NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 18a0542n.06

No. 17-4207

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

THERMO CREDIT, LLC,

Plaintiff-Appellant,

v.

DCA SERVICES, INC.,

Defendant-Appellee.

)

)

)

)

)

)

)

)

ON APPEAL FROM THE 

UNITED STATES DISTRICT 

COURT FOR THE

SOUTHERN DISTRICT OF 

OHIO

BEFORE: GIBBONS, STRANCH, and BUSH, Circuit Judges. 

JULIA SMITH GIBBONS, Circuit Judge. Thermo Credit, LLC (“Thermo Credit”) filed 

suit against DCA Services, Inc. (“DCA”), seeking to avoid and recover payments DCA received 

from one of Thermo Credit’s debtors because Thermo Credit claimed those payments were 

fraudulent transfers under the Ohio Uniform Fraudulent Transfer Act (“OUFTA”). The district 

court granted summary judgment for DCA and Thermo Credit appealed. A large portion of the 

payments Thermo Credit seeks to recover were subject to a valid lien and are thus exempt from 

OUFTA’s purview. As to the other payments, we conclude that Thermo Credit has waived its 

right to bring suit to recover them. We therefore affirm the judgment of the district court. 

I.

There are three relevant entities in this case: Plaintiff-Appellant Thermo Credit, DefendantAppellee DCA, and the now-defunct Communications Options, Inc. (“COI”).1

 Thermo Credit is 

 

1

“Communications Options, Inc.” and the “COI” abbreviation actually refer to three separate entities: 

Communications Options, Inc., Communications III, Inc., and Telecom Ventures, LLC. Communications Options, 

Inc. and Telecom Ventures, LLC were wholly owned subsidiaries of the parent company Communications III, Inc. 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-2-

a lender that provides funding to technology and communications companies. COI was a fullservice telecommunications provider, which in 2010, borrowed approximately $990,000 from 

Thermo Credit pursuant to a Loan and Security Agreement. DCA is a telecommunications 

software development company that, in 2012, considered purchasing COI. However, DCA 

decided not to purchase the company after realizing that COI had a substantial amount of debt in 

relation to its assets and therefore had no value. Instead of purchasing the company, DCA decided 

to enter into a business relationship with COI in which DCA would take over COI’s management 

and operations.

In February 2012, DCA and COI entered into a Managed Services Agreement (the 

“Original MSA”), where DCA agreed to accept “management control and responsibility for all 

assets, liabilities, customers, personnel, facilities, revenue and expenses” and to “appoint a Chief 

Restructuring Officer who will undertake the complete management and operation of the 

Business.” DE 37-2, Original MSA, Page ID 1424. Jeff Swenson, a vice president at DCA, was 

appointed the chief restructuring officer. In exchange for its services, DCA would receive 40% of 

the net profits generated by COI and monthly payments “equal to 20% of the net improvement to 

the Business’s Balance Sheet during the month.” Id. The Original MSA did not provide for 

minimum monthly payments.

By April 2012, however, DCA wanted to end its relationship with COI because it doubted 

its own ability to restructure COI successfully and did not think it would be able to make a profit 

from the company. According to Swenson, DCA’s threat to withdraw prompted COI to offer to 

renegotiate the relationship. Apparently, COI was concerned that if DCA terminated the 

 

The entities are referred to collectively as “Communications Options, Inc.” because they operated as one business 

with consolidated financial statements.
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-3-

relationship, COI would lose CenturyLink, its most important vendor that represented 70% of the 

company’s revenue. The leadership at COI therefore asked DCA if there was a way the two 

companies could continue the relationship so DCA could help with the CenturyLink issue. After 

Swenson discussed the matter internally with DCA, DCA agreed to keep managing COI in 

exchange for minimum monthly payments. 

