Summary of a Recent
Judicial Development in
Commercial Transactions

Neutral Expert Witness's Method of Calculation of Interest Affirmed

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In Minster Farmers Cooperative Exchange Co. v. Meyer, No. 17-08-31, 2009 WL 806575 (Ohio Ct. App. Mar. 30, 2008), the Ohio Court of Appeals held that the trial court had properly granted summary judgment to a plaintiff-creditor on the recommendation of a neutral expert witness, and had not abused its discretion in granting the defense counsel's motion to withdraw.

Background

The debtor stopped making payments on his account with Minster Farmers Cooperative Exchange ("Farmers") after Farmers raised the monthly finance charge from 1.5 to 2 percent. Id. at *1. He claimed he was not notified of the increase and should not be responsible for it, although it appeared on his monthly invoices. Id. Farmers filed a complaint against him for $51,374 plus finance charges due on his account, and both parties moved for summary judgment. Id. The trial court granted Farmers' motion, finding that under Ohio's version of the Uniform Commercial Code the monthly statements providing for a 2 percent interest rate constituted an enforceable contract, and ruled that the judgment should be computed by compounding interest monthly. Id. The appellate court agreed that the invoices constituted an enforceable contract, but held that the interest should not be compounded. Id. The Ohio Supreme Court reversed and held that the invoices did not constitute an enforceable contract, so the interest rates exceeded the statutory maximum. Id. On remand, the trial court held that the opening date of the account was the proper date to begin recalculating the account balance using the proper rate of interest, rather than the last date of a zero account balance as contended by Farmers. Id. at *2. Subsequently, the court granted the debtor's attorney leave to withdraw due to the debtor's lack of cooperation and nonpayment of legal fees. Id. The trial court again granted Farmers' motion for summary judgment and allowed an expert to calculate the interest, resulting in a $15,000 judgment (after some adjustments conceded by Farmers), and the debtor appealed pro se. Id. at *3.

Arguments

The debtor argued that the trial court erred by allowing the expert to calculate the amount due on his account from a date other than the date of the opening of the account. Id. at *4. Therefore, he claimed that the account balance of $15,000 was incorrect because his overpayment of interest was never deducted, and because the recalculation of interest on the account was not done starting with the opening of the account. Id. He also argued that the trial court erred by permitting his trial counsel to withdraw on his own motion. Id. at *6.

Analysis and Holdings

The court found that the debtor had waived his argument that the expert incorrectly recalculated the interest by failing to raise it previously, but added that even if he had not waived the argument, the expert had properly recalculated the interest from the starting date of the account. Id. Moreover, the court found that the expert had credited the debtor's account for excess interest he had paid. Id. at *5. Lastly, the court found no grounds to overturn the trial court's grant of the debtor's attorney's motion to withdraw; noting that the debtor had failed to provide transcripts of the hearing on the motion, the court stated that it "must presume that the trial court conducted a proper inquiry into the withdrawal motion." Id. at *6.

The case was decided on March 30, 2009.