2014 Ohio 257
Ohio Ct. App.2014Background
- On October 1, 2012, landlord Steven L. Buchenroth and tenant Carl Adkins signed a written residential lease for $525/month; the lease expressly provided that unpaid rent or court-awarded damages would bear 18% annual interest, and Adkins initialed that clause.
- Buchenroth filed a forcible entry and detainer complaint on June 5, 2013 for unpaid rent and late fees and attached the lease.
- At a June 27, 2013 hearing both parties appeared; Adkins was ordered to vacate by July 7, 2013.
- Buchenroth later moved for a damages hearing; the trial court issued judgment on August 29, 2013 awarding $1,138.58 (rent, damages, late fees less the security deposit) but denied enforcement of the lease’s 18% contractual interest rate, calling it "punitive."
- Buchenroth appealed, arguing the trial court erred by refusing to apply the contract rate of interest; the appellate court considered whether R.C. 1343.03(A) permits enforcement of an agreed contractual rate in a residential lease.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court should have applied the lease's 18% contractual interest rate to the judgment under R.C. 1343.03(A) | Buchenroth: the written lease specifying 18% interest is enforceable and entitles him to that rate on the judgment | Adkins: (did not file a brief; trial court characterized the rate as punitive and refused it) | The appellate court reversed: contractual rate applies when a writing exists and both parties assented; trial court erred in refusing enforcement |
Key Cases Cited
- Ohio Valley Mall Co. v. Fashion Gallery, Inc., 129 Ohio App.3d 700 (7th Dist.) (enforced 18% contractual interest in a commercial lease)
- Cafaro Northwest Partnership v. White, 124 Ohio App.3d 605 (7th Dist.) (statutory interest is automatic but parties may contract for a different rate)
- P. & W.F., Inc. v. C.S.U. Pizza, Inc., 91 Ohio App.3d 724 (8th Dist.) (enforced agreed higher interest rate in lease over statutory rate)
- Hobart Bros. Co. v. Welding Supply Serv., Inc., 21 Ohio App.3d 142 (10th Dist.) (requirements for a written contract and assent to apply contractual rate under R.C. 1343.03)