In accordance with their renegotiated relationship, on May 9, 2012, COI and DCA entered 

into a new Service Agreement, and later that month, they entered into a Supplemental Agreement 

(collectively, the “First Service Agreement”). Under the First Service Agreement, COI agreed to 

pay DCA a minimum monthly fee of $35,000. The parties executed yet another agreement on 

February 1, 2013, incorporating their prior agreements but making the following additions: 

(1) DCA assumed extra responsibilities “including Provisioning, Customer Services, Collections, 

Carrier Reconciliation, Revenue Assurance, and general administrative support,” and (2) the 

minimum monthly fee was increased to $55,000 per month. DE 37-2, Amendment One, Page ID 

1435. Shortly thereafter, on May 20, 2013, Swenson and others from DCA decided to take COI 

into Chapter 11 bankruptcy to “shed the massive vendor debts that ha[d] accumulated over the 

years.” DE 33, Swenson Dep., Page ID 361 (5/22/2013 Email).

After filing for bankruptcy, COI moved for an order authorizing it to use cash collateral so 

it could continue operating its business. COI asked the bankruptcy court to afford Thermo Credit 

adequate protection of Thermo Credit’s interests as a secured creditor2“by granting Thermo Credit 

a replacement lien in Cash Collateral generated by the post-petition operation of the Debtor’s 

 

2 Once a debtor files for bankruptcy, the debtor’s property becomes property of the estate and an automatic stay is 

placed on said property. 11 U.S.C. §§ 541(a), 362. The bankruptcy court’s approval is required to lift the stay on 

property, including cash collateral. Id. § 363. Any entity with an interest in property of the estate may object or 

condition the use of cash collateral “as is necessary to provide adequate protection” of the entity’s interest. Id.

§ 363(e). 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-4-

business, to the extent of any valid and subsisting liens or interest held by it in Cash Collateral as 

of the Petition Date.” DE 37-9, Bankruptcy Filings, Page ID 1701. The bankruptcy judge entered 

an interim order on May 23, 2013 permitting COI to use cash collateral and granting Thermo 

Credit liens in all post-petition property of COI. On June 17, 2013, the bankruptcy judge entered 

a final order authorizing COI to use cash collateral on a limited basis and granting Thermo Credit 

“valid, automatically-perfected, and unavoidable first-priority liens and security interests in and 

on all of the Debtor’s and Debtor-in-Possession’s assets.” Id. at 1744, 1751.

By the fall of 2013, DCA was “told that COI would like to take back accounting and 

finance,” and COI hired its own accountant, David Gearhart. DE 48, Huang Dep., Page ID 2734–

35. COI and DCA executed another Service Agreement (the “Second Service Agreement”) in 

October 2013, which reduced the minimum monthly payment to $51,000. That same month, 

Swenson left DCA and became a full-time employee of Communications Options, Inc. COI and 

DCA subsequently amended the Second Service Agreement three times. The December 1, 2013 

Amendment did not change the minimum monthly payment or the services that DCA would 

provide. However, the April 1, 2014 Amendment stated that DCA would no longer provide human 

resources or tech support services and reduced the minimum monthly payment to $46,000. The 

September 1, 2014 Amendment further lowered the minimum monthly payment to $32,500.

By the fall of 2014, COI discovered that the financial statements that it had been providing 

to the bankruptcy court were inaccurate and had been manipulated by Gearhart, meaning that the 

company was in worse financial condition than its leadership realized. On November 21, 2014, 

COI filed a voluntary motion to dismiss the bankruptcy. Swenson resigned from COI in December 

2014. On January 15, 2015, COI sent a letter notifying DCA that it was ceasing to provide 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-5-

telecommunications services. At the time COI terminated its relationship with DCA, it had paid 

DCA $1,595,315.43. Thermo Credit subsequently foreclosed on all of COI’s tangible assets.

Thermo Credit then initiated the instant case, seeking, pursuant to OUFTA, to avoid and 

recover the monthly payments COI made to DCA. It later moved to amend its complaint to add a 

cause of action for actual fraud under O.R.C. § 1336.04(A)(1). Both parties moved for summary 

judgment, and Thermo Credit also moved to strike certain evidence DCA had attached to its 

summary judgment motion. The district court granted DCA’s motion for summary judgment and 

denied Thermo Credit’s motion. It also denied Thermo Credit’s motions to amend its complaint 

and to strike evidence as moot.

