Court Opinion

ID: 9950836
Source: CourtListenerOpinion
Date Created: 2024-03-14 20:11:37.231981+00
Date Added: 2024-06-11T14:36:53.250454
License: Public Domain

[Cite as Huntington Bank v. Perdue, 2024-Ohio-945.]

            IN THE COURT OF APPEALS OF OHIO
                            SEVENTH APPELLATE DISTRICT
                                JEFFERSON COUNTY

                          HUNTINGTON NATIONAL BANK, NA,

                                         Plaintiff-Appellee,

                                                      v.

                                        GLENN PERDUE,

                                      Defendant-Appellant.

                       OPINION AND JUDGMENT ENTRY
                                        Case No. 23 JE 0011

                                   Civil Appeal from the
                      Court of Common Pleas of Jefferson County, Ohio
                                   Case No. 22 CV 55

                                           BEFORE:
           William A. Klatt, Retired Judge of the Tenth District Court of Appeals,
                                    Sitting by Assignment,
                         Cheryl L. Waite, Carol Ann Robb, Judges.

                                             JUDGMENT:
                                               Affirmed.

 Atty. Roy J. Schechter, Weltman, Weinberg & Reis, Co., L.P.A., for Plaintiff-Appellee
 and

 Atty. William Haynes, Jr., for Defendant-Appellant.

                                       Dated: March 13, 2024
                                                                                           –2–

 KLATT, J.

       {¶1}    Appellant, Glenn R. Perdue Jr., appeals the entry of summary judgment by
the Jefferson County Court of Common Pleas in favor of Appellee, Huntington National
Bank NA, in this breach of contract action on a credit card account. Appellant advances
a single assignment of error, that is, Appellee failed to disprove affirmative defenses
asserted by Appellant. However, in the body of his appellate brief he raises two additional
arguments. First, Appellant asserts federal law preempts state law in this case, and
second, Appellee violated the implied covenant of the duty of good faith and fair dealing
found in all Ohio contracts. For the following reasons, the judgment entry of the trial court
is affirmed.

                                  STANDARD OF REVIEW

       {¶2}    This appeal is from a trial court judgment resolving a motion for summary
judgment. An appellate court conducts a de novo review of a trial court’s decision to grant
summary judgment, using the same standards as the trial court set forth in Civ.R. 56(C).
Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Before
summary judgment can be granted, the trial court must determine that: (1) no genuine
issue as to any material fact remains to be litigated; (2) the moving party is entitled to
judgment as a matter of law; (3) it appears from the evidence that reasonable minds can
come to but one conclusion, and viewing the evidence most favorably in favor of the party
against whom the motion for summary judgment is made, the conclusion is adverse to
that party. Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327, 364 N.E.2d 267 (1977).
Whether a fact is “material” depends on the substantive law of the claim being litigated.
Hoyt, Inc. v. Gordon & Assoc., Inc., 104 Ohio App.3d 598, 603, 662 N.E.2d 1088 (8th
Dist.1995).
       {¶3}    “[T]he moving party bears the initial responsibility of informing the trial court
of the basis for the motion, and identifying those portions of the record which demonstrate
the absence of a genuine issue of fact on a material element of the nonmoving party’s
claim.” (Emphasis deleted.) Dresher v. Burt, 75 Ohio St.3d 280, 296, 662 N.E.2d 264
(1996). If the moving party carries its burden, the nonmoving party has a reciprocal
burden of setting forth specific facts showing that there is a genuine issue for trial. Id. at

Case No. 23 JE 0011
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293. In other words, when presented with a properly supported motion for summary
judgment, the nonmoving party must produce some evidence to suggest that a
reasonable factfinder could rule in that party’s favor. Doe v. Skaggs, 7th Dist. Belmont
No. 18 BE 0005, 2018-Ohio-5402, ¶ 11.
       {¶4}   The evidentiary materials to support a motion for summary judgment are
listed in Civ.R. 56(C) and include the pleadings, depositions, answers to interrogatories,
written admissions, affidavits, transcripts of evidence, and written stipulations of fact that
have been filed in the case. In resolving the motion, the court views the evidence in a
light most favorable to the nonmoving party. Temple, 50 Ohio St.2d at 327.

