Court Opinion

ID: 8214006
Source: CourtListenerOpinion
Date Created: 2022-10-13 21:09:23.192627+00
Date Added: 2024-06-11T16:42:26.577025
License: Public Domain

[Cite as Ltd. Invest. Group Corp. v. Huntington Natl. Bank, 2022-Ohio-3657.]

                             IN THE COURT OF APPEALS OF OHIO

                                  TENTH APPELLATE DISTRICT

Limited Investment Group Corp.,                        :

                Plaintiff-Appellant,                   :
                                                                                    No. 21AP-61
v.                                                     :                         (C.P.C. No. 10CV-3000)

Huntington National Bank et al.,                       :                       (REGULAR CALENDAR)

                Defendant-Appellee.                    :

Franklin County Treasurer                              :
[Cheryl Brooks Sullivan],
                                                       :
                Plaintiff-Appellee,
                                                       :                            No. 21AP-62
v.                                                                               (C.P.C. No. 12CV-1454)
                                                       :
Limited Investment Group Corp. et al.,                                         (REGULAR CALENDAR)
                                                       :
                Defendant-Appellant.
                                                       :
Huntington National Bank,
                                                       :
                Plaintiff-Appellee,
                                                       :                            No. 21AP-63
v.                                                                               (C.P.C. No. 12CV-1602)
                                                       :
Limited Investment Group Corp. et al.,                                         (REGULAR CALENDAR)
                                                       :
                Defendant-Appellant.
                                                       :
Huntington National Bank,
                                                       :
                Plaintiff-Appellee,
                                                       :                            No. 21AP-64
v.                                                                               (C.P.C. No. 12CV-6175)
                                                       :
Limited Investment Group Corp. et al.,                                         (REGULAR CALENDAR)
                                                       :
                Defendant-Appellant.
                                                       :
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                           2

                                    D E C I S I O N

                              Rendered on October 13, 2022

              On brief: Timothy J. Ryan; Kevin R. Nose; and Kevin E.
              Humphreys, for appellant. Argued: Kevin E. Humphreys.

              On brief: Dinsmore & Shohl, LLP, William M. Mattes,
              Katherine A. Rasmussen, and Justin M. Burns, for appellee
              The Huntington National Bank. Argued: William M.
              Mattes.

               APPEALS from the Franklin County Court of Common Pleas

KLATT, J.
       {¶ 1} Appellant, The Limited Investment Group Corporation, appeals a judgment
of the Franklin County Court of Common Pleas in favor of appellee, The Huntington
National Bank. For the following reasons, we affirm that judgment.
       {¶ 2} In 2003, Ashraf Ettayem formed Limited to acquire and rehabilitate
commercial properties in Columbus, Ohio. Ettayem was the president and sole shareholder
of Limited. In 2005, Limited purchased a shopping center located at 3150 Allegheny
Avenue for approximately $400,000. When Limited purchased the shopping center, four
tenants occupied it. By 2007, only one remaining tenant rented 1,000 square feet of the
27,000 square feet of available space.
       {¶ 3} In January 2008, Ettayem requested that Huntington extend a loan to
Limited for the purpose of rehabilitating and remodeling the Allegheny shopping center.
Huntington agreed to loan Limited $900,000. On October 1, 2008, the parties executed
the loan documents. Those documents included: (1) a Business Loan Agreement; (2) a
Promissory Note in the original amount of $900,000; (3) Open-End Mortgages on the
Allegheny shopping center, and on a second property Limited owned, 329 South Central
Avenue; (4) a Disbursement Request and Authorization; and (5) an Agreement to Provide
Insurance.
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                           3

       {¶ 4} The Promissory Note stated that it "evidence[d] a straight line of credit."
(Limited's Ex. 20.) Although the principal amount of the loan was $900,000, Limited did
not have to request the disbursal of the entire $900,000. The Promissory Note only
obligated Limited to repay "so much [of the principal amount] as may be outstanding,
together with interest on the unpaid principal balance of each advance." Id.
       {¶ 5} The Business Loan Agreement contemplated both initial and subsequent
advances of loan funds. Each request for the advancement of funds had to satisfy the
conditions precedent contained in the Business Loan Agreement. The conditions precedent
included the requirement that Limited provide Huntington specified documents, such as
security agreements and financing statements, as well as the requirement that Limited
provide "such other resolutions, authorizations, documents and instruments as Lender or
its counsel, may require." (Limited's Ex. 19.)
       {¶ 6} After the signing of the loan documents, Huntington immediately disbursed
approximately $535,000 of loan funds. The disbursed funds paid off a promissory note,
which was secured by a mortgage encumbering the Allegheny property; a second
promissory note, which was secured by a mortgage encumbering the Central Avenue
property; a line of credit with another bank; and credit card debt. Because the principal
amount of the loan was $900,000, approximately $365,000 remained available to Limited
for the rehabilitation of the Allegheny shopping center.
       {¶ 7} In November 2008, Ettayem sent Huntington loan officer Travis Sanders a
copy of a work proposal for the rehabilitation of the Allegheny shopping center in the
amount of $146,910. Ettayem requested the disbursement of loan proceeds in the amount
of the proposal. Sanders, however, informed Ettayem that Limited would have to submit
certain forms in order to receive a disbursement of funds for the rehabilitation of the
property. Sanders had given Ettayem copies of the necessary forms on October 1, 2008
when the parties signed the loan documents.
       {¶ 8} The required forms consisted of documents entitled "Application and
Certificate for Payment" and "Continuation Sheet,"1 as well as a mechanic's lien waiver
form. (Huntington's Ex. U.) The AIA forms allow a contractor to apply for partial payment

1 The American Institute of Architects ("AIA") created both of these forms, and the AIA designates them
"AIA Document G702" and "AIA Document G703." We will refer to them as the "AIA forms."
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                               4

after completion of a phase of work by providing evidence of the percentage of
rehabilitation work completed. Huntington required the mechanic's lien waiver form to
ensure that no mechanic's liens would affect the bank's collateral.
       {¶ 9} Sanders told Ettayem that Huntington only disbursed funds based upon
rehabilitation work completed in phases throughout the project.             Consequently,
Huntington refused to advance to Limited $146,910 based solely upon a contractor's work
proposal.
       {¶ 10} The Promissory Note established a draw period during which Limited could
request the disbursement of loan proceeds from Huntington. Specifically, the Promissory
Note provided, "Draw period. The proceeds of the loan evidenced hereby may be
advanced in partial amounts during the term hereof and prior to maturity, and no partial
advance shall be made after March 28, 2009." (Emphasis sic.) (Limited's Ex. 20.) Limited
never submitted to Huntington the necessary forms for an advance for rehabilitation work
prior to the expiration of the draw period on March 28, 2009. Huntington, therefore, did
not disburse to Limited any funds for the rehabilitation of the Allegheny shopping center.
       {¶ 11} The terms of the Promissory Note required Limited to begin making monthly
payments of both principal and interest beginning on April 28, 2009. Limited made the
required payments for three months. In July 2009, Ettayem attended a meeting with
Sanders and another Huntington representative. The Huntington employees told Ettayem
that Huntington would not extend the draw period or disburse the remaining loan
proceeds. After that meeting, Limited began submitting interest-only loan payments to
Huntington.
       {¶ 12} Due to Limited's noncompliance with its payment obligations, Huntington
sent Limited monthly invoices reflecting a past due balance. Huntington also transferred
responsibility for oversight of the loan to Scott Rudawsky in Huntington's Special Assets
Division in early October 2009.      Shortly after receiving oversight responsibility for
Limited's loan, Rudawsky discovered that a fire had significantly damaged the Allegheny
shopping center on or about May 6, 2009. As a result of the fire, Ettayem had received an
insurance proceeds check from State Auto Insurance in the amount of $139,861.82 made
payable to Limited and Huntington. In October 2009, Ettayem delivered that check to a
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                        5