The district court granted summary judgment to DCA for two primary reasons. First, it 

held that none of the payments COI made to DCA after May 2013 (when COI filed for bankruptcy) 

qualified as fraudulent transfers under OUFTA, because property is not considered an “asset” 

under OUFTA “to the extent it is encumbered by a valid lien” and Thermo Credit had a firstpriority lien in all of COI’s cash pursuant to the bankruptcy judge’s May 2013 order; thus, none 

of the payments made after this order qualified as “transfers of assets.” O.R.C. § 1336.01(B). 

However, the court found that the pre-May 2013 payments did qualify as “transfers of assets,” 

because it concluded that DCA had “not put forth evidence proving that Thermo Credit had a lien 

on COI’s cash until May 20, 2013.” DE 60, Op. & Order, Page ID 3083; see O.R.C. § 1336.05. 

Nonetheless, the district court still granted summary judgment to DCA because it concluded that 

Thermo Credit had failed to establish a genuine issue of material fact as to whether COI received 

less than reasonably equivalent value for the pre-May 2013 payments.
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-6-

II.

Thermo Credit argues that the district court improperly granted summary judgment to DCA 

for two reasons. First, it argues that the court erroneously held that the post-May 2013 payments 

were not “transfers of assets,” claiming that its lien on Thermo Credit’s cash would have been 

extinguished when the money was transferred to DCA. Second, Thermo Credit argues that the 

district court incorrectly applied the law requiring value to be “concrete and quantifiable” when 

determining that the payments were received for reasonably equivalent value. DCA counters that 

summary judgment was appropriate because none of the payments were “transfers of assets” under 

OUFTA’s definition of “asset,” and they were all received in exchange for services of reasonably 

equivalent value. It also proposes that we affirm on alternate grounds by finding that Thermo 

Credit waived its right to complain about the payments, an argument that the district court did not 

address. 

We review a district court’s decision to grant summary judgment de novo. Simpson v. 

Ernst & Young, 100 F.3d 436, 440 (6th Cir. 1996). Summary judgment is warranted when “there 

is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of 

law.” Fed. R. Civ. P. 56(a). A dispute is “genuine” if “the evidence is such that a reasonable jury 

could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 

248 (1986). “The moving party bears the initial burden of demonstrating the absence of any 

genuine issue of material fact.” Mosholder v. Barnhardt, 679 F.3d 443, 448 (6th Cir. 2012) (citing 

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). “Once the moving party satisfies its initial 

burden, the burden shifts to the nonmoving party to set forth specific facts showing a triable issue 

of material fact.” Id. at 448–49 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 

574, 587 (1986) and Fed. R. Civ. P. 56(e)).
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-7-

III.

The payments made before the bankruptcy court’s May 2013 order granting Thermo Credit 

a first-priority lien in all of COI’s assets and those made after the May 2013 order fall into two 

different categories for purposes of legal analysis. We address the pre-May 2013 payments first. 

A.

Both O.R.C. § 1336.04 and § 1336.05 require that the debtor make a “transfer” (or “incur 

an obligation,” which is not relevant here). A “transfer” is “every direct or indirect, absolute or 

conditional, and voluntary or involuntary method of disposing of or parting with an asset or an 

interest in an asset.” O.R.C. § 1336.01(L) (emphases added). Whether the payments were 

transfers therefore depend on whether the COI’s cash was an “asset.” The statute defines “asset” 

as “property of a debtor,” but it specifically excludes “[p]roperty to the extent it is encumbered by 

a valid lien.” O.R.C. § 1336.01(B)(1). And finally, a “valid lien” is defined as “a lien that is 

effective against the holder of a judicial lien subsequently obtained by legal or equitable process 

or proceedings.” O.R.C. § 1336.01(M). The district court held that only the post-May 2013 

payments were not “transfers of assets” because DCA had “not put forth evidence proving that 

Thermo Credit had a [valid] lien on COI’s cash until May 20, 2013.” DE 60, Op. & Order, Page 

ID 3082–83. Thermo Credit argues that the district court erred in holding that the lien granted by 

the bankruptcy court qualifies as a “valid lien” that would exempt the payments from OUFTA’s 

definition of “assets.” We disagree. 

