Court of Appeals of Ohio, First District, Hamilton
Appeal From: Hamilton County, TRIAL NO. A-1201799, Court of
Buchanan Ingersoll & Rooney PC and Timothy P. Palmer, for
F. Franke, for Defendants-Appellants.
While the defendants-appellants challenge sundry aspects of
the damage award in this case, at bottom, their appeal turns
on the question of whether the plaintiff-appellee laid a
proper foundation for the evidence establishing its award.
The trial court admitted the evidence in question under the
business-records exception to the hearsay rule, and our
review of the record confirms the propriety of this decision.
We therefore affirm the judgment of the trial court.
The history of this case traces to a foreclosure action on a
commercial loan for a hotel against two sets of guarantors;
defendants Amarjit S. and Kulwinder Gill are one set of the
guarantors. The underlying note was in the principal amount
of $1, 333, 000 to Business Loan Center, LLC, f.k.a. Business
Loan Center Inc. ("BLC"), which plaintiff-appellee
HSBC Bank USA, National Association ("HSBC")
eventually acquired via assignment. Upon default, HSBC
received $1, 090, 018.28 from a short sale of the collateral
property in 2007.
HSBC then commenced a collection action against the
guarantors to collect the balance owed on the loan, including
interest and fees. In 2015, however, the Gills exited from
this litigation after reaching a tentative settlement with
HSBC pending Small Business Administration ("SBA")
approval. HSBC proceeded to trial against the other
guarantors, ultimately receiving a judgment in the amount of
$461, 477.44 plus interest against the other set of
guarantors, with whom it settled for a $400, 002 payment on
The tentative settlement between the Gills and HSBC, however,
ultimately collapsed when the SBA did not approve the deal.
This prompted HSBC to sue the Gills to collect the balance of
the deficiency from them, and when the dust settled from this
litigation, the trial court entered a judgment against the
Gills in the amount of $145, 274.94.
With no serious dispute about their liability or
enforceability of their guaranty, the Gills' arguments
revolve around the amount and propriety of the damages award.
The Gills frame a single assignment of error challenging the
damages award, with multiple separate issues for review.
Ultimately, the predicate for most of these issues concerns
the admissibility of the relevant evidence, so we begin our
Before undertaking the substantive analysis, we pause for a
moment at the standard of review, which appears to be a bit
of a quagmire. Generally, "the trial court enjoys broad
discretion in admitting or excluding evidence. An appellate
court will not disturb the exercise of that discretion absent
a showing that the [party against whom the evidence was
admitted] has suffered material prejudice." (Citations
omitted.) State v. Sage, 31 Ohio St.3d 173, 182, 510
N.E.2d 343 (1987). While that proposition is familiar enough,
when it comes to hearsay and its exceptions, Ohio courts have
proven less-than-precise at times in terms of the standard of
review, generating conflicting precedent. We see this even in
our own district. Several years ago, in Meyers v. Hot
Bagels Factory, Inc., 131 Ohio App.3d 82, 100, 721
N.E.2d 1068 (1st Dist.1999), this court held that the
abuse-of-discretion standard is not appropriate relative to
the admissibility of hearsay in the civil context. We
squarely addressed this question and determined that
deferential review should not govern because the
admissibility of hearsay is not optional:" 'This
rule does not provide the trial court with discretion to
admit hearsay; rather, the rule mandates its exclusion unless
the exceptions found at Evid.R. 803, 804, or 807
apply.'" Id. at 100, quoting Smith v.
Seitz, 4th Dist. Vinton No. 97CA515, 1998 WL 393880, *1
(July 9, 1998). Given the distinction between hearsay and
garden-variety evidentiary decisions, we accordingly
held:" 'Unlike those evidentiary rulings which
relate to matters either explicitly or implicitly within the
trial court's discretion, the admissibility of hearsay
should be reviewed with little deference to the trial
court's decision.'" Id., quoting
Smith at *1.
Since that time, a split developed amongst the appellate
districts between those that view the admission of hearsay as
question of law for which de novo review is appropriate, and
those that treat hearsay as falling within the general
abuse-of-discretion standard. Compare, e.g., John Soliday
Fin. Group, L.L.C. v. Pittenger,190 Ohio App.3d 145,
2010-Ohio-4861, 940 N.E.2d 1035, ¶ 28 (5th Dist.)
("[W]hile the trial court has discretion to admit or
exclude relevant evidence, it has no discretion to admit
hearsay. * * * Thus, we review de novo the trial court's
decision * * *."); Monroe v. Steen, 9th Dist.
Summit No. 24342, 2009-Ohio-5163, ¶ 11 ("Whether
evidence is admissible because it falls within an exception
to the hearsay rule is a question of law, thus, our review is
de novo."); with Abrams v. Abrams,2017-Ohio-4319, 92 N.E.3d 368, ¶ 31 (2d Dist.) ("We
review rulings regarding hearsay under an abuse-of-discretion
standard."); Bishop v. Munson Transp., Inc.,109 Ohio App.3d 573, ...