Keenan v. Huntington Acceptance Co., 62879

• Decision Date: 15 November 1993
• Docket Number: No. 62879,62879
• Citation: 91 Ohio App.3d 795,633 N.E.2d 1164
• Parties: KEENAN, Appellant, v. HUNTINGTON ACCEPTANCE COMPANY, Appellee. *
• Court: Ohio Court of Appeals

Page 795

91 Ohio App.3d 795

633 N.E.2d 1164

KEENAN, Appellant, v. HUNTINGTON ACCEPTANCE COMPANY, Appellee. ^*

No. 62879.

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

Decided Nov. 15, 1993.

Nwabueze V. Okocha, Cleveland, for appellant.

William R. Strachan, Strachan, Green, Miller, Olender & Hobt, Cleveland, for appellee.

HARPER, Judge.

Plaintiff-appellant, Donald Keenan, filed a complaint in the Court of Common Pleas of Cuyahoga County on May 18, 1990, seeking compensatory and punitive damages for alleged violations of the Federal Truth in Lending Act and Pennsylvania and Ohio consumer laws with regard to the purchase and financing of a motor vehicle. Appellant now appeals from the granting of summary judgment in favor of defendant-appellee, Huntington Acceptance Company ("Huntington"), on his complaint and on the counterclaim of Huntington.

I

On May 31, 1989, appellant entered into a Pennsylvania Motor Vehicle Installment Contract ("the contract") with Bob Smith Ford, Inc., an automobile dealership located in Castle Shannon, Pennsylvania, for the purchase of a 1989 Ford Mustang ("the vehicle"). The contract set forth that the purchase price of the vehicle was $14,634.80. After deducting appellant's down payment of $816.94, the balance of the purchase price was financed over a sixty-six month term with sixty-five monthly payments of $312.93 and one final payment of $313.45. Appellant was thereby obligated to make these payments commencing July 15, 1989 and continuing on the fifteenth day of each month thereafter until the final payment date of December 15, 1994. The contract further disclosed the following information: annual percentage rate of 13.50 percent; finance charge of $6,212.04; the amount financed, $14,441.86; total payments of $20,653.90; and the total sale price, $21,470.84.

Subsequent to the execution of the contract, Bob Smith Ford, Inc. assigned it to Huntington. Huntington is a wholly owned subsidiary of Huntington Bancshares Incorporated. Although it is incorporated in Ohio, according to its president, William J. Coombs, Huntington was formed principally for the purpose of engaging in the business of motor vehicle sales financing in Pennsylvania. Moreover, since July 1988, Huntington has been a duly licensed sales financing company under the Pennsylvania Motor Vehicle Sales Finance Act with its principal place of business in Pittsburgh, Pennsylvania. It does not engage in, nor has it ever engaged in, any vehicle financing transactions outside that state.

Appellant complied with the monthly payment schedule between July 17, 1989 and April 10, 1990, making ten payments to Huntington and leaving an unpaid balance of $12,918.92. Appellant, however, notified Huntington in a letter dated April 26, 1990 that he "elects to rescind the consumer credit transaction (including all contracts and instruments which are a part of the transaction) * * *." The notice was forwarded to Huntington pursuant to Federal Reserve Regulation Z ("Reg. Z") and appellant testified during his deposition that he premised the rescission on the allegedly inaccurately disclosed annual percentage rate, the finance charge and the total of payments disclosed in the contract. An earlier overheard conversation prompted appellant to calculate his "actual interest rate" of 13.73 percent, .23 percent greater than that disclosed by appellant, 13.50 percent. Therefore, he concluded that the cost of his loan was $200 greater than the amount disclosed in the contract as the total amount of payments. Appellant thus requested the return of "all money and property given as earnest money, downpayment or otherwise and to take all other action necessary or appropriate to give effect to the rescission (including the return of all consideration, of every kind and character, to the party entitled thereto)." In addition, appellant ceased making his monthly payments to Huntington.

In his complaint, appellant set forth five causes of action. First, he claimed that appellee violated the disclosure requirements of the Truth in Lending Act, Section 1601 et seq., Title 15, U.S.Code ("TILA"), and Reg. Z, Section 226.1 et seq., Title 12, C.F.R., by failing to disclose: (1) the accurate amount financed; (2) the accurate finance charge; (3) the accurate annual percentage rate; and (4) the accurate total of payments. Second, appellant alleged that the contract is usurious and unenforceable pursuant to the Ohio Retail Installment Sales Act, R.C. 1317.01 et seq., and the "Pennsylvania Motor Vehicle Installment Sales Act." Third, Huntington knowingly committed deceptive, oppressive and unconscionable acts and practices in violation of Ohio R.C. 1345.02 and 1345.03. Fourth, appellant maintained that Huntington willfully, recklessly, maliciously and oppressively breached the implied covenant of good faith and fair dealing owed to him. Finally, he claimed that Huntington's actions were willful and malicious as "their conduct was intended to cause injury to plaintiff or were carried on with a conscious disregard of plaintiff's rights * * *." As a result of these claims, appellant prayed for compensatory and punitive damages as well as attorney fees pursuant to Section 1640(a), Title 15, U.S.Code and Ohio R.C. 1345.09.

