Yeckley Ents., Inc. v. Huntington Natl. BankYeckley Ents., Inc. v. Huntington Natl. Bank
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: December 12, 2024
Appearances:
CRK Law, LLC and Ricardo J. Cardenas, for appellant.
Perez & Morris LLC, Kerin Lyn Kaminski, Karen L. Giffen, and Jo A. Tatarko, for appellee.
EILEEN A. GALLAGHER, P.J.:
{¶ 1} Plaintiff-appellant, Yeckley Enterprises, Inc. (“Yeckley Enterprises“), appeals the trial court‘s order granting summary judgment in favor of defendant-appellee, The Huntington National Bank (“Huntington“), on its breach-of-contract and negligence claims arising out of Huntington‘s unauthorized change of mailing
{¶ 2} For the reasons that follow, we affirm.
Procedural and Factual Background1
{¶ 3} Yeckley Enterprises was incorporated in or around 2001 for the purpose of owning and operating The Bench Lounge, a local tavern. Dennis Yeckley (“Dennis“) was the president and owner of Yeckley Enterprises. The address for The Bench Lounge was 26594 Lakeshore Blvd., Euclid, Ohio 44132 (the “Lakeshore Blvd. address“). Dennis resided at 271 East 270th St. in Euclid, Ohio (the “E. 270th St. address“). Yeckley Enterprises used the E. 270th St. address as its mailing address.
{¶ 4} Yeckley Enterprises sold The Bench Lounge in 2018. Shortly thereafter, the buyer moved the bar to a new location and changed the name. Following the sale of The Bench Lounge, the business of Yeckley Enterprises was
{¶ 5} From approximately June 2020 until April 2022, Yeckley Enterprises held a checking account and a savings account with Huntington (the “accounts“). When the accounts were opened, the E. 270th St. address was listed as the mailing address for Yeckley Enterprises. From June 2020 through August 2020, monthly bank statements and other account documents were mailed to, and received by, Yeckley Enterprises at the E. 270th St. address.
{¶ 6} In September 2020, Ashley Phebus, a customer due diligence investigator for Huntington inadvertently changed the mailing address on Yeckley Enterprises’ accounts from the E. 270th St. address to the Lakeshore Blvd. address.2 Yeckley Enterprises never requested, nor authorized, Huntington to change the mailing address on its accounts.
{¶ 7} On September 17, 2020, Huntington sent a notice to Yeckley Enterprises at the E. 270th St. address captioned “Important Information about Your Change of Address.” The notice stated, in relevant part:
Please note that a change of address has recently been made on one or more of your Huntington accounts. You may have requested the
change yourself, or we may have obtained updated information from the U.S. Postal Service. . . . If you did not authorize a change of address, or if the address is incorrect, please contact us as soon as possible to ensure that the address information we have on file for you is complete and accurate.
{¶ 8} During his deposition Dennis testified that he could not recall whether he received the September 17, 2020 change-of-address notice. In an affidavit submitted with Yeckley Enterprises’ opposition to Huntington‘s motion for summary judgment, Dennis stated that “[n]o notices from Huntington were ever received at the Proper Address [the E. 270th St. address] to confirm that Huntington had changed the [mailing] addresses [for] statements . . . for the Accounts to the Improper Address [the Lakeshore Blvd. address].”
{¶ 9} The statements for activity in September 2020 through May 2021, were mailed to Yeckley Enterprises at the Lakeshore Blvd. address. Dennis testified that he did not discover the address change for many months and that he assumed he had not received paper copies of Yeckley Enterprises’ bank statements due to COVID-related issues with mail delivery.
{¶ 10} Although Dennis made regular deposits to, and withdrawals from, the accounts using an ATM, he could not recall whether he checked Yeckley Enterprises’ account balances at the ATM or balanced its accounts in any other way during the time period it did not receive paper bank statements. Dennis testified that although a bank teller enrolled Yeckley Enterprises in online banking, he never used it and that he usually checked account balances by reviewing monthly bank statements or
{¶ 11} At some point — Dennis could not recall when — Dennis called the bank‘s 1-800 number and told a Huntington representative that Yeckley Enterprises was not receiving paper copies of its bank statements in the mail. He indicated that the representative told him to go to the Huntington branch on East 260th St. and inform them. Dennis stated that he went to the branch and spoke with the branch manager who, in turn, directed him to the Shoregate branch where Dennis and/or Yeckley Enterprises had previously conducted banking business. At the Shoregate branch Dennis spoke with a bank teller who informed him that Yeckley Enterprises’ bank statements were being mailed to the Lakeshore Blvd. address. Dennis informed the teller that the Lakeshore Blvd. address was the wrong address and the teller then changed the mailing address back to the E. 270th St. address.
