Hubbard v. Charter One Bank
2017 Ohio 1033
| Ohio Ct. App. | 2017Background
- Laticia Hubbard owned multiple rental properties and faced foreclosure starting in 2007–2008; she and her father Larrie sought refinancing from Charter One.
- A Charter One employee, Elizabeth Dillow, referred them to a credit-repair specialist, Peru Barber; the Hubbards alleged they assumed Barber was a Charter One employee.
- The Hubbards paid Barber (funds withdrawn from Larrie’s account and deposited into Barber’s account at Charter One); Barber allegedly did little and properties were lost to foreclosure.
- Plaintiffs sued Charter One, Dillow, and Barber in 2014 for consumer fraud (CSPA), negligence, and breach of fiduciary duty; Charter One moved to dismiss based on the statute of limitations.
- After procedural back-and-forth, Charter One answered (without asserting statute-of-limitations in the answer) and moved for summary judgment; the trial court granted summary judgment on statute-of-limitations grounds and quashed service on Dillow and Barber.
- On appeal, the court held the statute-of-limitations defense was waived (not pleaded), but affirmed summary judgment on other grounds: (1) CSPA claims against Charter One fail as a matter of law, and (2) no agency/apparent agency established to hold Charter One liable for Barber’s acts; service on Dillow and Barber was also ineffective.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Charter One waived statute-of-limitations defense by not pleading it | Hubbard: Charter One previously raised limitations in a pre-answer motion but did not plead it in its answer, so the defense was waived | Charter One: raised limitations repeatedly, including in motions and summary-judgment briefing | Court: Statute-of-limitations defense was waived because it was not pled in the answer; trial court erred to grant SJ on that basis |
| Whether Charter One is liable under the CSPA | Hubbard: CSPA violation based on representation that Barber was connected to Charter One and provided credit-repair services related to obtaining loans | Charter One: transactions fall within financial-institution exclusion from CSPA; no mortgage/loan transaction meeting the statutory exception was alleged | Court: CSPA claim against Charter One fails as a matter of law (transactions exempt or not pleaded as mortgage transactions) |
| Whether Charter One can be vicariously liable for Barber’s conduct (agency/apparent agency) | Hubbard: Dillow’s referral and Hubbards’ reasonable belief create triable issue of apparent agency | Charter One: no evidence Barber was represented as an employee; Hubbards’ belief was merely an assumption; no agency by estoppel | Court: No evidence of an agency/principal–agent relationship or manifestations creating apparent agency; summary judgment for Charter One proper on negligence and breach claims |
| Whether service on Dillow and Barber was effective (default motion) | Hubbard: claimed proper service at residential addresses and sought default judgment | Charter One: service at Charter One address was improper; clerk’s certified-mail acceptance was inadvertent and later quashed; no subsequent proper service | Court: Service at bank address was not reasonably calculated to notify those defendants; court properly quashed service and denied default; claims dismissed as to those defendants for failure to serve within one year |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (summary-judgment standard)
- Dresher v. Burt, 75 Ohio St.3d 280 (moving party’s initial burden on summary judgment)
- Councell v. Douglas, 163 Ohio St. 292 (respondeat superior principles)
- Clark v. Southview Hosp. & Family Health Ctr., 68 Ohio St.3d 435 (limits of employer liability; independent contractors)
- Hanson v. Kynast, 24 Ohio St.3d 171 (agency requires principal–agent understanding)
- Baird v. Sickler, 69 Ohio St.2d 652 (agency and related principles)