571 N.E.2d 442 | Ohio Ct. App. | 1988
The single issue in this appeal is whether a retail purchaser of consumer goods may, under R.C.
On March 7, 1984, plaintiff-appellant Bank One, Dayton, N.A. ("Bank One") entered into a "dealer agreement" with Solar America, Inc. ("Solar") whereby Solar was authorized to arrange for the extension of credit for a "customer" purchasing goods from Solar who needed to borrow money to complete the transaction. The dealer agreement "deemed" Solar an independent contractor and not Bank One's agent. It is a reasonable inference that this was a continuing contractual business arrangement.
On August 21, 1985, Solar sold to defendant-appellee Mildred C. Doughman ("Doughman") a solar heat collector to be fully installed in her residence in College Hill, a Cincinnati neighborhood. Solar and Doughman entered into a written contract whereby Doughman agreed to pay $3,498, of which $498 was payable in cash in advance with the balance payable "upon completion." Simultaneously, Doughman borrowed $3,000 from Bank One to pay that balance, signing an "indirect loan application" to Bank One and an unsecured installment note. All three documents were executed at her residence with only Solar's employee present; no bank personnel were there. Solar received the full contract price.
Doughman made only the first of thirty-six monthly installment payments to Bank One. On August 12, 1986, Bank One sued Doughman for the entire balance owing under the installment note.1
Doughman answered, asserting eight defenses, one of which (designated "First Affirmative Defense") was that the "contract" was a retail installment contract that was unenforceable under R.C.
At the close of the plaintiff's case in a trial to the court, a jury having been waived, Doughman moved for a "directed verdict" on the one and only ground that the installment promissory note called for late charges of $25, in excess of the $3 allowed under R.C.
The single assignment of error is that the trial court erred in granting the motion for a directed verdict. We hold that the intent of this assignment of error is to draw into question the dismissal of Bank One's complaint at the close of its case for the single reason designated by the court, and that, thus understood, the assignment of error has merit.
The trial court and counsel used the wrong terminology. As has been said time and again, "[i]n a trial to the court without a jury, a motion for judgment at the conclusion of the plaintiff's case is one for dismissal under Civ. R. 41(B)(2), not a motion for a directed verdict under Civ. R. 50." Jones v. Dolle (Aug. 2, 1978), Hamilton App. No. C-77357, unreported, at 2.4 AccordJanell, Inc. v. Woods (1980),
We hold that the trial court erred as a matter of law in dismissing Bank One's complaint because the defense of an excessive late charge under R.C.
The trial court erred when it held that "the transaction involved herein constitutes a single retail installment contract." As we decided in Mullen v. Fifth Third Bank (1988),
An arrangement made between a seller of goods and a financial institution whereby the seller presents to the buyer (and even assists him in completing) documents obligating the buyer to make installment payments to a financial institution has been held to create a debtor-creditor relationship between the buyer and institution, negotiated at arm's length, even in the absence of any direct contact between the buyer and the institution. Blon v.Bank One, Akron, N.A. (1988),
The basic reason the installment note to the financial institution is not subject to ORISA is that it does not fall within any of the definitions in R.C.
Obviously, the installment note in the instant case is a promise to pay Bank One, not Solar. If Doughman had executed an installment note payable to Solar, and if Solar had subsequently assigned or endorsed that note to Bank One, then the note would have been subject to ORISA, and the defense of a violation of late-charge provision of R.C.
Doughman argues, however, that Bank One's installment note was a "purchase money loan" under R.C.
Bank One responds that even if it assumed for the purpose of this appeal that the instant installment note is a "purchase money loan" under R.C.
We are persuaded that Bank One's response is correct. In the first place, R.C.
The judgment of the trial court is reversed, and this case is remanded for further proceedings.
Judgment reversed and cause remanded.
SHANNON, P.J., and DOAN, J., concur.
"Every retail seller may, at the time of making any retail installment sale, contract for the payment by the retail buyer of lawful delinquent charges as follows:
"(1) No charges shall be made for delinquent payments less than ten days late.
"(2) Five cents for each dollar for a delinquent payment that is more than ten days late may be charged, but in no event shall adelinquent charge for any one installment exceed three dollars.
"A provision for the payment of interest on any installment not paid in full on or before its scheduled due date at a rate not to exceed one and one-half per cent interest per month is not a delinquent charge and is expressly authorized." (Emphasis added.)
"Notwithstanding section
"This distinction is important because two different tests are applied. The test for a motion to dismiss in a bench trial under Civ. R. 41(B)(2) is whether plaintiff has made his case by a preponderance of the evidence. The court is the trier of the facts and is entitled to weigh the evidence then before the court. The court's dismissal will not be set aside unless it is erroneous as a matter of law or against the manifest weight of the evidence. * * * [Citations omitted.] The test for a motion for a directed verdict under Civ. R. 50 is whether after construing the evidence most strongly in favor of the party against whom the motion is made, the court finds that upon any determinative issue, reasonable minds could come to but one conclusion upon the evidence submitted and that conclusion is adverse to such party. In such event, the court is not the trier of the facts and does not weigh the evidence in ruling on the motion." Jones v. Dolle, supra, at 2-3.
"`Purchase money loan' means a cash advance that is received by aconsumer from a creditor in return for a finance charge within the meaning of the `Truth in Lending Act,'
"(1) Cooperates with the creditor to channel consumers to the creditor on a continuing basis;
"(2) Is affiliated with the creditor by common control,contract, or business arrangement.
"If a credit card issued by a bank or a building and loan association is used by a consumer in a particular consumer transaction, the bank or building and loan association is not a creditor, within the meaning of this division, with respect to the particular consumer transaction." (Emphasis added.)