{¶ 12} After Dennis learned that the bank statements were being sent to the Lakeshore Blvd. address, he went to the Lakeshore Blvd. address, checked the mailbox and found some returned checks and bank statements.
{¶ 13} The bank account statement for activity in June 2021 was mailed to Yeckley Enterprises at the E. 270th St. address.
The Account Agreement
{¶ 14} A “Business Deposit Account Agreement” (the “account agreement“) governed the relationship between Huntington and Yeckley Enterprises with respect to the accounts. There is no provision in the account agreement that specifically
{¶ 15} With respect to “Returned Deposited Items” the account agreement states: “If we credit your Account for a deposited item, we may later deduct any amount of any item from your Account if we are unable to, or have reason to believe we will be unable to, collect the money from the applicable account holder. We may also charge you a fee if this happens and the item is returned to us unpaid.”
{¶ 16} With respect to “statements” and “notices of error,” the account agreement states, in relevant part:
a. Statements
We will provide you with periodic statements showing the activity on your Account through U.S. mail, or online if you choose this option. You may also request a mini-statement or an extended mini-statement at an ATM.We will provide monthly statements if you have electronic banking transactions during the statement period. However, if your Account has a zero or positive balance and there is no activity (deposits, withdrawals, or transfers) on your Account, we may only provide a statement three months from the month in which activity last
occurred on your Account. If we classify your Account as inactive, we may stop sending statements. You agree to notify us promptly if you change your address. b. Your Responsibility to Check for and Notify Us of Errors
Except as otherwise provided by applicable law, rules, or other Account Documents, you must notify us within 30 days after your statement is mailed or made available to you online of any errors with your Account or as soon as possible if you see an error in your transaction history online. Errors include such things as unauthorized transactions, fraudulent activity, forgeries, alterations and missing deposits.. . .
c. How to Notify Us
You must notify us of errors by:
(1) calling us at 800-480-2001 (2265); or
(2) writing to us at:
The Huntington National Bank
Attention: Customer Service
P.O. Box 1558
Columbus, Ohio 43216d. Our Liability if You Fail to Report Errors Timely
If you fail to notify us (i) within 30 days after your statement is mailed or made available to you or (ii) as soon as possible after discovering an error online in the transaction history, we will not be responsible for the errors and will not be required to reimburse you for them. We also will not be responsible for (i) additional error(s) by the same wrongdoer or (ii) any loss that we could have avoided if you had promptly notified us. . . .
{¶ 17} The account agreement did contain an indemnity provision pursuant to which Yeckley Enterprises agreed to indemnify and hold Huntington harmless from “any liability, loss or expense (including reasonable attorneys’ fees) arising from a deposited item that is . . . returned to us for an alleged breach of warranty under applicable law or other reason not caused by us,” including, “claims of: (a)
Yeckley Enterprises Cashes Bad Checks for Bergant
{¶ 18} Sometime after 2018 Yeckley Enterprises began cashing checks for Jeff Bergant, the brother of a friend of Dennis’ son, “to do him a favor.” Dennis testified that Yeckley Enterprises did not charge interest or fees or otherwise benefit from the arrangement. Dennis stated that he cashed checks for Bergant because he was a “[n]ice guy.” Dennis testified that the checks from Bergant were made payable to Dennis or Yeckley Enterprises, that Dennis would give Bergant cash for the amount of the checks and that Dennis would then deposit the checks into Yeckley Enterprises’ account. Dennis testified that he later learned that “[t]hey were all bad checks.” In total, Yeckley Enterprises cashed 44 checks for Bergant for approximately $16,740.