local Huntington branch, and Rudawsky learned about the fire after the check landed on
his desk.
       {¶ 13} Huntington had difficulties communicating with Ettayem concerning the fire
and the endorsement of the check. Ultimately, Huntington endorsed the check on its own
behalf and as attorney in fact for Limited. Huntington then applied the insurance proceeds
to Limited's outstanding indebtedness and reduced the principal amount due and owing on
the loan.
       {¶ 14} On February 10, 2010, after Limited had failed to properly pay on the loan for
eight months, Huntington sought a cognovit judgment against Limited in case No. 10 CV
2264 in the Franklin County Court of Common Pleas. The trial court granted Huntington
a cognovit judgment in the amount of $381,190.59, plus interest, late fees and charges, and
attorney fees, on February 17, 2010.
       {¶ 15} On February 25, 2010, Limited filed suit against Huntington for breach of
contract, fraud, and conversion in case No. 10 CV 3000. Limited alleged that Huntington:
(1) breached the loan documents by failing to disburse the totality of the loan funds,
(2) misrepresented that it would disburse the entire loan amount when it never intended to
do so, and (3) converted the $139,861.82 insurance proceeds check.
       {¶ 16} At the same time it filed its complaint, Limited moved for a preliminary
injunction ordering Huntington to give Limited the fire insurance proceeds. While the trial
court did not grant Limited the exact relief it sought, the trial court decided the motion in
Limited's favor. In a judgment dated December 19, 2011, the trial court ordered Huntington
to deposit $139,851.822 with the Franklin County Clerk of Courts until the court could
resolve who the money belonged to.
       {¶ 17} On February 6, 2012, the Franklin County Treasurer filed a foreclosure action
against Limited in case No. 12 CV 1454 with regard to the Allegheny property. The
complaint named Huntington as a defendant. Huntington filed a cross-claim against
Limited that also sought foreclosure and, in addition, asked for the appointment of a

2 This amount was $10 less than the amount of the insurance proceeds check but, apparently, no party
alerted the trial court to this discrepancy.
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                                 6

receiver.3 The trial court appointed a receiver for the Allegheny property on February 26,
2012.
        {¶ 18} On February 8, 2012, Huntington filed a foreclosure action against Limited
in case No. 12 CV 1602 with regard to the Central Avenue property. Again, Huntington
requested a receiver. The trial court appointed a receiver for the Central Avenue property
on February 15, 2012. With the trial court's approval, the receiver sold the Central Avenue
property on August 29, 2012. The receiver deposited the proceeds of the sale, $109,859.36,
into his escrow account.4
        {¶ 19} On Limited's motion, the trial court consolidated Limited's action against
Huntington (No. 10 CV 3000) with the two foreclosure actions (case Nos. 12 CV 1454 and
12 CV 1602). The consolidated case also included case No. 12 CV 6175, a creditor's bill
action Huntington filed against Limited to reach Limited's interest in a check in the amount
of $40,440.07 issued by State Auto Insurance as a result of the fire.
        {¶ 20} On August 30, 2012, Limited moved to vacate the cognovit judgment granted
against it in case No. 10 CV 2264. The trial court granted the motion because the attorney
confessing judgment failed to present the original warrant of attorney to the court at the
time the attorney made the confession pursuant to R.C. 2323.13(A). After vacating the
February 17, 2010 judgment, the trial court granted the attorney confessing judgment 14
days to produce the original warrant of attorney. The attorney complied with the trial
court's order. Consequently, on February 27, 2013, the trial court granted Huntington a
cognovit judgment in the amount of $521,052.41, plus interest, late fees and charges, and
attorney fees. The amount of damages owed increased from $381,190.59 to $521,052.41
because Huntington had to pay to the Franklin County Clerk of Courts the fire insurance
proceeds originally applied to the loan balance.
        {¶ 21} The trial court tried the consolidated cases in a bench trial in late January
2017. In the findings of fact and conclusions of law issued on November 13, 2017, the trial

3 On January 20, 2017, the treasurer voluntarily dismissed his complaint, leaving Huntington's cross-claim
pending.

4 In July 2017, the receiver admitted to the trial court that he had unlawfully removed funds from his escrow
account and loaned them to another individual. The trial court found both the receiver and the borrower
of the funds in contempt of court and ordered them to repay the funds. On the trial court's orders, they
deposited a total of $149,503.38 with the Franklin County Clerk of Courts.
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                  7

court awarded judgment in Huntington's favor in each of the four actions before it. The
trial court further found that Huntington was entitled to reasonable attorney's fees under
the Promissory Note, but did not determine the amount of fees due. Additionally, the trial
court concluded that Limited could not collaterally attack the cognovit judgment entered
in case No. 10 CV 2264, and that Huntington was "entitled to recover the full amount of the
Cognovit Note in the amount of $1,374,413.88 (interest per diem $97.69733)." (Nov. 13,
2017 Findings of Fact and Conclusions of Law at ¶ 267.)
       {¶ 22} Ultimately, the trial court awarded Huntington $928,593.73 in attorney's
fees and expenses. Moreover, on June 4, 2020, the trial court issued an order confirming
the sale of the Allegheny property and distributing the proceeds of that sale.
       {¶ 23} Limited now appeals to this court, and it assigns the following errors:
              [1.] THE TRIAL COURT ERRED IN ITS WHOLESALE
              ADOPTION     OF  THE   268  PARAGRAPHS    OF
              [HUNTINGTON]'S PROPOSED FINDINGS OF FACT AND
              CONCLUSIONS OF LAW.

              [2.] THE TRIAL COURT ERRED IN THE INTERPRETATION
              OF THE PARTIES' BUSINESS LOAN AGREEMENT.

              [3.] THE TRIAL COURT ERRED BY EXCLUDING
              EVIDENCE AT TRIAL OF THE TERMS WITHIN
              [HUNTINGTON]'S CONSTRUCTION LOAN AGREEMENT
              AND CONSTRUCTION MORTGAGE.

              [4.] THE TRIAL COURT ERRED IN ITS CONCLUSIONS
              REGARDING THE EFFECT OF [HUNTINGTON]'S
              COGNOVIT JUDGMENT.

              [5.] THE TRIAL COURT ERRED IN ENTERING JUDGMENT
              IN FAVOR OF [HUNTINGTON] RATHER THAN
              AWARDING JUDGMENT AND DAMAGES IN FAVOR OF
              [LIMITED] AGAINST [HUNTINGTON].

