2010 Ohio 6267
Ohio Ct. App.2010Background
- Marion Plaza and D & L entered into a Kiosk License Agreement on December 12, 2008, granting D & L a license to use premises in Eastwood Mall.
- The agreement required D & L to pay rent and other charges and to pay interest on past-due amounts at 18% per year (with a legal maximum if prohibited).
- D & L failed to pay amounts due; Marion Plaza sued on June 23, 2009 to collect past-due rent and related charges, plus prejudgment interest at 18%.
- D & L failed to answer; Marion Plaza moved for default judgment on September 16, 2009 for the requested amount and 18% prejudgment interest, excluding interest-on-interest calculations.
- The trial court entered default judgment on October 27, 2009 but reduced the interest rate to 5% per year without explanation.
- Marion Plaza appeals, arguing the court should enforce the 18% contractual rate for both prejudgment and postjudgment interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the contract's 18% rate control prejudgment interest? | Marion Plaza (plaintiff) argues under RC 1343.03(A) the written contract provides the applicable rate, so 18% should apply. | D & L argues the court may substitute a statutory rate (5%) absent contract enforcement. | Yes; contract rate governs prejudgment interest. |
| Should postjudgment interest also be at 18% under the contract? | Marion Plaza contends 18% applies to postjudgment interest per the contract. | D & L contends the court may apply a lower statutory rate postjudgment. | Yes; postjudgment interest at 18% is warranted. |
Key Cases Cited
- Cafaro Northwest Partnership v. White, 124 Ohio App.3d 605 (7th Dist. 1997) (default-judgment interest aligns with contract rate in leases)
- Ohio Valley Mall Co. v. Fashion Gallery, Inc., 129 Ohio App.3d 700 (7th Dist. 1998) (two-part analysis for prejudgment interest; consolidation of judgment amounts)
- P. & W.F., Inc. v. C.S.U. Pizza, Inc., 91 Ohio App.3d 724 (7th Dist. 1993) (requires written contract assent for higher interest rates)
- Mayer v. Medancic, 124 Ohio St.3d 101 (2009-Ohio-6190) (consolidation of principal and interest into final judgment; simple interest on judgment)
- Minister Farmers Cooperative Exchange Co. v. Meyer, 117 Ohio St.3d 459 (2008-Ohio-1259) (written contract may provide interest rate higher than statutory maximum)