{¶ 19} With respect to the “bad checks” Dennis deposited into the accounts at issue, Dennis deposited the first such check, a check for $320, on December 15, 2020. He deposited the last such check, a check for $480, on June 23, 2021. When Bergant‘s bank did not pay the checks, Huntington deducted the funds that had been previously credited for the deposits from Yeckley Enterprises’ account. Each such debit was identified on Yeckley Enterprises’ bank account statements as a “returned deposit item.” Yeckley Enterprises’ bank statements for the accounts at issue show 41 “returned deposit items” totaling more than $14,000 from December 16, 2020 to
{¶ 20} Dennis testified that at some point, he could not recall when, he inquired about the returned deposit items listed on Yeckley Enterprises’ bank statements and a Huntington bank teller provided him with copies of all the checks Yeckley Enterprises had deposited that had been returned. Dennis stated that, at that point, he stopped cashing checks for Bergant. Huntington waived or refunded all bank fees associated with the dishonored checks.
{¶ 21} After Dennis discovered that the checks he received from Bergant had been dishonored, he contacted Bergant and they entered into a settlement agreement. On July 24, 2021, Bergant executed a cognovit note promising to pay Dennis4 a total of $18,079.20 (consisting of principal of $16,740 and interest) in 16 monthly installments beginning in August 2021. Bergant failed to make the
Yeckley Enterprises’ Lawsuit Against Huntington
{¶ 22} On April 29, 2022, Yeckley Enterprises filed a complaint against Huntington in the Cuyahoga County Court of Common Pleas, Cuyahoga C.P. No. CV-22-962819. That case was voluntarily dismissed on June 2, 2023. On June 5, 2023, Yeckley Enterprises refiled its complaint, asserting claims of breach of contract and negligence against Huntington relating to the unauthorized change of address on Yeckley Enterprises’ accounts. Yeckley Enterprises alleged that Huntington had breached its contract with Yeckley Enterprises by (1) changing the mailing address for Yeckley Enterprises’ accounts without its authorization and (2) failing to send notice to Yeckley Enterprises of the change of address. Yeckley Enterprises further alleged that Huntington Bank had breached a duty of ordinary
{¶ 23} Huntington filed an answer in which it admitted that (1) from June 2020 until April 2022, Yeckley Enterprises had maintained accounts with Huntington, (2) from June 2020 through August 2020, statements for the accounts were mailed to the E. 270th St. address and (3) from September 2020 through May 2021, account statements were mailed to the Lakeshore Blvd. address. Huntington further averred that the account agreement governed the relationship between Yeckley Enterprises and Huntington. Huntington denied the remaining material allegations of the complaint and asserted various affirmative defenses.
Huntington‘s Motion for Summary Judgment
{¶ 24} On November 9, 2023, Huntington filed a motion for summary judgment. Huntington argued that it was entitled to summary judgment on Yeckley Enterprises’ breach-of-contract claim because (1) Yeckley Enterprises could not prove that Huntington breached the account agreement, (2) Yeckley Enterprises could not prove that it sustained any damages resulting from Huntington‘s alleged breach of the account agreement and (3) Yeckley Enterprises could not prove that it had fulfilled its own obligations under the account agreement, i.e., to monitor its accounts and to promptly notify Huntington of any errors with its accounts.