       {¶ 24} We will begin our analysis with Limited's second assignment of error. By that
assignment of error, Limited argues that the trial court erred in interpreting the loan
documents to condition the disbursement of advances for rehabilitation work on the
submittal of forms specified by Huntington. We disagree.
       {¶ 25} The interpretation of a written contract is a matter of law that a court reviews
de novo. Saunders v. Mortensen, 101 Ohio St.3d 86, 2004-Ohio-24, ¶ 9. When confronted
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                    8

with a question of contractual interpretation, a court's principal objective is to ascertain and
give effect to the intent of the parties. Hamilton Ins. Servs., Inc. v. Nationwide Ins. Cos.,
86 Ohio St.3d 270, 273 (1999). "The intent of the parties to a contract is presumed to reside
in the language they chose to employ in the agreement." Kelly v. Med. Life Ins. Co., 31 Ohio
St.3d 130 (1987), paragraph one of the syllabus. When that language is clear, a court may
look no further than the writing itself to find the intent of the parties. Sunoco, Inc. (R&M)
v. Toledo Edison Co., 129 Ohio St.3d 397, 2011-Ohio-2720, ¶ 37. However, when that
language is ambiguous, a court may consider extrinsic evidence to ascertain the parties'
intent. Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, ¶ 12.
       {¶ 26} Whether contractual language is clear or ambiguous is a question of law for
the court. Nationwide Life Ins. Co. v. Canton, 10th Dist. No. 09AP-939, 2010-Ohio-4088,
¶ 20. In answering that question, a court restricts its review to the four corners of the
contract. Id. Contractual language is ambiguous if a court cannot determine its meaning
from the four corners of the contract, or if the language is susceptible of two or more
reasonable interpretations. Covington v. Lucia, 151 Ohio App.3d 409, 2003-Ohio-346, ¶ 18
(10th Dist.). Once a court finds ambiguity in a contract, a finder of fact generally undertakes
the role of resolving that ambiguity. Galatis at ¶ 13.
       {¶ 27} Courts interpret writings executed as part of the same transaction as a whole,
and gather the intent of each part from consideration of the whole. Foster Wheeler
Enviresponse v. Franklin Cty. Convention Facilities Auth., 78 Ohio St.3d 353, 361 (1997).
Here, consequently, we must consider any relevant provisions of the Business Loan
Agreement, the Promissory Note, the Allegheny Open-End Mortgage, and the
Disbursement Request and Authorization.
       {¶ 28} To determine whether the loan documents conditioned advances for
rehabilitation work on the receipt of certain forms, the trial court looked to the section of
the Business Loan Agreement entitled "Conditions Precedent to Each Advance."
(Emphasis and capitalization omitted.) (Limited's Ex. 19.) That section provided:
              CONDITIONS PRECEDENT TO EACH ADVANCE.
              Lender's obligation to make the initial Advance and each
              subsequent Advance under this Agreement shall be subject to
              the fulfillment to Lender's satisfaction of all the conditions set
              forth in this Agreement and in the Related Documents.
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                 9

                      ***

                      * * * Borrower shall have provided such other
                      resolutions,    authorizations,    documents       and
                      instruments as Lender or its counsel, may require.
(Emphasis sic.) Id.
       {¶ 29} The trial court concluded that, based on this clear and unambiguous
language, Limited was only entitled to advances to pay for rehabilitation work if it first
submitted the documentation required by Huntington. On appeal, Limited asserts no
argument attacking this interpretation of the contractual language. We concur with the
trial court's conclusion that the provision at issue unambiguously conditions advances on
the submittal of documentation required by Huntington.
       {¶ 30} While the contractual provision at issue allows Huntington to require certain
documents before disbursing loan funds for rehabilitation work, the provision does not
specify what documents Huntington required of Limited. The provision, therefore, is
ambiguous on that point. Consequently, the trial court could turn to extrinsic evidence to
determine the type of documents Huntington required from Limited before it would
advance loan funds to pay for rehabilitation work.
       {¶ 31} Extrinsic evidence a trial court may consider in determining the meaning of
ambiguous contract language can include: " '(1) the circumstances surrounding the parties
at the time the contract was made, (2) the objectives the parties intended to accomplish by
entering into the contract, and (3) any acts by the parties that demonstrate the construction
they gave to their agreement.' " Lutz v. Chesapeake Appalachia, L.L.C., 148 Ohio St.3d 524,
2016-Ohio-7549, ¶ 9, quoting United States Fid. & Guar. Co. v. St. Elizabeth Med. Ctr., 129
Ohio App.3d 45, 56 (2d Dist.1998). A trial court's interpretation of ambiguous contractual
language will not be overturned absent an abuse of discretion. Campbell v. 1 Spring, LLC,
10th Dist. No. 19AP-368, 2020-Ohio-3190, ¶ 9.
       {¶ 32} Here, Huntington loan officer Travis Sanders testified that the documents
Huntington required under the contractual provision at issue included the AIA forms and
a mechanic's lien waiver form. Sanders testified that he gave Limited president Ashraf
Ettayem copies of these documents on October 1, 2008 when the parties executed the loan
documents. Sanders also testified that, in November 2008, when Ettayem sought a
disbursal of loan funds to make a deposit for rehabilitation work, Sanders "reiterate[d]
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                  10

[Huntington's] position to [Limited] * * *, that [Limited] needed to have the AIA documents
filled out and work completed." (Tr. at 327.) Based upon this evidence, we conclude that
the trial court did not abuse its discretion in finding that the contractual provision at issue
conditioned advances of loan funds for the payment of rehabilitation work on the submittal
of completed AIA forms and a mechanic's lien waiver form.
       {¶ 33} Limited ignores the "Conditions Precedent to Each Advance" section of the
Business Loan Agreement in favor of concentrating on a different loan document—the
Disbursement Request and Authorization. Limited focuses on a section of that document
that reads:
              DISBURSEMENT               INSTRUCTIONS.            Borrower
              understands that no loan proceeds will be disbursed until all of
              Lender's conditions for making the loan have been satisfied.
              Please disburse the loan proceeds of $900,000 as follows:

                     Undisbursed Funds:                   $900,000
                                                          _____________
                     Note Principal:                      $900,000

(Emphasis sic.) (Limited's Ex. 31.)
       {¶ 34} According to Limited, under this provision, once it complied with the
conditions for the "making" of the loan, Huntington had an obligation to disburse the entire
$900,000 loan amount. Limited maintains that the AIA forms and mechanic's lien waiver
form were not necessary to make the loan, and thus, the lack of those forms did not forestall
Huntington's contractual duty to advance the loan funds. We decline to adopt Limited's
interpretation as it conflicts with the "Conditions Precedent to Each Advance" section.
       {¶ 35} Courts must attempt to harmonize the provisions in writings executed as part
of the same transaction so that each provision has effect. Kent State Univ. v. Bradley Univ.,
11th Dist. No. 2017-P-0056, 2019-Ohio-2088, ¶ 39; Susany v. Guerrieri, 7th Dist. No. 15
MA 0079, 2016-Ohio-1062, ¶ 21. Limited, however, interprets the acknowledgement that
"no loan proceeds will be disbursed until all of Lender's conditions for making the loan have
been satisfied" to curtail the "Conditions Precedent to Each Advance" section of the
Business Loan Agreement. By the clear and unambiguous terms of the Business Loan
Agreement, "all" of the "Conditions Precedent to Each Advance" apply to "the initial
Advance and each subsequent Advance." (Limited's Ex. 20.) Under Limited's interpretation
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                               11

of the loan documents, Limited would be entitled to an advance by fulfilling only some of
the conditions precedent in the "Conditions Precedent to Each Advance" section because
not all of the listed conditions relate to the "making [of] the loan."
        {¶ 36} Limited's interpretation of the loan documents contravenes the plain
language of the documents. Limited was required to satisfy all the conditions precedent in
the "Conditions Precedent to Each Advance" section before Huntington's obligation to
make an advance arose. Consistent with our above analysis, to satisfy the conditions
precedent, Limited had to submit the necessary forms before Huntington had to disburse
loan funds for the payment of rehabilitation work. Accordingly, we conclude that the trial
court did not err in interpreting the loan documents. We therefore overrule the second
assignment of error.
        {¶ 37} By the third assignment of error, Limited argues that the trial court erred in
not admitting into evidence a construction loan agreement and mortgage executed by
Huntington and an unrelated third party in 2005.5 We disagree.
        {¶ 38} Decisions regarding the admissibility of evidence are within the discretion of
the trial court. Banford v. Aldrich Chem. Co., Inc., 126 Ohio St.3d 210, 2010-Ohio-2470,
¶ 38; Beard v. Meridia Huron Hosp., 106 Ohio St.3d 237, 2005-Ohio-4787, ¶ 20. An
appellate court will uphold such a decision absent an abuse of discretion. Banford at ¶ 38;
Beard at ¶ 20. Moreover, even in the event of an abuse of discretion, an appellate court will
not reverse the judgment unless the abuse materially prejudiced the complaining party.
Banford at ¶ 38; Beard at ¶ 20.
        {¶ 39} Limited contends that the agreements it sought to admit, which include
explicit provisions addressing AIA forms, draw requests, and mechanic's lien waivers,
demonstrate that Huntington did not intend to require Limited to submit AIA forms or
mechanic's lien waiver forms to receive advances under the parties' Business Loan
Agreement. However, as we explained above, "[t]he intent of the parties to a contract is
presumed to reside in the language they chose to employ in the agreement." Kelly, 31 Ohio
St.3d 130, at paragraph one of the syllabus. Extraneous deals with unrelated third parties,
therefore, are generally irrelevant to determining the intent of the parties to the contract at

