Court Opinion

ID: 2697869
Source: CourtListenerOpinion
Date Created: 2014-08-04 17:15:33.59342+00
Date Added: 2024-06-11T12:50:37.739491
License: Public Domain

[Cite as Ohio Neighborhood Fin. v. Meadows, 2011-Ohio-2759.]

                            IN THE COURT OF APPEALS OF OHIO
                               FOURTH APPELLATE DISTRICT
                                    LAWRENCE COUNTY

Ohio Neighborhood Finance, Inc.,      :
                                      :
      Plaintiff-Appellant,            :
                                      :           Case No. 10CA42
      v.                              :
                                      :           DECISION AND
Linda Meadows,                        :           JUDGMENT ENTRY
                                      :
      Defendant-Appellee.             :    File-stamped date: 6-02-11
________________________________________________________________

                                          APPEARANCES:

Anthony M. Sharett and Samir B. Dahman, Bricker & Eckler, L.L.P., Columbus, OH, for
Appellant.1
________________________________________________________________

Kline, J.:

{¶1}         Ohio Neighborhood Finance, Inc. (hereinafter “Ohio Neighborhood”) appeals

the judgment of the Ironton Municipal Court, which denied its motion for relief from

judgment. Ohio Neighborhood contends that the trial court abused its discretion when it

entered a default judgment against Linda Meadows (hereinafter “Meadows”) with an

interest rate of four percent per annum rather than twenty-five percent. However,

because we find that Ohio Neighborhood used a Civ.R. 60(B) motion as a substitute for

1
  Defendant-Appellee, Linda Meadows, did not file a brief or otherwise enter an
appearance in this appeal. Under App. R. 18(C), we may accept Ohio Neighborhood
Finance Inc.’s statement of the facts and issues as correct and reverse the trial court’s
judgment as long as its brief reasonably appears to sustain reversal. See Sprouse v.
Miller, Lawrence App. No. 06CA37, 2007-Ohio-4397, at fn.1; State v. Miller (1996), 110
Ohio App. 3d 159, 161-62. “An appellate court may reverse a judgment based solely on
a consideration of an appellant’s brief.” Sprouse at fn.1; see, also, Ford Motor Credit
Co. v. Potts (1986), 28 Ohio App. 3d 93, 96; State v. Grimes (1984), 17 Ohio App. 3d 71,
71-72. However, because we find that Ohio Neighborhood Finance Inc. improperly
used a Civ.R. 60(B) motion as a substitute for a direct appeal, we dismiss the appeal.
Lawrence App. No. 10CA42                                                         2

a direct appeal, we do not reach the merits of Ohio Neighborhood’s argument.

Accordingly, we dismiss Ohio Neighborhood’s appeal.

                                            I.

{¶2}      Ohio Neighborhood entered into a loan agreement with Meadows on October

14, 2009, whereby Ohio Neighborhood loaned Meadows $890. Under the loan

agreement, Meadows agreed to pay a loan origination charge of $100 and a credit

investigation fee of $10. Coupled with interest, Meadows was obligated to pay Ohio

Neighborhood $1,009.56 on October 28, 2009. The “PROMISE TO PAY” section of the

loan agreement provides “You [i.e., Meadows] promise to pay us [i.e., Ohio

Neighborhood] $1,000.00 (the Principal Amount of this loan) plus interest at a rate of

25% per annum on the principal outstanding for the time outstanding from the date of

this Customer Agreement until paid in full. Interest shall be computed daily upon the

principal balance outstanding by using the simple interest method, assuming a 365-day

year.”

{¶3}      Meadows did not repay the loan on October 28, 2009. Ohio Neighborhood

demanded payment, but Meadows failed to make the payments due and owing on the

loan. On December 30, 2009, Ohio Neighborhood filed its complaint against Meadows

in Ironton Municipal Court. Ohio Neighborhood sought judgment against Meadows in

the sum of $1,079.56 with interest at the agreed upon rate of twenty-five percent per

annum from the date of default.

{¶4}      Meadows failed to respond or otherwise plead to Ohio Neighborhood’s

complaint. Consequently, on April 9, 2010, Ohio Neighborhood moved for default

judgment against Meadows. The magistrate issued its decision on May 11, 2010, which
Lawrence App. No. 10CA42                                                             3

provided for judgment in the amount of $1,079.56 and an interest rate of four percent

rather than twenty-five percent. The trial court’s May 24, 2010 Judgment Entry

approved and adopted the magistrate’s decision. The Judgment Entry provides for

judgment in favor of Ohio Neighborhood against Meadows in the amount of $1,079.56

plus post-judgment interest at the “statutory rate from date of Judgment.” At the time of

judgment, the statutory rate of interest was four percent.

