Security Pacific Nat. Bank v. Roulette

• Decision Date: 14 May 1986
• Docket Number: No. 85-351,85-351
• Citation: 492 N.E.2d 438,24 OBR 14,24 Ohio St.3d 17
• Parties: , 24 O.B.R. 14 SECURITY PACIFIC NATIONAL BANK, Appellant, v. ROULETTE et al., Appellees.
• Court: Ohio Supreme Court

Page 17

24 Ohio St.3d 17

492 N.E.2d 438, 24 O.B.R. 14

SECURITY PACIFIC NATIONAL BANK, Appellant, v. ROULETTE et al., Appellees.

No. 85-351.

Supreme Court of Ohio.

May 14, 1986.

The Roulettes timely made the first $10,000 payment and the funds in their checking account were duly released to Security. The Roulettes then requested an extension on the time allotted for payment of the $45,000 still due on the $120,000 settlement. Security agreed to this extension on the condition that the Roulettes pay $10,000 of the settlement balance on January 2, 1980 and the remaining $35,000 balance on or before February 5, 1980. The Roulettes made the $10,000 payment, but failed to pay the $35,000 balance.

Security apparently made no effort to collect additional funds directly from the Roulettes until October 1980. At that time, Richard A. Granlund, Security's assistant vice-president, wrote to the Roulettes in an effort to resolve their debt. Shortly after receiving this letter, Thomas Roulette called Granlund to discuss the means by which he intended to liquidate his debt. At the time of this conversation and at least until January 1981, Security, through Granlund, apparently had not foreclosed the possibility for settlement upon a final payment by the Roulettes of approximately $35,000.

Subsequent to January 1981 and prior to the spring of 1982, there were no direct communications between the parties. Security asserts that it sent letters to the Roulettes demanding liquidation of their debt in March and August 1981 and March 1982; but, Thomas Roulette claims that he received only the March 1982 letter from Security. In any event, it is clear that Security received no communications from the Roulettes until April 14, 1982, at which time the Roulettes' attorney, Ronald H. Mills, called Security to request information regarding the extent of the Roulettes' obligation. Additional correspondence passed between the parties during the next two months; and, on June 14, 1982, Granlund sent a letter to the Roulettes which clearly took the position that, because the terms of the $120,000 settlement had not been met, the Roulettes were obligated to pay "the full remaining balance" on the total stipulated judgment. This balance, as reduced by payments made in mid-1980 from the Roulettes' "closed out dealer reserve accounts," ¹ totaled "$172,316.71 plus interest."

Subsequent to June 14, 1982, Security demanded payment from the Roulettes in letters dated August 27, 1982 and September 30, 1982. Apparently the Roulettes did not respond to these letters; and, on January 7, 1983, after failing to receive any payment directly from the Roulettes subsequent to January 1980, Security filed a complaint on its foreign judgment in the Court of Common Pleas of Lake County.

In May 1983, the Roulettes filed a motion in the California court seeking declaratory and injunctive relief from Security's judgment. This motion was denied in June 1983, and the instant action proceeded to trial before the common pleas court. On April 11, 1984, the trial court granted judgment for Security in the amount of $172,593 plus interest, giving full faith and credit to the California judgment that had been rendered on November 27, 1979. In granting judgment for Security, the trial court rejected the Roulettes' arguments in equity and their assertion that the unpaid balance on the original judgment of $269,593.67--to the extent that it exceeded the remaining balance on the parties' $120,000 settlement--was unenforceable as a "penalty" under California law.

The Court of Appeals for Lake County "modified" the judgment of the trial court, reducing the award to $22,724.04. Two of the appellate judges reasoned that Security's failure to promptly notify the Roulettes that payments made from their closed-out, dealer reserve accounts in mid-1980 had further reduced the amount of their obligation constituted a waiver of Security's right to enforce the full amount of the original judgment. The third appellate judge reasoned that, under California law, Security's failure to demonstrate that it had suffered actual damages as a result of the Roulettes' non-compliance with the terms of the $120,000 settlement barred enforcement of the full judgment.

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Baker & Hostetler, William W. Falsgraf and Haywood E. McDuffie, Cleveland, for appellant.

Dworken & Bernstein Co., L.P.A., and David J. Richards, Jr., Cleveland, for appellees.

PER CURIAM.

Section 1, Article IV of the United States Constitution requires that full faith and credit be given in each state to the judicial proceedings of other states. In Miller v. Bock Laundry Machine Co. (1980), 64 Ohio St.2d 265, at 266, 416 N.E.2d 620 [18 O.O.3d 455], we addressed the scope of the Full Faith and Credit Clause and quoted with approval, Comment b to 1 Restatement of the Law 2d, Conflict of Laws (1971) 306, Section 101, which provides: "A foreign judgment for the payment of money will not be enforced in an amount greater than the amount, including costs, for which the judgment is enforceable in the state where it was rendered. This is true even though the judgment had been rendered in a larger amount. * * * "

The appellant, Security, argues that the trial court properly applied the foregoing standard in giving full faith and credit to its foreign judgment against the Roulettes. Security further contends that the court of appeals failed to give due deference to the trial court's findings and improperly applied California law when it reversed the trial court's judgment. We believe the record supports Security's position.

A reviewing court may not substitute its judgment for that of the trial court "simply because it holds a different opinion concerning the credibility of the witnesses and evidence submitted before the trial court." iSeasons Coal Co. v. Cleveland (1984), 10 Ohio St.3d 77, 81, 461 N.E.2d 1273. A...