2016 Ohio 762
Ohio Ct. App.2016Background
- Am. Express Bank, FSB sued Roy Knapp and Consul-Tech, Inc. in Lake County, Ohio for breach of contract on a 1999 credit card.
- Knapp, president of Consul-Tech, testified he applied for the card for the corporation and denies signing a personal guaranty.
- Bank custodian Paul Carey testified the 1999 agreement is unavailable but the 2011 agreement exists and use of the card binds to terms; statements issued show periodic changes.
- Bank produced two exhibits: a 2011 credit card agreement and statements from 2007–2013 reflecting changes and active status; records purge older than seven years.
- The trial court entered judgment for the bank on May 18, 2015 for $27,665.89 plus 27.24% annual interest and costs; Knapp and Consul-Tech appealed.
- Appellants contend the 1999 agreement governs, challenging the 2011 agreement and personal liability; the appellate court affirmed the trial court’s ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the 2011 agreement govern and trigger Utah law? | Knapp/Consul-Tech argue 1999 agreement controls. | Knapp/Consul-Tech argue no unilateral alteration without assent under novation. | Yes; 2011 agreement governs; Utah law applies. |
| Is Knapp personally liable under the 2011 agreement? | Appellee asserts joint and several liability under 2011 terms. | Knapp argues no personal liability. | Yes; Knapp is jointly and severally liable. |
| Was there sufficient evidence of breach and damages under Utah law? | Billing statements show breach and damages totaling $27,665.89. | Disputed rates pre-2011 and computation of damages. | Sufficient evidence supported breach and damages. |
| Did the trial court err in allowing alleged improper interest rates? | Evidence shows contract terms set the rate; improper rates not proven. | Rates charged beyond statutory/default were claimed. | No error; contract allowed rate of 27.24% and evidence supported it. |
Key Cases Cited
- Bank One, Columbus, N.A. v. Palmer, 63 Ohio App.3d 491 (Ohio App. 1989) (credit card agreements; acceptance by use binds cardholder)
- Discover Bank v. Lammers, 2009-Ohio-3516 (2d Dist. Greene (Ohio) 2009) (novation requires clear assent; changes to terms may bind by conduct)
- MBNA Am. Bank, N.A. v. Goodman, 140 P.3d 589 (Utah App. 2006) (binding credit card agreement when copy provided and use constitutes acceptance)
- McGlothin v. Huffman, 94 Ohio App.3d 240 (12th Dist. 1994) (novation requires consent and valid consideration)
- Palmer (Bank One, Columbus), 63 Ohio App.3d 491 (Ohio App. 1989) (credit card agreements; unilateral changes require consent)
- Moneywatch Cos. v. Wilbers, 106 Ohio App.3d 122 (12th Dist. 1995) (evidence sufficiency standards for contract claims)