IN THE SUPREME COURT OF OHIO

Sandra J. Taylor Jarvis,

Appellee,

V.

First Resolution Investment Corp.,et al.,

Appellants.

Case No. 2013-0118

On Appeal from the Summit CountyCourt of Appeals, Ninth Appellate DistrictCase No. CA26042

MERIT BRIEF OF AMICI CURIAE OHIO CREDITOR'SATTORNEY'S ASSOCIATION AND DBA INTERNATIONAL

IN SUPPORT OF APPELLANTS CHEEK LAW OFFICES, LLC, ATTORNEY PARRIHOCKENBERRY, FIRST RESOLUTION INVESTMENT CORP. and FIRST RESOLUTION

MANAGEMENT CORP.

Michael D. SlodovCounsel of RecordSessions, Fishman, Nathan & Israel, LLC15 E. Summit St.Chagrin Falls, Ohio 44022(440) 318-1073(fax) (216) 359-0049xms 1 odov@sessions-law.lh i z

Attorneys for Anaici CuriaeOhio Creditor's Attorney's Associationand DBA International

("'l^b%^9( a r- P.9

Avm^ ^^^^RI OF OH10

Boyd W. Gentry, Esq.Law Office of Boyd W. Gentry, LLC9 East Dayton StreetWest Alexandria, Ohio 45381937.839.2881Fax 800>839.5843B entry(_e,̂boyd r̂,entz•ylaw.comAttorney for Appellants Cheek Law Offices,LLC and Attorney Parri Hockenberry

Jeffrey C. TurnerJohn LangenderferKevin A. LantzCounsel of 'Recora'Surdyk, Dowd & Turner Co., L.P.A.One Prestige Place, Suite 700Miamisburg, Ohio 45342Tel. (937) 222-2333Fax (937) 222-1970jturner(a; sdtlasvyers.conm'1} ang_enderfer(-)sdtlawyer.coinAttorneys for Appellants First ResolutionInvestment Corp. & First ResolutionManagement Corp.

- F;

.. .. l . .. . .

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TABLE OF CONTENTS

TABLE OF AUTHORITIES ........ ... ......... ............................................ ... ....... ...... ... .... .. . iv

INTEREST'S OF AMICI CURIAE.. . ..... ...... .. ... ... .... .... .... ......................................................... ..... . I

STATEMENT OF FACTS ....................................... . ..... .... . .......................................... 2

ARGUMI;NT . ............................................................................. ... ...................................... 2

Proposition of Law No. I: Absent an agreement otherwise, a cause of action against an Ohioconsumer for breach of a credit card contract accrues in Ohio ........ . ......... . ......... .. ..................... 2

Proposition of Law No. II; Absent an agreement otherwise, a claim for breach of a credit cardcontract accrues when a consumer fails to make a required payment, and subsequentinsufficient payments do not cure the breach . ....................... .. ..... ............................... 2

A. Rule of lexfori ...... ........................................................................ ... ... .... ......................... 2

B. Cause of Action . ... .. ................................................................. ....... ................. 3

1. Nature of Credit Cards . ........... ... .... ........................................................... ......... 4

2. Credit Card Lending ........ . . ..... .... .. ...... ......... ........................................ ..... .... .. 5

3. Bank Locations & Payment Centers .......... .... ...................................................... .. 5

4. Cardholder Agreements ....................................... ........... . .............................. 7

5. Applicable Terms and Conditions ......................................................... .................... 9

C. Actions for unpaid credit card debts ......... .. ................................................ ......... ......... 10

D. Accrual of cause of action for breach of contract ............................................,.............>. 10

E. Accrual of cause of action. for account claims..... . ......... . ......... .. ....................................... 11

F. Partial Payment ........................................................... ......... ................................ 12

G. Ohio Statutes of Limitation .................................................................. .... .. . . . . . ................. 14

H. Ohio's Borrowing Statute .... ...... ......... ....... ...................................... .. .............. 14

1. Accrual in the borrowing context .......... .............................................. .. ........... . . . .... 16

J. Tolling rules for absence from the forum in the borrowing context ................................. 20

K. Delaware Statutes of L'zmitations .... ... . ........ . .. .. ....... ........................................ 21

L. Assignment, factoring and sales of debt .................... .. ..... ... ............................ 22

M. Analysis ...... ....... .............................................................................. .................... 23

Proposition of Law No. III: A complaint for breach of a credit card contract may pray for apost-judgment interest rate that exceeds the statutory rate when there is evidence suggestingthat the parties agreed to the higher interest rate ............................. ....................................... 32

A. Prayer for relief. ........................................................................ ........................ 33

B. Interest in excess of the statutory rate is perrnitted by 1aw . .......................... . .................. 34

C. Proof of interest rate.... . ..... ............... .... ..... .......................................................... ...... ....... 36

ii

D. Whether the broad language of 15 U.S.C. § 1692e or § 1692f should apply to pleadings... .......................................................................................... . .... . ............................... 36

E. Analysis .... ............ ................................ ... ................................ . . . .. ........ ......... ... ...... . . . ... 38

Proposition of Law No. IV: The Ohio Consumer Sales Practices Act does not apply to bankassignees and their collection attorneys because there is no "consumer transaction" orlisupplier" .......................................................................................... .... ........ . ............... 40

A. Appellants are not suppliers . .................................................................. ...... .. .... .... .... ...... 40

B. Litigation and debt collection are not a consumer transaction ............................... . ......... 43

C. Procedural applications of substantive law are unconstitutional ..................................... 45

D. Applying the CSPA to measure pleadings violates the separation of powers ................. 45

E. Debt collection is regulated by R.C. §§ 1321.35 et seq., not the CSPA .......................... 45

F. The CSPA does not apply to pleadings because they are required by law ....................... 47

G. Pleadings are absolutely privileged under the comnn.on law ............................................ 47

H. Analysis ...................... .... ........ . . ........................................................... . ....... 49

CdNCLUSION ........................................... . ..................... ................................................ 50

CERTIFICATE OF SERVICE ................................. ..... .... ................................................ 51

iii

TABLE OF AUTHORITIES

Ohio Cases

Alexander andAssocs., Inc. 6th Dist. No. H-86-34, 1987 WL 15918 (Aug. 21, 1987) ............... 25

Allen v. Miller, 11 Ohio St. 374 (1860) ............................................ .......................................... 23

Alropa Corp. v. Kirchwehm, 138 Ohio St. 30, 33 N.E.2d 655 (1941) ............................................ 4

Alropa Corp. v. Kirchwehna, 33 Ohio Law Abs. 39, 36 N.E.2d 511 (2d Dist.1940) .................... 15

American Sec. Service; Inc. v. Bauznann, 32 Ohio App.2d 237, 289 N.E.2d 373 (10th Dist. 1972).. ................ ...................................................... ... .................................................. 33

Anderson v. Barclay's Capital Real E,state, Inc., 2013-Ohio-1933, -- N.E.2d ----, 2013 WL2097556 ................................ ............. ................................................ .. ................ 40,43

Baltimore & O.R. Co. v. Larwill, 83 Ohio St. 108, 93 N.E. 619 (1910)......................................... 3

Bank One, Columbus, iV.A. v. Palmer, 63 Ohio App.3d 491,

579 N.E.2d 284 (10th Dist. 1989) .. ................................................. ... ......... ..................... 8

Barnets, Inc. v. Johnson, 12th Dist. No. CA2004-02-005, 2005-Ohio 682 ............................ 12, 13

Bell v. Ohio State Bd. of Trustees, 10th Dist. No. 06AP-1174, 2007-Ohio-2790 ........................ 10

Bender v. Vaughn, 106 Ohio App. 136,153 N.E.2d 778 (6th Dist. 1958) .................................... 22

Broadnax v. Greene Credit Serv., 118 Ohio App,3d 881, 694 N.E.2d 167 (2d Dist. 1997) ........ 44

Calvafy SPV.I, L.L.C. v. Furtado, 10th Dist. No. 05AP-361,

2005-Ohio-6884 (Dec. 27, 2005) ...............................................................,>.>........................... 34

Calvary, Investments, L.L.C. v. Vonderheide, 1st Dist. No. C-0 10359,

2001 WL 1386190 (Nov. 9, 2001) ........... ...... ................... ................................................. 23

Capital One Bcznk (USA), N.A. v. Rhodes, 8th Dist. No. 93968, 2010-Ohio-5127 ....................... 11

Capital One Bank v. Day, 176 Ohio App.3d 516, 892 N.E.2d 932 (4th Dist. 2008) .................... 34

Capitcrl One Bank v. Nolan, 4" Dist. No. 06CA77, 2008-Ohio-1850 ......................................... 34

Celebrezze v. United Research, 19 C}hio App.3 d 49 (9th Dist. 1984) .......................................... 44

Cincinnati Bar Association v. F'oreclosure Solutions, LLC',123 Ohio St.3d 107,

2009-Ohio-4174, 914 N.E.2d 386. . .. ....................................................... ..... ......... 38

Citibank (South Dakota) N.A. v. Ogunduyile, 2d Dist. No. 21794, 2007-Ohio-5166 ................. 10

Citibank v. Eckmeyer, I ltb Dist. No. 2008-P-0069, 2009-OhiQ-2435 .......................................... 33

Clark v. Eddy, 10 Ohio Dec. Reprint 539, 1889 WL 351 (Wash. Co. Com.Pl. 1889) ................ 15

Courson's Ex'rs v. Courson, 19 Ohio St. 454 (1869) .............................................................. 11, 12

Crea'itrust C'orp, v. Richard, 2d Dist. No. 99-CA-94, 2000 WL 896265 (Jul. 7, 2000)........ 10, 23

C.'ty. of San Diego v. Elavsky, 58 Ohio St.2d 81, 388 N.E.2d 1229 (1979) ...... ......... ................. 46

iv

Culbreath v. Golding Fnts., I,.L.C., 114 Ohio St.3d 357, 2007-Ohio-4278, 872 N.E.2d 284...... 43

Cummings v. Groszko, 76 Ohio App.3d 812, 603 N.E.2d 387 (10th Dist. 1992) .............. .......... 13

D.A.N. Joint Venture III, L.P. v. Armstrong, 1 lth Dist. No. 2006-L-089, 2007-Ohio-898.... 23, 27

Danziger v. Luse, 103 Ohio St.3d 337, 815 N.E.2d 658 (2004) .................... . .............................. 48

Dartmouth Plan, Inc. v. Haerr, 3d Dist. No. 8-89-25, 1990 WL 197884 (Dec. 4, 1990) ............ 44

Davila v. Calo, 8th Dist. No. 49940. 1985 Westlaw 4615 (Dec. 19, 1985) . . ......... . .................... 49

Discover Bank C/O I)FS Servs. L. L. C. v. Lammers, 2d Dist. No. 08-CA-85, 2009-Ohio-3516 .. 33

Discover Bank v. Heinz, 10'h Dist. No. 08AP-1001, 2009-Ohio-2850 .............................. .. ......... 11

Discover Bank v. Poling, 10th Dist. No. 04AP-1117, 2005-Ohio-1543 ...... . .............................. 10

Discover Financial Servs., Inc. v. Belmont, 8th Dist. No. 86336, 2006-Ohio-1539 .................... 11

Erie Cty. Fctrmers' Ins. Co. v. Crecelius, 122 Ohio St. 210, 171 N.E. 97 (1930) .............. . ......... 48

Estate ofJohnson v. Randall Smith, Inc., N.E.2d , 2013-Ohio-1507 .............. . ................... 27

First Resolution Inv. Corp. v. Griffath, 10£h Dist. No. lOAP-212, 2010-Ohio-4748 ..................... 33

Flagstar Bank, F.S.B., v. Airline Cnion's Mtge. Co., 128 Ohio St.3d 529, 2011-Ohio-1961, 947N.E.2d 672 ............................. ..... .... ........................................................ .. ... 10, 26, 32

Fletcher v. Univ. Hosps. of Cleveland, 120 Ohio St.3d 167, 2001-Ohio-5379, 897 N.E.2d 147. 33

Gries Sports Ents., Inc. v. Modell, 15 Ohio St.3d 284 (1984) ...................................................... 25

Groch v. Gen. Motors Corp., 117 Ohio St. 3d 192, 230, 2008-Ohio-546,

883 N.E.2d 377 ...... ............................................................... .. ..... ................. 14, 24, 28

Horton v. Horner, 16 Ohio 145 (1847) .............. ....... ............................................ . .... 15

Ilowar-d v. Allen, 30 Ohio St.2d 130, 48 N.E.2d 224 (1972) .......................... .................. ........., 2

Hunter v. Niagara Fire 1'ns. Co., 73 Ohio St. 110 76 N.E. 563 (1905) .......... . ............................. 15

Huntington Nat. Bank v. Twining, 8th Dist. No. 60222, 1991 WL 20434 (8th Dist.1991) ........... 10

Jarvis v. First Resolution Mgt. Corp., 983 N.E.2d 380, 2012-Ohio-5653 ...................... 23, 24, 26

Justice v. Mowery, 69 Ohio App.2d 75, 430 N.E.2d 960 (1980) . ................... . .......................................................... 48

Kerper v. Wood, 48 Ohio St. 613, 29 N.E. 501 (1891) ..................................................... 2

Kilhreath v. Rudy, 16 Ohio St.2d 70, 242 N.E.2d 658 (1968) ................................... .................. 45

Kincaid v. Erie Ins. Co., 128 Ohio St.3d 322, 2010-Ohio-6036, 944 N.E.2d 207 ....................... 10

LaCourse v. Fleitz, 28 Ohio St.3d 209, 503 N.E.2d 159 (1986) .................................................. 48

Liggins v. The May Co., 44 Ohio Misc. 81, 337 N.E.2d 816 (Cuy. Co. 1975).......... . .................. 44

Lorain County Bar Association v. Kocak, 121 Ohio St.3d 396, 2009-Ohio-1430,

904 N.E.2d 885 ....................................... ........... ..................................................... .. 38

Ludtivig Homme.l d'rCo. v. Inc. Village of Woodsfield, 115 Ohio St. 675,

v

155 N.E. 386 (1927) ..................... .. .. ... ....... ..... ......................................... 11,12

M.J. DiCorpo, Inc. v. Sweeney, 69 Ohio St.3d 497, 634 N.E.2d 203 (1994) ................... .. ......... 47

IVlid-AmeYica Acceptance Co. v. Lightle, 63 Ohio App.3d 590,

579 N.E.2d 721 (10 Dist. 1989) ............... ....... ....... ......... ................. .............................. 49

Myers v. Toledo, 110 Ohio St.3d 218, 2006-Ohio-4353, 852 N.E.2d 1176 ................................ 42

Nationwide Mut. Pire Ins. Co. v. Rose, 9th Dist. No. 05CA008814, 2007-Ohio-1216 ..... .. ........... 2

Natl. Check Bur. v. Patel, 2d Dist. No. 21051, 2005-Ohio-6679 .................. . .............................. 23

NCR Universal Credit Union, Inc. v. Kleinberg, 2d Dist. No. 11807,

1990 WL 40632 (Apr. 6, 1990) ............................................ ................. ... ..... ............ 44

Payne v. Kirchwehm, 141 Ohio St. 384, 48 N.E.2d 224 (1943) ............................................. 20, 31

Pyle v. Flamin, 4th Dist. No. 745, 1990 WL 138470 (Sept. 14, 1990) ............................... ......... 33

Reagans v. tllountainlHigh Coachwoyks, Inc., 117 Ohio St.3d 22, 2008-Ohio-27 1,

881 N.E.2d 245 ........................................................... ...... ............... ............................... 43

Resner v. Owners Ins. Co., 3d Dist. No. CA 2001 0091,

2002 Westlaw 236970 (Feb. 14, 2002) ............................................ ....... ...... ................ 25

Slack v. Cropper, 143 Ohio App.3d 74, 84, 757 N.E.2d 404 (11th Dist. 2001) .......................... 13

Smelcer v. Bankers Lif'e and Casualty Co., 8th Dist. No. 37035,

1978 W L 217818 (Jul. 27, 1978) ................................................. ..... .................................. 16

State ex rel. Cordray v. Midway Motor Sales, Inc., 122 Ohio St.3d 234,

2009 -Ohio- 2610, 910 N.E.2d 432 ..... ........... ............................................... ....... ... .. 46

State ex rel. Wilson v. Preston. 173 Ohio St. 203, 181 N.E.2d 31 (1962) ...... . ............................... 4

Surace v. Wuliger, 25 Ohio St.3d 229, 495 N.E.2d 939 (1986) ................... ....................... 47, 48

SYy4, Inc, v. Straka, 8th Dist. No. 82103, 2003-Ohio-3259 (Jun. 19, 2003) ........... . ......... . ......... 41

Talco Capital Corp. v. State Underground Parking Comm., 41 Ohio ^-1.pp.2d 171;

324 N.E.2d 762 (10th Dist. 1974) ........ .................... ..... ........................................... 23

Unifund CCR Partners v. Cltilds, 2d I)ist. No. 23161, 2010-Ohio-746 ...................................... 10

Unifund CCR Partners v. Hall, 10th Dist. No. 09AP-37, 2009-Ohio-4215 ... . ......... .. .................. 11

Wilborn v. Bank One Corp., 121 Ohio St.3d 546, 2009-Ohio-306, 906 N.E.2d 396 .................. 35

William Deering & Co. v. Miller, 19 Ohio C.D. 259, 29 Ohio C.C. 259,

9 Ohio C.C.(N.S.) 392 (1899) ................................................................................................... 12

Williams and Company, Inc. v. Allied Sales o,fColumbus, 10th Dist. No. 75AP-165,

1975 WL 181914 (Nov. 13, 1975) .................................................................... .......... ....... 33

vi

Federal Cases

Abbot v. National Bank Uf'Comnzerce,175 U.S. 409, 20 S.Ct. 153 (1899)........ ........................... 48

Alberding v. Brunzell, 601 F.2d 474 (9th Cir. 1979) ...... ...,.... ...................... :..........................,... 18

Anastas v. American Sav. Bank (In re Anastas), 94 F.3d 1280 (9th Cir.1996) .............................. 9

Arandell Corp. v. Am. Elec. Power C'Co., Inc., No. 2:09-cv-231, 2010 WL 3667004 (S.D.OhioSept.15, 2010) ...................................................................... .. .... .................... ......... 27

Argentieri v. Fisher Landscapes, Inc., 15 F.Supp.2d 55 (D.Mass.1998) ..................................... 35

AT&T Universal Card Services v. Mercer (In re Mercer), 246 F.3d 391 (5th Cir. 2001) ............ 9

Avery v. First Resolution 11Ianagement Corp., 568 F.3d 1018 (9th Cir. 2009) ...................... 20, 21

Bank One, Utah v. Guttau, 190 F.3d 844, 849 (8th Cir. 1999).. ..................................................... 5

Barnes v. Advanced Call Center Technologies, LLC, 493 F.3d 838 (7th Cir. 2007) .................. 24

BE & KConst. Co. v. N.L.R.B., 536 U.S. 516 (2002) ................ ..................:.............................. 36

Beler v. Blatt, Hasenmiller, Leibsker &Moof•e, LLC, 480 F.3d 470 (7th Cir. 2007)................... 38

Butz v. Economou, 438 U.S. 478 (1978) ................................................... .. ...... ................... 48

Chase Bank USA, N.A. v. iVfcCoy, 131 S.Ct. 871 (2011) ........... .........................>.......................... 9

Cli!IACC) Automotive Systems, Inc. v. Wanxiang America Corp., 589 F.3d 235 (6th Cir.2009)... 16

Cochrane v. Turner, 582 F.Supp. 971 (D.C.N.C. 1983)...... ......................................................... 18

Cole v. Mileti, 133 F.3d 433 (6th Cir. 1998) ............................... ........ .... ............................ 2 , 3

Combs v. International Insurance Co., 354 F.3d 568 (6th Cir. 2004) .................................... 18, 19

Corn Exchange Nat. Bank & Trust Co., Philadelphia v. Klauder, 318 U.S. 434 (1.943)............ 22

Curl v. Greenlee Textron, Inc., 404 F.Supp.2d 1001 (S.D.Ohio 2005) .......................................... 3

Davis v. NCO Portf'olio Mgmt., Inc., No. 1:05 CV 734, 2006 WL 290491 (S.D. Ohio Feb. 7,2006) ........................ ...... ......... ......... ......... ............................................... .. ........... 36

Deere v. Javitch, Block, and Rathbone, L.L.P., 413 F. Supp.2d 886 (S.D. Ohio 2006)................ 36

Donohue v. Quick C'ollect, Inc., 592 F.3d 1027 (9th Cir.2010).............................................. 34,37

DRFP, LLC v. Republic Bolivariana de Venezuela, No. 2:04-cv-00793, 2013 WI, 2096652(S.D.Ohio 2013) ... .. ............................................................. . . .. ......... .................. 27

Dudek v. Thomas & Thomas Altys. & Counselors at Law, LLC, 702 F.Supp.2d 826 (N.D.Ohio2010) ................................... . ...... ...... ................................................ . 3, 16, 27

Executone of Colurnbus, Inc. v. Inter-Tel, Inc., 665 F.Supp.2d 899 (S.D.Ohio 2009) ............... 27

Fiberlink Communications Corp. v. Magarity, 24 Fed.Appx. 178, 2001 WL 1658914 (4th Cir.2001) ... .. ........................ ................ .... .. ......... ..... .................. ......... ... .............. .......... 18