{¶5}      On August 2, 2010, Ohio Neighborhood moved for relief from judgment under

Civ.R. 60(B). In its motion, Ohio Neighborhood argued that the magistrate improperly

reduced the interest rate on Meadows’ loan from twenty-five percent to four percent.

Ohio Neighborhood attached a copy of Ohio Neighborhood Fin., Inc. v. Dotson,

Lawrence App. No. 09CA27, 2010-Ohio-3366. In Dotson, we addressed a substantially

similar issue, though not in the Civ.R. 60(B) context. We held that where a loan

agreement provides for a specific interest rate, and such a rate is authorized by statute,

the trial court errs when it reduces the interest rate below the rate specified in the loan

agreement.

{¶6}      The magistrate held a motion hearing on September 27, 2010, and, on

September 28, 2010, the magistrate recommended denial of Ohio Neighborhood’s

motion without explanation. On October 18, 2010, the trial court denied Ohio

Neighborhood’s motion for relief without explanation.

{¶7}      Ohio Neighborhood appeals and asserts the following assignment of error:

“THE TRIAL COURT ABUSED ITS DISCRETION AFFIRMING THE MAGISTRATE’S

DECISION TO REDUCE TO 4% PER ANNUM, THE INTEREST RATE ON THE DEBT
Lawrence App. No. 10CA42                                                          4

IN THE DEFAULT JUDGMENT GRANTED IN FAVOR OF APPELLANT OHIO

NEIGHBORHOOD FINANCE, INC.”

                                             II.

{¶8}      Ohio Neighborhood argues that the trial court abused its discretion when it

adopted the magistrate’s decision. Specifically, Ohio Neighborhood objects to the trial

court’s decision to reduce the interest rate on Meadows’ debt from twenty-five percent

per annum, as provided in the loan agreement, to four percent. Despite framing its

argument in this fashion, Ohio Neighborhood actually appeals the denial of its motion

for relief from judgment under Civ.R. 60(B).

{¶9}      We review a trial court’s decision regarding a motion for relief from judgment

under an abuse of discretion standard. Dayton Power and Light v. Holdren, Highland

App. No. 07CA21, 2008-Ohio-5121, at ¶10; Harris v. Anderson, 109 Ohio St. 3d 101,

2006-Ohio-1934, at ¶7. An abuse of discretion connotes more than a mere error of

judgment; it implies that the court’s attitude is arbitrary, unreasonable, or

unconscionable. Blakemore v. Blakemore (1983), 5 Ohio St. 3d 217, 219.

{¶10}     Civ.R. 60(B) provides: “On motion and upon such terms as are just, the court

may relieve a party or his legal representative from a final judgment, order or

proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable

neglect; (2) newly discovered evidence which by due diligence could not have been

discovered in time to move for a new trial under Rule 59(B); (3) fraud (whether

heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of

an adverse party; (4) the judgment has been satisfied, released or discharged, or a prior

judgment upon which it is based has been reversed or otherwise vacated, or it is no
Lawrence App. No. 10CA42                                                             5

longer equitable that the judgment should have prospective application; or (5) any other

reason justifying relief from the judgment. The motion shall be made within a

reasonable time, and for reasons (1), (2) and (3) not more than one year after the

judgment, order or proceeding was entered or taken. A motion under this subdivision

(B) does not affect the finality of a judgment or suspend its operation.”

{¶11}     “To prevail on a motion brought under Civ.R. 60(B), the movant must

demonstrate that: (1) the party has a meritorious defense or claim to present if relief is

granted; (2) the party is entitled to relief under one of the grounds stated in Civ.R.

60(B)(1) through (5); and (3) the motion is made within a reasonable time, and, where

the grounds of relief are Civ.R. 60(B)(1), (2) or (3), not more than one year after the

judgment, order or proceeding was entered or taken.” GTE Automatic Elec., Inc. v.

ARC Industries, Inc. (1976), 47 Ohio St. 2d 146, at paragraph two of the syllabus.

{¶12}     Initially, we note that in its sole assignment of error, Ohio Neighborhood

focuses its challenge on the merits of the trial court’s decision. That is, Ohio

Neighborhood argues that the trial court abused its discretion by reducing the interest

rate on Meadows’ debt in its judgment. The trial court entered judgment against

Meadows on May 24, 2010, which provided for a four percent per annum interest rate

as opposed to the twenty-five percent rate from the loan agreement. Ohio

Neighborhood filed its motion for relief from judgment on August 2, 2010.

