathrin Cleary (Case No.

CA2014-02-032), King D. Bussie (Case No. CA2014-03-067), Bonnie Ferrell (Case No.

CA2014-03-068), Cathy Engel and Braun Combs (Case No. CA2014-04-086), and Chelsea

Harrison and Joshua Vitek (Case No. CA2014-04-087), after appellees defaulted in payment

under the terms of retail installment contracts entered into to finance the purchase of used

motor vehicles from Midwestern. Judgments were entered in favor of Midwestern on its

breach of contract claims, and the trial court awarded interest on the damages awards at the

statutory rate rather than at the interest rate set forth in the parties' contracts.

                                             I. FACTS

             A. Case No. CA2014-02-029: Kristi Lattimore and Oshae Martin

       {¶ 2} On July 9, 2013, Midwestern filed a complaint against Lattimore and Martin

after they defaulted under the terms of a retail installment contract entered into on February

5, 2013, for the purchase of a 2000 Buick Century from Midwestern. Midwestern asserted

that as of June 26, 2013, $3,200.64 was due and owing pursuant to the contractual

agreement entered into by the parties. Attached to Midwestern's complaint were copies of

the "Retail Purchase Agreement (Buyers Order)" form (hereafter, Purchase Agreement) and

the "Retail Installment Sale Contract" form executed by Lattimore and Martin, as well as an

account statement detailing Lattimore and Martin's payments and subsequent default on the

contract. The Purchase Agreement described the vehicle being purchased and set forth the

cash price of the vehicle, the down payment made by Lattimore and Martin, and the

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remaining unpaid balance. The Retail Installment Sale Contract set forth the Federal Truth-

in-Lending Disclosures, and provided that the "Annual Percentage Rate," or the "cost of your

credit as a yearly rate" was 24.89 percent. The Retail Installment Sale Contract also

provided that Lattimore and Martin were to make 36 weekly payments of $120 for the

purchase of the vehicle.

        {¶ 3} Neither Lattimore nor Martin filed an answer or otherwise appeared in the

action, and Midwestern moved for default judgment. The trial court granted default judgment

against Lattimore and Martin on November 15, 2013, finding that Midwestern was entitled to

judgment in its favor "in the amount of $3,200.64, plus interest at the contracted rate [sic] of

3.0% per year, from the date June 26, 2013, plus the costs of [the] action." On November

27, 2013, Midwestern filed a Civ.R. 60(B) motion for relief from judgment, seeking to have

the trial court set aside the damage award. Midwestern contended that the trial court erred,

as a matter of law, in awarding interest (including prejudgment interest) at the statutory rate

of 3.0 percent when the Retail Installment Sale Contract entered into by the parties provided

for an interest rate of 24.89 percent. However, on December 13, 2013, prior to the trial court

ruling on Midwestern's Civ.R. 60(B) motion, Midwestern appealed the court's award of default

judgment.1

                  B. Case No. CA2014-02-030: Donna J. Lee and Scott A. Lee

        {¶ 4} On January 31, 2013, Midwestern filed a complaint against Donna and Scott

after they defaulted under the terms of a retail installment contract entered into on

September 24, 2011, for the purchase of a 1999 Ford Expedition from Midwestern.

Midwestern asserted that as of December 17, 2012, $7,709.32 was due and owing pursuant



1. Although the trial court was divested of jurisdiction to consider Midwestern's Civ.R. 60(B) motion for relief
from judgment because Midwestern had appealed the entry granting default judgment, see Howard v. Catholic
Social Serv. of Cuyahoga Cty., Inc., 70 Ohio St.3d 141, 147 (1994), the trial court issued an opinion on January
31, 2014 denying Midwestern's motion for relief. Midwestern has not appealed from that decision.

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to the contractual agreement of the parties. Midwestern attached copies of the Purchase

Agreement and Retail Installment Sale Contract executed by Donna and Scott, as well as an

account statement detailing Donna and Scott's payments and subsequent default on the

contract to its complaint. The Purchase Agreement described the vehicle being purchased

and set forth the cash price of the vehicle, the down payment made by Donna and Scott, and

the remaining unpaid balance. The Retail Installment Sale Contract set forth the Federal

Truth-in-Lending Disclosures, and provided that the "Annual Percentage Rate," or the "cost

of your credit as a yearly rate" was 24.73 percent. The Retail Installment Sale Contract also

provided that Donna and Scott were to make 59 bi-weekly payments of $150 and one

additional payment $106.09 for the purchase of the Ford Expedition.