First National Bank in Plant Cit}:, v.Dickinson, 396 U.S. 122, 90 S.Ct. 337, 24 L.Ed.2d 312(1969)..... ... ...... ...................................................... ....... .... .......................... 5

vii

First National Bank of 1LfcCook ro. Fulkerson, 'No. 98-D-1024, 2000 WL 339141.21 (D. Colo.Mar. 7, 2000)..... .... ...... ......... .................. .............. ........................... ........... ... .... 6

Fr eyermuth v. Credit Bureau Services, Inc., 248 F.3d 767 (8th Cir.2001) ..> ......... ...........,>....... 35

Gabriele v. Am. Home Hortgage SeYvicing, Inc., 503 F. App'x 89 (2d. Cir. 2012) ...................... 37

Gade v. National Solid Wastes ManagententAss'n, 505 U.S. 88 (1992) ................ . ......... .. ......... 36

Gaisser v. Portfolio Recovery Associates, LLC, 571 F. Supp. 2d 1273 (S.D. Fla. 2008) ............. 49

Gates v. Asset Acceptance, LLC, 801 F. Supp. 2d 1044 (S.D. Cal. 2011) .................................... 39

Gertz v. Robert ffTelch, Inc., 418 U.S. 323 (1974) ....................................................................... 37

Gionis v. Javitch, Block & Rathbone, 405 F.Supp.2d 856 (S.D.Ohio 2005) . . .............................. 44

Gionis v. Javitch, Block, Rathbone, LLP, 238 Fed.Appx. 24,

2007 WL 1654357 (6th Cir. 2007) ..... ........................................................................ ....... .. ... 35

Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975) .............................................. ................... 36

Great.Plains Trust Co. v. Union Pacific R. Co., 492 F.3d 986 (8th Cir. 2007) ...................... 17, 20

Guild v. Meredith Village Sav. Bank, 639 F.2d 25 (1st Cir. 1980) .............................................. 29

Hahn v. Triumph Partnerships LLC, 557 F.3d 755 (7th Cir. 2009) ... . ......... .. ................. 34, 37, 39

Hansberry v. Lee, 311 U.S. 32, 61 S.Ct. 115, 117 (1940) ........................................................... 47

Harper v. Collection Basreau of Walla Walla, Inc., No. C06-1605, 2007 WL 4287293(W.D.Wash. Dec. 4, 2007) .. . ......... . ......... . ........................................ ............ ... ........ . . . .............. 21

Hartman v Great Seneca Fin. Corp., 569 F.3d 606 (6rh Cir. 2009), cert denied 130 S.Ct. 1688(2010) ..................................................................................................................................... 37

Harvey v. Great Seneca Fin. Corp., 453 F.3d 324 (6th Cir. 2006) ........................................ 36, 39

Heard v. Bonneville Billing and Collections, 2161F.3d 1087 (10th Cir. 2000) ............................ 42

Heintz v. .Ienkins, 514 U.S. 291 (1995),...... .. .. ................... ........................................ .. 39

Helnaers v. Anderson, 156 F.2d 47 (6th Cir. 1946), aff'd. sub nom Cope v. Anderson, 331 U.S.461, 466 67 S.Ct. 1340, 91 L.Ed. 1602 (1947) ............ .................... ......... ......... ................ 3,4

Hemmingsen v. Hesserli & Kramer, P.A., 674 F.3d 814 (8th Cir. 2012) ..................................... 40

Herbert v. Lando, 441 U.S. 153 (1979). ......... ...............................,........................... ......... 37

Hibbs v. Winn, 542 U. S. 88 (2004) ...................................................... .. ........................ 46

Hilliard v. Pennsylvania R. Co., 73 F.2d 473 (6th Cir. 1.934) .... . ................................................. 15

Household Credit Services, Inc. v. Pfennig, 541 U.S. 232, 124 S.Ct. 1741 (2004) ........................ 9

Hustler Magazine v. h.alwell, 485 U.S. 46 (1988) .......... .... ........ ......... ........................... 36

Imbler v. Pachtman, 424 U.S. 409, 96 S.Ct. 984, 47 L.Ed.2d 128 (1976) ............................. 40, 48

1'n re Spiegel, Inc., 86 F.T.C. 425, Doc. No. 8990, 1975 WL 173254 (1975), affd in relevantpart, 540 F.2d 287 (7th C'rr.1976) ..................................................... ......... ... .................. 21

viii

In re State Credit Assn., 86 F.T.C. 502, Docket C-2722, 1975 WL 1.73258 (1975) ................... 21

In The Matter ofJ.C. Penney Company, Inc., 109 F.T.C. 54, Docket No. C-3208, 1987 WL874620 (1987) .... ......... ......... ...................................................................... ....... ......... 21

Jenkins v. Heintz, 124 F.3d 824 (7th Cir.1997) ...................... .................................... 38

JFE Steel Corp. v. ICI Americas, Inc., 797 F.Supp.2d 452 (D.Del. 2011) ......................... ........... 3

Lamb v. Javitch, Block & Rathbone, LLP, No. 1:04-CV-520, 2005 WL 4137786 (S.D.Ohio2005) .. ..... ........................................................................... ... ..............................43

Lee v. Javitch, Block & Rathbone LLP, 601 F.3d 654 (6th Cir. 2010) ........................................ 37

Lembach v. Bierman, No. 12-1723, 2013 WL 2501752 (4th Cir. June 12, 2013)... .........,........ 37

Levin v. Diamond Slate Pountry Co., 175 F.Supp. 851 (D.Del.1959) .......................................... 14

Lewis v. ACB Business Services, 135 F.3d 389 (6th Cir. 1998) .......... . ........................................ 44

LifeWise Master Funding v. Telebank, 374 F.3d 917 (10th Cir.2004) ......... .. ......... . ................... 22

Manufacturer's Hanover Trust Co. v. Ward (In re Ward), 857 F.2d 1082 (6th Cir. 1988)........... 8

McClellan v. Chipman, 164 U.S. 347, 17 S.Ct. 85, 41 L.Ed. 461 (1896).... ................................... 5

McDonald v. Smith,472 U.S. 479 (1985)....... ...................................................... ... .......... 36

Miami Valley Mobile Health Services, Inc. v. ExamOne Worldwide, Inc., 852 F.Supp.2d 925(S.D.Ohio 2012) ........................................................... .. .. .. ....................................... 16

Miller v. Javitch, Block & Rathbone, 561 F.3d 588 (6th Cir.2009) .......................... . ............. 10, 37

Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652,

94 L.Ed. 865 (1950) .................................. .. . . ....... ...... . .......................................... 47

Nat'l Bank v. Commonwealth, 76 U.S. 353, 19 L.Ed. 701, 9 Wall. 353 (1869) ....... .. ......... . .......... 5

New York Times Co. v. Sullivan, 376 U.S. 254 (1964) ............... ............... .... ... .... ..................... 37

1Vorthern Pczcific Ry. Co. v. United States, 277 F.2d 615 (lOth Cir. 1960) ................................... 29

O'Bryne v. :Portfolio Recovery Associates LLC;h^ro. No. 12cv447-IEG, 2013 WL I223590(S.D.Cal. Mar. 26, 2013) . ........................................................ ................. ..... . ................ 10

Order of United Commercial Travelers ofAmerica v. Wolfe, 331 U.S. 586, 67 S.Ct. 1355, 91L.Ed. 1687 (1947) ....... ................ .... ......... ....... ....................................................... 14

OYmond v. Anthem, Inc., No. No. 1:05-cv-1908, 2008 WL 906157 (S.D.Ind. Ivlar. 31, 2008) .... 3

O'Rourke v. Palisacles Ac.quisition XVI, LLC, 635 F.3ci 938 (7th Cir. 20l l.) .............................. 39

Pollice v. National Tax Funding, L.P., 225 F.3d 379 (3d Cir. 2000) .......................................... 35

Professional Real Estate.Investors, Inc. v. Coluntbicr Pictures Industries, Inc., 508 U.S. 49(1993) ............. ....... . ................................................ ..... ................. ... ..... .................. 36

Rael v. Davis, No. 06-81, 2006 WL 2346396 (S.D.Ind. Aug. 11, 2006) ...................................... 35

Richards v. US., 369 U.S. 1, 82 S.Ct. 585 (1962).......... ........................................................,.... 20

ix

Rickenbach v. Wells Fargo Bank, N.A., 635 F. Siapp. 2d 389 (D.N.J. 2009) ............................... 49

Riermersma v. Messerli & Krarner. P.A., No. 07-3898, 2008 WL 2390729 (D. Minn. June 9,2008) ..................... . ... . ............. ............................................................ ...... ... 35

Satre v. Wells Fargo Bank, NA, No. 11-16099, 2013 WL 491550 (9th Cir. Jan:. 2, 2013).......... 37

Schroyer v. Frankel, 197 F.3d 1170 (6th Cir. 1999).. ........................... ........................................ 37

Shula v. Lawent, 359 F.3d 489 (7th Cir. 2004) ....................................................... . .... 35

Sonic Auto.9 Inc. v. Chrysler Ins. C'o., No. 1:10-cvr 717, 2011 WL 4063020

(S.D.Ohio Sept.13, 2011) .......................... .. . . .. ......... .............................................. 3 , 27

Sprini Communications Co., L.P. v. APCC Services, Inc., 554 U.S. 269,

128 S.Ct. 2531 (2008) ........ .......................................................... ... ......... ...................... 22

Tuttle v. Equifax Check, 190 F.3d 9 (2d Cir.1999) ......... ............. ......... 35

U.S. v. Bareiz, 411 F.3d 867 (7th Cir. 2005) ....................................................... ................... 22

Wallace v. Kato, 549 U.S. 384, 127 S.Ct. 1091, 166 L.Cd..2d 973 (2007) ..................................... 3

Washington v. Roosen, Varchetti & Oliver, PPLC, 894 F.Supp.2d 1015 (W.D.Mich. 2012)..... 35

W hite v. Nicholls, 44 U.S. 266 (1845) ....... ..... ...................................................... ................. 48

Wholesale Supply Co. v. South Chester T ube Co., 20 P.R.D. 310 (E.D.Pa.1957) ........................ 18

Willits v. Peabody Coal Co., 188 F.3d 510 (Tab1e), 1999 WL 701916 (6th Cir. 1999) .............. 18

Winn v. Zlnifsnd CCR Partners, No. 06-447, 2007 WL 974099 (D.Ariz. March 30, 2007)......,. 35

Other State Cases

Abraham v. General Cas. Co. of Wisconsin, 217 Wis.2d 294 576 N.W.2d 46 (1998) .... 17, 19, 30

Aviation Credit Corp. v. Batchelor, 190 So.2d 8(F1a. App. 1966) .............................................. 17

Beyers v. Richmond, 594 Pa. 654, 937 A.2d 1082 (Pa. 2007) ................................................................................ 45,49

BIIP Petroleudn (Americas), Inc. v. Texaco Ex,ploration and Production, Inc., I P.3d 1253(Wyo. 2000) ............ ...... .. .................... ........................................ . ..................... 19,30

Born v. Hosto & Buchan, PLLC, 2010 Ark. 292, 372 S.W.3d 324 (2010) .................................. 49

Brossman v. Federal Deposit Ins. Corp., 510 A.2d 471 (Del:1986) ............................................ 20

Brown v. Hathaway, 80 S.E. 959 (W.Va. 1914) .................................. ....... .... .................. 19

Bruner v. Alartin, 93 P. 165 (Kan. 1907) .................................................................. .................. 18

Bryant v. Silverman, 146 Ariz. 41, 703 P.2d 1190 (1985) ............................................................ 17

CAC V of Colorado v. Stevens, 248 Or.App. 624, 274 P.3d 859 (2012) ........................... 18, 20, 21

Chevy Chase Bank v. 11%IcCamant, 512 S.E.2d 217 (W.tiTa:1998) ................................................. 45

City Stores Co. v. Henderson, 116 Ga.App. 114, 1.56 S.E.2d 818 (1967)...................................... 8

Colhoun v. Greyhound Lines, Inc., 265 So.2d 18 (Fla. 1972) ...................................................... 17

x

DeLocrch v. Alfred, 960 P.2d 628, 192 Ariz. 28 (1998) .. .....,........... ................................. ........., 17

Duke v. Housen, 589 P.2d 334 (Wyo.1979) ....... .....................:....................... ......... .......20

Echevarria, McCalla, Raymer, Barrett & Frappier v. Cole, 950 So.2d 380 (F1a.2007) ............. 49

Employers Ins, of Wausau v. Ehlco Liquidating Tr•ust, 309 II1.App.3d 730, 243 I11.Dec. 384, 723N.E.2d 687 (1999) ........................ ..... ........... . ... .............. .. ..................................... 18

FIA Card Services, N.A. v. Weaver, 62 So.3d 709 (La. 2011) ...................................................... 9

Financial Bancorp, Inc. v. Pingree and Dahle, Inc., 880 P.2d 14 (Utah App. 1994) ................. 18

F'ulton County Adm'r v. Sullivan, 753 So.2d 549 (Fla. 1999) ....................................................... 19

Gantes v. Kason Corp., 145 N.J. 478, 679 A.2d 106 (1996) ........................................................ 19

Garber v. Harris, 104 I11.App.3d 675, 60 I11.Dec. 410, 432 N.E.2d 1309 (1982) .......................... 8

GreenAcresEnterprises, Inc. v. Freeman, 876 S.W.2d 636 (Mo.App.W.D. 1994) ................... 16

Gunn v Gunn, 74 Ga. 555, 58 Am.Rep. 447, 1885 WL 2454 (18$5) ...................... . ................... 11

Harodite Industries, Inc. v. Warren Elec. Corp., 24 A.3d 514 (R.I. 2011) .................................. 19

Hart v. Deshong, 8 A.2d 85 (Del. Super. 1939) ....... ................... ........................................ 14

Hawkins v. Barnes, 661 So.2d 1271 (I'la.Ct.App.1995) ............................................................... 26

Hossler vBarry, 403 A.2d 762 (Me. 1979) . ........................... ............................................... 18

Hunt Oil Co. v. Live Oak Energy, Inc., 313 S.W.3d 384 (Tex. App. 2009) ................................. 19

JR. Simplot Co. v. Jelinek, 275 Neb. 548, 748 N.W.2d 17 (2008) .............................................. 27

Jenkins v. Panama Canal Ry. Co., 208 P.3d 238 (Colo. 2009) .................................................... 17

Lancieri v Kansas City Improved Street Sprinkling Co. 95 Mo. App. 319, 69 S.W. 29 (Mo. App.1902) ............................................ ......... ..... .. ..... ..................................... . .......... .. . ... I1

McCann v. Foster Wheeler LLC, 48 Cal.4th 68, 225 P.3d 516, 105 Ca1.Rptr.3d 378 (2010)....... 17

Miller v. Stauffer Chemical Co., 99 Idaho 299, 581 P.2d 345 (1978) .................................. 18,32

Missouri State ex rel, Old Dominion Freight Line, Inc. v. Dally, 369 S.W.3d 773(Mo.App. S. Dist. 2012). . ......... ......... ............................................ . ................................. 18

.Mykulak v: Collins, 301 A.2d 313 (Del.Super. 1973)..... .. ....... ................................................. 31

Neuromonitoring Associates v. Centura Health Corp., _ P.2d . 2012 COA 136 (Aug. 16,2012) ............................................. ......... ......... ........................................ . . . ............... 17

Novack v. Cities Service Oil Co., 149 N.J.Super. 542, 374 A.2d 89 (1977)........... ........................ 8

Patamon v. Suburban Propane Gas Corp., 505 A.2d 1309 (table),

1986 WL 16466, (Del.1986) . .. .... ................................................................................ 14

Perkins v. Perkins, 541 P.2d 379 (Okl.App. 1975) ........................................ ... ......................... 18

Portfolio Recovery Associates v. King, 14 N.Y.3d 410 (2010) .............................................. 17, 18

President of Zlnion 13ank v. Knapp, 20 Mass. 96, 1825 WL 1533 (Mass. 1825).. ......................... 27

xi

R.N.C. Inc. v. Tsegeletos, 231 Cal. App. 3d 967, 283 Cal. Rptr. 48 (1st Dist. 1991) ................... 27

Roots v. Mason City Salt & 11%tining Co., 27 W.Va. 483 (W.Va. 1886) ................................................ 27

Runkle v. Pullin, 97 N.E. 956 (Ind. App. 1912) ........................ .. ... . ..................... 18

Saudi Basic Industries Corp. v. Mobil Yanbu Petrochemical C'o., Inc.,

866 A.2d 1(De1.2005) ............................ ................................................................ ...... 18 , 32

Scherer v. Hellstrom, 716 N. W.2d 307 (Mich.App. 2006) .................. ........, .............................. 18

Slayback vAlexander, 179 A.D. 696, 167 N.Y.S. 194 (1917) ..................................................... 26

Smith Barney, Harris Upham & Co., Inc. v. Luckie, 85 N.Y.2d 193, 623 N.Ir.S.2d 800, 647N.E.2d 1308 (1995) ......................................................................... . ........ ........ ............... 20

Smither v. Asset Acceptance, LLC, 919 N.E.2d 1153 (Ind.App.2010) ......................................... 26

Stanbury v. Larsen, 803 P.2d 349 (Wyo. 1990) ...................................................... ................... 17

State ex rel. Miller v. Midwest Service Bureau of 7opeka, Inc., 229 Kan. 322,

623 P.2d 1343 (1981) ........................................... ... ..... ................................................. 42

State F'arm Mut. Auto. Ins. Co. v. Roach, 945 So.2d 1160 (Fla. 2006) ........................................ 18

Thompson by Thompson v, Crawford, 833 S.W.2d 868 (Mo. 1992) ............................................ 20

Tornesello v. Tisdale, 948 A.2d 1244 (Me. 2008) .. ........ .......... .... ......... ............................. 18

Toth v. Mansell, 207 111. App. 3d 665, 152 Ilt. Dec. 853, 566 N.E.2d 730 (1 st Dist. 1990).,....... 27

Tullis v. Georgia-Pacific Corp., 45 S.W.3d 118 (Tex.App. 2000) ....... ....... .... ... ....... ........ . ......... 18

Unifund CCR Partners v. Sunde, 163 Wash.App. 473, 260 P.3d 915 (Wash.App. 2011) ........... 18

West v. Theis, 15 Idaho 167, 96 P. 932 (1908) ....................................................................... 17,18

Western Coal and Mining Co. v. Jones, 27 Cal.2d 819 (1946) ................................................................................. 17

Worrel v. Farmers Bank of State of Del., 430 A.2d 469 (Del. 1981) ........................................... 18

Wright v. Campbell, 277 S. W.3d 771 (Mo.App. W.D.2009) ...... ................................................. 18

Ohio Statutes

R.C. § 1.41 ................... . .... . ...... ........................... ................................................................ 46

R.C. § 1.47 ......... ........................................................................................ . ......... 45,46

R.C. § 1.49 ................................................................ .. .... ...... . ........ ........................... 41

R.C. § 1.51 .............................. . ........ ...... ....................................................... . ..46

R.C. §§ 1321.35 et sey. .... ......................................................................................... ........ .... . ....... 45

R.C. § 1321,36 .............................................................. ....... ... . ..................................46

R.C. § 1321.41 ..................... . .... .... .... ... ...................................................................... 46

R.C. § 1321..44 .............. . . . .............. ................................................................ ... ........ 46

R.C. § 1321,45 .............................................................. . ...... .. ... ............................ 46

xii

R.C. §§ 1345.01 to 1345.13 (1972) ........... ............................................................ .. . . . 41

R.C. § 1343.03 ......................................................... .. . ...................... ....... . ....................... 34

R.C. § 1345.01 ................................. .. ... . . .. ........................................ 40, 41, 43, 44

R.C. § 1345.09 ...................................................................................................... . 43

R.C. § 1345.12 ..................................................................................... ..... . ....................... 47

R.C. § 1345.13 ..................... . ...... . ....... ..... . ...... ................................................... . 49

R.C. § 1901.22... ... .. . ......... . ....... ........................................................................... 47

R.C. § 2305.03 ........................................................................................... ... . 16, 24, 27, 32

R.C. § 2305.06 ................................................... .... .. ... ......................................... 14, 28

R.C. § 2305.07... ................ ..... ............................................................................... . .. 14 , 28

R.C. § 2305.08 ......................................................................... .............. ......., . .................... 12

R.C. § 2305.20 ........................................... ...,.... ............................................................... .. 15

R.C. § 5725.01 ........... ..... ... ....................................................................... ................... 44

Federal Statutes

12 U.S.C. § 24(Seventh) ............. .. .. ........... .............................................................. 5

12 U.S.C. § 36 . .. ... ... ..... .................................................................................. ..... .......... 5

12 U.S.C. § 5517......................................... .............................. .... . ................................ 38

15 U.S.C. § 1692f(1) ................ ... .. ... ...................................................... ................. 34

15 U.S.C. § 1632....... ............................................................................. ......... ............... 9

15 U.S.C. § 1692i............................................................ ..... .. ....... ................. 20, 21, 32

15 U.S.C. § 16921 .................... ........... .... .. . ........................................................... ....... . 38

15 U.S.C. § 1692n. ...................................................................... ....... . .. .................. 21

15 U.S.C. § 45 ......................................................... .. . .. ... .................................... 20

Credit Card Accountability Responsibility and Disclosure Act of 2009, Public Law 111-24, 123Stat. 1734 (2009).......... .......................................................................................................... 9

Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, Title X, §1089(2), July 21, 2010, 124 Stat. 1376 .................................................................................... 38

