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E-Z Cash Pawn Shop, Inc. v. Minor

Court of Appeals of Ohio, Tenth District

June 20, 2017

E-Z Cash Pawn Shop, Inc., d/b/a Affordable Loan, Plaintiff-Appellee/ Cross-Appellant,
v.
Janice Minor, Defendant-Appellant/ Cross-Appellee.

         APPEAL from the Franklin County Municipal Court M.C. No. 2014 CV 29531

         On brief:

          Kevin O'Brien & Associates, and Kevin O'Brien, for appellee/cross appellant. Argued: Kevin O'Brien.

          The Legal Aid Society of Columbus, and Scott E. Torguson, for appellant/cross-appellee. Argued: Scott E. Torguson.

          DECISION

          BROWN, J.

         {¶ 1} This is an appeal by defendant-appellant/cross-appellee, Janice Minor, from a judgment of the Franklin County Municipal Court, overruling her objections to a magistrate's decision and entering judgment in favor of plaintiff-appellee/cross-appellant, E-Z Cash Pawn Shop, Inc., d.b.a. Affordable Loan ("E-Z Cash"), in an action for breach of a loan agreement. E-Z Cash has filed a cross-appeal from the trial court's denial of its motions to dismiss appellant's counterclaim and to stay the case and compel arbitration.

         {¶ 2} The following facts, which are essentially undisputed, are drawn primarily from the May 29, 2015 decision of the magistrate, as well as a stipulation entered by the parties on January 28, 2015. On July 6, 2010, E-Z Cash issued a loan to appellant in the amount of $569.49, with 25 percent simple interest. According to the terms of the written loan instrument entered between the parties, the loan was made pursuant to the Ohio Mortgage Loan Act ("OMLA"). Appellant provided E-Z Cash with a check in the amount of $575, and E-Z Cash agreed not to cash the check until July 20, 2010.

         {¶ 3} E-Z Cash subsequently presented appellant's check to a bank, which returned the check to E-Z Cash with the notation "unable to locate account." Appellant made one partial payment to E-Z Cash in the amount of $100 but made no other payments on the loan.

         {¶ 4} On September 10, 2014, E-Z Cash filed a complaint against appellant alleging breach of the loan agreement. E-Z Cash sought judgment for the principal amount due on the loan ($569.49), plus simple interest at the rate of 25 percent per annum from July 6, 2010, a returned check charge of $20, and a loan default charge of $15.

         {¶ 5} On October 6, 2014, appellant filed an answer and counterclaim. In the counterclaim, appellant alleged that E-Z Cash had violated R.C. 1321.591 by failing to comply with practices set forth in the federal Fair Debt Collection Practices Act ("FDCPA"); specifically, appellant argued that E-Z Cash charged an interest rate in excess of the rate authorized under R.C. 1321.57(A).

         {¶ 6} On November 3, 2014, E-Z Cash filed an answer to the counterclaim asserting in part that FDCPA was inapplicable and that, in the alternative, appellant failed to commence her counterclaim within one year of the alleged violation. E-Z Cash also filed a motion to stay the case and compel arbitration in the event the case was transferred out of the small claims division of the municipal court. On November 4, 2014, E-Z Cash filed a motion to dismiss appellant's counterclaim on the grounds it was time-barred.

         {¶ 7} Appellant subsequently filed a memorandum contra E-Z Cash's motion to stay the case and compel arbitration, as well as a memorandum contra E-Z Cash's motion to dismiss the counterclaim. On the date scheduled for trial, December 9, 2014, the parties appeared before the magistrate and agreed to submit trial briefs in lieu of an evidentiary hearing. At that time, appellant orally requested leave to amend her counterclaim to include an additional alleged FDCPA violation, which the magistrate denied. On January 14, 2015, appellant filed a renewed motion for leave to amend her counterclaim. In the accompanying memorandum in support, appellant argued she had learned, during the parties meeting before the magistrate on December 9, 2014, that E-Z Cash's complaint requested an amount that had not been offset by a payment. The magistrate denied appellant's renewed motion for leave to amend the counterclaim.

         {¶ 8} On May 9, 2015, the magistrate issued a decision finding the interest rate E-Z Cash sought to recover "does not violate R.C. 1321.57(A) because the rate is specifically authorized as an alternative rate by the plain language of R.C. 1321.571." Having found that the rate was permissible, the magistrate further determined that appellant's "counterclaim must fail."[1] The magistrate found that E-Z Cash was entitled to judgment in the amount of $469.49, "plus simple interest from the date of the loan at 25% per annum, plus $35.00 for check-return and default charges."

         {¶ 9} On June 12, 2015, appellant filed objections to the magistrate's decision arguing the magistrate erred in denying leave to amend the counterclaim and in finding that E-Z Cash was entitled to charge an interest rate of 25 percent. On June 16, 2015, E-Z Cash filed a renewed motion to stay the case and to compel arbitration. By decision and entry filed August 31, 2015, the trial court overruled appellant's objections to the magistrate's decision and also denied E-Z Cash's motion to stay the case and compel arbitration.

         {¶ 10} Appellant appealed the judgment of the trial court, and E-Z Cash filed a notice of cross-appeal from the trial court's decision denying its motions to dismiss appellant's counterclaim and to stay the case and compel arbitration. On October 15, 2015, E-Z Cash filed a motion to dismiss appellant's appeal, which appellant opposed. By entry filed November 10, 2015, this court held that E-Z Cash's motion to dismiss the appeal, as well as appellant's memorandum contra, "shall be submitted to the court at such time as the court addresses the merits of this appeal." On November 13, 2015, E-Z Cash filed a motion to stay and to compel arbitration. By entry filed November 20, 2015, this court denied E-Z Cash's motion to stay and ruled that E-Z Cash's motion to compel arbitration would be submitted to the court at the time it addresses the merits of the appeal.

         {¶ 11} On appeal, appellant sets forth the following two assignments of error for this court's review:

ASSIGNMENT OF ERROR I: The Trial Court Abused Its Discretion By Denying Ms. Minor's Motion For Leave To Amend Her Counter Claim.
ASSIGNMENT OF ERROR II: The Trial Court Erred By Granting Judgment For E-Z Cash On Its Complaint At The Interest Rate Of 25%, And By Granting E-Z Cash Judgment ...

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