        {¶ 5} Neither Donna nor Scott filed an answer or otherwise appeared in the action,

and Midwestern moved for default judgment. On November 21, 2013, the trial court granted

Midwestern's motion for default judgment, and awarded it damages "in the amount of

$7,709.32, plus interest at the contracted rate [sic] of 3.0% per year, from the date December

17, 2013, plus the costs of this action." On November 27, 2013, Midwestern filed a Civ.R.

60(B) motion for relief from judgment, seeking to have the trial court set aside the damage

award because the trial court had failed to award interest at the rate agreed to by the parties

in the Retail Installment Contract. However, on December 13, 2013, prior to the trial court

ruling on Midwestern's Civ.R. 60(B) motion, Midwestern appealed the court's award of default

judgment.2

              C. Case No. CA2014-02-031: King D. Bussie and Karen K. Brown

        {¶ 6} On June 6, 2013, Midwestern filed a complaint against Bussie and Brown after



2. After Midwestern appealed, the trial court issued a decision denying Midwestern's Civ.R. 60(B) motion on
January 31, 2014. As previously set forth, the trial court lacked jurisdiction to consider Midwestern's motion for
relief from judgment after Midwestern filed its appeal. See Howard, 70 Ohio St.3d at 147. Midwestern has not
appealed the trial court's January 31, 2014 entry denying Midwestern's motion for relief from judgment.

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they defaulted under the terms of a retail installment contract entered into on December 5,

2011, for the purchase of a 1998 Ford Expedition from Midwestern. Midwestern asserted

that as of March 1, 2013, $9,035.33 was due and owing pursuant to the contractual

agreement of the parties. Midwestern attached to its complaint copies of the Purchase

Agreement and Retail Installment Sale Contract executed by Bussie and Brown, as well as

an account statement detailing Bussie and Brown's payments and subsequent default on the

contract. The Purchase Agreement described the vehicle being purchased and set forth the

cash price of the vehicle, the down payment made by Bussie and Brown, and the remaining

unpaid balance. The Retail Installment Sale Contract set forth the Federal Truth-in-Lending

Disclosures, and provided that the "Annual Percentage Rate," or the "cost of your credit as a

yearly rate" was 24.88 percent. The Retail Installment Sale Contract also provided that

Bussie and Brown were to make 248 weekly payments of $65 and one additional payment of

$9.51 for the purchase of the Ford Expedition.

        {¶ 7} Neither Bussie nor Brown filed an answer or otherwise appeared in the action,

and Midwestern moved for default judgment. On November 15, 2013, the trial court entered

default judgment against Bussie and Brown, finding that Midwestern was entitled to damages

"in the amount of $9,035.33, plus interest at the rate of 3.0% per year, from the date March 1,

2013, plus the costs of this action."3 On December 13, 2013, Midwestern appealed the trial

court's award of default judgment against Brown and Bussie.4


3. After the trial court granted default judgment against Bussie and Brown, Midwestern filed a "Motion for
Amended Default Judgment," contending that the "prior judgment had errors in the amounts" and had to be
corrected to conform to the complaint. The trial court found no merit to Midwestern's Amended Motion for
Default Judgment. Midwestern appeals from the trial court's initial entry entering default judgment against Bussie
and Brown, filed on October 2, 2013, rather than from the denial of its Amended Motion for Default Judgment.

4. A review of the record reveals that Midwestern never received the notice mandated by Civ.R. 58(B) of the trial
court's November 15, 2013 judgment. As such, Midwestern is not time-barred, according to App.R. 4(A), from
appealing the trial court's November 15, 2013 judgment. See Civ.R. 58(B) and App.R. 4(A); Zuk v. Campbell,
12th Dist. Clermont No. CA94-03-018, 1994 WL 721990, *3 (Dec. 30, 1994). Midwestern's appeal in Case No.
CA2014-02-031 is, therefore, considered timely.


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                            D. Case No. CA20014-02-032: Kathrin Cleary

        {¶ 8} On October 19, 2012, Midwestern filed a complaint against Ryan M. Day and

Cleary after they defaulted under the terms of a retail installment contract entered into on

May 18, 2012, for the purchase of a 2002 Ford F-150 from Midwestern.5 Midwestern

asserted that as of October 10, 2012, $7,904.39 was due and owing pursuant to the

contractual agreement of the parties.               Midwestern attached copies of the Purchase

Agreement and Retail Installment Sale Contract executed by Day and Cleary, as well as an

account statement detailing Day and Cleary's payments and subsequent default on the

contract to its complaint. The Purchase Agreement described the vehicle being purchased

and set forth the cash price of the vehicle, the down payment made by Day and Cleary, and

the remaining unpaid balance. The Retail Installment Sale Contract set forth the Federal

Truth-in-Lending Disclosures, and provided that the "Annual Percentage Rate," or the "cost

of your credit as a yearly rate" was 24.87 percent. The Retail Installment Sale Contract also

provided that Day and Cleary were to make 49 bi-weekly payments of $250 and one

additional payment of $102.83 for the purchase of the Ford F-150.