B.

A valid lien is one “that is effective against the holder of a judicial lien subsequently 

obtained.” O.R.C. § 1336.01(M). Here, the bankruptcy court’s grant of “first-priority liens and 

security interests” in COI’s assets, including its cash, would certainly have been “effective against 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-8-

the holder of a judicial lien subsequently obtained”—otherwise, the bankruptcy court’s order 

would have provided no real protection to Thermo Credit’s interests as a secured creditor. 

The Bankruptcy Code “sets forth a basic system of priority, which ordinarily determines 

the order in which the bankruptcy court will distribute assets of the estate.” Czyzewski v. Jevic 

Holding Corp., 137 S. Ct. 973, 979 (2017). By granting Thermo Credit “first-priority liens” in all 

of COI’s assets, the bankruptcy court ensured that Thermo Credit would be paid from the estate 

first, before any of COI’s other creditors—including creditors holding “subsequently obtained” 

judicial liens. Consequently, the bankruptcy court’s order gave Thermo Credit a lien over COI’s 

assets—including its cash—that would be “effective against the holder of a judicial lien 

subsequently obtained.” Therefore, the post-May 2013 payments were encumbered by a valid lien 

and are outside the purview of OUFTA.

Thermo Credit argues that the post-bankruptcy payments were not encumbered by a valid 

lien because under Ohio’s version of the Uniform Commercial Code (“UCC”), cash or funds from 

a deposit account are generally transferred free of security interests. See O.R.C. § 1309.332. So, 

Thermo Credit claims, when COI made the payments to DCA, Thermo Credit’s encumbrances 

vanished. However, this argument is unpersuasive. Thermo Credit is correct that DCA took the 

payments free of its security interest. That is, once the money had been transferred to DCA, 

Thermo Credit no longer had any claim to those funds. But the fact that DCA took the payments 

free of Thermo Credit’s interest does not mean that they were free of encumbrances at the time of 

payment. As long as the cash remained in COI’s possession, it was still subject to Thermo Credit’s 

first-priority lien.

Furthermore, according to OUFTA’s definition of “asset” as “property of a debtor,” O.R.C. 

§ 1336.01(B), the payments to DCA could only be assets if they belonged to COI at the time of 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-9-

transfer, i.e., if they were COI’s “property.” This seems obvious. But in arguing that the payments 

were free of encumbrances, Thermo Credit asks us to look at whether the property was encumbered 

after the transfer—and thus after it had ceased being COI’s property. We decline to view the 

payments as COI’s property for one purpose but as DCA’s property for another purpose. The 

proper time to evaluate whether the property was encumbered is prior to the transfer, when it was 

in COI’s possession and control. And Thermo Credit acknowledges that “COI’s deposit accounts 

and funds were encumbered by a security interest while they were in the hands of COI.” CA6 R. 

24, Appellant Br., at 24. Therefore, the payments made to DCA after May 2013 were encumbered 

by a “valid lien” and are not covered by OUFTA.

3

 We affirm the district court’s grant of summary 

judgment as to those payments.

IV.

We also agree with the district court that DCA did not show that Thermo Credit had a valid

lien on COI’s cash until the bankruptcy court’s May 2013 order.4 Thus, those payments made 

before May 2013 fall within OUFTA’s reach. However, we still affirm the district court’s grant 

 

3 Thermo Credit argues that affirming the district court here would inhibit creditors’ ability to bring fraudulent transfer 

claims “because any cash or deposit account subject to a security interest would be out of reach.” CA6 R. 21, Reply 

Br., at 9. This argument misses the point. “The Ohio UFTA’s overall purpose is to discourage fraud and provide 

aggrieved creditors with a means to recover assets wrongfully placed beyond their reach.” In re Fair Fin. Co., 834 

F.3d 651, 674 (6th Cir. 2016) (emphasis added). OUFTA does not apply to property subject to a valid lien presumably 

because its drafters made the reasonable assumption that such property is at lower risk of being fraudulently 

transferred, since a secured creditor with a valid lien will be able to protect its interests using the powers available to 

it as a secured creditor. 