{¶13}     Ohio Neighborhood asserts that it “chose to file its Civ.R. 60(B) motion in lieu

of directly appealing the court’s decision because [Ohio Neighborhood] contemplated

that once it brought the [holding of Dotson] to the trial court’s attention, the court would
Lawrence App. No. 10CA42                                                            6

promptly modify the judgment accordingly and alleviate the need to burden the docket

with an appeal.” Appellant’s Brief at 4.

{¶14}     We find, however, that Ohio Neighborhood used a Civ.R. 60(B) motion as a

substitute for a direct appeal. “‘[W]here the remedy of appeal is available to a party,

and where the issues raised in a motion for relief from judgment are those which could

properly have been raised on appeal, a motion for relief from judgment will be denied.’”

Newell v. White, Pickaway App. No. 05CA27, 2006-Ohio-637, at ¶14, quoting

Burroughs Real Estate Co. v. Zennie R. Heath (Mar. 20, 1980), Cuyahoga App. No.

40476. “In order to bring [itself] within the limited area of Civ.R. 60(B), [Ohio

Neighborhood] must establish the existence of extraordinary circumstances which

rendered [it] unable to appeal[.] * * * [A] party should not be permitted to circumvent the

appeals process through application of Civ.R. 60(B), since it is the function of the

appellate court to correct legal errors committed by the trial court.” Newell at ¶14,

quoting Taylor v. Taylor (Mar. 27, 1987), Lawrence App. No. 1801 (emphasis sic). See,

also, Plotkin v. Pacific Tel. & Tel. Co. (C.A.9, 1982), 688 F.2d 1291; 7 Moore Federal

Practice (1985), Paragraph 60.18(8).

{¶15}     In short, Civ.R. 60(B) was intended to provide relief from a final judgment in

specific, enumerated situations and cannot be used as a substitute for a direct, timely

appeal. See Doe v. Trumbull County Children Services Board (1986), 28 Ohio St. 3d
128, at paragraph two of the syllabus; Newell at ¶15. “If a party raises the same

question in a Civ.R. 60(B) motion as [it] could have raised on a direct appeal, [that party]

could get an indirect extension of time for appeal by appealing the denial of the Civ.R.

60(B) motion.” Newell at ¶ 15, citing Parke-Chapley Construction Co. v. Cherrington
Lawrence App. No. 10CA42                                                           7

(C.A.7, 1989), 865 F.2d 907, 915. Thus, “[w]hen a Civ.R. 60(B) motion is used as a

substitute for a timely appeal, and when the denial of that motion is subsequently

appealed, the proper response is the dismissal of the appeal.” Garrett v. Gortz,

Cuyahoga App. No. 90625, 2008-Ohio-4369, at ¶14, citing State ex rel. Richard v.

Cuyahoga Cty. Commrs., 89 Ohio St. 3d 205, 2000-Ohio-135. See, also, Elliott v.

Smead Mfg. Co., Hocking App. Nos. 08CA13 & 08AP13, 2009-Ohio-3754, at ¶12-13.

{¶16}     Here, Ohio Neighborhood did not directly appeal the trial court’s judgment.

On a direct appeal, Ohio Neighborhood could have raised the same issue that it raised

in its Civ.R. 60(B) motion. That is, Ohio Neighborhood could have argued that the

interest rate on the judgment against Meadows should have been twenty-five percent

per annum, as provided in the loan agreement, rather than the four percent awarded by

the trial court. Therefore, Ohio Neighborhood improperly used a Civ.R. 60(B) motion as

a substitute for a direct appeal.

{¶17}     Accordingly, we reject Ohio Neighborhood’s assignment of error and dismiss

its appeal.

                                                                  APPEAL DISMISSED.
Lawrence App. No. 10CA42                                                            8

                                   JUDGMENT ENTRY

       It is ordered that the APPEAL BE DISMISSED. Appellant shall pay the costs
herein taxed.

       The Court finds there were reasonable grounds for this appeal.

       It is ordered that a special mandate issue out of this Court directing the
Ironton Municipal Court to carry this judgment into execution.

       A certified copy of this entry shall constitute the mandate pursuant to Rule
27 of the Rules of Appellate Procedure. Exceptions.

       Abele, J.: Concurs in Judgment and Opinion.
       McFarland, J.: Concurs in Judgment Only.

                                   For the Court

                                   BY:_____________________________
                                      Roger L. Kline, Judge

                                 NOTICE TO COUNSEL

       Pursuant to Local Rule No. 14, this document constitutes a final judgment
entry and the time period for further appeal commences from the date of filing
with the clerk.