        {¶ 9} Neither Day nor Cleary filed an answer or otherwise appeared in the action, and

Midwestern moved for default judgment. On April 10, 2013, the magistrate entered default

judgment against Day. Thereafter, on October 2, 2013, the trial court entered default

judgment against Cleary and in favor of Midwestern, finding Midwestern was entitled to

judgment "in the amount of $7,904.39, plus interest at the rate of 3.0% per year, from the

date October 10, 2012, plus the costs of this action." On November 27, 2013, Midwestern

filed a Civ.R. 60(B) motion for relief from judgment, seeking to have the trial court set aside



5. Although Ryan M. Day was a co-buyer of the 2002 Ford F-150 and default judgment was rendered against
him on April 10, 2013, Midwestern did not appeal from the judgment rendered against Day. Rather,
Midwestern's Notice of Appeal only sought to appeal the trial court's October 2, 2013 judgment of default against
Cleary. Day, therefore, is not a party to the present appeal.

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the damage award entered against Cleary. Midwestern contended that the trial court erred,

as a matter of law, in awarding interest, including prejudgment interest, at the statutory rate of

3.0 percent when the Retail Installment Sale Contract provided for an interest rate of 24.87

percent. However, on December 13, 2013, prior to the trial court ruling on Midwestern's

Civ.R. 60(B) motion, Midwestern appealed the courts award of default judgment against

Cleary.6 Midwestern did not appeal from the default judgment and damage award rendered

against Day.7

                             E. Case No. CA2014-03-067: King D. Bussie

        {¶ 10} On June 6, 2013, Midwestern filed a complaint against Bussie after he

defaulted under the terms of a retail installment contract entered into on September 14,

2012, for the purchase of a 1993 Chevrolet Lumina from Midwestern. Midwestern asserted

that as of March 1, 2013, $1,480.55 was due and owing pursuant to the contractual

agreement of the parties. Midwestern attached to its complaint copies of the Purchase

Agreement and Retail Installment Sale Contract executed by Bussie, as well as an account

statement detailing Bussie's payments and subsequent default on the contract.                                 The

Purchase Agreement described the vehicle being purchased and set forth the cash price of

the vehicle, the down payment made by Bussie, and the remaining unpaid balance. The

Retail Installment Sale Contract set forth the Federal Truth-in-Lending Disclosures, and

provided that the "Annual Percentage Rate," or the "cost of your credit as a yearly rate" was

24.61 percent. The Retail Installment Sale Contract also provided that Bussie was to make




6. Although the trial court was divested of the jurisdiction to consider Midwestern's Civ.R. 60(B) motion for relief
from judgment because Midwestern had appealed the entry granting default judgment, the trial court issued an
opinion on January 31, 2014 denying Midwestern's motion for relief. Midwestern has not appealed from that
decision.

7. Because Midwestern never received the notice mandated by Civ.R. 58(B) of the trial court's October 2, 2013
award of default judgment against Cleary, Midwestern's appeal of the October 2, 2013 judgment in Case No.
CA2014-02-032 is considered timely pursuant to Civ.R. 58(B) and App.R. 4(A). See Zuk, 1994 WL 721990 at *3.

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five bi-weekly payments of $150 and one additional payment of $56.71 for the purchase of

the Chevrolet Lumina.

       {¶ 11} Bussie failed to file an answer or otherwise appear in the action, and

Midwestern moved for default judgment. On October 2, 2013, the trial court entered default

judgment against Bussie, finding that Midwestern was entitled to damages "in the amount of

$631.74, plus interest at the rate of 3.0% per year, from the date March 1, 2013, plus the

costs of this action." Thereafter, on October 8, 2013, Midwestern filed a "Motion for

Amended Default Judgment" to correct an error in the amount due under the contract from

$631.74 to $1,480.55 and to have the interest rate changed from 3.0 percent to 24.61

percent. On November 15, 2014, the magistrate issued a decision granting in part and

denying in part Midwestern's motion for amended default judgment. The magistrate found

that the motion to amend was "not well taken as to the change in interest rate." Specifically

the magistrate held that "[i]nterest is granted at the statutory rate of 3% per annum simple

interest [as] [n]o specific contract rate was noted in the original documents." The magistrate

did, however, find that damages should have been awarded in the amount of $1,480.55, and

it amended the judgment to reflect this amount. Midwestern timely filed "Objections to or

Motion to Set Aside Magistrate's Decision/Order or Alternative Motion for Relief From

Judgment," arguing that it was entitled to interest, including prejudgment interest, at a rate of

24.61 percent rather than the statutory rate of 3.0 percent pursuant to the Retail Installment

Sale Contract entered into by the parties.