{¶ 25} In support of its motion, Huntington submitted the transcript from Dennis’ deposition, an affidavit from Phebus, copies of corporate and account documents relating to Yeckley Enterprises, the account agreement, account statements, a document confirming Yeckley Enterprises was enrolled in online banking, change-of-address notices dated September 17, 2020, June 27, 2021 and June 30, 2021 and documents related to Dennis’ settlement with, and subsequent lawsuit against, Bergant. In her affidavit, Phebus described the facts and
{¶ 26} Yeckley Enterprises opposed the motion arguing that there were genuine issues of material fact as to whether Huntington breached its contract with Yeckley Enterprises by (1) changing the mailing address on its accounts without its request or authorization and (2) failing to send notice of the change of address to
{¶ 27} In support of its opposition, Yeckley Enterprises submitted a (1) printout from the Ohio Secretary of State‘s website identifying Yeckley Enterprises as a corporation for profit since April 26, 2001 and listing Dennis, at the E. 270th St. address, under “Agent/Registrant Information,” (2) an affidavit from Dennis and (3) Huntington‘s responses to Yeckley Enterprises’ interrogatories.7 In his affidavit, Dennis detailed the facts and circumstances relating to the operations of Yeckley Enterprises, its accounts with Huntington, the unauthorized change of address, Yeckley Enterprises’ failure to receive notice of the change of address and
Trial Court‘s Ruling on Summary Judgment
{¶ 28} On March 20, 2024, the trial court granted Huntington‘s motion for summary judgment, concluding that there were no genuine issues of material fact and that Huntington was entitled to judgment as a matter of law on Yeckley Enterprises’ breach-of-contract and negligence claims. With respect to Yeckley Enterprises’ breach-of-contract claim, the trial court held that “there is no evidence that Huntington did not do what [it] was required to do under the account agreement.” The trial court determined that Yeckley Enterprises had failed to demonstrate a breach of contract because the account agreement required Yeckley Enterprises to “to check for and notify Huntington of any errors” associated with its accounts and that Yeckley Enterprises was notified of the “error” here, i.e., the inadvertent change of mailing address, on September 17, 2020 when the notice of the change of address was sent to Yeckley Enterprises. The trial court further found that “under the clear and unambiguous terms . . . of the account agreement,” Yeckley Enterprises had until October 17, 2020 to notify Huntington of the error, that “the evidence undisputedly shows” that Yeckley Enterprises failed to do so and that “because Yeckley [Enterprises] failed to timely notify Huntington of the error, any claim that Yeckley [Enterprises] may have had against Huntington because of the error is released/waived.” The trial court indicated that, even if Yeckley Enterprises did not receive paper account statements in the mail, Yeckley Enterprises had
{¶ 29} The trial court further held that even if Huntington had breached the account agreement by erroneously changing Yeckley Enterprises’ mailing address, Yeckley Enterprises had failed to demonstrate “any actual damages that were actually or proximately caused by the breach.” The trial court noted that Huntington had refunded any and all fees Yeckley Enterprises had been charged due to the dishonored checks and that the account agreement required Yeckley Enterprises to hold Huntington harmless for any liability, loss, or expense arising from a deposited item that was returned to Huntington. Further, the trial court stated that it appeared that Yeckley Enterprises had recouped any damages associated with the dishonored checks based on Dennis’ judgment against Bergant.
{¶ 30} With respect to Yeckley Enterprises’ negligence claim, the trial court held that because Yeckley Enterprises had failed to allege any negligent conduct that was “independent and separate” from any alleged breach of contract, its negligence claim was barred by the economic loss doctrine.
{¶ 31} Yeckley Enterprises appealed, raising the following three assignments of error for review:
First Assignment of Error
The trial court erred in granting Defendants-Appellees’ [sic] Motion for Summary Judgment where genuine issues of material fact existed as to whether Defendant-Appellee breached the Account Agreement by unilaterally and without authorization Changing the Mailing Address for Plaintiff-Appellant‘s Statements.
The trial court erred in granting Defendant-Appellee‘s Motion for Summary Judgment since Plaintiff-Appellant did demonstrate it suffered actual damages caused by Defendant-Appellee‘s breach.
Third Assignment of Error
The trial court erred in granting Defendant-Appellee‘s Motion for Summary Judgment since Plaintiff-Appellant demonstrated negligent conduct independent and separate from the breach to establish a negligence claim under the Economic Loss Doctrine.
Law and Analysis
Standard of Review
{¶ 32} We review summary judgment rulings de novo, applying the same standard used by the trial court. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105 (1996). We accord no deference to the trial court‘s decision and we conduct an independent review of the record to determine whether summary judgment is appropriate.
{¶ 33} Under
Yeckley Enterprises’ Breach-of-Contract Claim
{¶ 34} To prevail on a claim for breach of contract, a plaintiff must prove: (1) the existence of a contract, (2) performance by the plaintiff, (3) breach by the defendant and (4) damages resulting from the breach. See, e.g., 180 Degree Solutions LLC v. Metron Nutraceuticals, LLC, 2021-Ohio-2769, ¶ 41 (8th Dist.); FedEx Corp. Servs. v. Brandes Internatl. Co., 2020-Ohio-3449, ¶ 16 (8th Dist.).