4 There is no court order explicitly granting Thermo Credit a first-priority interest in COI’s cash and deposit accounts 

before May 2013, so we turn to the Ohio UCC to determine whether Thermo Credit had a “valid lien” on COI’s cash 

during this time period, i.e., whether it had a lien “effective against the holder of a judicial lien subsequently obtained.” 

O.R.C. § 1336.01(M). According to Ohio law, in order for a lien to “be effective” against a judicial lien, the 

lienholder’s security interest must be perfected. Comer v. Calim, 716 N.E.2d 245, 249 (Ohio Ct. App. 1998). There 

is no evidence in the record that Thermo Credit fulfilled the Ohio UCC’s technical requirements for perfection of its 

security interest in COI’s cash and deposit accounts. Thus, DCA has not made a showing that Thermo Credit had a 

valid lien on the payments before May 2013. 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-10-

of summary judgment as to the pre-May 2013 payments, although we do so on alternate grounds. 

Namely, we conclude that Thermo Credit waived its right to challenge those payments.

Both before the district court and on appeal, DCA argued that Thermo Credit waived its 

ability to challenge the payments in a lawsuit because it did not object to the payments at the time 

that COI was making them. Looking only to evidence of the parties’ knowledge and actions before 

the May 2013 order, we agree with DCA. Our conclusion is based on the following facts from the 

record: first, Thermo Credit definitively knew about the payments and had more or less open access 

to information about COI’s finances; second, it suspected that the payments may have been too 

high; third, it never raised any meaningful objections, attempted to stop the payments, or 

threatened legal action; and fourth, DCA was prejudiced by Thermo Credit’s failure to object in a 

timely manner. 

A.

“[W]aiver is a voluntary relinquishment of a known right.” Engleson v. Unum Life Ins. 

Co. of Am., 723 F.3d 611, 622 (6th Cir. 2013) (internal quotation marks and citation omitted). In 

Ohio, “[a] ‘waiver’ can be found in a great variety of circumstances.” Mark-It Place Foods, Inc. 

v. New Plan Excel Realty Tr., Inc., 804 N.E.2d 979, 1000 (Ohio Ct. App. 2004). Ohio recognizes 

a version called “waiver by estoppel,” which “exists when the acts and conduct of a party are 

inconsistent with an intent to claim a right, and have been such as to mislead the other party to his 

prejudice and thereby estop the party having the right from insisting upon it.” Id. In these cases, 

the party “neglect[ed] to insist upon [its] right at the proper time.” Motz v. Root, 4 N.E.2d 990, 

991 (Ohio Ct. App. 1934). “Waiver by estoppel allows a party’s inconsistent conduct, rather than 

a party’s intent, to establish a waiver of rights.” Nat’l City Bank v. Rini, 834 N.E.2d 836, 840 

(Ohio Ct. App. 2005). Thus, we need only find that Thermo Credit’s actions were “inconsistent 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-11-

with an intent to enforce its rights.” Id. While the record contains some evidence that Thermo 

Credit had the intent to relinquish its right to the payments, at the very least there is no dispute of 

material fact regarding Thermo Credit’s actions, which were highly inconsistent with an intent to 

enforce its rights as a secured creditor.

B.

We turn first to Thermo Credit’s knowledge about COI’s finances in general and about the 

payments specifically. While waiver by estoppel does not require proof of intent to relinquish a 

right, the party must still know that it has a right; i.e., Thermo Credit must have been aware that 

COI was making the payments and have had sufficient information to determine whether they were 

too high. Only if Thermo Credit had this information could it have reasonably been expected to 

take action to protect its interests as a secured creditor.