5 While Limited also argues in this assignment of error that the trial court erred in not admitting exhibits
41B, 41C, 41D, or 41E, we cannot address that argument because Limited failed to ensure that our record
contains those exhibits.
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                   12

issue. Consequently, we conclude that the trial court did not abuse its discretion in
excluding from evidence a separate and unrelated construction loan agreement and
mortgage. We therefore overrule the third assignment of error.
       {¶ 40} By the fourth assignment of error, Limited argues that the trial court erred in
(1) allowing the cognovit judgment entered in case No. 10 CV 2264 to have a preclusive
effect on Limited's claims against Huntington in case No. 10 CV 3000, and (2) rejecting
Limited's collateral attack on the February 27, 2013 cognovit judgment. We find both
arguments unavailing.
       {¶ 41} "The preclusive effect of a judgment is defined by claim preclusion and issue
preclusion, which are collectively referred to as 'res judicata.' " Taylor v. Sturgell, 553 U.S.
880, 892 (2008). Under the doctrine of claim preclusion, a final judgment rendered on the
merits forecloses all subsequent actions, by the same parties or their privies, based on any
claim arising out of the transaction or occurrence that was the subject matter of the
previous action. Grava v. Parkman Twp., 73 Ohio St.3d 379, 381 (1995). Issue preclusion,
on the other hand, bars relitigation of any fact or point determined by a court of competent
jurisdiction in a previous action between the same parties or their privies. O'Nesti v.
DeBartolo Realty Corp., 113 Ohio St.3d 59, 2007-Ohio-1102, ¶ 6.
       {¶ 42} In case No. 10 CV 3000, Huntington moved for summary judgment on the
basis that res judicata barred Limited's claims. According to Huntington, all Limited's
claims arose out of Limited's allegation that Huntington breached the Promissory Note.
Huntington argued that claim preclusion prevented Limited from asserting those claims
because the trial court had already issued a cognovit judgment in Huntington's favor on the
Promissory Note. The trial court denied Huntington's summary judgment motion. The
trial court declined to apply res judicata, finding that to do so would contravene fairness
and justice as Limited could not have raised its claims in the cognovit action.
       {¶ 43} Because the trial court did not give the cognovit judgment any preclusive
effect in case No. 10 CV 3000, the trial court did not err as alleged by Limited.
Consequently, Limited has not provided a basis on which to reverse the trial court’s
judgment.
       {¶ 44} Next, Limited argues that the trial court erred in concluding that Limited
could not collaterally attack the February 27, 2013 cognovit judgment. A collateral attack
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                  13

is an attempt to defeat the operation of a judgment initiated in a proceeding where a new
right derived from or through the judgment is involved. Ohio Pyro, Inc. v. Ohio Dept. of
Commerce, 115 Ohio St.3d 375, 2007-Ohio-5024, ¶ 16. Although collateral attacks are not
inherently improper, Ohio law strongly disfavors them because the primary way to
challenge a final judgment is through a direct appeal. Id. at ¶ 19, 22; Luper Neidenthal &
Logan v. Albany Station, LLC, 10th Dist. No. 13AP-651, 2014-Ohio-2906, ¶ 15. Thus, a
party may maintain a collateral attack in only two circumstances: "when the issuing court
lacked jurisdiction or when the order was the product of fraud (or of conduct in the nature
of fraud)." Ohio Pyro, Inc. at ¶ 23. "Absent either of those two grounds, a collateral attack
is improper." Bell v. Nichols, 10th Dist. No. 10AP-1036, 2013-Ohio-2559, ¶ 21.
       {¶ 45} Here, Limited contends that the February 27, 2013 cognovit judgment is void
because the court that entered it lacked jurisdiction. Because Limited may mount a
collateral attack under that circumstance, we must consider the merits of Limited's
argument.
       {¶ 46} To do so, we must review the court filings in case No. 10 CV 2264, which are
not part of the records in the cases currently on appeal before this court. However,
appellate courts may take judicial notice of public court records available on the internet.
State v. Estridge, 2d Dist. No. 2021-CA-25, 2022-Ohio-208, ¶ 12, fn. 1; Johnson v. Levy,
10th Dist. No. 18AP-775, 2019-Ohio-3492, ¶ 5, fn. 1. As the docket and filings in case No.
10 CV 2264 are publicly available on the internet, we take judicial notice of the docket and
filings in that case.
       {¶ 47} According to Limited, the trial court found the February 17, 2010 cognovit
judgment void for lack of subject-matter jurisdiction, so the trial court did not have subject-
matter jurisdiction to enter the February 27, 2013 cognovit judgment. We disagree.
       {¶ 48} Pursuant to R.C. 2323.13(A), "[a]n attorney who confesses judgment in a
case, at the time of making such confession, must produce the warrant of attorney for
making it to the court before which he makes the confession." This statutory provision
requires the attorney confessing judgment to present the original warrant of attorney to the
trial court. Huntington Natl. Bank v. 199 S. Fifth St. Co., LLC, 10th Dist. No. 10AP-1082,
2011-Ohio-3707, ¶ 21. Because the requirements of R.C. 2323.13(A) are jurisdictional, the
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                     14

failure to present the original warrant of attorney renders any cognovit note entered void.
Id.
       {¶ 49} In case No. 10 CV 2264, the trial court found that the attorney confessing
judgment had provided the court with a copied—not original—warrant of attorney at the
time of the confession. Applying Huntington National Bank, the trial court vacated the
February 17, 2010 judgment.
       {¶ 50} After vacating the final judgment, the trial court reinstated case No. 10 CV
2264 for further proceedings. The trial court allowed the attorney confessing judgment to
file an amended answer and present the original warrant of attorney. We find the trial
court's action appropriate. See Bronisz v. Ashcroft, 378 F.3d 632, 637 (7th Cir.2004)
("When a [trial] court grants a Rule 60(b) motion, the effect is to vacate the previous
judgment in the case. * * * Consequently, the previously filed case is reinstated and goes
forward from that point."); Fobian v. Storage Technology Corp., 164 F.3d 887, 890 (4th
Cir.1998) ("When a [trial] court grants a Rule 60(b) motion, it must necessarily vacate the
underlying judgment and reopen the record.").
       {¶ 51} Limited argues, however, that the trial court did not have subject-matter
jurisdiction to enter a cognovit judgment after the court reinstated the case. We are not
persuaded by this argument. Due to the absence of an original warrant of attorney, the trial
court lacked the authority necessary to enter the February 17, 2010 cognovit judgment.
Nevertheless, the trial court always possessed the subject-matter jurisdiction necessary to
adjudicate the cognovit action between Huntington and Limited.
       {¶ 52} " 'Subject-matter jurisdiction refers to the constitutional or statutory power
of a court to adjudicate a particular class or type of case,' " * * * and * * * " 'the focus is on
whether the forum itself is competent to hear the controversy.' " Ostanek v. Ostanek, 166
Ohio St.3d 1, 2021-Ohio-2319, ¶ 21, quoting Corder v. Ohio Edison Co., 162 Ohio St.3d 639,
2020-Ohio-5220, ¶ 14 (first part) and Bank of Am., N.A. v. Kuchta, 141 Ohio St.3d 75, 2014-
Ohio-4275, ¶ 19 (second part). The Ohio Constitution created the courts of common pleas
and gave them original subject-matter jurisdiction over all justiciable matters as may be
provided by law. Ohio Constitution, Article IV, Section 4(A) and (B). The courts of common
pleas are courts of general jurisdiction and, with narrow exceptions, possess subject-matter
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                              15

