Background
Northwest Bank sued Jacob R. Edwards for nonpayment of a vehicle loan evidenced by a promissory note. Edwards did not answer or otherwise respond, and Northwest Bank moved for default judgment.
The trial court entered judgment for Northwest Bank for $13,835.00 in principal and $1,976.06 in accrued interest, plus interest at the statutory rate from the date of judgment and costs. Northwest Bank appealed, arguing that the note—not the statutory rate—controlled postjudgment interest.
The Court’s Holding
The Eighth District vacated the default judgment and remanded. Reviewing the legal issue de novo, the court held that R.C. 1343.03 requires use of the contract rate when a written contract provides a different rate for money due and payable.
The note set both pre- and postjudgment interest at 13.04 percent per year from November 7, 2024. Because Northwest Bank requested that contractual rate in both its complaint and default-judgment motion, the trial court erred by awarding statutory interest instead. The appellate court ordered the trial court to enter default judgment using the 13.04 percent rate. Although the bank had requested $281.52 in late fees below, it did not challenge their omission on appeal, so that issue was waived.
Key Takeaways
- A written promissory note’s agreed interest rate controls over the statutory judgment rate when applicable under R.C. 1343.03.
- A creditor seeking default judgment may obtain the contractually specified postjudgment interest rate when it pleads and requests that relief.
- An issue not assigned as error or argued on appeal, including omitted late fees, is waived.
Why It Matters
The decision confirms that Ohio trial courts must honor a contractual interest provision in a default judgment when the creditor properly seeks it. Creditors should ensure that their pleadings and default-judgment motions clearly identify the contractual rate and its effective date.