       {¶ 12} On January 31, 2014, the trial court overruled Midwestern's objections or

alternative motion for relief, finding that while the federal Truth-In-Lending disclosure set forth

in Retail Installment Sale Contract signed by the parties stated that the annual percentage

rate for the loan was 24.61 percent, "a reading of the agreement does not disclose any text

that states that the Truth-in-Lending rate is also the contract rate for the loan." Absent such

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a designation, the trial court found that it was required to apply the 3.0 percent statutory

interest rate, as set forth in R.C. 1343.03. In reaching this determination, the court noted that

"[t]he APR as set forth in the Truth-in-Lending Disclosure Statement includes not only the

interest rate, but additional other fees and lender charges. * * * Absent a clear designation of

the agreed upon interest rate the statutory rate must apply." Following the denial of its

objections or alternative motion for relief from judgment, Midwestern appealed.

                         F. Case No. CA2014-03-068: Bonnie Ferrell

       {¶ 13} On April 23, 2013, Midwestern filed a complaint against Ferrell after she

defaulted under the terms of a retail installment contract entered into on September 26,

2012, for the purchase of a 2002 Oldsmobile Silhouette from Midwestern. Midwestern

asserted that as of March 1, 2013, $631.74 was due and owing pursuant to the contractual

agreement of the parties. Midwestern attached to its complaint copies of the Purchase

Agreement and Retail Installment Sale Contract executed by Ferrell, as well as an account

statement detailing Ferrell's payments and subsequent default on the contract.              The

Purchase Agreement described the vehicle being purchased and set forth the cash price of

the vehicle, the down payment made by Ferrell, and the remaining unpaid balance. The

Retail Installment Sale Contract set forth the Federal Truth-in-Lending Disclosures, and

provided that the "Annual Percentage Rate," or the "cost of your credit as a yearly rate" was

24.86 percent. The Retail Installment Sale Contract also provided that Ferrell was to make

55 weekly payments of $65 and one additional payment of $30.40 for the purchase of the

Oldsmobile Silhouette.

       {¶ 14} On September 27, 2013, Ferrell filed an answer out of time. In her answer,

Ferrell stated that it was her understanding that her insurance company had paid off

Midwestern following an automobile accident in which she was involved. A hearing on

Midwestern's motion for default judgment was held on October 23, 2013, before a magistrate.

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At this time, Midwestern provided evidence of the balance due on the retail installment

contract. On November 14, 2013, the magistrate issued a decision granting Midwestern's

motion for default judgment, finding that Midwestern was entitled to recover $631.74 with

interest from March 1, 2013 at the statutory rate of 3.0 percent.

       {¶ 15} Midwestern timely filed "Objections to or Motion to Set Aside Magistrate's

Decision/Order or Alternative Motion for Relief From Judgment," arguing that it was entitled to

interest, including prejudgment interest, at a rate of 24.86 percent rather than the statutory

rate of 3.0 percent pursuant to the Retail Installment Sale Contract entered into by the

parties. On January 31, 2014, the trial court overruled Midwestern's objections or alternative

motion for relief, stating that "[t]his Court agrees with the Decision of the Magistrate. The

APR set forth in the Truth-In-Lending Disclosure includes not only the interest rate, but

additional other fees and lender charges. Absent a clear designation of the agreed upon

interest rate the statutory rate must apply."     Following the denial of its objections or

alternative motion for relief from judgment, Midwestern appealed.

               G. Case No. CA2014-04-086: Cathy Engle and Braun Combs

       {¶ 16} On July 9, 2013, Midwestern filed a complaint against Engle and Combs after

they defaulted under the terms of a retail installment contract entered into on August 2, 2013,

for the purchase of a 2001 Cadillac Seville from Midwestern. Midwestern asserted that as of

October 9, 2013, $4,337.57 was due and owing pursuant to the contractual agreement

entered into by the parties. Attached to Midwestern's complaint were copies of the Purchase

Agreement and the Retail Installment Sale Contract form executed by Engle and Combs, as

well as an account statement detailing Engle and Combs' payments and subsequent default

on the contract. The Purchase Agreement described the vehicle being purchased and set

forth the cash price of the vehicle, the down payment made by Engle and Combs, and the

remaining unpaid balance. The Retail Installment Sale Contract set forth the Federal Truth-

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in-Lending Disclosures, and provided that the "Annual Percentage Rate," or the "cost of your

credit as a yearly rate" was 24.86 percent. The Retail Installment Sale Contract also

provided that Engle and Combs were to make 24 weekly payments of $150 and one

additional payment of $138.59 for the purchase of the Cadillac Seville.