jurisdiction over "all civil cases in which the sum or matter in dispute exceeds the exclusive
original jurisdiction of county courts."6 R.C. 2305.01; accord Ostanek at ¶ 25.
        {¶ 53} With regard to cognovit judgments, a "warrant of attorney shall be confessed
in the municipal court having jurisdiction * * * over the subject matter; otherwise, judgment
may be confessed in any court in the county where the maker or any of several makers
resides or signed the warrant of attorney."7 R.C 2323.13(A). Here, given the amount of
damages sought and where the warrant of attorney was signed, the forum competent to
hear the parties' dispute was the Franklin County Court of Common Pleas. That court,
therefore, had subject-matter jurisdiction over the cognovit action throughout the
proceedings before it.
        {¶ 54} Limited also argues that case No. 10 CV 3000, which was already pending
when the trial court reinstated case No. 10 CV 2264, gained jurisdictional priority over case
No. 10 CV 2264.          Therefore, Limited maintains, when the trial court vacated the
February 17, 2010 cognovit judgment and reinstated the case, the jurisdiction-priority rule
mandated that Huntington assert any claims involving the Promissory Note in case No. 10
CV 3000. According to Limited, the February 27, 2013 cognovit judgment is a nullity as it
was not issued by the judge presiding over the case with jurisdictional priority. We
disagree.
        {¶ 55} "The jurisdictional-priority rule provides that as between state courts of
concurrent jurisdiction, the tribunal whose power is first invoked acquires exclusive
jurisdiction to adjudicate the whole issue and settle the rights of the parties." State ex rel.
Consortium for Economic & Community Dev. for Hough Ward 7 v. Russo, 151 Ohio St.3d
129, 2017-Ohio-8133, ¶ 8. But that rule is not applicable to cases pending in the same court.
Id. at ¶ 10. Consequently, the jurisdictional-priority rule did not require Huntington to
transfer its cognovit action from case No. 10 CV 2264 to case No. 10 CV 3000 because both
cases were pending in the Franklin County Court of Common Pleas.

6Pursuant to R.C. 1907.03(A), county courts have exclusive original jurisdiction in civil actions where the
amount in controversy does not exceed $500.

7A municipal court has original jurisdiction only in those cases in which the amount claimed by any party
does not exceed $15,000. R.C. 1901.17.
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                    16

       {¶ 56} In the end, Limited has not established that the February 27, 2013 cognovit
judgment is void nor that the trial court gave that judgment or the February 17, 2010
cognovit judgment any preclusive effect.         Accordingly, we overrule Limited's fourth
assignment of error.
       {¶ 57} By Limited's fifth assignment of error, it argues that the manifest weight of
the evidence does not support the judgment in favor of Huntington on Huntington's
foreclosure action or Limited's claims for breach of contract, fraud, and conversion. We
disagree.
       {¶ 58} Appellate courts will only reverse a judgment as being against the manifest
weight of the evidence if it is not supported by some competent, credible evidence. C.E.
Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 279, 280 (1978). In determining whether
the record contains the necessary evidence, an appellate court weighs the evidence and all
reasonable inferences, considers the credibility of witnesses, and determines whether, in
resolving conflicts in the evidence, the finder of fact clearly lost its way. Eastley v. Volkman,
132 Ohio St.3d 328, 2012-Ohio-2179, ¶ 20. However, when conducting its review, an
appellate court "must always be mindful of the presumption in favor of the finder of fact."
Id. at ¶ 21. Appellate courts give deference to the trial court's factual findings because "the
trial judge is best able to view the witnesses and observe their demeanor, gestures and voice
inflections, and use these observations in weighing the credibility of the proffered
testimony." Seasons Coal Co. v. Cleveland, 10 Ohio St.3d 77, 80 (1984).
       {¶ 59} First, Limited argues that Huntington failed to prove its entitlement to
foreclose on the Allegheny Open-End Mortgage because it did not establish that it met all
the conditions precedent to foreclosure. Specifically, Limited contends that Huntington
failed to provide Limited with a written notice of default.
       {¶ 60} Where a prior notice of default is required by a note or mortgage, the
provision of that notice is a condition precedent to foreclosure. Huntington Natl. Bank v.
Haehn, 10th Dist. No. 17AP-342, 2018-Ohio-4837, ¶ 36; U.S. Bank N.A. v. Weber, 10th
Dist. No. 12AP-107, 2012-Ohio-6024, ¶ 12; Natl. City Mtge. v. Richards, 182 Ohio App.3d
534, 2009-Ohio-2556, ¶ 21 (10th Dist.). In the case at bar, the only provision referring to a
notice of default appears in the Open-End Mortgage. It states:
              NOTICES. Any notice required to be given under this
              Mortgage, including without limitation any notice of default
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                 17

              and any notice of sale shall be given in writing, and shall be
              effective when actually delivered, when actually received by
              telefacsimile (unless otherwise required by law), when
              deposited with a nationally recognized overnight courier, or, if
              mailed, when deposited in the United States mail, as first class,
              certified or registered mail postage prepaid, directed to the
              addresses shown near the beginning of this Mortgage.

(Emphasis sic.) (Limited's Ex. 21.) Importantly, while this provision specifies the form a
notice must take and when a notice becomes effective, it does not actually require
Huntington to give any notice of default. Limited has not directed this court to any other
provision in the loan documents that imposes on Huntington a duty to provide a notice of
default and we have not located any such provision. We must conclude, therefore, that no
such provision exists. Consequently, in this case, the provision of a notice of default was
not a condition precedent to foreclosure.
       {¶ 61} Nonetheless, the trial court concluded that Huntington adduced evidence
that it provided Limited with a notice of default. The trial court based its conclusion on the
testimony of Scott Rudawsky of Huntington's Special Assets Division that Huntington sent
Limited a notice of default, and the testimony of Ashraf Ettayem, Limited's president, that
Limited received a default letter.
       {¶ 62} On appeal, Limited asserts that Huntington loan officer Travis Sanders
testified that "no default notice was ever prepared." (Appellant's brief at 41.) Actually,
Sanders testified that he did not provide Limited a notice of default, but then "[he] would
never give a notice of default" [because] "[t]hat [was] way above [him]." (Tr. at 354.)
Limited also points to another Huntington witness, who, according to Limited, "admitted
that [Huntington] never called a default of [Limited's] Loan." (Appellant's brief at 41-42.)
In fact, that witness testified that, to the best of her knowledge, Huntington did not send a
written notice of default to Limited. Given the shortcomings in the testimony Limited relies
upon, we conclude that testimony does not outweigh Rudawsky's and Ettayem's testimony
that notice did occur.
       {¶ 63} In sum, we conclude that the loan documents did not include a condition
precedent requiring that Huntington provide Limited with a notice of default prior to
foreclosing on the mortgage.         Nevertheless, had such a condition precedent existed,
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                   18