Other State Statutes

12 Okl.St.Ann. § 105 .............................................. ......... ............. ...... ............................. 17

42 Pa.C.S.A. § 5521 ................. ...... .... . ...................................................................... 17

Ala. Code § 6-2-16 .............. .................................................................. .................. .............. 13

Ariz. Rev. Stat. § 12-506 ............................................................ ................................................. 17

Ariz. Rev. Stat. § 12-508 ................ ................................................................................. 13

Xlil

Ariz. Rev. Stat.Ann. § 12-506 ......................................... .................................................. ....... 16

Ca1.Civ.P. Code § 361 ................................................... . .......... .... ...... .............................. 16

Col. Rev. Stat. Ann. § 13-80-110 ....... ... .. . ... ................................................................ 16

Del. Code Ann., Tit. 10, § 8106 ................................................................................................ 21

Del. Code An.n., Tit, 10, § 8108 ................................................. .................................................. 21

Del. Code Ann., Tit. 10, § 8109............ ................................................................................. 21, 31

Del. Code Ann., Tit. 10, § 8117 .................. ................... ...................................................... 20,21

Del. Code Ann., Tit. 10, § 8121 ................................................... ....... .................................. 16

Fla. Stat. Ann.. § 95.10 ................ ........ .. . .... ....... . .......................................................... 16

Ga. Code Ann. § 9-3 -112 .... ............................................................................................. 13

Idaho Code § 5-239 ...................................................... ......................................................... 16, 19

Ill. Conipiled Stat. Ann., Ch. 735/13-210 ... ......... ................................................................. 16

Ind. Code § 34-11-4-2 .......... ..... .............................................................................. .... ... 17

Ind> Stat. § 34-11-4-2 .................................................................... ...... ........................... 18

Iowa Code Ann. § 614.11 ......................... ......... ...... ..................................................... 13

Kansas Stat. Ann. §§ 50- 623 to 50-679a (1973) ................................................... .. ... ....... . 41

Kansas Stat. Ann. § 50-624 ............................................................... ........ ... .... ................... 41

Kans. Stat. Ann. § 60-516 .............. ....... ..... . . . ............................................... 17

Ky. Rev. Stat. § 413.320. .. .................................................................................. ............. 17

Maine Rev. Stat. Ann., Tit. 14, § 866 ........................................ .. ... ... ...................... 17, 19

McKinney's CPLR § 202 .......................... . .. ....................................................... 17 , 18 5 20

Mich. Comp. Laws Ann. § 600.5861 ................................................................. ... .......... 17 , 19

N.C.Gen.Stat.Ann. § 1-21 ............................................ ....... ................................ 17

Nev.Rev.Stat. § 11.020 .................... . ........ ..... .. ......... .............................................. 17

Or. Rev. Stat. § 12.430 . ..................... ............................................................ ... . 17 , 18

Rev. Code Wash.Ann. § 4.18.020 ................................... ..... ............................... 17 , 19

Utah C.A. 1953 § 13-11-3(6) ....................... .. .. ..... ........................................................... 41

Utah C.A.1953, 13-11-1 to 13-11-23 (1973) ................................................ ....... ............... 41

Utah Code Ann. 1953 § 788-2-103 .............................. ..... ... .. ................................. 17

Va. Code Ann. § 8.01-247 ......... . ................................................................ 17 7 19

Vernon's Ann. Miss. Stat., § 516.190 .............................................................. ................. 17

Vernon's Tex. Stat. Code Ann., Civil Practice & Remedies Code § 16.067 ................................ 17

W. Va. Code, § 55-2A-2 ........................... .,. ........................................................................... 17

xiv

Wisc. Stat. Ann.. § 893.07 .............................................. .. .... ............................................. 17

Wy, Stat. Ann.. § 1-3-117.............................................................................................................. 17

Constitutional Provisions

Ohio Constitution, Art. II, Sec. 28 ..................... ...... .................................................... 24, 28

Ohio Constitution Article IV § 2 . ..................... ............................................. . ... ..... 45

Ohio Constituti:on Article IV, § 2(B)(1)(g) ....................................... ... ................................. 45

Ohio Constitution Article IV § 5 .................. .... .. ..................................................... 45

Rules

Civ.R. 3 (A) . ...................................................... ............... .. .............................................. 47

Civ.R. 8(A)(2) .............................. .......... ...... ...................................................... . ...... . .... 33

Civ. R. 84 ....... . ....... ....... ... ............................................................................. .................. 33

Civ.R. 84, Official Form 2 ..................................................................... .............................. 33

Civ.R. 84, Official Foixn 3 ................................. .... .................................................. .. 33

S.Ct. Rules of Practice, Appendix U ............................................................... ..................... 4

Regulations

12 C.F.R. § 5.30 ................... .... .... .......................................................... .. . ........ 5,6

12 C.F.R. § 7.4003 ... ......................................................................... . . ................................. 5

12 C.F.R. § 7.4008 ................................ . .................. .......... ................................................ 5

12 C.F.R. §§ 7.4000-7.4009 .............. .......................................................................................... 5

12 C.F.R. Part 32 . ........ ...................................................................... .. ................................ 5

Other Authorities

11 S. & C., 950; III Curwen, 1.941...... .... ................................................... .. ... .................. 15

III Chase, 1769, February 18, 1831, sec. 4 ............... ....... ... ...... ................................ . 15

1 Am. Jur. 2d Accounts and Accounting § 24 .. ........... ................................. ..... .. 26

2 Larry Lawrence and Bryan D. Hull, Payanent Systems (2012) ......... ......... ...........:.................. 7

75 Ohio L. 597 ..... ..... ................................................... .. ............................................... 15

98 Federal Reserve Bulletin, no. 2(Juble, 2012) ....................................................... .................. 4

Amend Sub. H.B. 103, 134 Ohio Laws 1233 ............. ................................. ..... ...................... 41

Amend. Sub. Senate Bill 80, 2004 Ohio Laws 144 ....... ................ ^..,.............................. 14, 15, 28

Annotation, C'hoice of lativ as to applicable statute of limitations in contract actions,

78 A.L.R.3d 639 (1977) . .............................................................................. .................. 16, 19

Annotation, Limitation of actions as applied to account stated, 51 A.L.R.2d 331 (1957)..... 12, 13

xv

Annotation, Payment on account, or claimed to be on account, as reinoving or tolling statute oflimitations, 156 A.L.R. 1082 (1945) ............................ ..... . .. .................................. 13

Annotation, nen is account "ynutudl "for purposes o; 'rule that limitations run ftotn last item inopen, current, and mutual account, 45 A.L.R.3d 446 (1972) .................................................. 12

Barkley Clark and Barbara Clark, The Law of Bank Deposits, Collections and Credit C'ards(2012) .. ............ ...... ..... ......................................... ..... .. . .. .... ....... ............... 5, 7, 8

Black's Law Dictionary (9th ed 2009) .... .......... . .. .... ... ................ ...... . ........................... 22, 32, 40

Brook v. Montague, 2 Cro. Jac. 90 (1606) .. ...... ... .............................................................. 48

Edward P. Weeks, Treatise on Attorneys & Counsellors at Law, (Fred B. Rothman & Co. 1997)(1878) ... ....................................................................................... ......... ... . ........................... 48

FTC, Statements of General Policy or Interpretation Proposed f?f'^cial Staff Commentary onFair Debt Collection Practices Act, 53 Fed. Reg. 50097-50107-08 (Dec. 13, 1988) ...,......... 35

General Code Section 11234 ........................................................................ ..... ..................... 15

H.R. 10191, § 804(6), 94"' Congress, 1 S` Sess. (Oct. 1975) . ......... .. . . . ........................................... 37

H.R. Rep. 99-405, 1986 U.S.C.C.A.N. 1752 (Nov. 26, 1985) 37

H.R. Rep. No. 88, 111th Cong., Ist Sess. 2009, 2009 WL 1137123,

2009 U.S.C.C.A.N. 453, 454 (Apr. 27, 2009) ....................... .................................................... 5

1-learings on S656; & 918, S. 1130, and H.R. 5294 Before the Subcomm. on Consumer Affairs offthe Conam. on Banking, Housing and Urban Affairs, 95th Cong. 44 (1977) ....... .. .................. 43

Hodg,ron v. ^S'carlet, I B. & Al. 232 ............................................. .. .................................... 48

http://www.aliexpress.com/item/Nf;W-300PC-I3rass-lOmm-Fumiture-Upholstry-Nails-Tacks-Studs/5 823 663 86.h.tm1 ........ ..... ... . ........ ................................................... . .............. 4

http://wTww.bloglines.com/company/11391945/Donohoo. Donovan.Jr.And,Associates.513-576-6770 .. .. .... ......... ......... ............................. ....... ..... ... ...... ............................... 4

http://w-ww.census.gov/compendiafstatab/2011/tables/11 s 1187.pdf .............................................. 4

http://www.consumerfinance.gov/credit-cards/agreements/ ........................... .. ......... . .................................... 10

http://www.federalreserve.gov/Pubs/BWletin/2012/PDF/scfl.2.pdf ..... .............................. ........... 4

http://www.fdic.gov/bank/individual/failed/banklist.html ............................................................ 29

http://www.ffiec.gov/nicpubweb/Content/HELP /N1ICfaq.htm.................................. . .................... 6

http:; Iwww.ffiec.gov/nicpubweb/nicu-eb/InstitutionHistory.aspx .............................................. 6.7

http://www.federalreserve.gov/zlewsevents/press/orders/2013orders.htm ................................... 29

http://www.irs.gov/uac/Pay-Taxes-by-Credit-or-Debit-Card .......................... . .. ... .. . . . .................... 4

http:/h,Y-ww.occ.gov/publications/publi cations-by-type/comptrollers-handbook/credit.pdf............ 5

J. M. Spanbauer, 7he First Amendanent Right To Petition Government For A Redress OfGrievances: Cut From A Different Cloth. 1 Hastings Const. L.Q. 15 (1993) ....... ... ................. 48

xvi

Legislative Service Commission, Final Analysis, Amend. Sub. Senate Bill 80, (2004) .. .. ......... 15

Office of the Cotnptroller of the Currency, Cornptroller L1'andbook, Credit Card Lending .......... 5

Random House Dictionary, p. 473 (1966) ............ ......... .. ................. .............................. 42

Restatement (Second) of Conflict of Laws § 142 (1971) ......... .. .............................................. 3,20

Restatement (Second) of Conflict of Laws § 142 (1988) . ...................................... ...... .... ... ........... 3

Restatement (Second) of Conflict of Laws § 195 (1971) ............................................................... 6

Restatement (Second) of Contracts § 31 (1981) ..................................................................... .... 8

Rev. Stat. 4990 . . . . .. . .. .. .. . . . . . .. .. ... ... . .. . .. .. .. .. ..... .. .... ... .. ... . .. .. .. .. .. . .. .. . . ..... .... . . . .... .. .. .. . .. . ... .. 15

S. Rep. No. 382, 95th Cong., 1 st Sess. 1977, 1)77 U.S.C.C.A.N. 1695 ...................................... 43

S. Rep. No. 382, p. 95th Cong., 1 st Sess. 1977, 1977 U.S.C.C.A.N. 1695 .................................. 21

Sub. H.B. 545, 2008 Ohio Laws 91 ........................................................................ ...... ....... 45

Swan's Statutes, 555, § 4 .................................................. ...............,... ....................................... 15

T.L. Anenson, Absolute Inirnunity From Civil Liabilitj,: Lessons For Litigation La-wyers, 31Pepp. L. Rev. 915 (2004) .. ............ .. . .... ......................................................... ....... ..... 48

Tatge, Tatge, & Flaxman, American Factoring Law (BNA 2009) ........................................ 22, 23

Tatge, Tatge, & Flaxm.an, American Factoring Latv Supplement (BNA Supp. 2011)........... 22, 23

Uniform Consumer Sales Practices Act, §2 .......................................................... ...... ... 41 , 47

Uniform Laws Annotated, tTniform ConsLimer Sales Practices Act, References & Annotations 41

Williston on Contracts (4th ed.).................................................................. .................................. 22

xvii

INTERESTS OF AMICI CURIAE

The Ohio Creditor's Attorney's Association (OCAA) represents the shared interests of its

member attorneys and law firms whose primary practice is the collection of consumer debt in

Ohio. The OCAA educates its members and others on the laws that impact legal practices

involving the protection and assertion of creditors' rights. OCAA actively encourages

compliance with legislation regulating retail collections, including the Fair Debt Collection

Practices Act, 15 U.S.C. §§ 1692 et seq. (FDCPA). OCAA members engage in consumer debt

collection, and their conduct is often subject to challenge in lawsuits under the FDCPA.

DBA lnternational (DBA) is the nonprofit trade association that represents the interests of

companies that acquire distressed asset portfolios on. the secondary market. Founded in 1997 by

a small group of companies to provide a forum to advance best practices within the industry,

today DBA has grown to represent over 600 companies. DBA provides its members with

netvvorking, educational, and legislative advocacy opportunities through an annual conference,

an executive summit, regional seminars, state and regional committees, newsletters, webinars,

teleconferences, and other media. DBA maintains a code of ethics and a national certification

progranl which member companies must coinply with in order to maintain membership that

promotes uniform industry standards based on best practices. DBA is headquartered in

Sacramento, California.

Amici curiae OCAA and DBA urge the Court to reverse the Ninth District's decision and

find that: (a) the account stated cause of action at issue accrued in Ohio; (b) the cause of action

accrued when payment was not made; (c) the lawsuit properly prayed for interest in excess of the

statutory rate; and (d) the Ohio Consumer Sales Practices Act does not apply to debt collection or

the litigation activities of attorneys regarding assigned credit card debts.

1

STATEMENT OF FACTS

In the interests of judicial economy, Amici Curiae adopts by reference the Statement of

Facts and Case submitted by Appellants Cheek Law Offices, LLC, and Attorney Parri

IIockenberry.

ARGUMENT

Proposition of Law No. I: Absent an agreement otherwise, a cause of action against anOhio consumer for breach of a credit card contract accrues in Ohio.

Proposition of Law No. II: Absent an agreement otherwise, a claim for breach of a creditcard contract accrues when a consumer fails to make a required payment, and subsequentinsufficient payments do not cure the breach.

Because the issue of "where" and "when" a cause of action on a credit card claim accrues

are intertwined, these to propositions of law will be addressed together.

A. Rule of lexa fori

Ohio has adopted the "rule of lex fori°" view that the law of the forum governs procedural

statute of limitations issue. Kerper v. Wood, 48 Ohio St. 613, 622, 29 N.E. 501 (1891); Howard

v. Allen, 30 Ohio St.2d 130, 133, 48 N.E.2d 224 (1972); Vaccariello v. Srnith & Nephew

h'ichards•, Inc., 94 Ohio St.3d 380, 391, 763 N.E.2d 160, 2002-Ohio-892, p. 16 (Stratton, J.,

concurring in part).

Accordingly, "[a]bsent an express statement that the parties intended another state's

statute of limitations to apply, the procedural law of the forum governs time restrictions on an

action for breach[.]" Nationwide Mut, Fire Ins. Co. v. Rose, 9th Dist. No. 05CA008814, 2007-

Ohio-1216, at7 (quoting Cole v. Mileti, 133 F.3d 433 (6th Cir. 1998)).'

1 When there are conflicts as to the appropriate statute of limitations, the Restatement (Second)of Conflict of Laws § 142 (1971) provides that an action can proceed if the action is not barredby the statute of limitations of the forum state. Cole v. Mileti, 133 F.3d 433, 437 (6th Cir.1998).In 1988, § 142 was revised to allow a more flexible analysis, taking various interests intoaccount. Restatement (Second) of Conflict of Laws § 142(2)(a), (b) (1988). To date, no Ohio

2

B. Cause of Action

A cause of action is "the fact or combination of facts which gives rise to a right of action,

the existence of which affords a party a right to judicial interference in his behalf." Baltimore &

Q.R. Co. v. Larwill, 83 Ohio St. 108, 93 N.E. 619 (1910) syllabus par. two; Helmers v. Anderson,

156 1.2d 47, 50 (£th Cir. 1946), aff'd. sub nom Cope v. Anderson, 331 U.S. 461, 466 67 S.Ct.

1340, 91 L.Ed. 1602 (1947); Wallace v. Kato, 549 U.S. 384, 388, 127 S.Ct. 1091, 166 L.Ed.2d

973 (2007).2

A cause of action on a contract and a liability arising by virtue of a contract are neither

synonymous nor necessarily contemporaneous. Instead, it is the occurrence of a "last significant

event" by which a cause of action arises or accrues:

The place where a cause of action arises is the place where the operative facts that giverise to the action occur. Although it may be necessary that a number of separate factsexist in order to create a cause of action, yet it is the happening of the last of such factswhich brings the cause of action into existence. Sucli an act, or the failure to act wherethere is a duty to do so, is the critical event which transforms a potential liability into onepresently enforcible. [sic] See Brown v. O'Keefe, 300 U.S. 598, 603, 57 S.Ct. 543, 81L.Ed. 827. A liability, whether created by contract or by statute, is not the same as acause of action. A person may execute a note payable in the future. Such an obligation isa liability, but it does not become a cause of action until the note matures and the makerfails to pay. A business man may make a contract obligating him to manufacture anddeliver certain goods at a time in the future. Ilis obligation under that contract is aliability, but no cause of action exists against him uirtil the date of performance arrivesand he fails or refuses to perform.... The failure of the stockholder to pay on or before thedate set for payment by the Comptroller is accordingly the critical event whichtransfonned the liability into a cause of action. At that time and upon the happening ofthe last of those events the Statute of Limitations began to run. .... The time when a cause

Courts have used the 1988 revision of § 142, and most federal courts have predicted this Courtwill adhere to the 1971 version. Ormond v. Anthena, Inc., No. 1:05-cv-1908, 2008 WI,906157(S.D.Ind. Mar. 31, 2008); Dudek v. Thomas & :lhomas Attys. & Counselors at Law, LLC, 702F.Supp.2d 826, 834 (N.D.Ohio 2010); JFE Steel Corp. v. ICI Americas, Inc., 797 F.Supp.2d 452,468 (D.Del. 2011); Sonic Automotive, Inc. v. Chrysler Ins. Co., No. 1:10-CV-717, 2011 WL4063020, *5 (S.D.Ohio Sep 13, 2011) (collecting cases). But see Curl v. Greenlee Textron, Inc.,404 F.Supp.2d 1001, 1004 (S.D.Ohio 2005).2 ("[I]t is the standard rule that [accrual occurs] when the plaintiff has a complete and presentcause of action, ... that is, when the plaintiff can file suit and obtain reliefl.]") (internal quotations& references omitted).

3

of action arises and the place where it arises are necessarily connected, since the same actis the critical event in each instance. The final act which transforms the liability into acause of action necessarily has both aspects of time and place. It occurs at a certain timeand in a certain geographical spot.

Helmers v. Anderson, 156 F.2d 47, 50-5 1; State ex rel. GVilson v. Pi•eston. 173 Ohio St. 203, 208,

181 N,E.2d 31 (1962). The law of the forum is used to assess available remedies and causes of

action.. Alropa Corp. v. Kirchn,ehm, 138 Ohio St. 30, 34, 33 N.E.2d 655 (1941).

1. Nature of Credit Cards

In determining the time and place of accrual of a cause of action on a credit card debt, it

is helpful to understand the nature of a credit card. Credit cards became ubiquitous in the last

decades of the twentieth century as credit became easier to obtain. According to the U.S. Census,

the U.S. had an estimated 183,000,000 credit cardholders in 2011, who purchased over two

billion dollars of goods and services.3 Credit cards are now available for use in almost every

imaginable transaction in commerce as a form. of payment, from buying brass tacks from China4

or the professional services of an accountant,5 to paying court filing feess or taxes.7

According to the Federal Reserve, more than 75% of families have credit cards, and as of

2012, nearly 40% carry a balance.8

' U.S. Census Bii.reau, Statistical Abstract of the tlnited States: 2011, Table 1187,ht-tp://www;census.gov/compendia/statab/2011/tables/ 11sI187.pdf (accessed May 31, 2013).

http:!/wwvv.aliexpress.cozn/item/NEW-300PC-I3rass-10mm-Furniture-Upholstry-,Nails-Tacks-Studs/582366386.html (accessed May 31, 2013).` http://www.bloglines.com/company/11391945/Donohoo.Donovan.Jr.And.Associates.513-576-6770 (accessed May 31, 2013).6 S.Ct. Rules of Practice, Appendix G (credit card filing fee form).7 http://www.irs>gov/uac/Pay-Taxes-by-Credit-or-Debit-Card (accessed May 31, 2013).8 98 Federal Reserve Bulletin, no. 2, p. 66-67 (June, 2012) (online athttp://www.federalreserve.gov/Pubs/Bulletin/2012/PDF/scfl2.pdf) (accessed May 31, 2013);H.R. Rep. No. 88, 11 Ith Cong., 1st Sess. 2009, 2009 WL 1137123, 2009 U.S.C.C.A.N. 453, 454(April 27, 2009) (Credi-t Card Accountability Responsibility And Disclosure Act of 2009).