        {¶ 17} On November 14, 2013, Engle and Combs filed an answer. Thereafter, on

December 10, 2013, Midwestern filed a motion for judgment on the pleadings. Engle and

Combs did not file a brief in opposition. A hearing on Midwestern's motion was held on

January 9, 2014.         On February 7, 2014, the magistrate issued a decision granting

Midwestern's motion for judgment on the pleadings, and awarding judgment in favor of

Midwestern in the amount of $4,337.57 with interest from the date of judgment at the

statutory rate of 3.0 percent. Midwestern timely filed "Objections to or Motion to Set Aside

Magistrate's Decision/Order or Alternative Motion for Relief From Judgment," arguing that it

was entitled to interest, including prejudgment interest, at a rate of 24.86 percent rather than

the statutory rate of 3.0 percent pursuant to the Retail Installment Sale Contract entered into

by the parties. On March 11, 2014, the trial court overruled Midwestern's objections or

alternative motion for relief, finding that the statutory rate of interest applied. The court,

therefore, adopted the magistrate's decision awarding $4,337.57 plus interest at the statutory

rate of 3.0 percent from the date of judgment to Midwestern.8 Midwestern timely appealed

the trial court's decision.9

              H. Case No. CA2014-04-087: Chelsea Harrison and Joshua Vitek



8. The trial court mistakenly referred to the date of judgment as January 9, 2014, which was the date of the
hearing on Midwestern's motion for judgment on the pleadings. The magistrate's decision was entered on
February 7, 2014.

9. Midwestern erroneously attached a copy of the trial court's April 2, 2014 denial of Engle and Combs' motion
for relief from judgment to its Notice of Appeal. However, from the face of Midwestern's Notice of Appeal, it is
apparent that Midwestern is seeking to appeal the trial court's March 11, 2014 decision overruling Midwestern's'
objections to the magistrate's decision and entering judgment on the pleadings in favor of Midwestern in the
amount of $4,337.57 with interest at the statutory rate of 3.0 percent.

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       {¶ 18} On October 28, 2013, Midwestern filed a complaint against Harrison and Vitek

after they defaulted under the terms of a retail installment contract entered into on July 22,

2013, for the purchase of a 2006 Pontiac Grand Prix from Midwestern. Midwestern asserted

that as of September 25, 2013, $6,552.75 was due and owing pursuant to the contractual

agreement entered into by the parties. Attached to Midwestern's complaint were copies of a

Credit Application, the Purchase Agreement, and the Retail Installment Sale Contract form

executed by Harrison and Vitek, as well as an account statement detailing Harrison and

Vitek's payments and subsequent default on the contract. The Purchase Agreement

described the vehicle being purchased and set forth the cash price of the vehicle, the down

payment made by Harrison and Vitek, and the remaining unpaid balance. The Retail

Installment Sale Contract set forth the Federal Truth-in-Lending Disclosures, and provided

that the "Annual Percentage Rate," or the "cost of your credit as a yearly rate" was 24.74

percent. The Retail Installment Sale Contract also provided that Harrison and Vitek were to

make 38 bi-weekly payments of $200 and one additional payment of $82.03 for the purchase

of the Pontiac Grand Prix.

       {¶ 19} On November 18, 2013, Harrison and Vitek filed separate answers to

Midwestern's complaint, "disputing" the claims brought against them.            Thereafter, on

December 10, 2013, Midwestern filed a motion for judgment on the pleadings. Harrison and

Vitek did not file a brief in opposition. A hearing on Midwestern's motion was held on

January 9, 2014.      On February 7, 2014, the magistrate issued a decision granting

Midwestern's motion for judgment on the pleadings, and awarding judgment in favor of

Midwestern in the amount of $6,552.75 with interest from the date of judgment at the

statutory rate of 3.0 percent. Midwestern timely filed "Objections to or Motion to Set Aside

Magistrate's Decision/Order or Alternative Motion for Relief From Judgment," arguing that it

was entitled to interest, including prejudgment interest, at a rate of 24.74 percent rather than

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the statutory rate of 3.0 percent pursuant to the Retail Installment Sale Contract entered into

by the parties. On March 11, 2014, the trial court overruled Midwestern's objections or

alternative motion for relief, finding that the statutory rate of interest applied. The court,

therefore, adopted the magistrate's decision awarding $6,552.75 plus interest at the statutory

rate of 3.0 percent from the date judgment to Midwestern.10 Midwestern timely appealed the

trial court's decision.