Huntington adduced competent, credible evidence that it satisfied that condition precedent
by giving Limited a written notice of default before filing for foreclosure.
       {¶ 64} Second, Limited argues that it provided competent, credible evidence
establishing all elements of its claim for breach of contract. We disagree.
       {¶ 65} "A cause of action for breach of contract requires the claimant to establish the
existence of a contract, the failure without legal excuse of the other party to perform when
performance is due, and damages or loss resulting from the breach."              Lucarell v.
Nationwide Mut. Ins. Co., 152 Ohio St.3d 453, 2018-Ohio-15, ¶ 41. Here, the trial court
found that Limited had not proven that Huntington failed to perform when performance
was due. Limited, however, contends that the record contains evidence that Huntington
breached the Business Loan Agreement by not advancing loan funds to Limited for the
rehabilitation of the Allegheny shopping center. According to Limited, it requested that
Huntington disburse all the loan proceeds—totaling $900,000—in the document entitled
"Disbursement Request and Authorization," which Ettayem signed at the loan closing.
Although Huntington disbursed approximately $535,000 of loan proceeds to pay off
Limited's debts, it did not disburse the remaining $365,000 to Limited to fund the
rehabilitation. Limited claims this failure constitutes a breach of contract.
       {¶ 66} In making its argument, Limited disregards the "Conditions Precedent to
Each Advance" section in the Business Loan Agreement. A "condition precedent" is " 'a
condition that must be performed before obligations in a contract become effective.' "
Transtar Elec., Inc. v. A.E.M. Elec. Servs. Corp., 140 Ohio St.3d 193, 2014-Ohio-3095, ¶ 22,
quoting Coffman v. Ohio State Adult Parole Bd., 10th Dist. No. 12AP-267, 2013-Ohio-109,
¶ 11. If a condition precedent is not fulfilled, a party is excused from performing the duty
promised under the contract. Id.; accord Gilman v. Physna, LLC, 1st Dist. No. C-200457,
2021-Ohio-3575, ¶ 19 ("An unsatisfied condition precedent excuses performance under the
contract and is a defense to a breach-of-contract claim."); Little v. Real Living HER, 10th
Dist. No. 13AP-924, 2014-Ohio-5664, ¶ 12 ("[T]he general rule is that, without the
occurrence of conditions precedent, a promisor has no liability for breach of contract.").
       {¶ 67} As we explained above, the "Conditions Precedent to Each Advance" section
conditioned advances of loan funds for the payment of rehabilitation work on the submittal
of completed AIA forms and a mechanic's lien waiver form. In the absence of the relevant
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                   19

forms, Huntington had no obligation to release loan funds to Limited for the rehabilitation
of the Allegheny property. Limited does not dispute that it did not submit the necessary
forms in conjunction with the Disbursement Request and Authorization. Huntington,
therefore, did not breach the Business Loan Agreement in not advancing the $365,000 to
Limited to fund the rehabilitation.
       {¶ 68} Limited directs us to testimony from Huntington witnesses that it claims
proves that it was entitled to the full $900,000 as requested in the Disbursement Request
and Authorization. First, Limited points to the testimony of Lisa Hefflinger, a Huntington
vice president, that the documents "required for the loan" were the documents listed in a
part of the "Conditions Precedent to Each Advance" section that named specific documents
the borrower had to provide. (Tr. at 751-53.) Because the named documents did not
include the AIA forms or a mechanic's lien waiver form, Limited argues that submittal of
those particular documents was not a condition precedent to receiving the remaining
$365,000 to fund the Allegheny shopping center's rehabilitation.
       {¶ 69} Limited, however, cannot use a witness' testimony to interpret the clear and
unambiguous terms of the Business Loan Agreement. See Sunoco, Inc, 129 Ohio St.3d 397,
2011-Ohio-2720, at ¶ 37 ("When the language of a written contract is clear, a court may look
no further than the writing itself to find the intent of the parties."). Moreover, Limited fails
to appreciate that the "Conditions Precedent to Each Advance" section contains multiple
conditions precedent.     Here, one condition precedent required Limited to turn over
specified documents, while another conditioned advances on the submittal of documents
required by Huntington. As we held above, that latter provision necessitated the submittal
of the AIA forms and the mechanic's lien waiver form. Hefflinger did not testify regarding
that provision.
       {¶ 70} Next, Limited asserts that Scott Rudawsky testified that "the full amount of
the $900,000 was going to be disbursed at closing." (Appellant's brief at 11.) Limited draws
this testimony from the following exchange:
              Q: But it is your understanding, as I understand your
              testimony, that the expectation was when the note was entered
              into between the parties, that the full $900,000 was going to
              be disbursed, correct?
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                20

                A: Yes. The note is for $900,000. That was the agreed upon
                loan amount.

(Tr. at 218.)
        {¶ 71} In isolation, this exchange could mean that the parties expected the disbursal
of $900,000 to occur on the date they executed the loan documents. But we must consider
the context of the question and answer.          Rudawsky was testifying regarding how
Huntington had calculated the terms for the repayment of the loan, and he had just stated
that "[t]he payment is basically saying when the loan was originated, we are assuming that
$900,000 will be advanced. We don't know if the full amount will or will not, but in order
to state a payment amount that is going to be due, it is assumed that the full $900,000 is
advanced, and that is how payment is calculated." (Tr. at 216-17.) Thus, when Rudawsky
agreed that "it [was his] understanding * * * that the expectation was when the note was
entered into between the parties, that the full $900,000 was going to be disbursed,"
Rudawsky was affirming that, when the parties executed the loan documents, they expected
that Limited would draw down the entire $900,000 loan amount over the course of the
loan. (Tr. at 218.) Rudawsky did not testify that Huntington planned to disburse to Limited
$900,000 at the loan closing.
        {¶ 72} Limited also contends that Robert Hiss, the team leader who supervised
Travis Sanders, testified that "the full amount of the loan was intended to be disbursed at
the beginning of the loan." (Appellant's brief at 43.) But Hiss did not testify to that. Hiss
acknowledged that a disbursement of $900,000 in response to the request in the
Disbursement Request and Authorization would create an obligation to repay $900,000 in
note principal. However, Hiss also stated that, "[t]o disburse [funds], [Huntington] would
follow the business loan agreement[,] note, mortgage, any of the other documents." (Tr. at
821.)
        {¶ 73} Finally, Limited argues that Huntington had to disburse the entire $900,000,
regardless of satisfaction of the conditions precedent, because the monthly principal and
interest payments due beginning on April 28, 2009 were calculated using the $900,000
amount. The loan payment structure, however, did not mandate the disbursal of the entire
loan principal. As Rudawsky explained, "[t]he principal and interest payment [was]
calculated on a full face value of the note, but [the monthly payment] would just pay off the
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                    21