4

2. Credit Card Lending

National banks have the authority to engage in credit card lending under the National

Bank Act. 12 U.S.C. § 24(Seventh); 12 C.F.R. Part 32.9 While the relationship between the bank

and the cardholder is shaped by the Truth in Lending Act and Regulation Z, some aspects of the

relationship are governed by state law, including permissible interest rates, contract formation

and default and collections. Barkley Clark and Barbara Clark, The Law of Bank Deposits,

Collections and Credit Cards ^I 15.02 (2012) (hereinaftcr, Law qf Cr. Cards), T 15.09[1],

15.09[2][a], 15.09[2][b], 15.14[1]. .S'ee also 12 C.F.R. §§ 7.4000-7.4009, 7.4008(d)(10), (e)(1),

(4); Nat'l Bank v. Commonwealth, 76 U.S. 353, 362, 19 L.Ed. 701, 9 Wall. 353 (1869);Io

!llcClellan v. Chiprnan, 164 U.S. 347, 356-57, 17 S.Ct. 85, 41 L.Ed. 461 (1896).

3. Bank Locations & Payment Centers

Where a National Bank and its branches are located, is governed by federal law. 12

U.S.C. § 36; 12 C.F.R. § 5.30; Firstl'Vational Bank in Plant City v.Dickinson, 396 C.S. 122, 134,

90 S.Ct. 337, 24 L.Ed.2d 312 (1969). A National Bank's home state is "the state in which the

national batzk's main office is located." 12 C.F.R. § 5.30(d)(2). While National Banks are located

throughout the states and have various offices to carry out banking activities, those offices are

not considered to be a "branch" of the national bank unless it is a location "at which deposits are

received, or checks paid, or money lent." 12 U.S.C. § 36(j); 12 C.F.R. § 7.4003; Bank One, Utah

v. Guttau, 190 F.3d 844, 849 (8th Cir. 1999). Even if a facility operated by a bank is one at

which the bank receives deposits, accepts payments, lends money or pays checks, it is not

considered a branch if "the facility does not perznit nieinbers of the public to have physical

9 See Office of the Comptroller of the Currency, Cornpta^oller Handbook, Credit Card Lending(1996), http://ww-w.4cc.gov/publications/publications-by-type/comptrollers-handbook/credit.pdf.10 (national banks "are subject to the laws of the State, and are governed in their daily course ofbusiness far more by the laws of the State than of the nation. All. their contracts are governed andconstrued by State laws. I'heir acquisition and transfer of property, their right to collect theirdebts, and their liability to be sued for debts, are all based on State law.") (emphasis added).

5

access to the facility for purposes of making deposits, paying checks, or borrowing money (e.g.,

an office established by the bank that receives deposits only through the mail)." 12 C.F.R.

§5.30(d)(l)(ii)(A). For example, a loan production office is not a branch under federal law. First

National Bank of .McCook v. Fulkerson, No. 98-D-1024, 2000 WL 33914121, *4-8 (D. Colo.

Mar. 7, 2000).

Thu.s, the mere fact that credit card payments are remitted to a particular location in or

outside the forum is immaterial when the location where the payments are sent is neither the

Bank's main office nor a Bank's branch, but is instead, merely a payment processing facility. See

Restatement (Second) of f Conflict of 'Laws § 195, cmt. d(1971):

Money lent by a bank or deposited in a bank is usually repayable at the bank itself or,when the bank has branches, at the branch with which the customer dealt. In the absenceof an effective choice of law by the parties, the state of the applicable law in suchinstances will almost invariably be the state where the bank, or the particular branchthereof, is located.

In addition, according to the Federal Reserve's Federal Financial Institution Examination

Council's National Information Center,11 there were numerous institutions named First USA -

for example, First USA, Inc., RSS ID 1675601, two First USA Bank, National Association's

(one acquired the other in 1999, RSS ID 313513 and 427719), and First USA Card Services,

Inc., RSS Il) 2928498. First USA Bank, Nation.al Association was renamed Bank One,

Delaware, National Association in September 2002, and was acquired by Chase Manhattan Bank

USA, National Association on October 1, 2004, and then became a branch.12 First USA, Inc.,

was acquired by Banc One Corporation in June 1997, was renam.ed Bank One in 1998, and was

11 "The National Information Center (NIC) provides comprehensive information on banks andother institutions for which the Federal Reserve has a supervisory, regulatory, or research interestincluding both domestic and foreign banking organizations operating in the U.S."http://www.ffiec.gov/nicpubweb/Content/HELP/NICfaq.htm. (accessed May 27, 2013).12 http://www.ffiec.gov/nicpubweb/nicwebllnstitutionHistory.aspx?parID-RSSD-427719&parDT_END=99991231 (accessed May 27, 2013).

6

acquired by J.P. Morgan Chase & Co. in July of 2004. In March 1, 2005, Chase Manhattan Bank

IJSA, National Association was renamed Chase Bank USA, National Association, RSSID

489913."

4 Cardholder Agreements

In order for a credit card to be used to pay for any transaction, a number of contracts have

to be in place. In the prototypical bank issued card, there are three to four contracts in place

before any transaction can be funded by a credit card - the merchant must have a contract with

the financial network; the financial network must have a contract with the bank, the banks must

have contracts with each other, and the card issuer must have a contract with a cardholder. Law

of Cr. Cards 4,'1 15.02. In the m.erchant issued card context, there are three contracts - the

merchant must have a contract with the bank, the banks must have contracts with each other, and

the card issuer must have a contract with a cardholder. 2 Larry Law-rence and Bryan D. Hull,

Payment Systenzs § 17:2 (2012).

When the card is used to make a purchase, an additional sales contract must be entered.

into between a merchant seller and a cardholder buyer authorizing a payment by the card issuer.

Law of Cr. Cards ¶ 15.02[4]. The cardholder agreement between the issuing bank and the

cardholder may vary from bank to bank or year to year, but they typically contain fairly standard

terms, authorizing the issuing bank to make payment to the merchant for purchases on request; a

cardholder's promise to repay all credit extended; limiting liability for unauthorized transactions,

cancellation of credit privileges, periodic billing, TILA disclosures, and "the agreement is

usually made subject to the laws of the state where the issuing bank is domiciled[,] ... [which

13 http://www.ffiec.gov/nicpubweb/nicweb/InstitutionProfile.aspx?parID-Rssd-489913&parDT_I --N'T7=20050228 (accessed May 27, 2013).

7

allows] the issuer to export higher rates to consumers who live in states where the [interest rate]

ceilings may be lower." Law oaf'Cr. Cards'^ 15.02[4] [a].

Thus, with respect to the bank's claim against a cardholder for non-payment, it has

become widely accepted that "[c]redit card agreements are contracts whereby the issuance and

use of a credit card creates a legally binding agreement. * * * More specifically, a bank credit

card * * * is a tluee-party, three-part agreement between the bank, the consumer and the

merchant. * * * The agreement between the consumer/cardholder and the issuing baic, usually

contains a detailed description of each party's rights, duties and liabilities." Bank One, Columbus,

N.A. v. Palfner, 63 Ohio App.3d 491, 493, 579 N.E.2d 284 (10th Dist. 1989) (citations omitted).

Credit card debts are not created by the cardholder agreement; rather it is the use of the card that

gives rise to the debt:

Wllen an issuer of a credit card, like MasterCard, Visa or An-ierican Express, sends to theholder the card and the form describing the terins for its use, it makes "an offer [for] ...the formation of a number of contracts by successive acceptances from time to time," asthe card is used. Restatement (Second) of Contracts § 31 (1981). "A standard example ofa divisible offer is the continuing guaranty, the promise to guarantee performance ofobligations of a specified type as a third party may incur to the offeree from time totime." Ir,l., Comment b. The credit card relationship, properly analyzed, should be viewedas an offer by the issuer to create the opportunity for a series of unilateral contracts whichare actually formed when the holder uses the credit card to buy goods or services or toobtain cash.

The several state courts which have analyzed the contractual relationship with care haveadopted this line of reasoning. They hold that a contract is not formed wlien a credit cardis issued but rather unilateral contracts are form.ed each time the card is used. Garber v.Harris, 104 Il1.App.3d 675, 60 Ill.Dec. 410, 412-13, 432 N.E.2d 1309, 1311-12 (1982);IVovack v. Cities Service Oil Co., 149 N.J.Super. 542, 374 A.2d 89 (1977); City StoresCo. v. Henderson, 116 Ga.App. 114, 156 S.E.2d 818, 823 (1967).

A!lanufacturef•°s Hanover Trust Co. v. lVard (In re Tf'ard), 857 F.2d 1082, 1086-87 (6th Cir.

1988) (Merrit, J. dissenting). See also Law of 'Ca•, Cards ;^ 15.02, 15.02[2], 15.02[5]; Anastas v.

8

American Sav. Bank (In re A.nastas), 94 F.3d 1280, 1285 (9th Cir. 1996); 14 AT&1' Universal Card

Services v. Mercer (In re MerceY), 246 F.3d 391, 406 (5th Cir. 2001); FIA Card Services, N.A. v.

bVeaver, 62 So.3d 709, 71.8 (La. 2011);15 Chase Bank USA, N.A. v. McCoy, 131 S.Ct. 871, 879

(2011)(change in terrns notice not required to increase interest rate on default); Household Credit

Services, Inc. v. Pfennig, 541 U.S. 232, 243, 124 S,Ct. 1741 (2004).

5. Applicable Terms and Coraditioras

In this case, the parties were unable to establish by sufhcient evidence what the

applicable terms and conditions governing M. Jarvis's cardholder agreements provzded.16

Nonetheless, the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Card

Act) was signed into law on May 22, 2009. Public Law 111-24, 123 Stat. 1734 (2009). The Card

Act amended the Truth in Lending Act (TILA) and instituted a number of new stzbstantive and

disclosure requirements to establish fair and transparent practices pertaining to open-end

consumer credit plans. As provided in 15 U.S.C. § 1632(d), all credit card lenders are required

by federal law to post the governing terms and conditions applicable to credit cards issued, and

the Bureau of Consumer Financial Protection maintaiiis an online public repository of all such

14 (",[wT]e view each individual credit card transaction as the formation of a unilateral contractbetween the card holder and card issuer consisting of the following promise in exchange forperformance: the card holder promises to repay the debt plus to periodically make partialpayments along with accrued interest and the card issuer performs by reimbursing the merchantwho has accepted the credit card in payment.").15 ("[1]t is black letter law that, if a credit card company sends a notice of change in terms of theat^reement, the customer assents to the new terms by his continued use of the card.").

The Chase Cardholder agreement attached to Appellant's motion for summary judgmentshowed that the term default was defined to occur in the event "[w]e do not receive at least theminimum amount due by the due date and time due as shown on your billing statement." CheekLaw Offices Motion for Summary Judgment, Exhibit B (Exhibit A to Admission Responses, p. 3¶ 6). It also provided for interest at 2% per month after being six months past due. Id.

9

agreements.17 A search for the word "default" in the database reveals that "default" is almost

universally defined as including any "failure to pay [the minimum monthly amount] when due."

C. Actions for unpaid credit card debts

Ohio Courts have recognized that in bringing an action for an unpaid credit card debt, the

action can be maintained as either an express or an implied contract claim. Discover 13'ank v.

Poling, 10th Dist. No. 04AP-1117, 2005-Ohio-1543, 1[ 17-18 (breach of express contract);

Unifirnd CCR Partners v. Childs, 2d Dist. No. 23161, 2010-Ohio-746, Tlll 15-18 (implied

contract), Variations on the nature of implied contract claims that may permissibly be brought

iiiclude an action on account, account stated, unjust enrichment, and assumpsit claims such as

money lent, money had and received or money paid. Huntington Nat. Bank v. 7'wining, 8th Dist.

No, 60222, 1991 WL 20434, *3 (8th Dist.1991)(account); Citibank (South Dakotcz) N.A. v.

Ugasnduyile; 2d Dist. No. 21794, 2007-Ohio-5166, fI 11-12 (account); Creditrust t:orp. v.

Richard, 2d Dist. No. 99-CA-94, 2000 WL 896265, *4 (Jul. 7, 2000)(account stated); .hliller v.

Javitch, Block & Rathbone, 561 F.3d 588, 593 (6'}' Cir. 2009)(money lent); O'Bryne v. PoNfolio

Recovery Associates LLC,No. No. 12cv447-IFc:J, 2013 WL 1223590, *7 (S.D.Cal. Mar. 26,

2013)(assumpsit & unjust enrichn-ient).

D. Accrual of cause of action for breach of contract

"The general rule is that a cause of action exists from the time the wrongful act is

committed." Flagstar Bank, F:S.B., v. Airline Union's iVtge. Co., 128 Ohio St.3d 529, 2011-

C?hio-1961, 947 N.E.2d 672, T, 13. "A cause of action for breach of contract accrues when the

breach occurs or when the complaining party suffers actual damages." Bell v. Ohio State Bd of

Trustees, 10th Dist. No. 06AP-1174, 2007-Ohio-2790 fi 27; Kincaid v. Erie Ins. C'o., 128 Ohio

St.3d 322, 2010-Ohio-6036, 944 N.E.2d 207, ¶ 13. The failure to pav when due is a breach of

17 Online at http://www.consumerFnance.gov/credit-cards/agreements/ (accessed May 27, 2013).

10

contract and damages result immediately when payment is not made. Discover Bank v. Heinz,

10tJ' Dist, No. 08AP-1001, 2009-Ohio-2850, ^, 17; Capital One Bank (US.4), MA, v. Rhodes, 8th

Dist. No. 93968, 2010-Ohio-5127,. T,^, 22-23; Unifund CCR Partners v. Hall, 10th Dist. No.

09AP-37, 2009-Ohio-4215, ^ 16; Discover Financial Servs., Inc. v. Belmont, 8th Dist. No.

86336, 2006-Ohio-1539, ¶ 4.

E. Accrual of cause of action for account claims

Accrual of a cause of action on an account turns on the nature of the account -the statute

of limitations on a simple accounts runs from the date of each entry on the account; on a mutual

account, it runs from the date the balance between the parties has been struck. In the case of an

account stated, some courts hold the cause of action accrues when the agreement of the

correctness of the account balance was acknowledged; others hold the cause of action accrued

from the final debit entry on the account.

A mutual account is said to exist where both parties engage in dealings whereby the

obligations to pay run both ways. For example, a laborer performing services for a lawyer and

the lawyer providing legal services for the laborer, or where two persons each borrowed money

from and lent money to the other. Lancieri v Kansas C.ity Improved Street SpNinkling Co. 95 Mo.

App. 319, 69 S.W. 29, 30 (Mo. App. 1902); Gunn v Gunn, 74 Ga. 555, 58 Am.Rep. 447, 1885

WL 2454, * 6-9 (1885). In such case, money is owed to each for the services rendered, and the

obligations offset one another, leaving a balance owed in favor of one of the parties to the mutual

account. Compare Courson :r .E'x'rs v. Courson, 19 Ohio St. 454 (1869), syllabus par. 1(simple

account); with Ludwig Hommel & Co. v. Inc. Il'illage of Woodsfield, 115 Ohio St. 675, 681, 155

N.E. 386 (1927) (mutual running account).

11

In the case of a simple accoztnt, the cause of action accrues on each on item of an account

at the time of its due date. Courson's Exrs, syllabus par. 1; Barnets, Inc. v. Johnson, 12th Dist.

No. CA2004-02-005, 2005-Ohio-682,1( 18.18

In the case of mutual accounts, the cause of action accrues once the balance has been

struck. Ludwig Ilommel & C.'o., 115 Ohio St. 675, 681. See also Annotation, When is account

"mutual" for purposes of r•ule that limitations run from last item in open, cuYrent, and mutual

account, 45 A.L,.R..3d 446 §2[a] (1972).19

In the case of an account stated, an early Ohio case held that where a single statement is

rendered and agreed upon, such claims are governed by the 15 year statute of limitations based

on written contracts. iViZliam Deering & Co. v. Miller, 19 Ohio C.D. 259, 264, 29 Ohio C.C. 259,

9 Ohio C.C.(N.S.) 392 (1899). The frequency by which account statements are rendered,

generally does not alter accrual rules. Annotation, Limitation of actions as applied to account

stated, 51 A.L.R.2d 331 (1957), §5[a], § 9.20

F. Partial Payment

As provided in R.C. § 2305.08, partial payments extend the time for bringing an action

"founded on a contract." R.C. § 2305.08. In effect, making a partial payment on an account after

18 ("Open and running accounts are a series of implied contracts, and the six-year statute oflimitations for actions on unwritten contracts set forth in R.C. 2305.07 applies to each item of theaccount; thus, each item of the account will be barred six years after the right of action on thatitem accrues.").19 ("there is almost universal agreement that an account is mutual only where there are itemsdebited and credited on both sides, which items operate to extinguish each other pro tanto, so thatthe balance on either side is the debt between the parties....[A] mutual account will not resultfrom an ordinary store account where the customer purchases goods from time to time andmakes payments to the merchant; nor upon money lent at different times in separate andunrelated transactions; nor even upon coLmter demands consisting in part of liabilities reduced toFromissory notes, bonds or the like conflated the final default with the initial default.").°(where one statement is in issue, the" limitations against an action to enforce an account stated

begin to run at the time the statement is made;" where successive statements are rendered. thegeneral rule is the statute begins to run from the statement where the balance was first struck orthe date on which the use of the account ceased).

12

a cause of action accrues tolls the running of the statute of limitations. Slack v. Cropper, 143

Ohio App.3d 74, 84, 757 N.E.2d 404 (11th Dist. 2001); }3at•nets, Inc. v. Johnson, 12th Dist. No.

CA2004-02-005, 2005-Ohio 682 ^ 24; Annotation, Limitation of actions as applied to account

stated, 51 A.L,R.2d 331 § 10. Partial payment rules do not determine when the cause of action

first accrued; they look to the date the cause of action last accrued. Cummings v. Groszko, 76

Ohio App.3d 812, 817, 603 N.E.2d 387 (10th Dist. 1992).

States vary in the way a partial payment effects the statute of limitations. Some states

treat a partial payment as a renewal of the promise to pay, resetting the statute of limitations date

to run from the date of last payment; other states treat the import of the partial payment as a

question of fact relating to the question of intent to renew the promise to pay, and some states do

not permit a partial payment to reset the statute of limitations. Compare Ala. Code § 6-2-16;21

Ga. Code Ann. § 9-3-112;22 Iowa Code Ann. § 614.11;23 Mth Ariz. Rev. Stat. § 12-5 0F.24 See

generally, Annotation, Paynxent on account, or claimed to be on account, as removing or tolling

statute of limitations, 156 A.L.R. 1082 (1945). Under Delaware law, it is well-settled that

"[p]ayment on account of a debt not yet barred by the statute of limitations tolls the operation of

the statute because a new promise to pay is implied from the partial payment of the debt."

Patamon v. Suburban Propane Gas Corp., 505 A.2d 1309 (table), 1986 WL 16466, *1

21 ("No act, promise or acknowledgment is sufficient to remove the bar to an action created bythe provisions of this chapter, nor is such evidence of a new and continuing contract, except apartial payment, made upon the contract by the party sought to be charged before the bar iscomplete or an unconditional promise in writing signed by the party to be charged thereby.")22 ("A. payment entered upon a writl.en evidence of debt by the debtor or upon any other writtenacknowledgment of the existing liability shall be equivalent to a new promise to pay.").23 ("Causes of action founded on contract are revived by an admission in writing, signed by therarty to be charged, that the debt is unpaid, or by a like new promise to pay the same.").4 ("When an action is barred by limitation no acknowledgment of the justness of the claim made

subsequent to the time it becazne due shall be admitted in evidence to take the action out of theoperation of the law, unless the acknowledgment is in writing and signed by the party to becharged thereby.").

13

(I7e1.1986) (citing Levin v. Diamond Stale Pountry Co., 175 F.Supp. 851, 854 (D.Del.1959)); Cf

Hart v. Deshong, 8 A.2d 85, 87 (Del. Super. 1939).

G. Ohio Statutes of Limitation

During all material times, Ohio law provided a 15 year statute of limitations on express

contract claims;25 and a six year statute of limitations for implied contract claims. R.C. §§

2305.06; 2305.07. Private parties may contractually agree to define how long one has to bring a

claim for breach of contract. Cf. Order of United Colnfnereial Travelers ofArnerica v. Wolfe, 331

U.S. 586, 608, 67 S.Ct. 1355, 91 L.Ed. 1687 (1947). In the absence of evidence of any agreement

on these issues, common law rules governing the accrual of a cause of action depend on: (a) the

nature of the claim; and (b) policy choices embodied in the forum's statutes of limitations. Grocla

v. Gen. Motors Corp., 117 Ohio St. 3d 192, 230, 2008-Ohio-546, 883 N.E.2d 377, ¶ 212.

H. Ohio's Borrowing Statute

In 2004, the 125'h General Assembly passed Amend. Sub. Senate Bill 80 as part of

sweeping tort reform legislation. Amend. Sub. Senate Bill 80, 2004 Ohio Laws 144. The

purposes of the Bill were set forth in Section 3, which provided in pertinent part:

(A) The General Assembly finds:(1) The current civil litigation system represents a challenge to the economy of the stateof Ohio, which is dependent on business providing essential jobs and creative innovation.(2) The General Assembly recognizes that a fair system of civil justice strikes an essentialbalance between the rights of those who have been legitimately harmed and the rights ofthose who have been unfairly sued.(3) This state has a rational and legitimate state interest in making certain that Ohio has afair, predictable system of civil justice that preserves the rights of those who have beenharmed by negligent behavior, while curbing the number of frivolous lawsuits, whichincreases the cost of doing business, threatens Ohio jobs, drives up costs to consumers,and may stifle innovation. ....