It is undisputed that Thermo Credit knew COI was making the payments to DCA. On 

February 10, 2012, Seth Block, the executive vice president of Thermo Credit, received an email 

from Scott Halliday, COI’s president at the time, about DCA’s managed services offer with the 

Managed Services Agreement attached. About one month later, Halliday sent an email to Block 

confirming that COI had entered into the Managed Services Agreement.

Moreover, Thermo Credit had access to COI’s financial information and was able to 

monitor the company. Block testified in his deposition that before COI went into bankruptcy in 

2013, Thermo Credit sent auditors to COI “once or twice a year.” DE 34, Block Dep., Page ID 

491, 615. Block further admitted that Thermo Credit’s board required it “to have control of cash 

over every client,” and in fact Block sent an email on May 2, 2011 in reference to COI stating, 

“[C]ontrol of cash is key here.” Id. at 630; DE 34-1, 5/2/2011 Block Email, Page ID 800. 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-12-

Swenson stated that he provided Thermo Credit with monthly financial statements 

“[d]uring DCA’s engagement” and that he “spoke to [Block] fairly regularly.” DE 33, Swenson 

Dep., Page ID 249. Huang confirmed that monthly cash flow spreadsheets were sent to Thermo 

Credit. Additionally, Thermo Credit increased its level of oversight when COI defaulted on its 

loan in 2012, as Block acknowledged when he testified that clients in default were subject to extra 

monitoring. For example, Thermo Credit sent Halliday a notice in April 2012 that Thermo Credit 

would be conducting due diligence. And while Thermo Credit did not have total control of COI’s 

cash, Block estimated that at least after it sent COI a notice of default in February 2012, sixty 

percent of COI’s cash was in an account controlled by Thermo Credit. 

Finally, the record indicates that not only did Thermo Credit know about the payments, it 

was concerned about their amount. Block testified that in December 2014, “[w]e concluded that 

DCA was being overpaid for the services that COI was receiving . . . . I don’t know that I could 

say from day one of the relationship, but certainly for an extended period of time.” DE 34, Block 

Dep., Page ID 494. He also stated that even before December 2014, “there were times where we 

wondered whether they were paying them a lot of money and were they getting that value.” Id. at

492.

C.

Having established that Thermo Credit had sufficient information to determine whether the 

monthly payments were excessive at the time that they were being paid—and that it actually 

suspected the payments were excessive—we now turn to Thermo Credit’s actions. In order to 

conclude that Thermo Credit has waived its claim by estoppel, we must first decide whether its 

actions were “inconsistent with an intent to claim a right.” Mark-It Place Foods, Inc., 804 N.E.2d 

at 1000. The record reveals that Thermo Credit’s actions were entirely inconsistent with its current 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-13-

position. It chose not to get involved in COI’s operations, foreclose on COI’s assets, or assert its 

rights as a secured creditor. Instead, it sanctioned COI’s relationship with DCA and stood by while 

COI made the monthly payments without raising any meaningful objection.

Block stated that Thermo Credit “didn’t look into the operations of [COI] . . . . [as long as] 

we were given a budget that showed that they had sufficient cash, that our debt was being serviced, 

and that it was satisfactory to the U.S. trustee, we didn’t have much of a complaint.” DE 34, Block 

Dep., Page ID 562. He reiterated this policy of avoidance several times, testifying that “it wasn’t 

our position to try to dictate what the company was doing at that point,” id. at 492, and “I wasn’t 

going to make a decision about [operations],” id. at 605. We find the following exchange from 

Block’s deposition particularly telling:

Q: And you don’t want one of your clients paying a vendor some unreasonable 

amount; right? That’s poor cash control?

A: Well, we don’t know what’s—we don’t know what is a—the wrong amount. 

It’s not our decision—we don’t negotiate their contracts and it’s not our decision to 

what they pay their vendors. What our consideration is is [sic] are their assets 

keeping up with their liabilities.

Q: And as long as that’s happening, you don’t care what they’re paying?

A: It’s not my say-so.

