AMF, Inc. v. Mravec

• Citation: 440 N.E.2d 600,2 Ohio App.3d 29
• Decision Date: 14 May 1981
• Docket Number: No. 43024,43024
• Parties: , 2 O.B.R. 32 AMF, INC., Appellee, v. MRAVEC et al., Appellants.
• Court: Ohio Court of Appeals

Page 29

2 Ohio App.3d 29

440 N.E.2d 600, 2 O.B.R. 32

AMF, INC., Appellee, v. MRAVEC et al., Appellants.

No. 43024.

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

May 14, 1981.

Syllabus by the Court

1. An account is a pleading device used to consolidate several claims which one party has against another. An action on an account is appropriate where the parties have conducted a series of transactions, for which a balance remains to be paid.

2. An action on an account is an action for breach of contract. Where the defendant denies all the allegations of the complaint, the plaintiff has the burden of proving by a preponderance of the evidence all the elements of a claim for breach of contract.

3. In an action on an account, the account must be appended to the complaint, but it need not be admissible at trial, nor is the plaintiff required to introduce any other documentary evidence to prove its case. The plaintiff may establish a prima facie case of breach of contract through oral testimony.

4. In an action on an account, invoices are competent evidence if they qualify under the business records exception to the hearsay rule. The relevance of a particular invoice, however, depends upon the business use of the invoice.

David R. Mayo, Cleveland, for appellee.

George W. Joseph, Jr., Lakewood, for appellants.

JACKSON, Chief Justice.

The appellee, a corporation which sells bowling equipment, brought this action on an account against the appellants. The trial court entered judgment for the appellee in the sum of $4,467.08, plus interest. The appellants appeal, citing four assignments of error.

The appellee, to prove its case of breach of contract, called only one witness to the stand: Sally Stein, the accounts receivable supervisor for AMF, Inc. She testified that she was responsible for keeping records and reconciling the balances each month for all accounts of appellee company. She admitted that she had no personal knowledge of the transactions between the parties. Specifically, she admitted that she did not know whether the balance of the appellants' account was at zero before 1971, whether the appellants had ever asked for an account, whether the appellants requested that all transactions be conducted on a cash basis, and whether merchandise was sent to the appellants that did not belong to them.

Appellee used the witness' testimony to lay the foundation for the introduction of three documents into evidence: (1) Exhibit A is a computer printout entitled "Composite Aging Report;" listed on the printout are a number of charges to the appellants. The witness testified as follows regarding the manner in which the computer printout information was obtained:

"Originally a shipping order is created. It can be created in West Fair or by salesmen in the field. The shipping order is then processed through our electronic data processing. The order is shipped and an invoice is created by the computer. We identify all of our customers by number. Each customer has a specific customer number. That invoice is then sent back to the billing department, verified and mailed out through our mail room.

"At that point, all the actual open account invoices which belong in the accounts receivable system are processed into my system weekly. Then the other section actually would be the cash which is also, when it comes in coded with the customer's number, applied directly to his account. At that point, we apply a check to specific invoices."

The witness stated that when payment is received and applied against an invoice, the record of the invoice is deleted from the "Composite Aging Report". In effect, the "Composite Aging Report" is merely a record of invoices for which payment has not been received. The witness testified that the eleven unpaid invoices totaled $4,467.08; in fact, simple addition yields the sum of $4,424.26. Neither party asked the witness to explain this discrepancy. The witness did state that the "Composite Aging Report" was kept under her supervision and control.

(2) Exhibit B is a set of nine invoices, which correspond to nine of the entries on the "Composite Aging Report." The witness testified that two or three of the invoices had been destroyed, either deliberately or because of a fire in the warehouse. The witness implied, but did not state, that these invoices were kept under her supervision and control. The amounts shown on the nine invoices total $4,018.26. With few exceptions, it is not apparent from the invoices what goods were shipped to the appellants, since most of the entries on the invoices consist of abbreviations and codes.

(3) Exhibit C, the third document identified by appellee's witness, is a two-page handwritten summary, listing payments made by the appellants since February 1971, and listing the invoices to which the payments were applied. The summary was prepared by the witness, and the appellants did not object to the introduction of the document into evidence. None of the invoices listed in Exhibit C as having been paid was listed in Exhibit A, the "Composite Aging Report," nor were the paid invoices offered into evidence.