                                               II. ANALYSIS

        {¶ 20} Midwestern has raised as its sole assignment of error in each of the foregoing

cases the following:

        {¶ 21} THE TRIAL COURT ERRED IN NOT AWARDING INTEREST AT A

CONTRACTED RATE AND PREDATING THE JUDGMENT.

        {¶ 22} Within its sole assignment of error, Midwestern argues that the trial court erred

in its award of damages. Specifically, Midwestern contends that the trial court should have

awarded interest on the damages awards at the rates set forth in the retail installment sales

contracts rather than at the 3.0 percent statutory rate. Midwestern further argues the trial

court erred in not awarding prejudgment interest at the higher, contractual rate from the time

the money in the contract became due and payable.

                                            A. Rate of Interest

        {¶ 23} As Midwestern's argument raises an issue of law with respect to the rate of

interest that should have been awarded on its breach of contract claims, our review is de

novo. See Realty Income Corp. v. Garb-Ko, Inc., Franklin No. 13AP-35, 2013-Ohio-4932, ¶

33; John Soliday Fin. Group, LLC v. Sutzman, 9th Dist. Wayne No. 08CA0046, 2009-Ohio-




10. The trial court mistakenly referred to the date of judgment as January 9, 2014, which was the date of the
hearing on Midwestern's motion for judgment on the pleadings. The magistrate's decision was entered on
February 7, 2014.

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2081, ¶ 6. "A de novo review requires an independent review of the trial court's decision

without any deference to the trial court's determination." Id.

         {¶ 24} R.C. 1343.03(A) establishes interest rates for both prejudgment and post-

judgment interest. It provides, in relevant part, as follows:

                  when money becomes due and payable upon any bond, bill,
                  note, or other instrument of writing, upon any book account, upon
                  any settlement between parties, upon all verbal contracts entered
                  into, and upon all judgments, decrees, and orders of any judicial
                  tribunal for the payment of money arising out of tortious conduct
                  or a contract or other transaction, the creditor is entitled to
                  interest at the rate per annum determined pursuant to section
                  5703.47 of the Revised Code, unless a written contract provides
                  a different rate of interest in relation to the money that becomes
                  due and payable, in which case the creditor is entitled to interest
                  at the rate provided in that contract. (Emphasis added).

R.C. 1343.03(A).11

         {¶ 25} The statutory rate set forth in R.C. 1343.03(A) is a default rate that is applied

unless the parties have otherwise agreed on a different rate of interest in writing. Realty

Income Corp. at ¶ 34. Pursuant to R.C. 1343.03(A), in order for there to be a deviation from

the statutory rate of interest, two prerequisites must be met: "(1) there must be a written

contract between the parties; and (2) the contract must provide a rate of interest with respect

to money that becomes due and payable." Chappell Door Co. v. Roberts Group, Inc., 12th

Dist. Fayette No. CA90-09-013, 1991 WL 71980, *4 (May 6, 1991), citing Hobart Bros. Co. v.

Welding Supply Serv., Inc., 21 Ohio App.3d 142, 144 (10th Dist.1985). See also Realty


11. R.C. 1343.02 also addresses the interest rate to be awarded when a contract exists. It provides that "[u]pon
all judgments * * * rendered on any bond, bill, note, or other instrument of writing containing stipulations for the
payment of interest in accordance with section 1343.01 of the Revised Code, interest shall be computed until
payment is made at the rate specified in such instrument." While both R.C. 1343.02 and R.C. 1343.03 state that
if there is a written contract specifying the rate of interest, the creditor is entitled to interest at the rate provided in
the contract, R.C. 1343.03 has been applied more frequently. See Kulton v. Hoffer, 9th Dist. Summit No. 24738,
2009-Ohio-5943, ¶ 7; First Bank of Ohio v. Wigfield, 10th Dist. Nos. 07AP-561 and 07AP-562, 2008-Ohio-1278;
K. Ronald Bailey & Assoc. Co., L.P.A. v. McQuaide, 6th Dist. Erie No. E-02-006, 2002 WL 1292806 (May 24,
2002). Furthermore, where the contract entered into by the parties fails to set forth an agreed rate of interest for
money due and payable, R.C. 1343.03 is the applicable statute. See Kulton at ¶ 7. As discussed above, R.C.
1343.03 is the applicable statute in the present case as the retail installment sales contracts entered into by
Midwestern and appellees failed to stipulate an agreed rate of interest.

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Income Corp, 2013-Ohio-4932 at ¶ 34. "Once a judgment is rendered, the interest rate in the

contract * * * will continue to govern until the amount due is paid." Id., citing First Bank of

Ohio v. Wigfield, 10th Dist. Franklin Nos. 07AP-561 and 07AP-562, 2008-Ohio-1278, ¶ 20.