Id. at 635–36. Block also admitted that he received an email from Halliday about the Original 

MSA but did not think Thermo Credit “had the right to tell COI that [it] didn’t think that a managed 

services agreement was a good idea” because the MSA was part of “the operational side” of the 

company. Id. at 601. In fact, Block never even responded to the email. Nor did he take advantage 

of Halliday’s proffered phone call to discuss the MSA in more detail. In fact, COI gave Thermo 

Credit permission to speak with DCA and become more involved in the relationship, but Block 

still declined to “get into the details of what they were providing and how that service worked and 

operations.” Id. at 605.
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-14-

Thermo Credit therefore actively decided not to educate itself on COI’s relationship with 

DCA or become involved in negotiations about the monthly payments. And even though there 

were apparently suspicions that the payments were too high, Thermo Credit took no real action. 

In fact, Swenson testified that, “[Block] wanted [the payments] to be lower, I wanted them to be 

lower, and we made them lower, but he never objected to the payment after the fact.” DE 33, 

Swenson Dep., Page ID 251. Swenson perceived DCA’s relationship with Thermo Credit as 

“cordial”; he recalled COI being “complimented by [Block] on a number of occasions for the—

for the frequency and transparency of the communications that we provided.” Id. at 252. Swenson 

appears to have viewed himself and Block as collaborators who were both trying to lower the 

monthly payments to DCA, and Block provided no testimony to the contrary.

Based on actions taken by Thermo Credit, therefore, DCA believed that it supported the 

relationship with COI; while it may have wanted the payments to be lower, Thermo Credit gave 

no indication that it believed they were grossly disproportionate to the value COI was receiving. 

Further, once COI was in default, Thermo Credit could have foreclosed on COI’s assets according 

to the terms of its security agreement. However, Thermo Credit did not exercise its foreclosure 

rights when COI defaulted in 2012, choosing instead to allow the company to proceed—and to 

proceed with its relationship to DCA. This is highly significant, since Thermo Credit sent COI the 

default notice in February 2012, and the First Service Agreement that provided for a minimum 

monthly payment was executed in May 2012, three months after COI defaulted. So even though 

COI had defaulted on its loan, Thermo Credit acquiesced to the minimum monthly payments 

without threatening foreclosure or other legal action, or insisting that the payments be lowered. 

In summary, Thermo Credit did not assert its rights as a secured creditor. It did not give 

any indication to DCA that it believed there was something legally problematic with the payments. 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-15-

It did not foreclose on COI. In short, it “neglect[ed] to insist upon [its] right at the proper time.” 

Motz, 4 N.E.2d at 991.

D.

Next, we ask whether DCA was prejudiced by Thermo Credit’s failure to challenge the 

payments at the time COI made them. See PHH Mortg. Corp. v. Ramsey, 17 N.E.3d 629, 634 

(Ohio Ct. App. 2014) (“Waiver by estoppel exists when the acts and conduct of a party are 

inconsistent with an intent to claim a right, and have been such as to mislead the other party to his 

prejudice and thereby estop the party having the right from insisting upon it.” (alterations, internal 

quotation marks, and citation omitted)). Here, COI’s bankruptcy proceeding—the standard forum 

to resolve disputes between creditors—is over. Instead, Thermo Credit has forced DCA to defend 

itself in this lawsuit that could have been prevented if Thermo Credit had insisted that the payments 

be stopped or lowered at the time COI was making them. In fact, Block stated that had Thermo 

Credit insisted that COI terminate the agreements with DCA, he would have done so, although 

“not without first explaining what the cost of that to COI would have been.” DE 33, Swenson 

Dep., Page ID 251. Thermo Credit was far from powerless at the time COI was making the 

payments, especially since COI was in default; nevertheless, it failed to object and led DCA to 

believe that it approved of the company’s relationship with COI. On the rare occasion that Thermo 

Credit got involved with DCA, it behaved in a collaborative, rather than adversarial, fashion.

Also, throughout COI’s relationship with DCA, Thermo Credit was paid every month—

from March 2012 to October 2014, COI paid Thermo Credit $636,212. It seems likely that the 

reason for this, at least in part, is that DCA enabled COI to stay in business at a time when the

company was floundering. Thermo Credit therefore arguably benefitted from the monthly 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-16-

payments that it now seeks to recover via litigation. We have no trouble concluding that DCA was 

prejudiced by Thermo Credit’s actions. 

