2019 Ohio 5366
Ohio Ct. App.2019Background
- Dix Road Property Management LLC entered a written lease with Jeremy Thomas and Brittany Adams on May 24, 2017 that included a 24% interest rate on any outstanding balances.
- Thomas and Adams defaulted on rent, fees, utilities, and other charges; Dix Road sued for $2,670 on March 29, 2019 for breach of contract.
- Defendants filed no responsive pleadings; Dix Road moved for default judgment and the trial court granted judgment on June 27, 2019.
- The trial court awarded $2,670 plus postjudgment interest at 5% per year (and costs), rather than the 24% contractual rate requested by Dix Road.
- Dix Road appealed, arguing the court was required to apply the written 24% rate to both prejudgment and postjudgment interest; the court reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court erred by awarding interest at 5% instead of the 24% contract rate | Contractually agreed 24% rate governs both prejudgment and postjudgment interest | No responsive pleadings; trial court applied statutory/default rate (5%) | Reversed: the written 24% rate governs prejudgment and postjudgment interest; remanded |
Key Cases Cited
- Minster Farmers Coop Exchange Co. v. Meyer, 117 Ohio St.3d 459 (Ohio 2008) (parties may contract for a higher interest rate than the statutory rate)
- Hobart Bros. Co. v. Welding Supply Serv., Inc., 21 Ohio App.3d 142 (10th Dist. 1985) (identifies prerequisites for a contract rate to displace the statutory rate)