        {¶ 26} Attached to Midwestern's complaints in the aforementioned cases were copies

of the retail installment sales contracts. These contracts provide as follows:

                 You, the Buyer (and Co-Buyer, if any) may buy the vehicle below
                 for cash or credit. By signing this contract, you choose to buy the
                 vehicle on credit under the agreements in this contract. You
                 agree to pay the Creditor-Seller (sometimes "we" or "us" in this
                 contract) the Amount Financed and the Finance Charge in U.S.
                 funds according to the payment schedule below. We will figure
                 your finance charge on a daily basis. The Truth-in-Lending
                 Disclosures below are part of this contract.

Thereafter, the federal truth-in-lending disclosures provide that the "annual percentage rate,"

or "[t]he cost of your credit as a yearly rate," is a rate in excess of 24 percent.12 The truth-in-

lending disclosures further state the finance charge (or "[t]he dollar amount the credit will cost

you"), the amount financed (or "[t]he amount of credit provided to you on your behalf"), the

total of payments (or "[t]he amount you will have paid after you have made all payments as

scheduled"), and the total sale price (or "[t]he total cost of your purchase on credit, including

your down payment"). Following the truth-in-lending disclosures, the payment schedule for

the purchase of the vehicle is set forth. The contracts then provide other important terms,

such as warranty disclaimers, the buyers' limited right to cancel, how buyers' payments are

applied to the loan, the seller's remedies upon default of payment, and that the contracts are

governed by federal law and Ohio law.

        {¶ 27} Having examined the retail installment sales contracts, we find that the

contracts fail to designate a rate of interest with respect to money that becomes due and



12. The eight retail installment sales contracts entered into by appellees set forth a truth-in-lending APR ranging
from 24.61 percent to 24.89 percent. For ease of discussion, we shall reference all of the APR's set forth in
appellees' respective contracts as rates in "excess of 24 percent."

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payable. Nowhere within the contracts is an agreed rate of interest set forth. Contrary to

Midwestern's argument, the truth-in-lending annual percentage rate ("APR") of 24-plus

percent is not a designated rate of interest. The truth-in-lending APR listed in the retail

installment sales contracts informed appellees of the cost of their credit as a yearly rate. The

APR, therefore, included not only interest but also other finance charges associated with the

loan. See Ohio Neighborhood Fin. Inc. v. Scott, 139 Ohio St.3d 536, 540, 2014-Ohio-2440, ¶

14; Smith v. Anderson, 801 F.2d 661, 663-664 (4th Cir.1986) (finding that the APR "differs

from the general definition of interest rate because it considers, by definition, a broader range

of finance charges when determining the total cost of credit as a yearly rate"). See also 15

U.S.C. 1605; 15 U.S.C. 1606. Consequently, the truth-in-lending APR is not a rate of interest

with respect to money that has become due and payable.

       {¶ 28} In support of its position that it is entitled to recover interest at a rate in excess

of 24 percent, Midwestern cites to Marion Plaza, Inc. v. D & L Ent., Inc., 7th Dist. Mahoning

No. 09-MA-207, 2010-Ohio-6267; and Kulton v. Hoffer, 9th Dist. Summit No. 24738, 2009-

Ohio-5943. In Marion Plaza, the Seventh District Court of Appeals modified a damage award

in a breach of contract case to allow prejudgment and post-judgment interest at the

contracted rate of 18 percent rather than at the statutory interest rate. Marion Plaza at ¶ 18.

After reviewing the contract in Marion Plaza, the Seventh District found that the licensing

agreement "unequivocally stipulated that an 18% interest rate would apply to all amounts due

and payable." Id. at ¶ 12. Similarly, in Kulton, the Ninth District Court of Appeals reversed

and remanded a damage award in a breach of contract case after concluding that the trial

court incorrectly calculated damages. Kulton, 2009-Ohio-5943 at ¶ 10. The Ninth District

determined that imposition of the default statutory interest rate was improper given the

parties' stipulation in a written settlement agreement that interest would accrue at a higher

rate. Id. at ¶ 9. There, the settlement agreement specifically provided that "in the event the

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remainder of the debt is declared to be due, interest shall accrue at the rate of eight percent

(8.00%) per annum, computed monthly." Id.

       {¶ 29} Unlike the contracts in Marion Plaza and Kulton, the retail installment sales

contracts entered into by appellees and Midwestern do not set forth a specific rate of interest

that was agreed to by all parties. As there was no "meeting of the minds" or express written

statement that interest would accrue on amounts due and payable at a rate higher than the

statutory rate set forth in R.C. 1343.03(A), Midwestern is not entitled to recover interest at

rates in excess of 24 percent. See Chappell Door, 1991 WL 71980 at *4; Takats v. Groth,

12th Dist. Butler No. CA93-06-106, 1993 WL 500241, *3 (Dec. 6, 1993). Accordingly, we find

that the trial court did not err in awarding interest at the statutory rate of 3.0 percent.

