Mohammad v. Awadallah
2012 Ohio 3455
Ohio Ct. App.2012Background
- Mohammad loaned Saife Properties $200,000, secured by a mortgage on 13939 Lorain Ave., with a note due September 15, 2003.
- Awadallah requested extensions; Mohammad orally agreed and Awadallah made seven payments toward the balance.
- A May 2005 extension extended the due date to December 31, 2005; Mohammad alleges remaining balance not paid.
- Foreclosure of the property occurred in 2007; Mohammad, as note holder, acquired the property at sheriff’s sale in 2009.
- In December 2010 Mohammad filed a cognovit complaint on judgment from Plymouth Park Tax Servs.; judgment entered against Awadallah for about $593,991.
- Awadallah sought relief from judgment under Civ.R. 60(B)/62(A) in December 2010; case reinstated in March 2011; Mohammad amended complaint in April 2011.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does partial payment toll the statute for negotiable instruments? | Mohammad: partial payments extend limitations under contract law. | Awadallah: no tolling under negotiable-instrument regime. | Partial payments toll not applicable; six-year limit controls. |
| Is the note a negotiable instrument subject to a six-year statute? | Mohammad: note is a negotiable instrument; 6-year limit applies. | Awadallah: note is nonnegotiable contract; 15-year limit applies. | Note is negotiable; six-year limit under R.C. 1303.16(A) governs |
| Do oral modifications toll the statute by altering due date? | Mohammad: oral modifications toll limitations. | Awadallah: any modification falls under statute of frauds (writing required). | Oral modifications, being unwritten per statute of frauds, toll no tolling; not enforceable to extend period. |
Key Cases Cited
- Midland Title Sec., Inc. v. Carlson, 171 Ohio St.3d 678 (2007-Ohio-1980) (notes that mortgage-collateral relationships do not override negotiable-instrument status)
- Seaman v. Fannie Mae, 8th Dist. No. 92751 (2009-Ohio-4030) (contract attached to complaint treated as part of pleading for Civ.R. 12(B)(6))
- Olympic Holding Co., L.L.C. v. ACE Ltd., 122 Ohio St.3d 89 (2009-Ohio-2057) (statute of frauds requires writing for agreements not performable within one year)