Anzend. Sub. Senate Bill 80 § 3. Numerous provisions of the Bill addressed when various tort

causes of action accrued. See Legislative Service Commission, Final Analysis, Amend. Sub.

15 2012 S 224, eff. 9-28-12, reduced the statute of limitations on express contract claims from 15to 8 years.

14

Senate Bill 80, pp. 17-18 (2004). In addition, Amend. Sub. Senate Bill 80 amended R.C.

2305.03, to provide, effective April 7, 2005:

Sec. 2305.03. A ^i°,;' ^e4ion, (A) Except as provided in division (E3) of this section andunless a different limitation is prescribed by statute, c-an a civil action may becommenced only within the period prescribed in sections 2305:032305.04 to 2305.22;^nelasive, of the Revised Code. W-he If interposed by proper plea by a party to an actionmentioned in sueh any of those sections, lapse of time shall be a bar tleret-e to the action.

(B) No civil action that is based upon a cause of action that accrued in any other state,territory, district, or foreign iurisdiction may be commenced and inaintained in this stateif the period of limitation that applies to that action under the laws of that other state,territory, district, or foreign j_urisdiction has expired or the period of limitation thatapplies to that action under the laws of this state has expired.

Amend. Sub. Senate Bill 80 § 1. As recounted in Clark v. Eddy, 10 Ohio Dec. Reprint 539, 1889

WL 351, *3 (C.P. 1889), Ohio first enacted a "borrowing statute" in 1831, Clark v. Eddy, 1889

WL 351, *.3.`6 That statute limited its operation to persons who were not residents when the

contract was made. In 1853, the statute was amended, adding the place where the cause of action

arose to the statute, and to expand its operation beyond contract claims. Id.27 In 1878, the statute

was revised again, and became Section 4990 Revised StatLrtes, and then provided "If by the laws

of the state or country where the cause of action arose, the action is barred, it is also barred in

this state." Id.'`8 The borrowing statute was then renumbered and modified as General C'ode

Section 11234. See Alropu Corp. v. I•_'irchwehrn, 33 Ohio Law Abs. 39, 36 N.E,2d 511, 514 (2d

Dist.1940), aff d 138 Ohio St. 30 (1941).29 In 1953, G.C. 11234 was codified as R.C. §2305.20,

26 (quoting III Chase, 1769, February 18, 1$31, sec. 4); • Horton v. Horner , 16 Ohio 145, 146-47(1847)(citing Swan's Statutes, 555, § 4).2 7 (quoting 11 S. & C., 950; IlI Curwen, 1941).28 (quoting Rev. Stat. 4990)(citing 75 Ohio L. 597); see also Hilliard vPennsylvania R. Co., 73F.2d 473, 475 (6th Cir, 1934); Hunter v. .'Virxgtxrca Fire Ins. Co., 73 Ohio St. 110, 113, 76 N.E.563 (1905)(quoting Sec. 4990).29 (quoting Sec. 11234).

15

but then repealed in 1965. Sinelcer v. Bankers Life and Casualty Co., 8th Dist. No. 37035, 1978

VdL 217818, *4 (Jul. 27, 1978);30 131 v H 456, eff. 11-5-65.

A borrowing statute is not an exception to the rule of lexfori. f1.i-inotation, Choice of law

as to applicable statute of lirnitations in contract actions, 78 A.L.R.3d 639, § 2(1977). It is

instead, an application of the forum state's statutes of limitations, which measures both the

limitations period of the forum state and that of the state where the claim accrued, to identify the

shorter of the two. Id. Borrowing statutes are also viewed as codified conflict rules. Green Acres

Enterprises, Inc. v. Freeman, 876 S.W.2d 636, 639-40 (Mo.App.W.D. 1994).

Under the borrowing statute, "[ilf the Court were to find that Ohio's borrowing statute

applies, the Court would apply Ohio law `to make the initial determination where the cause of

action accrued.' . ..The Court would then `borrow the law of the jurisdiction where the cause of

action accrued for purposes of interpreting that state's statute of limitation."' Dudek v. Thomas &

Thomas Attorneys & Counselors at Law, LLC, 702 F.Supp.2d 826, 836, n. 10 (N.D.Ohio

2010).31 If the cause of action accrued in Ohio, by the terms of R.C. § 2305.03(B), it would not

be "a cause of action that accrued in any other state...," and the borrowing statute would not

apply. Miami Valley Mobile Health Services, Inc. v. ExamOne Worldwide, Inc., 852 F.Supp.2d

925, 932 (S.D.Ohio 2012).

1. Accrual in the borrowing context

At least 26 other states currently have borrowing statutes.32 For purposes of determining

the time and place of accrual of a cause of action under borrowing statutes, there are three tests

30 (quoting R.C. § 2305.20).31 (quoting CMAC'O Automotive Systems, Inc. v. Wanxiang America Corp., 589 F.3d 235, 242 n.6 (6th Cir.2009)).32 Arizona - Ariz.Rev.Stat.Ann. § 12-506 ; California - Cal.Civ.P. Code § 361; Colorado - Col.Rev.Stat.Ann. § 13-80-110; Delaware - Del. Code Ann., Tit. 10, § 8121; Florida - Fla. Stat.Ann.. § 95.10; Idaho - Idaho Code § 5-239; Illinois - 111. Compiled Stat. Ann., Ch. 735/13-210;

16

courts usually employ in contract cases - the place of injury or performance test, the last

significant event test, and the center of gravity/significant contacts test. Abraham v. General Cas.

C"o. of Wisconsin, 217 Wis.2d 294, 302-12, 576 N.W.2d 46 ( 1998). In addition, Florida Courts

adhere to the view that the last act performed that is necessary to consummate the contract is the

place where the cause of action accrues for statute of limitations purposes. Colhoun v.

Greyhound Lines, Inc., 265 So.2d 18, 21(H la. 1972)(lex locus contracti).

Plaintiff cited six cases33 in the t-rial court and court of appeals asserting they represent

the majority rule under borrowing statutes conceming the place of injury test. A survey of the

views of the state courts having borrowing statutes does not indicate either a "universal rule" or a

clear majority,34 and the text of the statutes vary substantially.35 Courts generally decline to use

Indiana - Ind. Code § 34-11-4-2; Kansas- Kans. Stat. Ann. § 60-516; Kentucky - Ky. Rev. Stat. §413.320; Maine - Maine Rev. Stat. Ann., Tit. 14, § 866; Michigan - Mich. Comp. Laws Ann. §600.5861; Missouri - Vernon's Ann. Miss. Stat., § 516.190; North Carolina - N.C.Gen.Stat.Ann.§ 1-21; Nevada - Nev.Rev.Stat. § 11.020; New York - McKinney's CPLR § 202; Oklahoma - 12Okl.St.Ann. § 105; Oregon - Or. Rev. Stat. § 12.430; Pennsylvania - 42 Pa.C.S.A. § 5521; Texas- Vernon's Tex. Stat. Code Ann., Civil Practice & Remedies Code § 16.067; IJtah - Utah CodeAnn. 1953 § 78B-2-103; Virginia - Va. Code Ann. § 8.01-247; West Virginia - W. Va. Code, §55-2A-2; Washington - Rev. Code Wash.Ann. § 4.18.020; Wisconsin - Wisc. Stat. Ann. §893.07; Wyoming - Wy. Stat. Ann. § 1-3-117,33 Western Coal and Mining Co. v. Jones, 27 Cal.2d 819 (1946); Aviation Credit Coyp. v.Batchelor, 190 So.2d 8, 11 (Fla. App. 1966); West v. Theis, 15 Idaho 167, 96 P. 932 (1908);Great Plains Trust Co. v. Union Pacfflc R. Co., 492 F.3d 986, 992-93 (8th Cir. 2007); Portf"olioRecoveyy Associates v. King, 14 N.Y.3d 410 (2010); Stanbury v. Larsen, 803 P.2d 349, 353(Wyo. 1990).34 Arizona - (Ariz. Rev. Stat. § 12-506(A) limited to non-resident Defendants moving toArizona) -DeLoach v. AIked, 960 P.2d 628, 631, 192 Ariz. 28 (1998)("`the state where the injuryoccurs does not have a strong interest in compensation if the injured plaintiff is a non-resident."')(quoting Bryant v. Silverman, 146 Ariz. 41, 45, 703 P.2d 1190, 1194 (1985));California -1VIcCann v. Foster Wheeler LLC, 48 Cal.4th 68, 87, 225 P.3d 516, 105 Cal.Rptr.3d378 (2010)(governmental interest analysis is applicable to resolve choice of law relating tostatutes of limitation); Colorado - (unsettled) see e.g., Jenkins v. Panama Canal Xy. Co., 208P.3d 238 (Colo. 2009); iVeuronzonitoring Associates v. Centura Heulth Corp., _P.2d _, 2012COA 136 (Aug. 16, 2012)("In circurnstances where a contract contains this type of `continuingduty to perform, generally a new claim accrues for each separate breach' and the plaintiff `mayassert a claim for damages from the date of the first breach within the period of limitation."');

17

Delaware - (unsettled) Saudi Basic Industries Corp. v. Mobil Yanbu Petrochemical Co., Inc.,866 A.2d 1, 16 (Del.2005)(borrowing statute held inapplicable to cause of action accrued outsideDelaware against non-resident); Worrel v. Farmers Bank of State, qf' Del., 430 A.2d 469, 472(Del. 1981)( "... a right of action accrues and the Statute begins to run at the time the contract isbroken, not at the time when actual daxnage results or is ascertained..."); Florida - State Faf•mMut. Auto. Ins. Co. v. Roach, 945 So.2d 1160, 1163 (Fla. 2006)(place of contrating/lex locicontractus); Idaho - West v. Theis, 96 P. 932, 936(Idaho 1908)(place of performance); Miller v.Stauffer Chemical Co., 99 Idaho 299, 581 P.2d 345 (1978)(plaintiff's residence in the forumexcepts claims accruing elsewhere from operation of the borrowing statute); Illinois -Employers Ins. of'Wausau v. Ehlco Liquidating Trust, 309111.App.3d 730, 243 I11.Dec. 384, 723N,E.2d 687, 693 (1999)(borrowing statute inapplicable to claims involving Illinois residents);Indiana -(Ind. Stat. § 34-11-4-2 applicable only if defendant is a non-resident) Runkle v. Pullin,97 N.E. 956, 958 (Ind. App. 1912) (place of payment); Kasas - Missouri State ex rel. OldDominion Freight Line, Inc. v. Daily, 369 S.W.3d 773 (Mo.App.S.Dist. 2012)(cause of actionaccrues when and where the damage is sustained and is capable of ascertainment); Bruner v._Martin, 93 P. 165, 167 (Kan. 1907); Kentucky - Willits v. Peabody Coal Co., 188 F.3d 510(Table), 1999 WL 701916, *13 (6th Cir. 1999)(place of wrongful conduct); Conabs v.International Insurance Co., 354 F.3d 568, 602 (6th Cir. 2004)(place of breach); Maine -(unsettled); see IIvssler v. Barry, 403 A.2d 762, 765 (Me. 1.979)(for borrowing statute to apply,both parties must have resided in Maine); Tornesello v. Tisdale, 948 A.2d 1244, 1250 (Me.2008); Michigan - Scherer v. ITellstrom, 716 N.W.2d 307 (Mich.App. 2006) (borrowing statuteapplies only if action accrued without any essential facts giving rise to cause of action occurringin Michigan); Missouri- Wright v, Campbell, 277 S.W.3d 771, 774 (Mo.App. W.D.2009)(causeof action accrued when and where damages are sustained and can be ascertained); Nevada -Alberding v. .13runzell, 601 F.2d 474, 477 (9th Cir. 1979)(cause of action on an obligation accruesin the place where the defendant resided when the obligation came due); New York - PortfolioRecovery Associates v. King, 14 N.Y.3d 410 (2010) (place of payment, but inapplicable to claimsof residents)(CPLR § 202 provides: "An action based upon a cause of action accruing withoutthe state cannot be commenced after the expiration of the time limited by the laws of either thestate or the place without the state where the cause of action. accrued, except that where the causeof action accrued in favor of a resident of the state the time limited by the laws of the state shallapply."); North Carolina - Cochrane v. Ttcrner, 582 F.Supp. 971, 972 (D.C.N.C.1983)(borrowing statute applied when cause of action arises in another state against an, out ofstate defendant & tolls statute until Defendant returns to the state); Oklahoma - Perkins v.Perkins, 541 P.2d 379, 381 (Okl.App. 1975)(place of payment); Ore =on - CACV of Colorado v.Stevens, 248 Or.App. 624, 274 P.3d 859 (2012)(substantive law governing the contract governs,per O.R.S. § 12.430(1)(a), but because tolled due to non-residence, under escape clause ofUniforin Conflict of Laws-Limitations Act, Oregon law govenied); Pennsylvania - Wholesale^^'upply Co. v. South Chester Tube Co., 20 F.R.D. 310, 314 (E.D.Pa.1957) (place ofperformance); Texas - unsettled - Tullis v. Georgia-Pacific Corp., 45 S.W.3d 118, 128(Tex.App. 2000); Utah - Financial Bancorp, Inc. v. Pingree and Dahle, Inc., 880 P.2d 14, 17(Utah App. 1994)(place of payment or perforrnance) Virginia - Fiberlink Communications Corp.v. Magarity, 24 Fed.Appx. 178, 182, 2001 WL 1658914, *3 (4th Cir. 2001)(law governing thecontract governs); Washington - Unifund CCR Partners v. Sunde. 163 Wash.App. 473, 487, 260P.3d 915, 923(Wash.App. 2011)(substantive law governing the contract governs, per RCW

18

the center of gravity/significant contacts test for the purpose of deternlining the time and place of

accrual of a contract cause of action under borrowing statutes, and confine its application to

substantive conflict of law questions, because its application in this context adds unnecessary

complexity, uncertaiiity, promotes forum shopping and thereby undermines legislative intent.

Abraham, 217 Wis.2d 294, 307-09; C'ombs v. Intel°national.Ins. Co., 354 F.3d 568, 589-92. Some

states do use the significant contacts test for statute of limitations questions, but they appear to be

confined to states that treat statutes of limitations as involving a substantive state 1aw question,

where the statutory right incorporates an express limitation, and to tort cases.36

Some borrowing statutes apply ozily if the entire action has no factual connection to the

forum;37 others are inapplicable if the defendant is a resident of the state where the action was

brought,38 while still others, except from the operation of the borxowing statute a claim that arose

while the plaintiff was a resident of the forum state.3R

4.18.040(1)(a), but because tolled due to non-residence, under escape clause of Uniform Conflictof Laws-Limitations Act, Washington law governed); West Virginxa - Brown v. Hathaway, 80S.E. 959, syllabus (W.Va. 1914)("if the right to maintain the action is in fact barred by lex locicontractus, it is also barred by lex _for^i."); Wisconsin - Abraham v. General Cas. Co, qfWisconsin, 217 Wis.2d 294, 302-12, 576 N.W.2d 46 (1998)(last significant event test);M'yoming - BHP Petroleum (Americas), Inc. v. Texaco Exploration and Production, Inc., I P.3d1253, 1258 (Wyo. 2000)(place of breach). See also e.g., Annotation, Choice of' law as toapplicable statute of limitations in contract actions, 78 A.L.R.3d 639 (1977).35 Compare Va. Code Ann. § 8.01-247, and Idaho Code Ann. § 5-239 with Me. Rev. Stat. tit. 14,§ 866.36 See e.g. Fulton County Adm`r v. Sullivan, 753 So.2d 549 (Fla. 1999); Hunt Oil Co. v. Live OakEnergy, Inc., 313 S.W.3d 384 (Tex. App. 2009); Gantes v. Kason Corp., 145 N.J. 478, 484, 679A.2d 106 (1996); Harodite Industries, Inc. v. Warren Elec, Corp., 24 A.3d 514, 534 (R.I. 2011).37 See e.g., M.ich. Comp. Laws Ann. § 600.5861.38 See e.g., Employers Ins. of Wausau v. E171co Liquidating Trust, 309 I11.App.3d 730, 243Il1.Dec. 384, 723 N.E.2d 687, 693 (1999)("A third condition, judicially created ...., is therequirement that all parties be non-Illinois residents at the time the action accrued and until thelimitations laws of the foreign state runs.").39 See e.g., Idaho Code § 5-239.

19

J. Tolling rules for absence from the forum in the borrowing context

In borrowing another state's limitation law, the majority rule is that Courts also borrow

the state's tolling rules as well. Restatement (Second) of Conflict of Laws § 142, (1971) cmt. f;

S'rnith Barney, Harris Upham & Co., Inc. v. Laickie, 85 N.Y.2d 193, 207, 623 N.Y.S.2d 800, 647

N.E.2d 1308 (1995) (construing McKinney's CPLR § 202); CAC'V of ColoNado, LLC v. Stevens,

274 P.3d 859 (Or. App. 2012); Avery v. First Resolution Management Corp,, 568 F.3d 1018 (9th

Cir. 2009); Great Plains Ti°8tst Co. v. Union Pacifzc R. C.'o., 492 F.3d 986 (8th Cir. 2007); Duke v.

Housen, 589 P.2d 334, 345 (Wyo.1979); Thompson by Thonipson v. C'rauford, 833 S.W.2d 868,

872-73 (Mo. 1992); Richards v. US., 369 U.S. 1, 11, 82 S.Ct. 585(1962). A claim accruing

under Delaware law is tolled during the time "such person is out of the State...." DeI. Code Ann.,

Tit. 10, § 8117; Brossman v. Federal Deposit Ins. Corp., 510 A.2d 471, 472(Del.1986).

In Payne v. Kirchwehm, this Court took what at first blush appears as the minority view,

that "[t]he fact that a person is absent from Florida when such a cause of action accrues against

him does not likewise toll the statute of limitation in Ohio when such person is in Ohio and

sub;ect to an action in that forum." Payne v. Kirchwehm, 141 Ohio St. 384, 384, 48 N.E.2d 224

(1943) syllabus par. 2 (emphasis added).

This Court, however, has never addressed the effect of whether tolling rt.iles should apply

in an action such. as this, where the person was never subject to an action in the other forum, and

federal law bars the action in the other forum. Appellee was never subject to an action in

Delaware because she never resided there, and federal law prohibited her creditors from suing

her there. 15 U.S.C. § 1692i(a)(2)(B), In fact, federal law has prohibited lenders from suing

consumers in the state where the consumer does not reside and lender does business since 1975

under the FTC Act, 15 U.S.C. § 45, in what became known as the "fair venue standard." In re

Spiegel, Inc., 86 F.T.C. 425, Doc. No. 8990, 1975 WL 173254, * 10-20 (1975), affd in relevant

20

part, 540 F.2d 287 (7th Cir.1976); In re State C:reclitAssn., 86 F.T.C. 502, Docket C-2722, 1975

WL 173258, *5 (1975); In 7'he Matter of.I C. Penney Company, Inc., 109 F.T.C. 54, Docket No.

C-3208, 1987 WI, 874620 ( 1987). Congress modeled 15 U.S.C. § 1692i on the "fair venue"

standard. S. Rep. No. 382, p. 95th Cong., lst Sess. 1977, 1977 U.S.C.C.A.N. 1695, 1699. The

FDCPA preempts any contrary state venue law for debt-collection actions. 15 U.S.C. § 1692n;

Llarper v. Collection Bureau of Walla Walla, Iizc., No. C06-1605, 2007 WL 4287293

(W.D.Wash. Dec. 4, 2007). Thus, "fPderal law precludes plaintiff fs om bringing this actzon in

Delaware until sucla time, if ever, that defendant moves there." CACV of Colorado, LLC v.

Stevens, 248 Or.App. 624, 632, 274 P.3d 859, 864; see also Avery v. First Resolution

Management Corp., 568 F.3d 1018, 1023.

K. Delaware Statutes of Limitations

Delaware law provides a three year statute of limitations for certain debts "not evidenced

by a record or by an instrument under seal, ... based on a detailed statement of the mutual

demands in the nature of debit and credit betxveen parties arising out of contractual or fiduciary

relations, ... [or] based on a promise, ..." Del. Code Ann., Tit. 10, § 8106; six years for "an

acknowledgment under the hand of the party of' a subsisting demand," Del. Code Ann., Tit. 10, §

8109,40 and in the case of "a mutual and running accouiit between parties," the three vear period

under § 8106 does not run "while such account continues open and current." Del, Code Ann.,

Tit. 10, § 8108. Delaware law also proirides where the "person is out of the State, the action may

be commenced, within the time limited therefor in this chapter, after such person comes into the

State in such manner that by reasonable diligence, such person may be served with process." Del.

Code Ann., Tit. 10, § 8117.

40 See Mykulak v. Collins, 301 A.2d 313 (1973), holding an acknowledgement of an existing debtis subject to the six year statute of limitations under § 8109, and no express statement is required.