V.

We are not persuaded by Thermo Credit’s arguments against waiver. It primarily argues 

that we should not hold its actions against it because it could not stop the payments or interfere 

with the COI-DCA relationship without incurring “lender liability.” “Lender liability” stems from 

agency law and holds a creditor liable for its debtor’s activities if the creditor exerts sufficient 

supervision and control over the debtor’s operations. See Restatement (Second) of Agency § 14O 

(Am. Law Inst. 1958). In City of Cincinnati v. Scheer & Scheer Development, the Ohio Court of 

Appeals found the city of Cincinnati had “overstepped its role as a creditor and entered into a 

principal-agent relationship” with the developer Scheer & Scheer by taking over “the mode and 

manner of operations” of the developer’s business. 862 N.E.2d 122, 126–27 (Ohio Ct. App. 2006). 

It considered the following facts as proof of the city’s supervision and control:

The city provided complete contractual oversight over the eight parcels of property 

that Scheer & Scheer was redeveloping. The city retained the authority to approve 

all subcontractors and plans, provided all construction standards and requirements, 

and imposed city policies for small-business-enterprise programs, equalemployment-opportunity programs, and prevailing-wage rates. The city also had 

inspectors on the job every day to approve the work. When the project was 

completed, the city was to share in the profits upon the sale of the renovated 

buildings. 

Id. at 127. 

Based on the Ohio court’s interpretation of the lender liability doctrine, Thermo Credit 

would not have run a serious risk of incurring lender liability were it to insist on more proof that 

the payments to DCA were justified, or even to stop the payments. The city in Scheer exerted 

almost complete control over every aspect of the debtor’s business and was heavily involved in its 

day-to-day operations. Merely objecting to one specific recurring expense or insisting on more 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-17-

justification for that expense would not rise to anywhere near the level of supervision and control 

the city exercised in Scheer. Additionally, COI was in default on its loan beginning in 2012, so it 

would not be unusual for Thermo Credit to take more aggressive measures to protect its interest. 

Secured creditors sometimes must walk a fine line, but Thermo Credit’s attempt to justify 

its approval of the payments as an attempt to avoid lender liability does not ring true. Thermo 

Credit is a sophisticated lender who has experience as a secured creditor in the telecommunications 

field. Throughout COI’s relationship with DCA, Thermo Credit was getting paid every month—

from March 2012 to October 2014, COI paid Thermo Credit $636,212. Forcing DCA to terminate 

the relationship, or significantly lower the payments it received from COI, could have put COI’s 

monthly payments to Thermo Credit at risk. So Thermo Credit approved the payments, continued 

to get paid, and now seeks to recover the payments as “fraudulent transfers.” Perhaps Thermo 

Credit did not fully grasp how wide the gap was between the value of COI’s remaining assets and 

the balance of its outstanding debt; once it realized that foreclosing on COI’s tangible assets still 

would not cover the full amount, it began scrambling for additional ways to obtain funds to pay 

the debt. But we decline to allow it to recover those payments when it had numerous opportunities 

to protect its interests, failed to do so, and prejudiced DCA by its failure to assert its rights. 

VI.

Our holding today is narrow and heavily dependent on the facts and circumstances of this 

particular case. Here, Thermo Credit was a sophisticated lender with expertise in the 

telecommunications field that had a great deal of access to information about its debtor’s finances, 

far more access than the average consumer or competitor. It made a calculated decision to approve 

a series of payments its debtor made to another company, all the while benefitting from the work 

the other company was doing, since the debtor was able to make its monthly payments. Now, it 
No. 17-4207

Thermo Credit, LLC v. DCA Services, Inc.

-18-

seeks to recover those payments even though it had every opportunity to stop them, lower them, 

or foreclose on its debtor’s assets. In these circumstances, we find that Thermo Credit waived its 

claim that the payments were fraudulent transfers. We therefore affirm the judgment of the district 

court.