First Assignment of Error

"The court erred by admitting into evidence a 'Composite Age Report' as an account."

For its first assignment of error the appellants assert that the trial court erred in admitting the "Composite Aging Report" into evidence, on the ground that since the report did not contain a record of all the transactions between the parties, the report did not constitute an "account." The appellants are correct in their contention that Exhibit A is not an "account." An "account" is defined as follows:

" 'An account must show the name of the party charged. It begins with a balance, preferably at zero, or with a sum recited that can qualify as an account stated, but at least the balance should be a provable sum. Following the balance, the item or items, dated and identifiable by number or otherwise, representing charges, or debits, and credits, should appear. Summarization is necessary showing a running or developing balance or an arrangement which permits the calculation of the balance claimed to be due.' " American Security Service v. Baumann (1972), 32 Ohio App.2d 237, 239, 61 O.O.2d 256, 289 N.E.2d 373.

The appellants misconceive, however, the role of an "account." An account is merely a pleading device used to consolidate several different claims one party has against another; an action on an account is appropriate where the parties have conducted a series of transactions, for which a balance remains to be paid. Dykeman v. Johnson (1910), 83 Ohio St. 126, 93 N.E. 626. In an action on an account, the "account" must be attached to the complaint. Civ.R. 10(B). The account need not be admissible at trial, nor must the plaintiff introduce any documentary proof into evidence to prove breach of contract; the plaintiff may establish a prima facie case through oral testimony. American Security Service v. Baumann, supra. Where the defendant enters a general denial to the allegations of the complaint, the plaintiff must prove all the elements of a cause of action for breach of contract. Dykeman v. Johnson, supra; American Security Service v. Baumann, supra.

Exhibit A, the "Composite Aging Report," is not an account because it does not at least summarize all of the transactions between the parties. The exhibit is not inadmissible at trial for that reason. Exhibit A is relevant and material because it tends to prove some of the elements of the claim of the appellee.

The appellants also argue that Exhibit A does not qualify as a business record (and is, therefore, inadmissible under the hearsay rule), because it was not made in the normal course of business, it was not compiled at or about the time of the events that it records, and because the persons who entered the information on the computer were not called to testify that they had personal knowledge of the transactions. Only the last of these three arguments was raised in the lower court. ¹ We decline to discuss the merits of the first two arguments, because neither the trial court nor opposing counsel was apprised that the appellants objected to the introduction of Exhibit A on those grounds. A party may not assert a new legal theory for the first time before the appellate court. Kalish v. Trans World Airlines (1977), 50 Ohio St.2d 73, 4 O.O.3d 195, 362 N.E.2d 994; Stores Realty Co. v. Cleveland (1975), 41 Ohio St.2d 41, 70 O.O.2d 123, 322 N.E.2d 629; Moats v. Metropolitan Bank of Lima (1974), 40 Ohio St.2d 47, 69 O.O.2d 323, 319 N.E.2d 603. Where a party makes a specific objection to the introduction of evidence, the party is considered to have waived all other grounds for excluding the evidence. Johnson v. English (1966), 5 Ohio App.2d 109, 34 O.O.2d 229, 214 N.E.2d 254.

We note that the admissibility of Exhibit A was not resolved at the hearing where evidence was taken. The hearing was had before a referee, who reserved ruling on the issue of the admissibility of Exhibits A and B. The referee died before issuing a recommendation to the court. The court did not enter judgment until September 1980. Since the Ohio Rules of Evidence went into effect on July 1, 1980, ² the trial court had the option of applying the statutory business records exception (R.C. 2317.40) or the new evidence rule governing the business records exception to the hearsay rule (Evid.R. 803 ). The court apparently applied the statutory rule. ³ We find that under either R.C. 2317.40 or Evid.R. 803(6), the custodian of the business record is the only witness who must be called in order to lay a foundation for the introduction of the business record. The statute and the rule provide:

"As used in this section 'business' includes every kind of business, profession, occupation, calling, or operation of institutions, whether carried on for...