                         FACTS AND PROCEDURAL HISTORY

       {¶5}   On February 18, 2022, Appellee filed a complaint alleging Appellant was in
default of the terms of a “Voice Credit Card®” credit agreement executed between the
parties on June 13, 2018. As a consequence and pursuant to the terms of the credit
agreement, Appellee accelerated the time for payment and claimed the entire balance of
$18,999.17 was due and owing.
       {¶6}   In response to a motion for a more definite statement, Appellee filed copies
of the application, signed acknowledgement form, monthly statements, and terms and
conditions of the credit card. The credit card statements bear the caption “Mastercard
Worldcard,” but text in the statement reads in relevant part, “Put your Voice Credit Card®
to work for you.”
       {¶7}   Appellant filed his answer on June 17, 2022, in which he admits he applied
for a Voice Credit Card® credit card. Appellant asserted no counterclaims, however he
did assert an affirmative defense for recoupment, based on the allegation that Appellee
violated 15 U.S.C. 1637 of the Truth in Lending Act (“TILA”). 15 U.S.C. 1637, captioned
“Open end consumer credit plans,” imposes both substantive and disclosure-oriented
requirements on open-end consumer credit plans, primarily intended to enhance fairness
and transparency for consumers.
       {¶8}   Appellant also alleged Appellee violated 15 U.S.C. 1665e, captioned
“Consideration of ability to repay.” 15 U.S.C. 1665e reads in its entirety, “[a] card issuer
may not open any credit card account for any consumer under an open end consumer

Case No. 23 JE 0011
                                                                                         –4–

credit plan, or increase any credit limit applicable to such account, unless the card issuer
considers the ability of the consumer to make the required payments under the terms of
such account.”
       {¶9}   On February 27, 2023, Appellee filed the motion for summary judgment
currently before us on appeal. Attached to the motion are the credit card statements, the
card member agreement, and the affidavit of Chris McMorran. McMorran avers the
documents attached to the motion were maintained in the ordinary course of business,
Appellant defaulted on the credit account, and a balance of $18,999.17 is due and owing.
       {¶10} Appellant filed his opposition brief on March 20, 2023. The opposition brief
advances three arguments: (1) Appellee failed to address Appellant’s allegation that
Appellee violated 15 U.S.C. 1637; (2) Appellee violated 15 U.S.C. 1665e, which
constitutes a violation of the implied covenant of good faith and fair dealing in every Ohio
contract; and (3) Appellant applied for a Voice Credit Card®, but was issued a Mastercard
Worldcard.
       {¶11} Attached to the opposition brief are Appellee’s responses to Appellant’s first
set of interrogatories, the signed acknowledgement form, and Appellant’s affidavit. In his
affidavit, Appellant denies receipt of the disclosures required by 15 U.S.C. 1637 and
attests his credit has been adversely affected by the above-captioned lawsuit. He avers
his credit score was reduced to 500, which has severely limited his ability to obtain credit
at any reasonable rate in any useful amount. Finally, Appellant denies the debt.
       {¶12} In an interrogatory, Appellant asks Appellee to explain the difference
between a Voice Credit Card® and a Mastercard Worldcard. Appellee objects to the
interrogatory on the ground of relevance. In the opposition brief, Appellant cites 15 U.S.C.
1642, captioned “issuance of credit cards,” which reads in relevant part, “[n]o credit card
shall be issued except in response to a request or application therefor.”
       {¶13} The trial court conducted oral argument on the motion on April 10, 2023. At
the hearing, Appellant’s counsel argued Appellant’s credit score fell 250 points as a result
of the above-captioned action and “[h]is floor plan for [his automobile business] he lost
completely.” (4/10/23 Hrg. Tr., p. 5.) Appellant’s counsel continued, “[s]o if this is
overruled, we will be asking for the ability to file a counterclaim based on the injury to his
credit.” At the conclusion of his argument, Appellant’s counsel stated, “[s]o not only am

Case No. 23 JE 0011
                                                                                       –5–

I thinking – believing that [the motion] should be overruled, [I am] asking the Court for
permission to file a counterclaim for the damage to his credit and his business.” (Id., p.
7.) The trial court did not rule on the oral motion to file a counterclaim.
       {¶14} On April 26, 2023, the trial court issued the judgment entry on appeal
sustaining Appellee’s motion for summary judgment.           The judgment entry reads, in
relevant part:

       The Court [ ] finds that reasonable minds can come but to one conclusion
       that [Appellant] cannot dispute that he applied for, retained and used the
       charge account in question. The Court further finds that [Appellant’s] use
       of the account binds him to the terms of the card member agreement.
       [Appellant] further failed to maintain the minimum monthly payments and
       [Appellee] is entitled to charge interest and fees on the account where
       proper.