note sooner if the full amount was not disbursed." (Tr. at 216.) Hefflinger further clarified
that interest only accrued on the amount disbursed, so surplus payment resulted when a
lender borrowed less than the full amount of the loan. Huntington credited the surplus
between the amount of interest as calculated/paid and the amount of interest actually owed
to the principal balance.
       {¶ 74} None of the evidence Limited points us to constitutes competent, credible
evidence that Huntington breached the Business Loan Agreement. Huntington's duty to
disburse loan funds for rehabilitation work only arose if Limited submitted the necessary
forms. According to the undisputed evidence, Limited never submitted those forms.
Huntington, therefore, did not have to disburse any funds. Consequently, the manifest
weight of the evidence supports the trial court's conclusion that Huntington did not breach
the parties' agreement.
       {¶ 75} Third, Limited argues that it provided competent, credible evidence
establishing all elements of its fraud claim. We disagree.
       {¶ 76} To establish a claim for fraud, a plaintiff must prove: (1) a representation;
(2) that is material to the transaction at hand; (3) made falsely, with knowledge of its falsity,
or with such utter disregard and recklessness as to whether it is true or false that knowledge
may be inferred; (4) with the intent of misleading another into reliance upon it;
(5) justifiable reliance upon the representation; and (6) a resulting injury proximately
caused by the reliance. Williams v. Aetna Fin. Co., 83 Ohio St.3d 464, 475 (1998). As a
general matter, promises or representations concerning future actions or conduct cannot
serve as a basis for fraud. Patel v. Univ. of Toledo, 10th Dist. No. 16AP-378, 2017-Ohio-
7132, ¶ 41; Anderson v. Baker, 10th Dist. No. 08AP-438, 2008-Ohio-6919, ¶ 37; Deitrick v.
Am. Mtge. Solutions, Inc., 10th Dist. No. 05AP-154, 2007-Ohio-839, ¶ 16. However,
liability for a claim of promissory fraud arises if a party makes a promise without the
present intent of performing. Patel at ¶ 41; Anderson at ¶ 37; Deitrick at ¶ 16. "When a
person 'makes [a] promise of future action, occurrence, or conduct, and * * * at the time he
makes it, has no intention of keeping his promise,' that person misrepresents his existing
state of mind and present intent." (Emphasis sic.) Patel at ¶ 41, quoting Martin v. Ohio
State Univ. Found., 139 Ohio App.3d 89, 98 (10th Dist.2000) (further quotation omitted).
" ' "Since a promise necessarily carries with it the implied assertion of an intention to
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                  22

perform[,] it follows that a promise made without such an intention is fraudulent * * *. This
is true whether or not the promise is enforceable as a contract." ' " Deitrick at ¶ 16, quoting
Applegate v. Northwest Title Co., 10th Dist. No. 03AP-855, 2004-Ohio-1465, ¶ 22, quoting
4 Restatement of the Law 2d, Torts, Section 530, Comment c (1977).
       {¶ 77} Here, Limited bases its fraud claim on a representation contained in the
February 12, 2008 letter in which Huntington informed Limited that it had approved
Limited for a loan. In that letter, Huntington stated the purpose of the loan was to
"[r]efiance commercial property located at 3150 Allegheny Ave.[,] Columbus, Franklin
County, Ohio[,] and fund construction/rehab." (Limited's Ex. 4.) Limited argues that, at
the time the parties executed the loan agreement, Huntington did not intend to "fund" the
rehabilitation of the Allegheny shopping center with the loan proceeds. Rather, Limited
contends, Huntington intended Limited to fund the rehabilitation and then seek
reimbursement from Huntington for the money spent paying for the rehabilitation work.
       {¶ 78} Limited's argument ignores an obvious alternative: Limited could hire a
contractor willing to accept partial payment for work completed in phases. In such a
situation, payment to the contractor could come directly from loan funds upon the
submittal of the AIA forms and a mechanic's lien wavier form. This is the type of payment
arrangement Huntington believed Limited would institute with its contractor, as illustrated
by Travis Sanders' testimony:
              Q: Now, * * * you had discussions with Mr. Ettayem * * *
              relative to * * * [how] the project was going to be completed,
              right?

              A: Yes.

              Q: At that time you were aware of [Limited]'s financial
              situation, right?

              A: Yes.

              Q: And did you ask Mr. Ettayem during that conversation,
              well, where are you going to get this money to do the work that
              you are doing?

              A: I figured the contractor would do it, and then we would pay
              them for it.
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                                23

                Q: And that is even though Mr. Ettayem had come to you and
                said that the contractor required 25 percent up front?

                A: I told them we paid on completed work. He said he would
                find another contractor.

(Tr. at 352-53.)8
        {¶ 79} Sanders further testified that he did not know of any representation made to
Ettayem with an intent to mislead Limited into entering the loan agreement. Given
Sanders' testimony, we conclude that the manifest weight of the evidence supports a ruling
in Huntington's favor on the fraud claim.
        {¶ 80} Fourth, Limited argues that it provided competent, credible evidence
establishing all elements of its conversion claim. We disagree.
        {¶ 81} "Conversion is 'the wrongful exercise of dominion over property to the
exclusion of the rights of the owner, or withholding it from his possession under a claim
inconsistent with his rights.' " Allan Nott Ents., Inc. v. Nicholas Starr Auto, L.L.C., 110
Ohio St.3d 112, 2006-Ohio-3819, ¶ 36, quoting Joyce v. Gen. Motors Corp., 49 Ohio St.3d
93, 96 (1990). To establish a claim for conversion, a plaintiff must prove: (1) actual or
constructive possession, or an immediate right to possession of the property; (2) a
defendant's wrongful interference with the plaintiff's right to possession; and (3) damages.
Parmater v. Internet Brands, Inc., 10th Dist. No. 14AP-391, 2015-Ohio-253, ¶ 20.
        {¶ 82} Here, Limited contends that Huntington wrongfully withheld from it the
$139,861.82 in insurance proceeds paid in October 2009.                         To determine whether
Huntington's action constituted conversion, we must identify whether Limited or
Huntington had a right to possess the insurance proceeds. To do that, we turn to the
language in the loan documents.
        {¶ 83} Pursuant to the "Maintenance of Insurance" provision of the Allegheny
Open-End Mortgage, Limited had the duty to "procure and maintain policies of fire
insurance * * * with a standard mortgagee clause in favor of Lender." (Limited's Ex. 21.)
The Agreement to Provide Insurance also obligated Limited to provide fire insurance for
the Allegheny property that included a "[s]tandard [m]ortgagee's clause in favor of The

8 This type of payment arrangement is common. Although John Schilling, Limited's contractor, requested
a deposit from Limited, Schilling testified, "when [his company] did work on a lot of projects, actually, over
the years, the banks would pay out money as you did the job." (Tr. at 626.)
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                 24

Huntington National Bank, its successors and/or assigns * * *." (Limited's Ex. 25.) The
Notice of Insurance Requirements, sent to Limited's insurer, detailed the insurance
Huntington required on the Allegheny property, including a "[s]tandard [m]ortgagee's
clause."   (Limited's Ex. 26.)   The Notice of Insurance Requirements requested that
Limited's insurer provide evidence that Limited had obtained the necessary insurance.
Finally, Limited's insurer provided a document entitled "Evidence of Property Insurance,"
which indicated that insurance had been issued covering the Allegheny property and listing
Huntington as the mortgagee.
       {¶ 84} A standard mortgage clause in a property insurance policy creates a separate
contract between the insurer and the mortgagee, which makes the mortgagee an
independent insured. Pittsburgh Natl. Bank v. Motorists Mut. Ins. Co., 87 Ohio App.3d
82, 85 (9th Dist.1993); 4 Plitt, Maldonado, Rogers, & Plitt, Couch on Insurance, Section
65:36 (3d Ed.1997). Under such a mortgage clause, the mortgagee is entitled to the
insurance proceeds to the extent that they are equal to the debt owed by the property owner
under the mortgage, with any surplus belonging to the property owner. State ex rel. Squire
v. Royal Ins. Co., 58 Ohio App. 199, 202-03 (8th Dist.1938); accord Std. Fire Ins. Co. v.
Knowles, 129 F.Supp.3d 1271, 1278 (N.D.Ala.2015) ("As to between the mortgagor/insured
and the mortgagee, '[t]he mortgagee has the first right to the insurance proceeds to the
extent of the amount owing it by the insured, not exceeding the total liability of the insurer
under the policy; and the insured is entitled to the balance of the amount of such
liability.' "); In re Haas, 71 B.R. 335, 340 (Bankr.N.D.Ohio 1987) (applying Ohio law,
holding that under a standard mortgage clause, "the mortgagee has a prior right to the
proceeds over the competing claim of the mortgagor"); Jones v. Wesbanco Bank
Parkersburg, 194 W.Va. 381, 387 (1995) ("[U]nder a standard mortgage clause, the lender
* * * named as a mortgagee is entitled to insurance proceeds to the extent that they are
equal to the debt owed by the property owner * * *."); Hoosier Plastics v. Westfield S. & L.
Assn., 433 N.E.2d 24, 27 (Ind.App.1982) ("Where * * * the mortgage agreement requires
that the insurance policy contain a standard mortgage clause * * * the mortgagee is
generally entitled to the proceeds of the policy to the extent of his mortgage debt holding
the surplus for the mortgagor's benefit."); Grady v. Utica Mut. Ins. Co., 419 N.Y.S.2d 565,
569 (N.Y.App.1979) ("The effect of the standard mortgagee clause is simply to require that
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                 25

