Background
BND Rentals, Inc. (d/b/a Vandalia Rental) rented an excavator to Coy Gayhart in August 2020 under an equipment rental agreement calling for periodic rental payments. Gayhart maintained possession of the excavator until January 2023, during which time he failed to make all required payments. BND offered Gayhart two purchase quotes for the equipment, but Gayhart rejected both, and BND ultimately sold the excavator to a third party.
BND filed suit in the Montgomery County Common Pleas Court for breach of contract, seeking past-due rental payments. BND moved for summary judgment, and Gayhart opposed, asserting defenses including breach of the duty of good faith and fair dealing, estoppel, unclean hands, and recoupment. The trial court granted summary judgment to BND and, on a post-judgment motion, awarded attorney fees pursuant to a fee-shifting clause in the rental agreement. Gayhart appealed both rulings.
The Court’s Holding
The Second District affirmed in full. On the breach of contract claim, the court found that BND submitted sufficient evidence through its owner’s affidavit and the contract itself to establish all elements of breach. Gayhart’s defenses failed because he offered no evidence beyond mere allegations; he did not demonstrate that BND owed him a duty of good faith beyond the contract’s express terms, and his claims of estoppel and unclean hands were unsupported by any Civ.R. 56 evidence.
The attorney fees issue required the court to address whether the rental contract constituted a “contract of indebtedness” under R.C. 1319.02, which limits fee-shifting provisions in contracts of indebtedness that do not exceed $100,000. Following Columbus Truck & Equipment Sales v. Global Const. (2d Dist. 2004), the court held that an equipment rental agreement—where the lessor retains title, the lessee pays periodic rent, and there is no fixed principal sum or maturity date—is not a “contract of indebtedness” under R.C. 1319.02. The contractual fee-shifting clause was therefore enforceable regardless of the contract amount.
Key Takeaways
- An equipment rental agreement in Ohio is generally not a “contract of indebtedness” under R.C. 1319.02, meaning the $100,000 threshold for enforcing fee-shifting clauses does not apply.
- A party opposing summary judgment on breach of contract must present affirmative evidence supporting its affirmative defenses, not merely allegations in its brief or answer.
- The duty of good faith and fair dealing in Ohio does not create stand-alone obligations beyond the express terms of a contract; it merely requires honest performance of agreed-upon duties.
Why It Matters
This decision reinforces an important distinction for Ohio practitioners who draft or litigate equipment rental agreements. Because the Second District classified equipment rental contracts as outside R.C. 1319.02’s definition of “contracts of indebtedness,” lessors can include and enforce attorney fee provisions without regard to the statute’s $100,000 monetary threshold. Practitioners advising lessees should be aware that fee-shifting clauses in rental agreements are fully enforceable and should counsel clients accordingly before disputes arise. The decision also underscores the rigorous evidentiary burden at summary judgment: vague assertions of affirmative defenses, without supporting evidence, will not create a genuine issue of material fact.