{¶ 35} In its first assignment of error, Yeckley Enterprises contends that the trial court erred in granting summary judgment on its breach-of-contract claim because genuine issues of material fact exist as to whether (1) Huntington breached the account agreement by unilaterally changing Yeckley Enterprises’ mailing address without authorization, (2) Huntington sent and/or Yeckley Enterprises received the September 17, 2020 notification of change of address, (3) the notification of change of address was sufficiently specific to put Yeckley Enterprises on notice that its mailing address had been changed to the Lakeshore Blvd. address and (4) Yeckley Enterprises’ failure to review its account information and report its nonreceipt of paper statements to Huntington precluded Yeckley Enterprises from recovering for Huntington‘s alleged breach of contract.
{¶ 36} In its second assignment of error, Yeckley Enterprises contends that the trial court erred in concluding that Yeckley Enterprises failed to show that it
{¶ 37} Following a thorough, independent review of the record and viewing the evidence in the light most favorable to Yeckley Enterprises, we agree with the trial court that there are no genuine issues of material fact and that Huntington is entitled to summary judgment on Yeckley Enterprises’ breach-of-contract claim.
{¶ 38} In support of its claim that the trial court erred in granting summary judgment on its breach-of-contract claim, Yeckley Enterprises cites Travelers Cas. & Sur. Co v. Washington Trust Bank, 86 F. Supp.3d 1148 (E.D. Wash. 2015), and DelJack, Inc. v. U.S. Bank Natl. Assn., 2012 U.S. Dist. LEXIS 140929 (D. Idaho Sept. 26, 2012).
{¶ 39} In Travelers, a bank customer‘s employee embezzled funds by stealing and cashing over 300 checks made payable to her employer‘s clients. Washington Trust Bank at 1151-1152. Travelers, who paid a claim to the bank customer under an insurance policy after the fraud was discovered, brought an action against the bank, alleging that the bank should not have accepted the checks because they had been signed by the employee and not the payees on the checks. Id. at 1152. In that case, the bank argued, among other things, that Travelers’ claim was
{¶ 40} In DelJack, the defendant bank cashed checks from its plaintiff customer that contained restrictive “For Deposit Only” indorsements, failing to honor the indorsement and, instead, “handed the cash over” to an employee of the customer “who showed up with the checks.” 2012 U.S. Dist. LEXIS 140929, at * 2. Within a three-year period, the bank violated the “For Deposit Only” indorsements on 127 checks, and the customer sued the bank. Id. In denying the bank‘s motion for summary judgment, the court rejected the bank‘s argument that, under the account agreement, the customer was precluded from suing the bank because it failed to examine its account statements and notify the bank within 30 days of the bank‘s failure to deposit the “For Deposit Only” checks in accordance with their indorsements. Id. at *7-8, 15. The court held that those provisions of the account
{¶ 41} These cases involve very different facts and do not warrant a finding that a genuine issue of material fact exists regarding Yeckley Enterprises’ ability to prevail on its breach-of-contract claim. Unlike the cases cited by Yeckley Enterprises, there is no allegation here that Huntington acted improperly in its handling of the checks from Bergant.
{¶ 42} Even assuming Huntington breached the agreement by changing the mailing address without authorization and even assuming Yeckley Enterprises did not receive the September 17, 2020 change-of-address notification Huntington claimed to have mailed to the E. 270th St. address,8 Yeckley Enterprises has not demonstrated the existence of a genuine issue of material fact as to whether it sustained any damages as a result of these alleged breaches of the account agreement.