Huntington thereafter filed its answer and a counterclaim on November 29, 1990. In the counterclaim, Huntington sought to recover the payments under the contract and possession of the vehicle in accordance with the contract's default provisions.

Huntington later filed a motion for summary judgment on May 10, 1991. On June 10, 1991, appellant filed a motion for enlargement of time in which to respond to Huntington's motion. The trial court extended appellant's response time to August 1, 1991 pursuant to his request. Appellant failed to file a brief in opposition by this date.

On August 14, 1991, the trial court granted Huntington's motion for summary judgment on appellant's complaint. Huntington's counterclaim was set for hearing on August 30, 1991. The journal entry which set forth these dispositions did not contain any "no just reason for delay" language as provided for in Civ.R. 54(B).

Appellant filed a Civ.R. 60(B) motion for relief from judgment on August 29, 1991. Therein, appellant's counsel claimed that the brief in opposition to Huntington's motion for summary judgment was prepared but inadvertently lost in his office and just recently found by him. The brief in opposition was attached to the Civ.R. 60(B) motion. Appellant argued that he was entitled to relief from judgment based upon excusable neglect, i.e., counsel's failure to timely file the brief in opposition, and a meritorious defense presented in his brief. The trial court overruled the Civ.R. 60(B) motion on October 8, 1991.

On November 21, 1991, the trial court issued its final judgment in favor of Huntington on its counterclaim and appellant's complaint. It awarded possession of the 1989 Ford Mustang to Huntington. In addition, Huntington was awarded a judgment in the amount of $19,521.10. The judgment was composed of the unpaid principal balance of $12,918.92; plus accrued and unpaid interest in the amount of $2,671.01, calculated on an unpaid principal balance to charges in the amount of $112.65 also due on the contract; plus an allowance of $3,140.52 for attorney fees and litigation costs and expenses in the amount of $687. ¹

This appeal followed with appellant raising as error:

"I. The trial court committed prejudicial error in granting summary judgment inasmuch as there are genuine issues of material fact.

"II. The trial court committed prejudicial error by enforcing an agreement that was rescinded and therefore nonexistent.

"III. The trial court committed prejudicial error by holding an ex parte hearing on the damages, which deprived the plaintiff of notice and a hearing renders the damage award null and void.

"IV. The trial court abused its discretion by denying plaintiff's motion and relief from judgment without a hearing when plaintiff has clearly demonstrated through unchallenged testimony that he has a meritorious claim.

"V. The judgment of the trial court is excessive and violates plaintiff's due process as guaranteed in both the Constitutions of the United States and the state of Ohio."

II

Appellant presents a four-part argument in his first assignment of error in which he submits that the trial court erred in granting summary judgment in favor of Huntington. Specifically, he claims that there were genuine issues of material fact with regard to Huntington's alleged violation of TILA, the Ohio Consumer Sales Practices Act, the Pennsylvania Unfair Trade Practices and Consumer Protection Law, and with regard to its conduct which constituted bad faith and a breach of the implied covenant of good faith and fair dealing.

In order for summary judgment to be granted pursuant to Civ.R. 56(C), it must be determined that: (1) there is no genuine issue of material fact to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) reasonable minds can come to but one conclusion which is adverse to the nonmoving party when construing the evidence most strongly in favor of that party. Osborne v. Lyles (1992), 63 Ohio St.3d 326, 327, 587 N.E.2d 825, 827, quoting Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327, 4 O.O.3d 466, 471, 364 N.E.2d 267, 273. In reviewing the granting of summary judgment, an appellate court must apply the same standard as the trial court. Temple, op. cit.

Moreover, a moving party has the burden to persuade the court that no genuine issue of material fact exists and that it is entitled to summary judgment as a matter of law. Celotex Corp. v. Catrett (1986), 477 U.S. 317, 330, 106 S.Ct. 2548, 2556, 91 L.Ed.2d 265, 278 (Brennan, J., dissenting); Paul v. Uniroyal Plastics Co. (1988), 62 Ohio App.3d 277, 281, 575 N.E.2d 484, 486. The nonmoving party may not then rely on his...