(4/26/23 J.E., p. 1.)

       {¶15} This timely appeal followed.

                                ASSIGNMENT OF ERROR

       THE COURT ERRED IN GRANTING [APPELLEE’S] MOTION FOR
       SUMMARY JUDGMENT WHERE [APPELLEE] FAILED TO ADDRESS
       AFFIRMATIVE DEFENSE AND OTHER DEFENSES RAISED BY
       [APPELLANT].

       {¶16} In addition to the argument advanced in Appellant’s sole assignment of
error, Appellant presents two issues within the body of his appellate brief. First, he
contends that 15 U.S.C. 1642 preempts Ohio law. Second, he argues the implied
covenant of good faith and fair dealing in every Ohio contract requires a credit card issuer
to assess a consumer’s ability to pay pursuant to 15 U.S.C. 1665e. Appellant’s arguments
are addressed out of order for ease of analysis.
       {¶17} “A suit regarding a credit card balance is ‘founded upon contract and thus
a plaintiff must prove the necessary elements of a contract action.’ ” Am. Express

Case No. 23 JE 0011
                                                                                         –6–

Centurian Bank v. Banaie, 7th Dist. Mahoning No. 10 MA 9, 2010-Ohio-6503, ¶ 11,
quoting Capital One Bank (USA), N.A. v. Heidebrink, 6th Dist. Ottawa No OT-08-049,
2009-Ohio-2931, at ¶ 29. The elements of a breach of contract claim are: (1) the
existence of a contract; (2) performance by the plaintiff; (3) breach by the defendant; and
(4) damage or loss to the plaintiff. Lucio v. Safe Auto Ins. Co., 183 Ohio App.3d 849,
2009-Ohio-4816, 919 N.E.2d 260, at ¶ 23.
       {¶18} Before addressing Appellant’s arguments, it is important to note that
Appellant did not assert any counterclaims, and he stated his affirmative defense and
other defenses in terms of recoupment. “Recoupment is a defense which arises out of
the same transaction as plaintiff’s claim, is a claim of right to reduce the amount
demanded[,] and can be had only to an extent sufficient to satisfy the plaintiff’s claim.”
Riley v. Montgomery, 11 Ohio St.3d 75, 77, 463 N.E.2d 1246 (1984).
       {¶19} In order to establish the defense of recoupment, the defendant must show:
(1) the plaintiff’s claim is based on a particular contract or transaction; (2) to entitle the
plaintiff to the sum claimed, he must prove compliance with certain obligations of the
contract; (3) the plaintiff failed to do so; and (4) the defendant has been so damaged in
the transaction the plaintiff is not entitled to recover. Id. 15 U.S.C. 1640(e) specifically
authorizes a person to assert certain TILA violations in an action to collect the debt outside
the TILA limitations period “as a matter of defense by recoupment or set-off in such action,
except as otherwise provided by State law.”
       {¶20} Turning to the merits of Appellant’s appeal, he argues Appellee was
obligated to disprove Appellant’s affirmative and other defenses. However, “[a] plaintiff
or counterclaimant moving for summary judgment does not bear the initial burden of
addressing the nonmoving party’s affirmative defenses.” Todd Dev. Co. v. Morgan, 116
Ohio St.3d 461, 2008-Ohio-87, 880 N.E.2d 88, syllabus. The Todd Court observed:

       We agree with the appellants that there is no requirement in the Civil Rules
       that a moving party must negate the nonmoving party’s every possible
       defense to its motion for summary judgment. To the contrary, Civ.R. 56(E)
       states that a party opposing summary judgment may not rest upon its
       pleadings, but must set forth specific facts showing that there is a genuine
       issue for trial. If a moving party meets the standard for summary judgment

Case No. 23 JE 0011
                                                                                                    –7–

        required by Civ.R. 56, and a nonmoving party fails to respond with evidence
        of a genuine issue of material fact, a court does not err in granting summary
        judgment in favor of the moving party.

Id. at ¶ 14.