{¶ 44} Yeckley Enterprises has not shown that the losses it sustained as a result of cashing “bad checks” for Bergant resulted from any breach of the account agreement. Those losses occurred, not as a result of Huntington‘s improper change of address on Yeckley Enterprises’ accounts, but because Yeckley Enterprises cashed checks for Bergant for which Bergant had insufficient funds — and continued to do so for more than six months. The address change occurred on or about September 17, 2020 — nearly three months before any of the checks at issue were deposited and dishonored. Under the terms of its account agreement with Huntington, Yeckley Enterprises was obligated to promptly review its account statements and to notify Huntington of any errors in its accounts and although Yeckley Enterprises was aware that it had not received paper copies of its account statements, Yeckley Enterprises did not review its account balances or transactions and did not promptly notify Huntington that it was not receiving paper account statements. Dennis could not recall when he first contacted Huntington about the
{¶ 45} In its appellate brief, Yeckley Enterprises asserts Huntington was “in the best position” to have avoided the harm to Yeckley Enterprises and that if “the statements [had] been correctly provided to the correct E. 270th [St.] address” Yeckley Enterprises “would not have continued to cash checks” for Bergant. However, the record does not support this claim. Based on the averments in Dennis’ verified complaint in his lawsuit against Bergant, it appears that Dennis and/or Yeckley Enterprises had cashed bad checks for Bergant even before the address change occurred. In his verified complaint seeking judgment on the cognovit note, Dennis averred that “[t]he purpose of said promissory note was for Defendant to guarantee restitution for all losses from a business transaction where Defendant tendered to Plaintiff forty-four (44) checks between December 19, 2019, and June 23, 2021, in exchange for cash.” (Emphasis added.) Even assuming all of the “returned deposit items” in Yeckley Enterprises’ account statements related to dishonored checks Yeckley Enterprises received from Bergant, the account documents reflect that only 41 of the 44 checks were deposited into Yeckley Enterprises’ accounts during the time period at issue, i.e., during the approximately nine months from September 2020 to June 2021 when paper account statements were sent to the Lakeshore Blvd. address.
Yeckley Enterprises’ Negligence Claim
{¶ 47} In its third assignment of error, Yeckley Enterprises argues that the trial court erred in concluding that its negligence claim was barred by the economic loss doctrine. Once again, we disagree.
{¶ 48} Under the economic loss doctrine, “a party cannot recover purely economic damages in a tort action against another party based upon the breach of contractually created duties.” B&H Res., L.L.C. v. 28925 Lorain Inc., 2017-Ohio-7248, ¶ 16 (8th Dist.), citing Corporex Dev. & Constr. Mgmt. v. Shook, Inc., 2005-Ohio-5409, syllabus. “Tort law ‘is not intended to compensate parties for monetary
{¶ 49} Yeckley Enterprises asserts that Huntington “engaged in independent and separate negligent conduct in violation of [R.C.] 1304.12” and “failed to meet this statutory obligation” to “exercise ordinary care when sending notice of a dishonored item” “by sending the notice to the wrong address.” Yeckley Enterprises did not, however, include such an allegation in its complaint and did not raise this argument below. In its complaint, Yeckley Enterprises alleged that Huntington had breached its contract with Yeckley Enterprises when it changed the mailing address for Yeckley Enterprises’ accounts without authorization and failed to send notice to Yeckley Enterprises of the change of address, resulting in damages. Complaint at ¶ 12-14. As to its negligence claim, Yeckley Enterprises similarly alleged only that Huntington Bank had breached a duty of ordinary care owed to Yeckley Enterprises “[b]y changing the mailing address on the [a]ccounts and failing to send written notice to [Yeckley Enterprises] at the Proper Address,” resulting in damages. Complaint at ¶ 16-19.
{¶ 50} Because Yeckley Enterprises made no mention of any alleged “independent and separate” violation of a statutory obligation under
{¶ 51} The economic damages Yeckley Enterprises seeks to recover on its negligence claim — damages allegedly resulting from Huntington‘s change of address on Yeckley Enterprises’ accounts and Yeckley Enterprises’ alleged nonreceipt of the change-of-address notice — are the same economic damages Yeckley Enterprises seeks to recover on its breach-of-contract claim arising out of Huntington‘s alleged breach of the account agreement. Accordingly, the trial court properly concluded that Yeckley Enterprises’ negligence claim was barred by the economic loss doctrine and did not err in granting summary judgment in favor of Huntington on Yeckley Enterprises’ negligence claim. Yeckley Enterprises’ third assignment of error is overruled.
{¶ 52} Judgment affirmed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the Cuyahoga County Common Pleas Court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to
EILEEN A. GALLAGHER, PRESIDING JUDGE
SEAN C. GALLAGHER, J., and WILLIAM A. KLATT, J.,* CONCUR
(*Sitting by assignment: William A. Klatt, J., retired, of the Tenth District Court of Appeals.)