2011 Ohio 2286
Ohio Ct. App.2011Background
- NCB granted a $10,000 small business line of credit to RPH and Associates, Inc. on January 10, 2005.
- In August 2009, NCB sued to collect $9,272.46 plus interest for default on the account.
- Dispute centers on whether defendants were personal guarantors for the loan.
- Trial court found the Section 4 guarantor box was ambiguous and allowed extrinsic evidence; defendants testified it was not checked.
- NCB failed to produce evidence contradicting defendants’ testimony; a prior payment deduction was reversed as a mistake.
- Court entered judgment for defendants; NCB appealed, arguing parol evidence and a material alteration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Parol evidence and contract interpretation | NCB: contract unambiguous; extrinsic evidence barred. | Defendants: ambiguity exists; extrinsic evidence permitted. | Ambiguity exists; extrinsic evidence admissible |
| Material alteration by a checked box | NCB: checked box reinforces clear language; not material alteration. | Defendants: unchecked box creates ambiguity; alteration material. | No reversible error; box ambiguity affects guaran tor status |
Key Cases Cited
- Davis v. Loopco Industries, Inc., 66 Ohio St.3d 64, 609 N.E.2d 144 (1993) (contract terms interpreted per four corners when clear)
- Kelley v. Ferraro, 188 Ohio App.3d 734, 2010-Ohio-2771 (Ohio App. 8th Dist. 2010) (ambiguities permit parol evidence)
- Franck v. Railway Exp. Agency, 159 Ohio St. 343, 112 N.E.2d 381 (1953) (ambiguous contract terms construed against drafter)