payment of the loss be first made to the mortgagee up to the extent of his interest and that
the balance be remitted to the mortgagor."). In other words, " '[t]he standard mortgage
loss-payable clause gives the insurance proceeds to a mortgagee to the extent that they are
equal to or less than the mortgage debt and accords priority to insuring the mortgage debt
over the insured mortgagor's claim.' " Brown v. Frankenmuth Mut. Ins. Co., 187 Mich.App.
375, 384 (1991). Mortgagees require the inclusion of standard mortgage clauses in order to
indemnify themselves " 'against the diminution of the value of the security for [the] loan
due to loss from certain perils and thereby to make certain that in the event of such a loss,
the mortgagee would be protected up to the amount of [the] lien.' " Jones at 388, quoting
Citizens S. & L. Assn. v. Proprietors Ins. Co., 435 N.Y.S.2d 303, 306 (N.Y.App.1981).
       {¶ 85} Because the mortgagee has a right to the insurance proceeds to the extent of
the mortgage debt, the mortgagee "may decide whether the money is to be applied to the
mortgage obligation or is to be used to repair the premises." Squire at syllabus; accord Gen.
G.M.C. Sales, Inc. v. Passarella, 195 N.J.Super. 614, 625 (N.J.App.1984), aff'd, 101 N.J. 12
(1985) (holding that under a standard mortgage clause, "the mortgagee had the right to
receive a portion of the insurance proceeds sufficient to satisfy the owners' debt. * * * [The
property owners] did not have the right to use those proceeds to rebuild the damaged
buildings."); Hoosier Plastics at 27 ("A mortgagee named in a [standard mortgage] loss
payable clause will [ ] prevail over a mortgagor who wishes to use the proceeds for repair
and restoration.").
       {¶ 86} To confirm its authority to determine the disposition of any insurance
proceeds, Huntington added the "Application of Proceeds" provision to the Allegheny
Open-End Mortgage. That provision stated:
              Lender may, at Lender's election, receive and retain the
              proceeds of any insurance and apply the proceeds to the
              reduction of the indebtedness, payment of any lien affecting the
              Property, or the restoration and repair of the Property. * * * If
              Lender holds any proceeds after payment in full of the
              Indebtedness, such proceeds shall be paid to Grantor as
              Grantor's Interests may appear.

(Limited's Ex. 21.) Such a provision regarding the distribution of insurance proceeds is
enforceable in favor of the mortgagee. Jones v. GE Capital Mtge. Co., 179 B.R. 450, 456
(Bankr.E.D.Penn.1995) (holding that the mortgagee had no obligation to turn over
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                 26

insurance proceeds to the property owner where the mortgage provided that "[t]he
insurance proceeds, or any part [t]hereof may be applied by Mortgagee at its option either
to the reduction of the indebtedness or to the restoration or repair of the property
damaged").
       {¶ 87} In the case at bar, Limited's mortgage debt exceeded $500,000 at the time of
the fire. Huntington, therefore, was entitled to the $139,861.82 in insurance proceeds,
which it applied to reduce Limited's indebtedness. As Huntington had a right to the
insurance proceeds and to apply them to the mortgage indebtedness, Limited cannot show
that Huntington wrongfully interfered with Limited's possession of the funds.
Consequently, Limited cannot prevail on its conversion claim.
       {¶ 88} In sum, we conclude that the trial court did not err in entering judgment in
Huntington's favor on Huntington's action for foreclosure on the Allegheny mortgage or on
Limited's claims. Accordingly, we overrule the fifth assignment of error.
       {¶ 89} Finally, we return to Limited's first assignment of error, by which it argues
that the trial court erred in adopting virtually verbatim the findings of fact and conclusions
of law that Huntington proposed. We disagree.
       {¶ 90} Pursuant to Civ.R. 52, when questions of fact are tried by a court without a
jury, the court must provide written findings of fact and conclusions of law upon the request
of any party. The rule permits a court to require the parties to submit proposed findings of
fact and conclusions of law.
       {¶ 91} This court, as well as others, have expressed concern over the wholesale
adoption of one party's proposed findings of fact and conclusions of law. State v. Stillman,
5th Dist. No. 2005-CA-55, 2005-Ohio-6299, ¶ 26; Kaechele v. Kaechele, 72 Ohio App.3d
267, 276-77 (10th Dist.1991). Nevertheless, it is not per se error for a trial court to adopt,
verbatim, a party's proposed findings of fact and conclusions of law. Estie Invest. Co. v.
Braff, 11th Dist. No. 2017-L-172, 2018-Ohio-4378, ¶ 22; Mulchin v. ZZZ Anesthesia, Inc.,
6th Dist. No. E-05-045, 2006-Ohio-5773, ¶ 20. Before doing so, a trial court must
thoroughly review the document to ensure that it is accurate in fact and law. Watts v.
Fledderman, 1st Dist. No. C-170255, 2018-Ohio-2732, ¶ 22; Bluford v. Wells Fargo Fin.
Ohio 1, Inc., 176 Ohio App.3d 500, 2008-Ohio-686, ¶ 16 (8th Dist.); An v. Manson, 10th
Dist. No. 06AP-90, 2006-Ohio-6733, ¶ 15. If the proposed findings of fact and conclusions
Nos. 21AP-61, 21AP-62, 21AP-63 and 21AP-64                                                 27

of law are supported in the record and law, then the trial court does not err by adopting
them. Watts at ¶ 22; Gottlieb v. Gottlieb, 10th Dist. No. 90AP-1131 (Mar. 19, 1991).
       {¶ 92} In the case at bar, Limited criticizes the trial court for not making a number
of findings of fact. However, the findings Limited faults the trial court for omitting are
either irrelevant or not supported by the manifest weight of the evidence. A review of the
entirety of the trial court's findings shows that the court accurately recounted the evidence,
although it relied on evidence and drew inferences that Limited disputes. We cannot fault
the trial court for finding Huntington's version of events more credible and convincing than
Limited's version. Accordingly, we conclude that the trial court did not err in adopting
Huntington's proposed findings of fact and conclusions of law, and we overrule the first
assignment of error.
       {¶ 93} For the foregoing reasons, we overrule Limited's five assignments of error,
and we affirm the judgment of the Franklin County Court of Common Pleas.
                                                                        Judgment affirmed.
                       BEATTY BLUNT and MENTEL, JJ., concur.