21

L. Assignment, factoring and sales of debt

There are some resources suggesting the practice of selling accounts receivable dates

back 4,000 years to the time of the Mesopotamians, but the practice was clearly part of the

financial landscape of England as early as the 12t' century, and part of the American financial

services industry of the 1800's. Tatge, Tatge, & Flaxman, American Factoring Law, pp. 8-126

(BNA 2009); American Factoring Law &pplement, 6 (2011); see generally Williain & James

Brown & Co. v. McGran, 39 U.S. 479, 494-95 (1840); Bender v. Vaughn, 106 Ohio App. 136,

140, 153 N.E.2d 778 (6th Dist. 1958); ,Sprint Cofnmunications Co., L.P. v. APCC &rvices, Inc.,

554 U.S. 269, 277-85, 128 S.Ct. 2531 (2008). In any case, by the 1940's, factoring4i was already

a billion dollar plus industry in the United States. Corn Exchange Nat. Bank & Trust Co.,

I'hilcrdelphia v. Klauder, 318 U.S, 434, 438, n. 10 (1943). There are many variations to the

arrangement, some involving recourse and others are nonrecourse in the event of nonpayment;42

which affects the value of the accounts. American Factoring Law, 181-85 (2409) & Supplenaent,

12, 28-29 (2011). The role factoring or assignment plays in the economy is invariably to provide

working capital to businesses short on cash. Corn Exchange Nat. Bank &77rust Co., Philadelphia

v. Klauder, 318 U.S. 434, 440; Williston on Contracts § 62:25 (4th ed.). The differences

between the sale or assignment of debt and modern accounts receivable factors are minor.

4' The term "factoring" is defined as "[t]he buying of accounts receivable at a discount. The priceis discounted because the factor (who buys them) assumes the risk of delay in collection and losson the accounts receivable." Black's Law Dictionary (9"' Ed. 2009). See also U.S. v. Baretz, 411F.3d 867, 869 (7th Cir. 2005)("Factoring is the purchase of a cornpany's invoices at adiscount.").42 One buys debt with recourse, when it is returned to the originator of the debt in the event ofnon-payment. Black's Law Dictionary (9th ed 2009)(defining "with recourse" and "withoutrecourse"); ZifefYise 1Vfaster Fundia2g v. Telebank, 374 F.3d 917, 925 (10th Cir.2004)("'Recourse' refers only to the liability of a seller of receivables to the purchaser if theunderlying obligors fail to pay the receivables. A seller disclaims this liability, known as `creditliability,' by selling the receivables `without recourse. "').

22

American Factoring Law Supplement, 46, 112 (2011); American Factoring Law, 235-36; 491-35

(2009).

Ohio Courts have entertained suits based on assigned debts, and assigned credit card debt

claims for many years. Allen v. Miller, 11 Ohio St. 374, 377 (1860); Talco Capital Corp. v. State

Underground Parking Comm., 41 Ohio App.2d 171, 176, 324 N.E.2d 762 (10th Dist. 1974);

Creditrust C'orp. v. Richard, 2d Dist. No. 99-CA-94, 2000 WL 896265, *1(Jul. 7, 2000);

Calvary> Investments, L.L.C. v. Vonderheide, lst Dist. No. C-010359, 2001 WL 1386190, *2

(Nov. 9, 2001); Natl. Check Bur. v. Patel, 2d Dist. No. 21051, 2005-Ohio-6679.

M. Analysis

Under the rule of lexfori, Ohio`s statutes of limitations govern. Supra, ¶ A. In the context

of the borrowing statute, when and where the cause of action accrued are procedural issues

which are also decided by Ohio law. ^S°upra, T H. Unless the operative cause of action accrued

after April 7, 2005, or if the cause of action accrued in Ohio, the borrowing statute is not

applicable at all. Id.; D.A.N. Joint Venture III, L.P. v. Armstrong, l lth Dist. No. 2006-L-089,

2007-Ohio-898, ¶^l 29-30.

Before addressing when and where the cause of action accrued, it is important to first

establish whose and what cause of action is in issue. The evidence showed that the account was

owned by five entities during its life span, the last use of this credit card occurred in 2004 when

the account was owned by Chase, and that First Resolution did not acquire the account until June

of 2008. Jarvis v. First Resolution lVgt. Corp., 983 N.E.2d 380, 2012-Ohio-5653, ''j' 32 (9th

Dist.). If the Court were looking solely at the rights of First Resolution, it could have no cause of

action relative to the account before June of 2008. In such case, the operation of R.C.§

23

2305.03(B) in this case runs afoul of Section 28, Article lI of the Ohio Constitution, because it

would have never have had the time to sue.43

Under R.C. § 2305.03(B), it is clear that Chase's right of action is the bellwether for

determining the time and place of accrual because the borrowing statute asks whether this was a

"civil action that is based upon" a cause of action accruing elsewhere.

As to what cause of action, Chase held a cause of action against Ms. Taylor Jarvis under

a variety of theories at several points in time before April 7, 2005.44 As to breach of express

contract claim, there is no evidence in the record when Chase's cause of action for breach of

express contract accaued because the operative contract is not before the Court .41 Similarly,

where the express contract claim might have accrued is impossible to determine because there is

no evidence of those contracts in the record. As to an implied contract claim, what is known is

that during 2003, 2004, and early in 2005, Ms. Jarvis was repeatedly behind and failed to pay the

minimum monthly amount owed. Jarvis v. Fif•st Resolution Mgt. Corp., 983 N.E.2d 380, 2012-

Ohio-5653, ¶ 32. On the April 7, 2005, the periodic billing statement for the period March 8 to

April 7, 2005 stated: "Your charge privileges are now revoked...." FRMC MSJ, Exhibit C, p. 14.

This clearly signaled the point in time where Chase notified Ms. Jarvis that it terminated her

ability to use the account further. These facts show that Chase had a right of action to pursue an

a.ccount claim against Ms. Jarvis before Apri17, 2005. Supra, ¶ E.

43 Groch v. Gen. Motors Corp., 117 Ohio St.3d 192, 2008-Ohio-546, ¶ 199. This assumes thestatute operates prospectively from April 7, 2005 and the three years expired on April 7, 2008.44 See e.g., Barnes v. Advanced Call Center Technologies, LLC, 493 F.3d 838, 840 (7th Cir.2007)(credit card lender placed past due balance for collection with debt collector, as opposed toamount outstanding on credit card account).45 See supra, note 16. In light of the date of last use of the account in May 2004, and that Chasedid not acquire Bank One until October 2004, supra n. 12, it is entirely unlikely that Chase'sright of action would be governed by a Chase cardholder agr.eement, and more likely that theright of action would have been governed by the original issuer's agreement, First USA or itssuccessor in interest, Bank One (assuming new terms and conditions were issued by it).

24

In passing on the question of where the cause of action accrued, and without addressing

what various causes of action Chase held, the Court of Appeals erroneously applied the rules

applicable to substantive choice of law questions to what is clearly a procedural issue. The

weight of authority interpreting borrowing statutes in sister states apply a last significant event

test, place of contracting or place of injury test to decide where a cause of action accrues. Of

these tests, the trial court correctly adopted the last significant event test; the court of appeals

adoption of the "most significant relationship" test was clearly wrong. The C;ourt of Appeals

therefore mistakenly relied on the balancing test in Gries Sports Ents., Inc. v. Modell, 15 Ohio

St.3d 284 (1984), which is only applicable when a court is attempting to determine what

substantive law applies. Resner v. Uwners Ins. Co., 3d Dist. No. CA 2001 0091, 2002 Westlaw

236970, * 1-2(Feb. 14, 2002); Alexander ancl .4ssocs., Inc. 6th Dist. No. H-86-34, 1987 WL

15918, *1(Aug. 21, 1987). SupNa, ¶ 1. Under the last significant event test, the trial court found

that Ms. Taylor Jarvis's failure to pay was the triggering event which gave rise to a cause of

action in Ohio and that this occurred before April 7, 2005. The conclusion is consistent with the

approach taken in several states, noted above. Supra, ¶ I.

In addressing when the cause of action accrued, the trial court found that Plaintiff last

used her Chase credit card account on May 5, 2004, first failed to make the minimum required

monthly payment on January 1, 2005, and the cause of action accrued before April 7, 2005, the

effective date of the borrowing statute. That determination is consistent with the general rule that

absence evidence otherwise, a cause of action on an accotmt claim accrues immediately. Supra, T

E; I Am. Jur. 2d Accounts and Accounting § 22. It is also consistent with the "general rule is that

a cause of action exists from the time the wrongful act is committed." Flagstar Bank FS.B., v.

25

Airline Union's Mtge. Co., 128 Ohio St,3d 529, 2011-Ohio-1961, 947 N.E.2d 672, ^13. Hence,

the lawsuit, filed March 9, 2010, was timely filed under R.C. § 2305.07.

The Court of appeals noted that the payments were past due as early as December, 2003,

the accouilt Nvas last used in 2004, but the Court erred in looking to the date of last payment as

the date of accrual of the cause of action. Jarvis v. First Resolution Wgt. Corp., 983 N.E.2d 380,

2012-Ohio-5653 Ti 32. It is well settled that a cause of action accrues when the plaintiff has a

right to file suit and obtain relief; partial payments made after that time, only extend the time for

filing the cause of action. Supra,'^1 F; 1 Am,. Jtir. 2d Accoui^its and Accounting § 24.

T`he Court of Appeals conciuded that the cause of action accrued "followi.ng the last entry

in the account" based on the date of last payment in June 28, 2006. Jarvis, 201.2-Ohio-5653 Tj

35.4b In so holding, the Court of Appeals was clearly "Tong. Here, Ms. Jarvis last used the

account in 2004 to make a purchase. Id. at^32. The only entries on Ms. Jarvis' account: balance

after that point were interest and payments and late fees. Ms. Jarvis conceded that before Apri17,

2005, "a cause of action ... accrued for the installment payment then due, i.e., $485." Jarvis

Reply to Summary Judgment, filed March 25, 2011, p. 1; Jarvis Appellate brief, p. 5. Courts

have consistently refijsed to extend the accrual. date for account claims by the mere addition of

interest or payments to the account that appears on later statements. Supra, 1; F; Slayback v

Alexander, 179 A.D. 696, 698, 167 N.Y.S. 194, 196 (1917); Roots v. Mason City Salt & Alining

46 Construing Smither v. Asset Acceptance, LLC, 919 N.E.2d 1153, 1159 (Ind.App.2010).Smither in turn, relied on Kawkins v. Barnes, 661 So.2d 1271, 1272-73(f'la.Ct.App.1995),which observed that the statute of limitations on an account claim varies depending on what typeof account is in issue: "For a simple open account in which there is a unilateral obligation to payfor items purchased on credit, the statute applies to each item separately and the claims areseverally barred when the stattite runs as to each. ... However, if the parties have agreed that eachitem of an account represents a single demand for payment of the entire balance, the statute runsfrom the date of the last item [charged] and all previous items are drawn with it to that time."(internal citation omitted).

26

Co., 27 W.Va. 483 (W.Va. 1886); Tnth v. !lllansell, 207 Ill. App. 3d 665, 672, 152 I11. Dec. 853,

566 N.E.2d 730 (l st Dist. 1990); President of 'Univn Bank v. Knapp, 20 Mass. 96, 112, 1825 WL

1533, *12 (Mass. 1825). See R.lti. C. Inc. v. Tsegeletos, 231 Cal. App. 3d 967, 972, 283 Cal.

Rptr. 48 (1 st Dist. 1991):

A book accotuat does not remain open indefinitely so that any payment towards the debtnecessarily becomes an `entry' for purposes of the applicable limitations period. Instead,a book account like any open account, becomes closed once the account creditor ceasesto extend credit and there will be no further activity on the account other than thepayments by a debtor towards the settled debt.

Likewise, interest entries appearing on account statements do not extend the applicable statute of

limitations. J.R. Siniplot Co. v. Jelinek, 275 Neb. 548, 560, 748 N.W.2d 17 (2008).

It is illogical to suggest that under the borrowing statute, a "civil action .,. based upon a

cause of action" held by Chase before the account was sold, must be measured by the cause of

action filed by First Resolution on an account stated theory after the account was sold. As the

cases above clearly reflect, the "when" and "where" of accrual depend in part on the type of

claim pursued. If the operative cause of action under the borrowing statute is measured by

Chase's account claim, the mere fact that payments were made through June, 2006, would not

change the date its cause of action first accrued. Supra,T, E.

Based on the foregoing, Amici urge the Court to find that Chase's cause of action first

accrued before April 7, 2005, which was the effective date of the borrowing statute.

Consequently, Chase's right to sue became vested47 prior to the effective date of the borrowing

47 State and federal courts have consistently held that the 2005 amendment to R.C. § 2305.03(B)does not apply retroactively. D.A.N. Joint Venture III, L.P. v. Armstrong, 2007-Ohio-898, ¶ 29(11th Dist.); Dudek v. Thomas & Thomas Attorneys & Counselors at Law, LLC, 702 F.Supp.2d826, 836 ; Sonic Auto., Inc. v. Chrysler Ins. Co., No. 1:10-cv-717, 2011 WL 4063020, at *4(S.D.Ohio Sept.13, 2011); Arandell Corp. v. Am. Elec. Power Co., Inc., No. 2:09-ev-231, 2010WL 3667004, at *6 (S.D.Ohio Sept.15, 2010) (same); Executone o,f'C.'olumbus, Inc. v. Inter---Tel,Inc•., 665 F.Supp.2d 899, 918-19 (S.D.Ohio 2009) (same); DRI'P, LLC v. Republic Bolivariana

27

statute. Under R.C. §2305.07, it acquired the right to sue Ms. Jarvis any time before April 6,

2011; under R.C. § 2305.06, the right to sue in contract would not lapse before April 6. 2020.

Thus, the suit filed on March 9, 2010 was timely filed.

Even if the Court were to find the borrowing statute could be applicable, because the

cause of action is found to accrue after April 7, 2005, or because it operates prospectively from

April 7, 2005, Amici urge the Court to find that the borrowing statute does not apply in this

context because the purpose of the borrowing statute would not be furthered. The borrowing

statute was reenacted to address the problem of forum shopping in tort cases, and to promote the

state economy. Supra,'^ H; Am. Sub. S.B. 80, 125th General Assembly §3. There is nothing in

the history of the legislation to suggest that the state legislature intended the borrowing statute to

apply to an ordinary credit card cases, or that consumers were subject to overreaching by credit

card lenders. If the borrowing statute is applied to credit card claims, it would result in less

available credit for Ohioans, and more suits against consumers - and neither outcome would

promote the Ohio economy. This is not a tort case, and there was never any argument that the

claim pursued here involves forum shopping. Rather, the borrowing statute is sought to be

employed here by a resident to avoid paying a just debt. Ms. Taylor Jarvis was not unfairly sued;

she owed a debt she never repaid. While banks lend nationally and can dictate what substantive

law applies to the meaning and interpretation of the agreement, Ms. Taylor Jarvis could not have

held any expectation that the law of Delaware would govern the procedural question of when and

de Venezuela, No. 2:04-cv-00793, 2013 WL 2096652, *18 (S.D.Ohio 2013). See also Estate ofJohnson v. Randall Smith, Inc., _ N.E.2d _, 2013-Ohio-1507, 11 20("If there is no clearindication of retroactive application, then the statute may only apply to cases which arisesubsequent to its enactment.); Gi•och v. Gen. 1lilotors Corp., 117 Ohio St.3d 1.92, 2008-Ohio-546¶ 199 (holding that to the extent S.B. 80 effects an accrued substantive right and operates toprovide an unreasonably short period of time to sue, it is unconstitutionally retroactive incontravention of Section 28, Article 11 of the Ohio Constitution).

28

where the bank's claim accrued when the credit card account was opened or at the time she

stopped paying. SWpra, T 13(4). Consequently, in order to prevent the misapplication of the

borrowing statute, Amici urge the Court to adopt a residency requirement as in the case of

Illinois, Maine or Indiana, to limit the operation of the borrowing statute to prevent its

application to cases where the purpose of the legislation would not be furthered. See supra, n. 34.

Application of the borrowing statute in this context would also promote uncertainty,

because bank mergers,48 bank failures,49 and asset sales make tracing the debt's history and paper

trail extraordinarily difficult. Given that Ms. Taylor Jarvis last used her credit card in May, 2004,

Ms. Taylor Jarvis could never have become bound by te.rms and conditions issued by Chase. See

supra, note 45. Further, with the freedom to travel from state to state, where the consumer

resided during the life of the card, where payments were sent, all become variables in flux that

cannot be ascertained before the claim is brought, making it inipossible to determine with 1.00°fo

certainty what law governs and the time for bringing claims.

The FDCPA and CSPA claims here assume that the statute of limitations can be used as

both a defense to atfirmative claims and as a source for the iznposition of liability, which runs

counter to the universal recognition that statutes of limitations act as a shield not a sword. See

Northern Pacic Ry. Co. v. United States, 277 F.2d 615, 623-24 (10th Cir.1960) ( statute of

limitations available only as shield, not as sword); Guild v. Meredith L'illage Sav. Bank, 639

F.2d 25, 27(Ist Cir. 1980). If the FDCPA or CSPA truly permit liability to be premised on suing

a debt after the statute of limitations has run, the uncertainty would create a minefield that dictate

application of the shortest national limitation period to every claim from the earliest default date,

and thereby promote litigation and forum shopping. Consumers would be incentivized to send

48 http://www.federalreserve.gov/newsevents/press/orders/2{113orders.htm (accessed 6/17/2013).49 http://","w.fdic.gov/bank/individual/failed/banklist.htm.l (accessed 6/17/2013).

29

their payments to lenders offices in Delaware, even if directed to pay elsewliere, in an effort to

create a nexus to a state with the shortest limitation period. In other words, it would require

creditors to assume every debt accrues in Delaware, and to sue for minor defaults.

Even if the Court were to nonetheless find that the borrowing statute were applicable,

Amici urge the Court to find that the claims accrued in Ohio because the critical event that

transformed the liability into a cause of action was the failure to pay and that event took place in

Ohio. Abraham v. General Caas. Co. of Wisconsin, 217 Wis.2d 294, 302-12, 576 N.W.2d 46;

BHP Petroleum (Americas), Inc. v. Texaco Exploration and Production, Inc., I P.3d 1253, 1258

(Wyo. 2000). Meekison v. Groschner, 153 Ohio St. 301, 91 N.E.2d 680 (1950) is readily

distinguishable from this case, in that the instrument in Meekison was a time note, due without

demand and payable at a specified location. Meekison v. Groschner, 153 Ohio St. 301, 302-03.

Here, there is no contract before the court specifying the place of payment, nor specifying when

payments were due. Appellee is expected to argue here as she did below that the cause of action

accrued at the place of payment in Delaware. Because there was no evidence in the record of

where the Banks involved or their branches were located., it was error for the Court to find that

the cause of action accrued in Delaware by virtue of sending payments to a post office box

address in Delaware. It is not the address appearing on a periodic billing statement that dictates

where a financial injury is felt by,a National Bank. Where the Bank is located is a function of

federal law, and whether the post office box where payments are remitted is a "branch" location

is decidedly not apparent in this record. Supra B(3).

Further, even if the cause of action accrued in Delaware, Aniici urge the Court to find the

cause of action was tolled by partial payments made after the cause of action accrued. By virtue

30

of having made her last payment on June 28, 2006, the statute of limitations -vvould have reset

under either Ohio or Delaware law, and run from that date. Supra T F.

Moreover, under Delaware law, because the payment on the account were in the form of

checks signed by Ms. Jarvis, they amount to "an acknowledgment under the hand of the party of

a subsisting demand," and the claim is governed by a six year statute of limitations - not three -

under Delaware law. Supra ¶ K; Del. Code Ann., Tit. 10, § 8109; Myk-ulak v. Collins, 301. A.2d

313, 316 (Del.Super. 1973); Jarvis Opposition to Summary Judgment, filed March 25, 2011,

Exhibit 1. Thus, the complaint filed March 9, 2010 was not time-barred when filed.

In addition, if the cause of action is found to have accrued in Delaware, the statute of

limitations in Delaware was tolled because Ms. Jarvis has always resided in Ohio and was never

amenable to suit there. SupraJ. The dissent in Payne v. Kir•e:hwehm correctly observed that a

cause of action accrues in another state only if two conditions are present - one, facts necessary

to show a right to relief exists, and two, amenability of the defendant to suit in the other forum.

Payne v. Kirchwehm, 141 Ohio St. 384, 397, 48 N.E.2d 224 (1943)(Bell, J. dissenting). Here,

Ms. Jarvis was never amenable to suit in Delaware.5Q Forum shopping presents itself as an

opportunity to exploit an advantage in the law of one state over the law in another state when a

50 Courts have held tolling statutes unconstitutional under the Commerce clause where theyfailed to distinguish between out of state defendants who were subject to the long-armjurisdiction of the court and those who were not. &e Bendix Autolite C'nrp. v. MidwescoEnterprises, Inc., 486 U.S. 888, 898, 108 S.Ct. 2218, 100 L.Ed.2d 896 (1.988)(Scalia, J.,concurring)("A tolling statute that operated only against persons beyond the reach of Ohio`slong-arm statute, or against all persons that could not be found for mail service, would benarrowly tailored to advance the legitimate purpose of preserving claims;. but the present statuteextends the time for suit even against corporations which (like Midwesco Enterprises) are fullysuable within Ohio, and readily reachable through the mails."); see also Bottineau FarmersElevator v. Woodward-Clyde Cvnsult-anes, 963 F.2d 1064, 1074 (8th Cir.1992); Juzwin v.Asbestos Corp., 900 F.2d 686, 690-92 (3d Cir. 1990). In the same fashion, a borrowing statutethat applies irrespective of whether the Defendant was suable in the borrowed forum would beoverbroad under the Commerce clause.