                               B. Award of Prejudgment Interest

       {¶ 30} "Once a plaintiff receives judgment on a contract claim, the trial court has no

discretion but to award prejudgment interest under R.C. 1343.03(A)." Textiles, Inc. v. Design

Wise, Inc., 12th Dist. Madison Nos. CA2009-08-015 and CA2009-08-018, 2010-Ohio-1524, ¶

49. While the language of R.C. 1343.03(A) is mandatory, a trial court retains discretion in

determining when money becomes "due and payable." Id. at ¶ 50, citing Hance v. Allstate

Ins. Co., 12th Dist. Clermont No. CA2008-10-094, 2009-Ohio-2809, ¶ 17. "This court reviews

the trial court's determination of when prejudgment interest accrues under an abuse of

discretion standard." Deerfield Twp. v. Mason, 12th Dist. Warren No. CA2011-12-138, 2013-

Ohio-779, ¶ 29. An abuse of discretion constitutes more than an error of law or judgment; it

requires a finding that the trial court acted unreasonably, arbitrarily, or unconscionably. Id.

       {¶ 31} Prejudgment interest acts as compensation and serves to make the aggrieved

party whole. Royal Elect. Constr. Corp. v. Ohio State Univ., 73 Ohio St.3d 110, 117 (1995).

"[T]o make the aggrieved party whole, the party should be compensated for the lapse of time



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between accrual of the claim and judgment." Id.

       {¶ 32} As we have previously determined that the trial court did not err in awarding

damages at the statutory interest rate of 3.0 percent, the question now becomes whether the

trial court abused its discretion in determining when prejudgment interest began accruing. In

Case Nos. CA2014-02-029, CA2014-02-030, CA2014-02-031, CA2014-02-032, CA2014-03-

067, and CA2014-03-068, the trial court awarded interest as of the date of appellees' default

on the retail installment sales contracts. We find that the trial court did not abuse its

discretion in determining that prejudgment interest, at the statutory rate of 3.0 percent, began

accruing on the date of default in these cases.

       {¶ 33} However, in Case Nos. CA2014-04-086 and CA2014-04-087, we find that the

trial court erred by failing to award prejudgment interest. Although the trial court granted

Midwestern judgment on the pleadings in each case, thereby finding that appellees Engle

and Combs and Harrison and Vitek had defaulted on the terms of repayment under the retail

installment sales contracts as set forth in Midwestern's complaints, the court's entry does not

award prejudgment entry from the time of default. Rather, the trial court awarded interest at

the time of judgment. Such an award cannot be construed as an award of prejudgment

interest. See Foister v. Lowe, 12th Dist. Warren Nos. CA97-06-054 and CA97-06-055, 1998

WL 117164, *4-5 (Mar. 16, 1998). As we previously recognized, once a plaintiff receives

judgment on a contract claim, the trial court must award prejudgment interest under R.C.

1343.03(A). Textiles, 2010-Ohio-1524 at ¶ 12. Because the amount owed under the terms

of the retail installment sales contracts became due and payable upon appellees' default,

Midwestern was entitled to interest, or compensation, for the lapse of time between the

accrual of the claim and the court's award of judgment. See Royal Elec. Constr. at 117-118;

Foister v. Lowe, 12th Dist. Warren Nos. CA97-06-054 and CA97-06-055, 1998 WL 117164,

*4-5 (Mar. 16, 1998). We therefore find that the trial court abused its discretion by failing to

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award prejudgment interest at the rate of 3.0 percent in Case Nos. CA2014-04-086 and

CA2014-04-087 from the time the retail installment sales contract became due and payable.

      {¶ 34} Accordingly, for the reasons set forth above, Midwestern's sole assignment of

error is overruled in Case Nos. CA2014-02-029, CA2014-02-030, CA2014-02-031, CA2014-

02-032, CA2014-03-067, and CA2014-03-068, and is overruled in part and sustained in part

in Case Nos. CA2014-04-086 and CA2014-04-087. The judgments in Case Nos. CA2014-

04-086 and CA2014-04-087 are reversed and the causes remanded to the trial court for the

limited purpose of applying prejudgment interest from the time the retail installment sales

contracts become due and payable at the statutory rate of 3.0 percent.

                                      III. CONCLUSION

      {¶ 35} Judgment affirmed in part, reversed in part, and the matter remanded for further

proceedings consistent with this Opinion.


      RINGLAND, P.J., and PIPER, J., concur.




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