        {¶21}    As a consequence, we find Appellee had no obligation to disprove
Appellant’s affirmative defense and other defenses. Insofar as Appellee demonstrated
no genuine issue of material fact exists regarding the existence of the contract, Appellee’s
performance, Appellant’s breach, and damages resulting therefrom, the burden shifted to
Appellant to offer evidence in support of his respective defenses. In other words, the
burden shifted to Appellant to demonstrate a genuine issue of material fact existed with
respect to his asserted defenses.
        {¶22} Next, Appellant argues Appellee’s alleged violation of 15 U.S.C. 1665e
constitutes evidence of Appellee’s breach of the implied covenant of good faith and fair
dealing. Appellant attempts to read 15 U.S.C. 1665e into the terms of the credit card
agreement as he conceded at oral argument no private right of action exists under the
statute.1
        {¶23} Appellant asserted no counterclaim for breach of contract or breach of the
implied covenant of good faith and fair dealing. In Lucarell v. Nationwide Mut. Ins. Co.,
152 Ohio St.3d 453, 2018-Ohio-15, 97 N.E.3d 458, the Ohio Supreme Court opined “there
is no independent cause of action for breach of the implied duty of good faith and fair
dealing apart from a breach of the underlying contract.” Id. at ¶ 45. Insofar as Appellant
did not file counterclaims for breach of contract and breach of the implied duty of good

1 Numerous courts have found TILA does not provide a private right of action with respect to
claims under “Part C,” that is, 15 U.S.C. 1661-1665e, captioned “Credit advertising and Limits on
Credit Card fees.” Carrasco v. M&T Bank, 2021 WL 4846844, *7 (D. Md.) ; Jordan v. Montgomery
Ward & Co., 442 F.2d 78, 81 (8th Cir. 1971) (“In fact it appears that it was the intent of the
Congress not to provide private civil relief for violations of the credit advertising provisions.”), cert.
denied 404 U.S. 870 (1971); Smeyres v. General Motors Corp., 660 F. Supp. 31, 32-33 (N.D.
Ohio 1986) (“[N]o private cause of action exists under Part C of Subchapter I of the Truth In
Lending Act[.]”), aff'd 820 F.2d 782 (6th Cir. 1987).

Case No. 23 JE 0011
                                                                                       –8–

faith and fair dealing, we find he is procedurally barred from asserting the good faith and
fair dealing claim.
       {¶24} Finally, Appellant argues Appellee’s breach of contract claim is preempted
by federal law. Appellant did not argue federal preemption in his opposition brief to the
motion for summary judgment. However, at oral argument, Appellant’s counsel argued,
“Federal law preempts the state law. The Federal law on credit cards is rather clear. It
says – and what we are calling to here – is in order to issue a credit card, you must have
an application for that credit card.” (4/10/23 Hrg. Tr., p. 4.) Appellant’s counsel advanced
no legal analysis at oral argument.
       {¶25} Despite de novo review on summary judgment, we have explained there is
no “second chance” to raise arguments that should have been raised before the trial court.
Price v. K.A. Brown Oil & Gas, L.L.C., 7th Dist. Monroe No. 13 MO 13, 2014-Ohio-2298,
¶ 17, quoting Am. Express Centurian Bank v. Banaie, 7th Dist. Mahoning No. 10 MA 9,
2010-Ohio-6503, ¶ 24. Appellant did not brief nor argue the applicable law on federal
preemption before the trial court.
       {¶26} Nonetheless, the doctrine of federal preemption originates from the
Supremacy Clause of the United States Constitution, which provides that “the Laws of the
United States * * * shall be the supreme Law of the Land; and the Judges in every State
shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary
notwithstanding.” Article VI, cl. 2. In 2021, the Ohio Supreme Court provided the following
explanation of federal preemption in State ex rel. Yost v. Volkswagen Aktiengesellschaft,
165   Ohio    St.3d   213,   2021-Ohio-2121,    cert.   denied   sub   nom.    Volkswagen
Aktiengesellschaft v. Ohio, 142 S.Ct. 515, 211 L.Ed.2d 313:

       Under the Supremacy Clause, the United States Congress has the power
       to preempt state law. In re Miamisburg Train Derailment Litigation, 68 Ohio
       St.3d 255, 259, 626 N.E.2d 85 (1994); see also Gibbons v. Ogden, 22 U.S.
       1, 210-211, 9 Wheat. 1, 6 L.Ed. 23 (1824) (“the act of Congress, or the
       treaty, is supreme; and the law of the State, though enacted in the exercise
       of powers not controverted, must yield to it”). Congress may do so either
       expressly or impliedly. Kansas v. Garcia, [589] U.S. –––, –––, 140 S.Ct.