31

litigant has a choice of forums, and effectively prohibits plaintiffs from electing one forum over

another due to the length of time available to sue in different states. See e.g., Miller v. Stauffer

Chemical Co., 99 Idaho 299, 302, 581 P.2d 345, 348 (1978). Because Ms. 'i'aylor-Jarvis was

never amenable to suit in Delaware by virtue of the fair venue standard and 15 U.S.C. § 1692i,

and because the Appellants never had a choice of forums, the rationale for applying the

borrowing statute here is inapplicable. Supra Ti J; Saudi Basic Industries Corp. v. 1wobil Yanbu

Petrochemical Co., Inc., 866 A.2d 1, 18 (Del.Supr. 2005). In this context, Ohio consumers

residing in Ohio, repeatedly use their cards in, from or while situated in Ohio, manifest assent to

the terms of each transaction and the terms of the cardholder agreement by using the card in

Ohio, received billing statements in Ohio, made payments from Ohio, and claims the benefits

and protections of Ohio law when attempts to enforce the obligation are made. The debtor's sole

reason for seeking the benefits of the borrowing statute is to avoid the obligation to pay,

notwithstanding the fact that he or she was never subject to being sued in another state, and was

protected by the laws of Ohio throughout the terms of the agreement. Measured under R.C. §

2305.03(B), six years is clearly shorter than the tolled statute of limitations.

The gate-keeping function served by the statutes of limitations is cabined by giving the

statutes "a liberal construction to pennit cases to be decided upon their merits." Flagstar Bank,

F.S:B., v. Airline Union's Mtge. Co., 128 Ohio St.3d 529, 2011-Ohio-1961,T 7.

Because the Court of Appeals did not "indulge[ ] everv reasonable presumption and

resolves all doubts in favor of giving, rather than denying, the plaintiff an opportunity to

litigate[;]" Aniici urge reversal. Flagstar Bank, ,F S. B., supra.

Proposition of Law No. III: A complaint for breach of a credit card contract may pray fora post-judgment interest rate that exceeds the statutory rate when there is evidencesuggesting that the parties agreed to the higher interest rate.

32

A. Prayer for reliefA prayer for relief is "[a] request addressed to the court and appearing at the end of a

pleading." Black's Law Dictionary 1213 (9th ed. 2009). "[A] demand for judgment for the relief

to which the party claims to be entitled" is required by Rule 8(A)(2). Civ.R. 8(A)(2). Under Ohio

Civ. R. 84, this Court approved a set of official forms which "are sufficient" under the rules to

"indicate th.e simplicity and brevity of statement[s]" the rules require plead a cause of action.

Civ.R. 84. Official Form 3, titled Complaint on an Account, provides: "Defendant owes plaintiff

dollars according to the account hereto annexed as Exhibit A. Wherefore (etc. as in F.ozm

2)." Form 2's "wherefore" clause (on a promissory note) states: "Wherefore plaintiff demands

judgment against defendant for the sum of dollars, interest, and costs." Civ.R. 84.

Official Form 2. The use of language in a pleading modeled after Ohio Official Form 3, states a

cause of action for recovery under an account theory. Pyle v. Hamm; 4th Dist. No. 745, 1990 WI,

138470, *2 (Sept. 14, 1990); Williams and Company, Inc. v. AllieclSales of Columbus, lOth Dist.

No. 75AP-165, 1975 WL 181914, * 2. (Nov. 13, 1975).

In Fletcher v. Univ. Hosps. of Cleveland, 120 Ohio St.3d 167, 2001-Ohio-5379, 897

N.E.2d 147,11, this Court stated that in pleading an accotznt claim, a copy of the contract is not

required to be attached to the complaint:

[A]ny claim that is based on an account or written instrument must have a copy of theaccount or written instrument attached to the pleading. Notably, Civ.R. 10(D)(1) ends atthat point. Because there is no language in Civ.R. 10(D)(1) that the account or writteninstrument is required to establish the adequacy of the complaint, any failure to attach therequired copies is properly addressed by a motion for a more definite statement underCiv.R. 12(E). In short, a party can still plead a prima facie case in such circumstanceseven without attaching the account or written agreement to the complaint.

See also A merican Sec. Service, Inc. v. _Baumann; 32 Ohio App.2d 237, 240, 289 N.E.2d 373

(10th Dist. 1972) (Rule 10(D), "provide[s] a rule of pleading and not a rule of evidence.");

Discover Bank C14 DFS Servs. L.L.C. v. Lammers, 2d Dist. No. 08-CA-85, 2009-Ohio-3516,

33

25; Citibank v. Eckmeyer, 11`t' Dist. No. 2008-P-0069, 2009-Ohio-2435, ^T 14-15; First

Resolution Inv. Corp. v. Gr°if^th, lOt" Dist. No. lOAP-212, 2010-Ohio-4748, ¶T 8-9; C:apital One

Bank v. Nolan, 4th Dist. No. 06CA77, 2008-Ohio- 1850, TT 10-13; Capital One Bank v. Day, 176

Ohio App.3d 516, 522, 892 N.E.2d 932 (4th Dist. 2008).

B. Interest in excess of the statutory rate is permitted by law.

As provided in R.C. § 1343.03, "the creditor is entitled to interest at the rate per annum

determined pursuant to section 5703.47 of the Revised Code, unless a written contract provides a

different rate of interest in relation to the money that becomes due and payable, in which case the

creditor is entitled to iiiterest at the rate provided in that contract." R.C. § 1343.03 (emphasis

added). Interest is awarded for the loss of use of money resulting from the failure to pay a credit

card debt, is intended to make the Plaintiff whole, and runs from the date of default. Calvary S..t'V

I, L.L.C. v. Furtado, 10th Dist. No. 05AP-361, 2005-Ohio-6884, ^, 22 (Dec. 27, 2005). The fact

that Appellants specified the interest rate they were seeking in the complaint, rather than

obfuscated the rate they intended to claim, was "extra detail" that does not violate the p'DCPA,

Hahn v, 7'rizimph Partnerships LLC, 557 F.3d 755, 757 (7th Cir. 2009); l7otaohue v. Quick

Collect, Inc., 592 F.3d 1027, 1033-34 (9th Cir.2010).

To the extent the Court of Appeals relied on case law interpreting a claimed entitlement

to attorney's fees, in that there is no comparable provision of Ohio law creating an entitlement to

recover attorney's fees, those cases are inapposite. Under federal law, a debt collector is

prohibited from "[t]he collection of any amount (including any interest, fee, charge, or expense

incidental to the principal obligation) unless such amount is expressly authorized by the

agreement creating the debt or permitted by law." 15 U.S.C. § 1692f(1). As explained in the

FTC's commentary on the FDCPA, pursuant to this restriction, a debt collector cannot seek to

collect an amount that exceeds the amount of the debt, when the charge is expressly prohibited

34

under state law, and when the agreement creating the debt and state law are silent. As stated

conversely by the FTC, a debt collector may only collect additional fees wllen they are expressly

contracted for at the time the debt was created and the charge is not prohibited by state law, or

where the contract is silent and the charge is expressly permitted by state law.5a

Indeed, under Ohio law, recovery of attorney's fees in the event of a defaulted consumer

credit obligation are void as contrary to public policy, and a claim filed in court seeking

attorney's fees in such a case has been found to violate the FDCPA. Wilborn v. Bank One Corp.,

121 Ohio St.3d 546, 549, 2009-Ohio-306, 906 N.E.2d 396, T 10-14; Gionis v. Javitch, Block,

Rathbone, LLP, 238 Fed.Appx. 24, 25, 2007 WL 1654357, *1 (6th Cir. 2007). However, "the

fact that the debt collector failed to attach the credit-card agreement to the complaint, and may

not have possessed the credit-card agreement at the time the state-court complaint was filed, does

not constitute a violation of the FDCPA." Washington v. Roosen, 11'archetti & Oliver, PPLC,

894 F.Supp.2d 1015, 1024 (W.D.Mich. 2012).

Where the demand for relief in a pleading is alleged to seek more than the Plaintiff is

entitled, as opposed to some amount prohibited under state law, many Courts have held the

prayer for relief is not actionable under the FDCPA. See Argentieri v. Fisher Landscapes, Inc.,

15 F.Supp.2d 55, 61-62 (D.Mass.1998) (request for attorneys' fees in prayer for relief does not

violate FDCPA); Winn v. Unifund CCR Partners, No. 06-447, 2007 WL 974099, at *2-3

(D.Ariz. March 30, 2007) (same); Rael v. Davis, No. 06-81, 2006 WL 2346396, at *4-5 (S.D.Ind.

51 FTC, Statements qf General Policy or Interpretation Proposed Official Staff C:ommeniary onFair Debt Collection Practices Act, 53 Fed. Reg. 50097-50107-08 (Dec. 13, 1988). See alsoShula v. Lcnwent, 359 F.3d 489, 493 (7th Cir. 2004); Freyermuth v. Credit Bureau Services, Inc.,248 F.3d 767, 770-71 (8th Cir.2001); Tuttle v. Equifax Check, 190 F.3d 9, 11-15 (2d Cir.1999);Pollice v. National Tax Funding, L.P., 225 F.3d 379, 408 (3d Cir. 2000).

35

Aug. 11, 2006) (same); Riermersma v. Messerli & Kramer, P..4., No. 07-3898, 2008 WL

2390729, *2 (D. Minn. June 9, 2008)(same).

C. Proof of interest rate

It is of no moment that all the proof going to the interest rate was not in Appellants

possession at the time the action was filed.52 Harvey v. Great Seneca Fin. Corp., 453 F.3d 324,

331-33 (6th Cir. 2006); Deere v. Javitch, Block, and Rathbone, L..L.P., 413 F.Supp.2d 886, 890

(S.D. Ohio 2006); Davis v. NCO Por•tfolio tlvIgmt., Ifzc,, No. 1:05 CV 734, 2006 WL 290491, * 1-

4(S.D. Ohio Feb. 7, 2006). In essence, "[s]he essentially alleges that more of a paper trail should

have been in the lawyers' hands or attached to the complaint. The FDCPA imposes no such

obligation." I-farvey v. Great Seneca Financial C'orp., 453 F.3d 324, 331 (quoting Deere).

1). Whether the broad language of 15 U.S.C. § 1692e or § 1692f should apply topleadings.

The content of state court pleadings and regulating the practice of law, are areas

traditionally recognized as falling within the ambit of state concern. Goldfarb V. Virginia State

Bar, 421 U.S. 773, 792 (1975); Gade v. National Solid Wastes Management Ass'n, 505 U.S. 88,

98 (1992). Filing a suit supported by probable cause, that is not objectively baseless, contains no

materially false representations, and brought in good faith based on a client's representation that

a debt is owed, is entitled to protection under the First Amendment. McDonald v. Smith,472 U.S.

479, 484 (1985); I'rof'essional Real Estate Investors, Inc. v. Columbia .Pictures Industries, Inc.,

508 U.S. 49 (1993); Bill Johnson's Restauratzts, Inc, v. N.L.R.B., 461 U.S. 731, 743 (1983); B'

& K Const. Co. v. tV.L:R.B., 536 U.S. 516, 532 (2002). Pleadings retain protection under the

First Amendment tmtil there is a heightened showing of intent, falsity or recklessness, before

liability can be imposed, to prevent a chilling efiect on protected, truthful, speech. See e.g.,

52 The Chase Cardliolder agreement attached to Appellant's motion for summary judgmentshowed that the interest rate on the tanpaid balance was 2% per month, or 24%. Cheek LawOffices Motion for Summary Judgment, Exhibit B(l~,x.hibit A to Admission Responses, p. 3¶ 6).

36

Hustler Magazine v. Falwell, 485 U.S. 46, 52 (1988); Gertz v. Robert Welch, Inc., 418 U.S. 323,

341 (1974); Herbert v. Lando, 441 U.S. 153, 156-57 (1979); New York 7'irnes Co. v. Sullivan,

376 U.S. 254, 279-80 (1964).

Liability under the FDCPA and Ohio CSPA cannot be premised on the statements in the

pleadings so long as the statements were not "false." Lee v. Javitch, Block & Rathbone LLP, 601

F,3d 654, 657, n. 2 (6th Cir. 2010); Hartman v Great Seneca Fin. Corp., 569 F.3d. 606, 615-16

Wh Cir. 2009), cert. denied 130 S.Ct. 1688 (2010); Satre v. Wells Fargo Bank, NA, No. 11-

16099, 2013 WL 491550, *1(9th Cir. Jan. 2, 2013). In addition, to be actionable, the "false"

statement must be material. HHahn v. Triumph P'ships LLC 557 F.3d 755, 758 (7th Cir.2009).53

Before enactment, Congress considered, and ultimately rejected, including a provision in

the Act that would have prohibited "[fJalsly representing or falsly implying any facts about the

character, extent or anlount of an alleged debt of a consumer or of its status in any lezal

roc°^ eedt^.'" IH.R. 10191, § 804(6), 94'h Congress, 1st Sess. (Oct. 1975). Prior to 1986, the

FDCPA did not govern attorneys at all. Schroyer v. Frankel, 197 F.3d 1170, 1174-75 (6th Cir.

1999). Moreover, when the attorney exemption from the Act was removed in 1986, the reason

for making the change had nothing to do with acts or practices in the context of litigation; the

exemption was removed because attorneys were competing with traditional debt collectors

unfairly in the debt collection market. H.R. REP. 99-405, 3, 1986 U.S.C.C.A.N. 1752, 1753 ---

53 (holding that "a false but non-material statement is not actionable" under the FDCPA because"[a] statement cannot mislead unless it is material"). Several circuit courts have read amateriality requirement into the FDCPA's prohibition of false, deceptive, or misleading practicesin the collection of a debt. See, e.g., Lembach v. Bierman, No. 12-1723, 2013 WL 2501752 (4thCir. June 12, 2013)("Under this standard, a false statement that would not mislead the "leastsophisticated consumer" is not actionable.' ), Gabriele v. Am. Home Mortgage Servicing, Inc.,503 F. App'x 89, 94 (2d Cir. 2012); Donohue v. Quick Collect; Inc., 592 F.3d 1027, 1034 (9thCir.201 0) (finding that mislabeling in state cornplaint of interest owed on debt was not a materialmisrepresentation under the FDCPA); Miller v. Javitch, Block & Rcrthhone, 561 F,3d 588, 596(6th Cir.2009) (same).

37

1754. Congress intended to place attorneys engaged in debt collection under the same standards

that governed traditional debt collectors. Jenkins v. Heintz, 124 F.3d 824, 833-834 (7th

Cir. 1997). In light of the Act's legislative history, "it is far from clear that the FDCPA controls

the contents of pleadings filed in state court." Beler v. Blatt, Hasenrniller, Leibsker & Moore,

LLC. 480 F.3d 470, 473 (7th Cir. 2007).

One of the reforms ushered in by the enactment of the Dodd-Frank Wall Street Reform

and Consumer Protection Act,54 involves regulation of debt collectors under the FDCPA. When

originally enacted, the FDCPA prohibited the Federal Trade Commission from enacting

regulations to interpret its meaning.55 Under Dodd-Frank, the newly created Consumer Financial

Protection Btireau (CFPB) was given the authority to enact regulations under the FDCPA. At the

same time, however, CFPB was prohibited from:

°`[F,]xercise[ing] any supervisory or enforcement authority with respect to an activityengaged in by an attorney as part of the practice of law under the laws of a State in whichthe attorney is licensed to practice law . . . [however, this] shall not be construed so as tolimit the authority of the Bureau with respect to any attorney, to the extent that suchattorney is otherwise subject to ... [the FDCPA]."56

The practice of law and debt collection are not synonymous. Cincinnati Bar Association

v. Foreclosure Solutions, LLC, 123 Ohio St.3d 107, 2009-Ohio-4174, 914 N.E.2d 386, 121-27.

The practice of law encompasses the preparation of legal documents and instruments upon which

legal rights are secured and advanced. Lorain County Bar Association v. Kocak, 121 Ohio St.3d

396, 2009-Ohio-1430, 904 N.E.2d 885, ¶ 17.

E. Analysis

The Court of Appeals erred in concluding that the prayer for relief is actionable here. In

short, a prayer for relief is required by Ohio law, is "an. activity engaged in by an attorney as part

54 Pub. L. 111-203, Title X, § 1089(2), luly 21, 2010, 124 Stat. 1376.s` 15 U.S.C. § 16921(d) (§ 814(d)).56 12 U.S.C. § 5517(e)(1), (3).

38

of the practice of law;" interest in excess of the statutory rate is permitted by Ohio law, and even

where interest is prayed for in excess of the statutory rate, no contract need be attached to the

complaint to pursue an account claim. Supra T A-C. So long as the principal amount of the debt

stated in the complaint was correct, the rate or amount of interest prayed for in the complaint is

not material. Gates v. Asset Acceptance, LLC, 801 F. Supp. 2d 1044, 1047 (S.D. Cal. 2011);

Hahn v. Triumph Partnerships I,LC 557 F.3d 755, 757-58.

Further, given that the account statement attached to the complaint stated the interest rate

on the account was 24.99%, that the contract believed to govern the account provided for 24%

interest,'7 and given that the complaint prayed for judgment interest at the rate of 24%, Ms.

Taylor Jarvis was put on notice of what Appellants Nvere seeking from the Court. The FDCPA

does not sanction attorneys for failure to have sufficient evidence to prove their claims, nor for

providing more information than is minimally required. 7-Iarvey, supra; Hahn v. Triumph

Partnerships LLC, supra. The FDCPA extends its protections to consumers, or those standing in

a consumer's shoes, and does not apply to representations made to state court judges. O'Rourke

v. Pa•lisades.AcquisitionX'VI LLC, 635 F.3d 938, 940-41, 44 (7th Cir. 2011):

[T]he question is not whether this dubious rnethod is an acceptable means of practicinglaw. Nor is the question whether the attached staternent would have misled theunsophisticated consumer. Rather, the question O'Rourke presents is whether thisstatement, which O'Rourke alleges was meant to deceive the state court judge, isactionable under the Act.... Because nothing in the Act's text extends its protections toanyone but consumers and those who have a special relatioriship with the consumer, wehold that the Fair Debt Collection Practices Act does not extend to communications thatwould confuse or mislead a state court judge.

The decision also runs counter to the Supreme Court's admonition that "we do not see

how the fact that a lawsuit turns out ultimately to be unsuccessful could, by itself, make the

bringing of it an "action that cannot legally be takert[,)" in violation of the FDCPA. Heintz v.

57 See supra note 52.

39

Jenkins, 514 U.S. 291, 295-96 (1995). As aptly stated by the Court of Appeals for the Eighth

Circuit:

If judicial proceedings are to accurately resolve factual disputes, a lawyer "must bepermitted to call witnesses without fear of being sued if the witness is disbelieved and itis alleged that the lawyer knew or should have known that the witness' testimony wasfalse." ... Judges have ample power to award attorney's fees to a party injured by alawyer's fraudulent or vexatious litigation tactics. ... There is no need for follow-on §1692e litigation that increases the cost of resolving bona fide debtor-creditor disputes.

IHemmiiigsen v. Messerli & Kramer, P.A., 674 F.3d 814, 819-20 (8th Cir. 2012)(quoting Imbler

v. Pachtman, 424 U.S. 409, 439, 96 S.Ct. 984, 47 L.Ed.2d 128 (1976) (White, J., concurring)).

Because the Court of Appeals was incorrect in concluding the prayer for relief was

actionable under these circumstances, Arnici urge reversal.

Proposition of Law No. IV: The Ohio Consumer Sales Practices Act does not apply to bankassignees and their collection attorneys because there is no "consumer transaction" or"supplier"

There are seven reasons why the Court should find that the Ohio Consumer Sales

Practices Act (CSPA) does not apply to a lawsuit filed by a credit card. issuer's assignee's

attorney engaged in litigation and wholly inapplicable to debt collection.

A. Appellants are not suppliers.

First, as recently observed in Anderson v. Barclay's Capital Real Etate., Inc., 2013-(Jhio-

1933, -- N.E.2d ----, 2013 WL 2097556, under the CSPA, "suppliers" are those that cause a

consunier transaction to happen or that seek to enter into a consumer transaction. Anderson,

2013-Ohio-1933 T 30. "`Supplier' means a seller, lessor, assignor, franchisor, or other person

engaged in the business of effecting or soliciting coxisumr transactions, whether or not the

person deals directly with the consumer. R.C. 1345.01(C)." Andersnn, supraT 29; id. atT 30.58

58 ("'Effect' is defined as '[t]o bring about;. to make happen[;] 'Solicitation' is defined as `[t]heact or an instance of requesting or seeking to obtain soznething; a request or petition.`)(tluotingBlack's Law Dictionary 592, 1520 (9th Ed.2009)).

40

Lawsuits filed by lawyers and debt collection efforts do not cause a consumer transaction to

happen. SWA, Inc. v, Straka,8th Dist. No. 82103, 2003-Ohio-3259, ¶11 ( Jun. 19, 2003).59

The legislative history does not bear out the proposition that the legislature viewed

lawyers or debt collectors as suppliers. R.C. § 1.49(C). The Ohio CSPA, modeled after the

Uniform Consumer Sales Practices Act, was adopted in Ohio in 1972. Amend Sub. H.B. 103,

134 Ohio Laws 1233. The Uniform Consumer Sales Practices Act of 1970 (UCSPA) was

adopted in only three states: Ohio, Kansas and Utah. LTniform Laws Annotated, Uniform

Consumer Sales Practices Act, References & Annotations. (citing Kansas Stat. Ann. §§ 50- 623

to 50-679a (1973), R.C. §§ 1345.01 to 1345.13 (1972), and Utah C.A.1933, 13-11-1 to 13-11-23

(1973)). Under Section 2 of the UCSPA, a`supplier' was defined as "a seller, lessor, assignor,

or other person who regularly solicits, engages in, or enforces consumer transactions, whether

or not he deals directly with the consumer." UCSPA, §2(5)(emphasis added). Utah and KaaLsas

both adopted this definition; Ohio did not. Compare t7tah C.A. 1953 § 13-11-3(6)60 & Kansas

Stat. Ann, 50-624(i)61 with R.C. § 1345.01(C).

Thus, the UCSPA definition includes "other persons who regularly, solicits, engages in or

enforces ,.." while the Ohio CSPA only includes persons "engaged in the business of effecting

or soliciting ... " consumer transactions. The crucial difference is that Ohio's CSPA does not

include those who enforce consumer transactions. Thus, the Ohio definition of a"supplier"

deliberately excluded entities that "enforce" consumer transactions from its scope. The Ohio

59 ("Simply because Straka was sued by SWA does not mean she engaged in a`transaction' withSWA.").60 ("'Supplier' means a seller, lessor, assignor, offeror, broker, or other person who regularlysolicits, engages in, or enforces consumer transactions, whether or not he deals directly with theconstuner.").61 ("'Supplier' means a manufacturer, distributor, dealer, seller, lessor, assignor, or other personwho, in the ordinary course of business, solicits, engages in or enforces consumer transactions,whether or not dealing directly with the consumer.")(emphasis added).

41

CSPA definition also alters the portion of the definition relating to regularly engaging in

consumer transactions; in place of "regularly ... engages in," the Ohio CSPA uses the term

"engaged in the business of effecting ...:" The term "effecting" is not synonymous with

enforcing. Anderson, at ^, 30. The tenn "enforce" means to "compel obedience to; ... to obtain

(payment, obedience, etc) by force or compulsion." Random House Dictionary, p. 473 (1966).

In light of the express language of the Kansas CSPA, which adopted the UCSPA

defin.ition verbatim, the Kansas Supreme Court has held that an "independent debt collection

agency falls within the definition of a`supplier' and is subject to the provisions of the KCPA, if

it is found that three specific conditions exist: (1) The debt sought to be enforced came into being

as a result of a consumer transaction; (2) The parties to the origialal consumer transaction were a

`supplier' and a`consumer' as defined in the act; and (3) The conduct complained of, either

deceptive or unconscionable, occurred during the collection of, or an attempt to collect, a debt

which arose from the consumer transaction and was owed by the consumer to the original

supplier." State ex rel. Miller v. Midwest Service But•eau of Topeka, 1'nc., 229 Kan. 322, 323-324,

329, 623 P.2d 1343 (1981) (construing K.S.A. 50-624(i)). See also Heard v. Bonneville Billing

and Collections, 216 F.3d 1087, 1087 (10th Cir. 2000) (holding collection agency violated

Utah's version of the CSPA).

The variation in sta.tutory text obviously evidences a legislative intent to limit the scope

of the Ohio Act to exclude enfarcement activity u.nder the maxim expressio unius est exclusion

alterius. Myers v. Toledo, 110 Ohio St.3d 218, 2006--Ohio--4353, 852 N.E.2d 1176, at 24.

Indeed, at the time the FDCPA was enacted in 1977, five years after the enactment of the

CSPA in Ohio in 1972, Congressman Chalmers Wylie, rai-ihiaig minority member of the House

Consumer Affairs Committee from Ohio, repeatedly stated that Ohio had no debt collection law.

42

See e;g., HeaNings on S. 656, S. 918, S. 1130, and .i<I R. 5294 Before the &bcomm. on Consumer

Affairs of the Comm. on Banking, Housing and Urban Affairs, 95th Cong. 44 (1977).62 The

absence of state laws on the subject was one of the rationale's that led to the enactment of the

FDCPA. S. Rep. No. 382, 95th Cong., 1st Sess. 1977, 1977 U.S.C.C.A.N. 1695, 1696-97.63

B. Litigation and debt collection are not a consumer transaction

Second, in order to maintain a right of action under the CSPA, Plaintiff initially must

show that he is a"consumer" who engaged in a "consumer transaction" with a"suppliera" as

required by R.C. § 1345.09. Culbreath v. Golding Ents., L. L. (:., 114 Ohio St.3d 357, 2007-Ohio-

4278, 872 N.E.2d 284, at ¶¶ 22-30. There is no indication from the text of R.C. § 1345.01(A)

that the legislature intended a lawsuit or debt collection as a consumer transaction, because

neither involves a "transfer of an item of goods, a service, a franchise, or an intangible, to an

individual." Anderson, at ¶ 8, 15 (quoting R.C. § 1345.01(A)). A lawsuit and debt collection do

not sell or give anything to an individual, tangible or intangible. While a lawyer or debt collector

attempting to collect a credit card debt "provides a service to a financial institution, ... [this] is

neither analogous to transferring a service to a borrower nor sufficient to inipose liability under

the CSPA." Anderson at ¶ 17.

Further, it is beyond dispute that transactions between banking institutions and consumers

are not "consumer transactions," and are therefore not governed by the CSPA. Reagans v.

MountainHigh Coachworks, Inc., 117 Ohio St.3d 22, 2008-Ohio-271, 881 N.E.2d 245, at ¶33.

See also Lamb v. Javitch, Block & Rathbone, LLP, No. 1:04-CV-520, 2005 WL 4137786

(S.D.Ohio 2005); Gionis v. Javitch, Block & Rathbone, 405 F.Supp.2d 856, 869 (S.D.Ohio

62 (statement of Chalmers P. Wylie)("there is a need for uniform standards of conduct in that you[Mr. Proxmire] said there are 13 states, including my own state of Ohio, which do not have anylaws governing debt collection practices[.]").63 ("there are 13 States, with 40 million citizens, that have no debt collection laws. These Statesare... Ohio, ....").

43

2005); Lewis v. ACB Business Services, 135 F.3d 389, 412 (6th Cir. 1998); Clark v, Lender

Processing Servs., Inc., No. 1:12-CV-2187, 2013 WL 2476944, *10 (N.D. Ohio June 7, 2013).

The claim here was originated as a financial transaction, exempted from the definition of

a consumer transaction. As used in Sections 1345.01 to 1345.13 of the Revised Code:

"Consumer transaction" ... does not include transactions between. persons, defined in sections

4905.03 and 5725.01 of the Revised Code, and their customers[.]" R.C. § 1345.01(A). In turn,

R.C. §5725.01 provides, in pertinent part: (A) "Financial institution" means: * * * (3) A bank,

banking association, trust company, savings and loan association, savings bank, or other banking

institution that is incorporated or organized under the laws of any state[.]'° R.C. § 5725.01(A)(3).

This debt is therefore not governed by the CSPA, and the mere fact that the underlying

debt was subsequently assigned cannot transform it into a consumer transaction. Dartmouth

Plan, Inc, v. Ilaerr, 3d Dist. No. 8-89-25, 1990 WL 197884, *2 (Dec. 4, 1990);64 NCR Universal

Credit Union, Inc. v. Klein_herg, 2d Dist. No. 11807, 1990 WL 40632, *3 (Apr. 6, 1990). While

some courts have entertained CSPA. claims for collection efforts under the CSPA, the cases have

not pointed to anything in the statutory text of the OCSPA supporting that outcome, typically by

the specious reasoning that collection "effects" a consumer transaction. See Celebyezze v. tlnited

Reseaf•ch, 19 Ohio App.3d 49, 51 (9th Dist. 1984); Liggins v. The May Co., 44 Ohio Misc. 81.,

337 N.13 .2d 816 (Cuy. Co. 1975); Broadnax v. Greene CNedit Serrv., 118 Ohio App.3d 881, 892,

694 N.E.2d 167 (2d Dist. 1997). None of these cases considered the textual origin of the

statutory definition of a consumer transaction, the plain meaning of the term, the legislative

history, or the constitutional implication of a construction that would apply the CSPA to

litigation.

64 ("[A] mere assignee of the installrnent obligation is not a supplier within the meaning of R.C.1345.01(C). "),

44

C. Procedural applications of substantive law are unconstitutional

Third, such a construction would rend.er the statute unconstitutional under the Ohio

Constitution. R.C. § 1.47(A). 'I'o the extent the Court of Appeals held that allegations in a state

court complaint are subject to and are to be assessed under the Ohio CSPA, this is in effect a

procedural application of a substantive law, which is clearly prohibited by Article IV, §2

(B)(1)(g) and Article IV §5 of the Ohio Constitution. See e.g., Kilbreath v. Rudy, 16 Ohio St.2d

70, 72, 242 N.E.2d 658 (1968) ("Substantive law is that which creates duties, rights and

obligations, wlzile procedural or remedial law prescribes the methods of enforcement of rights or

obtaining redress."); Ohio Const. Art. IV §2 (B)(1)(g), § 5.

D. Applying the CSPA to measure pleadings violates the separation of powers

Fourth, the rules governing practices and procedures applicable in Ohio Courts are

promulgated by the Ohio Supreme Court under Ohio Constitution Article IV, §5. See Ohio

Const. Art. IV, §5.65 Further, regutation and discipline of the conduct of attorneys licensed to

practice in the State of Ohio falls within the exclusive province of the Ohio Supreme Court under

Ohio Const. Art. IV, § 2(B)(1)(g), not the legislature. See e.g., Chevy Chase Bank v. McCamant,

512 S.E.2d 217(Vi-'.Va.1998). Allowing the Legislature to dictate the circunistances by which an

attorney should be subject to liability, violates the separation of powers between the Legislative

and Judicial branches of govermnent. Beyers v. Richmond, 594 Pa. 654, 660-71, 937 A.2d 1082,

1086-93 (Pa. 2007).

E. Debt collection is regulated by R.C. §§ 1321.35 et seq., not the CSPA

Fifth, the Legislature recently enacted legislation goveming payday lending, including

regulation of debt collection of payday loans in R.C. S§ 1321.35 et seq. Sub. H.B. 545, 2008

65 ("The supreme court shall prescribe rules governing practice and procedure in all courts of thestate, which rules shall not abridge, enlarge, or modify any substantive right.... All laws inconflict with such rules shall be of no further force or effect after such rules have taken effect,").

45

Ohio Laws 91 (eff. 9-1-08). As part of the new legislation, Ohio enacted specific debt collection

standards for the collection of pay day loans. R.C. §§ 1321.41, 1321.45. That law affords a

person a private right of action under the Ohio CSPA. R.C. § 1321.44(A). The scope of the

legislation, however, is limited by its definition of a "debt collector:"

(1) "Debt collector" means a licensee, officer, employee, or agent of a licensee, or anyperson acting as a debt collector for a licensee, or any person while serving or attemptingto serve legal process on any other person in connection with the judicial enforcement ofany debt resulting from a short-terrn loan made by a licensee.

R.C. § 1321.45(A)(1). The reference in this definition to "licensee" refers to persons who are

required to obtain a license to make short term loans, as provided in R.C. §1321.36. The

definition adopted by the Legislature makes abundantly clear that a`debt collector' does not

include an attorney practicing law, who files suit on behalf of a creditor, unless they have

undertaken to serve process, and that it only pertains to collection of pay day loans.

Further, if debt collection and litigation generally had already been governed by the Ohio

CSPA, the new legislation would be entirely superfluous. See Cty. of San Diego v. Elav.sky; 58

Ohio St.2d 81, 86, 388 N.E.2d 1229 (1979);66 R.C. §§ 1.41, 1.47, 1.51(B); Hibbs v. Winn, 542

U.S. 88, 89 (2004) (rule against superfluities). Because these provisions are in pari naateria, they

must be construed together, such that each is given meaning. State ex rel. C'ordray v. Midway

MotorSczles, Inc., 122 Ohio St.3d 234, 2009 -Ohio- 2610, 910 N.E.2d 432, at ^, 25.6?

Doing so inexorably leads to the conclusion that litigation and "debt collection" are not a

"consumer transaction," and debt collectors and their lawyers are not "suppliers" under R.C. §

66 ("It is a primary rule of statutory construction that courts should not construe one statute in away that would abrogate, defeat, or nullify another statue, where a reasonable construction ofboth is possible.").67 ("In reading statutes in pari materia and construing them together, this court nxust give areasonable construction that provides the proper effect to each statute.... All provisions of theRevised Code bearing upon the same subject matter should be construed harmoniously unlessthey are irreconcilable.").

46

1345.01. Otherwise, there would have been no need for the Ohio Legislature to draft a new

statute governing debt collection for pay day loans; and R.C. § 1321.45 would be entirely

meaningless.

F. The CSPA does not apply to pleadings because they are required by law

Sixth, Section 1.4 of the UCSPA provides "[flhis act does not apply to: (1) an act or

practice required or specifically permitted by or under Federal law, or by or under State law."

R.C. §1345.12 likewise provides that "Sections 1345.01 to 1345.13 of the Revised Code do not

apply to:(A) An act or practice required or specifically permitted by or under federal law, or

by or under other sections of the Revised Code...." R.C. § 1345.12. The Official comment to

UCSPA, §2(5), explained: "Section 14 should be consulted in order to ascertain the conduct

by suppliers which is exempt from the Act." UCSPA §2 Official Comment on Subsection (5).

The act of filing a complaint in municipal or common pleas Court is expressly required to

commence a lawsuit. See R.C. § 1901.22. 'The Civil Rules, in tuan, expresslv state that: "A civil

action is commenced by filing a complaint with the court...." Civ.R. 3(A). Filing and service of a

complaint is also required by federal Iaw. See, e.g., Alullane v. Central l.^anover Bank & Trust

Co., 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950); Hansherry v. Lee, 311 U.S. 32, 40,

61 S.Ct. 115, 117 (1940).

G. Pleadings are absolutely privileged under the common law

Seventh, Ohio comnion law has always recognized absolute immunity for participants in

the judicial process. "The absolute privilege or `immunity" for statements made in a judicial

proceeding extetzds to every step in the proceeding, from beginning to end." 1Vl,l.. DiCorpo, Inc.

v. Sweeney, 69 Ohio St.3d 497, 506, 6341\.E.2d 203 (1994); Surace v. Wuliger, 25 Ohio St.3d

229, 235, 495 N.E.2d 939 ( 1986). The privilege for statements made in the course of judicial

proceedings protects the integrity and reputation of the justice system by allowing persons

47

involved in judicial proceedings to speak freely without fear of retaliatory suits against them.

Erie Cty. Farmers' Ins. Co. v. Crecelius, 122 Ohio St. 210, 171 N.E. 97 (1930). Thus, witnesses,

parties, attorneys, and judges are protected while functioning as such in the usual and regular

course of judicial proceedings. See id.; Surace v. Wuliger, 25 Ohio St.3d 229, 495 N.E.2d 939,

syllabus; Justice v. Mowery, 69 Ohio App,2d 75, 76, 430 N.E.2d 960 (1980). The absolute

immunity from suit deriving from this privilege was an outgrowth of several historical sources,

including the right of citizens to petition for redress of grievances, ensuring access to courts, the

right to counsel, and the fair and proper administration of justice. See T.L. Anenson, Absolute

Immunity From Civil Liability: Lessons For Litigation Lawyers, 31 Pepp. L. Rev. 915, 919-24

(2004); J. M. Spanbauer, The First Amenclnaent Right To Petition Government For A Redress Of

Grievances: Cut From A Different Cloth, 1 Hastings Const. L.Q. 15, 22-25, 52-57 (1993);

Edward P. Weeks, Treatise on Attorneys & Counsellors at Law, §§ 106, 110, pp. 196-98, 205-

210 (Fred B. Rothman & Co. 1997) (1878) (citing Brook v. Montague, 2 Cro. Jac. 90 (1606);

Ilodgson v. Scarlet, 1 B. & Al. 232). Immunity has been justified as a necessary price to pay for

the fair administration of justice. See Abbot v. National Bank of Commerce,175 U.S. 409, 411,

20 S.Ct. 153 (1899); White v. Nicholls, 44 U.S. 266, 280 (1845); Imbler v. Pachtman, 424 U.S.

409, 426, n. 23 (1976);68 Butz v. Economou, 438 U.S. 478, 512 (1978).

Ohio law recognizes the principle that state statutes must be construed as consistent with

and not in derogation of common law unless a clear intent of the legislature appears to the

contrary. Danziger v. Luse, 103 Ohio St.3d 337, 81 5 N.E.2d 658 (2004); LaCourse v. Fleitz, 28

Ohio St.3d 209, 212, 503 N.E.2d 159 (1986). Further, the Ohio CSPA does not supersede

68 ("a concern for the airing of all evidence has resulted in an absolute privilege for anycourtroom statement relevant to the subject matter of the proceeding. In the case of lawyers theprivilege extends to their briefs and pleadings as well.").

48

common law claims and defenses. Mid-America Acceptance C'o. v. Liglrtle, 63 Ohio App.3d 590,

601, 579 N.E.2d 721, 728 (10 Dist. 1989); R.C. § 1345.13); Davila v. C'alo, 8th Dist. No. 49940,

1985 Westiaw 4615, *2 (Dec. 19, 1985).

Because the state interests in keeping courts open, regulating the practice of law and

governing the procedures used by state courts would be undermined by applying state consumer

protection law to litigation, the Ohio CSPA does not supercede the common law immunity

afforded to attorneys for their pleadings. See E chevczrr-ia, ^lfcCalla, Raymer, Barrett & Frappier

v. Cole, 950 So.2d 380, 384 (Fla.2007);69 see also, e.g., Born v. Hosto & Buchan, PLLC, 2010

Ark. 292, 14-15, 372 S.W.3d 324, 334 (2010);7° Beyers v. Richmond, 594 Pa. 654, 660-71, 937

A.2d 1082 (Pa. 2007);71 Gaisser v. I'ortfolio Recovery Associates, LLC; 571 F. Supp. 2d 1273,

1280 (S.D> Fla. 2008); Rickenbach v. Wells Fargo Bank, N.A., 635 F. Supp. 2d 389, 403 (D:N.J.

2009).

H. Analysis

The suggestion that attorneys and their clients should subject to damages under the Ohio

Consumer Sales Practices Act for filing a lawsuit well grounded in fact and law because an

untested affirmative defense is raised, premised on the complexities of unsettled law on a

borrowing statute of limitations, is anathema. In the topsy-turvy world of consumer debt

collection, however, a mind field of ambiguities in the law have given rise to the type of tactics

seen here - a lawsuit over a credit card debt spawns class action counterclaims, joinder of the

lawyers, and overstated claims of egregious misconduct. This Court should put to rest the

ambiguity and hold pleadings, litigation and debt collection do not constitute a consumer

69 ("The litigation privilege applies across the board to actions in Florida, both to common-lawcauses of action, those initiated pursuant to a statute, or of some other origin.").^i (Ark. deceptive trade practices act does not apply to the practice of law).

(collecting statutes and cases)(holding deceptive trade practices act does not apply to thepractice of law).

49

transaction; that lawyers engaged in litigation and debt collectors are not suppliers; that the

statute of limitations cannot be used as a sword; debt collectiozi and litigation are not subject to

the CSPA, and statements made in the course of a judicial proceeding are absolutely privileged.

The text of the CSPA, its legislative history and the language of the Uniform CSPA adopted in

sister states support this result.

While much could be gainsaid about the between the varying aims and definitions found

in the FDCPA and CSPA, each of the foregoing reasons are independently sufficient to

demonstrate that neither litigation nor debt collection are subject to the CSPA. Combined, they

overwhelmingly show the Court of Appeals erred in concluding otherwise.

The Court of Appeals' failed to recognize that CSPA claims must stand on their own, and

be established by evidence showing the Plaintiff is a consumer, the Defendants were suppliers,

and the parties engaged in a consumer transaction. Because the Court of Appeals did not

correctly assess each of these issues, Amici urge reversal.

CONCLUSION

For the reasons discussed, OCAA and DBA, aniici curiae in support of the Appellants

Cheek Law Offices, Attorney Parri HockenbeiTy, First Resolution Investment Corp. and First

Resolution Management Corp. respectfWly requests this iionorable Court adopt each of

Appellants propositions of law; and reverse the judgment of the Ninth District Court of Appeals

on the grounds proposed herein.

50

Respectfull , bmitted,

Michael . Slodov, SCR#0051678Counsel of RecordSessions, Fishman, Nathan & Israel, LLC15 E. Summit St.Chagrin Falls, Ohio 44022(440) 318-1073(fax) (216) 359-0049(email) mslodov@sessions-law.biz

Attot-neys for Amici CuriaeOhio C reclitor•'s Attorney's Association andDBA International

CERTIFICATE OF SERVICE

A true and accurate copy of the foregoing has been served u on the following by depositing acopy in the United States Mail, postage prepaid, this^^ day of^-e_ , 2013 addressed to:

James F. Burke, Jr., Esq.John J. Horrigan, Esq.Burke & Horrigan1660 West Second Street900 Skylight Office TowerCleveland, Ohio 44113Attorneys for Plaintiff-AppellantSandra J. Taylor Jarvis

Boyd W. Gentry, Esq.Law Office of Boyd W. Gentry, LLC9 East Dayton StreetWest Alexandria, Ohio 45381Attorney for Appellants Cheek Law Offices,LLC and Attorney Parri Hockenberry

Jeffrey C. TurnerJohn. LangenderferKevin A. LantzSurdyk, Dowd & Turner Co., L.P.A.One Prestige Place, Suite 700Miamisburg, Ohio 45342jturner@sdtlawyers. com:j iangenderfer^aJsdtlawyers.com

Attol°neys for Appellants First ResolutionInvestment Corp. & First ResolutionlVanagement Corp.

Michael D. Slodov, SCR#0051678

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