Case No. 23 JE 0011
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      791, 801, 206 L.Ed.2d 146 (2020); Girard v. Youngstown Belt Ry. Co., 134
      Ohio St.3d 79, 2012-Ohio-5370, 979 N.E.2d 1273, ¶ 14.

      When Congress expressly preempts state law, it explicitly says so with clear
      statutory language. English v. Gen. Elec. Co., 496 U.S. 72, 78-79, 110 S.Ct.
      2270, 110 L.Ed.2d 65 (1990). When considering whether preemption is
      implied, courts look to congressional intent to determine whether Congress
      meant to preempt state law without saying as much. See id. at 79, 110 S.Ct.
      2270. Identifying implied preemption is thus a little more complicated than
      identifying express preemption, but courts generally find this type of
      preemption in two circumstances.

      The first circumstance occurs when Congress has enacted a legislative and
      regulatory scheme that is so pervasive “ ‘that Congress left no room for the
      States to supplement it’ ” or when the legislative and regulatory scheme “
      ‘touch[es] a field in which the federal interest is so dominant that the federal
      system will be assumed to preclude enforcement of state laws on the same
      subject.’ ” (Brackets added in English.) Id., quoting Rice v. Santa Fe
      Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947).
      Implied preemption of this variety is referred to as “field preemption.”
      English at 79, 110 S.Ct. 2270. * * *

      The second circumstance in which implied preemption is found occurs when
      a state law “actually conflicts with federal law.” Id. This type of implied
      preemption is fittingly referred to as “conflict preemption.” Id. at fn. 5.
      Conflict preemption may be broken down further into subcategories
      depending on whether the conflict exists because (1) compliance with both
      state and federal law is impossible, Id. at 79, 110 S.Ct. 2270, citing Florida
      Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-143, 83 S.Ct.
      1210, 10 L.Ed.2d 248 (1963), or (2) the state law “ ‘stands as an obstacle
      to the accomplishment and execution of the full purposes and objectives of

Case No. 23 JE 0011
                                                                                       – 10 –

       Congress,’ ” Id., quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399,
       85 L.Ed. 581 (1941).

Id. at ¶ 11-14.

       {¶27} Appellant has failed to establish express or implied federal preemption of
Appellee’s breach of contract claim. 15 U.S.C. 1640(e), which creates an exception to
the limitations period for TILA claims asserted in terms of recoupment in an action to
collect a debt, clearly reflects that Congress did not intend to preempt state actions to
collect a debt based on the federal statute.
       {¶28} Finally, Appellant has failed to offer any evidence Appellee violated 15
U.S.C. 1642.       Appellant argues Appellee objected to Appellant’s interrogatory
propounded to elicit the distinction between a Voice Credit Card® and a Mastercard
Worldcard. However, Appellant made no other effort to elicit the foregoing information
through discovery. Moreover, the credit card statements in the record establish the
caption “Mastercard Worldcard” does not create a genuine issue of material fact regarding
Appellant’s allegation he received a different card than the card for which he applied. Text
in the credit card statements refer to the card as a “Voice Credit Card®.” Based on the
record, we find that Appellant failed to meet his burden to show that a genuine issue of
material fact exists with respect to the alleged TILA violation.

                                       CONCLUSION

       {¶29} For the foregoing reasons, the entry of summary judgment in favor of
Appellee by the trial court is affirmed.

Waite, J., concurs.

Robb, P.J., concurs.

Case No. 23 JE 0011
[Cite as Huntington Bank v. Perdue, 2024-Ohio-945.]

         For the reasons stated in the Opinion rendered herein, the assignment of error
 is overruled and it is the final judgment and order of this Court that the judgment of the
 Court of Common Pleas of Jefferson County, Ohio, is affirmed. Costs to be taxed
 against the Appellant.
         A certified copy of this opinion and judgment entry shall constitute the mandate
 in this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that
 a certified copy be sent by the clerk to the trial court to carry this judgment into
 execution.

                                      NOTICE TO COUNSEL

         This document constitutes a final judgment entry.