The Fifth District Court of Appeals has rendered its decision in Phoenix Fin. Solutions, Inc. v. Jackson, 2013-Ohio-5280. In this case, the Defendant entered into a promissory note for the purchase of a motor vehicle. The Defendant defaulted on his payments resulting in the automobile being repossessed and a deficiency on the promissory note. The promissory note provided for a 21% APR to accrue in the event of default.
Phoenix Financial Services, Inc., the Plaintiff, brought an action to recover the deficiency balance. The Plaintiff and Defendant entered into a consent judgment for the Plaintiff to recover the balance due on the loan. The consent judgment provided that the Defendant was to make monthly payments of $75.00 with the contractual interest rate of 21% continuing to accrue.
The trial court, on its own, struck the interest term from the consent judgment. In its place, the court permitted interest to accrue at the statutory rate of 3% per annum.
On appeal, the Plaintiff challenged the trial court’s decision to change the interest term. Citing R.C. 1343.03, the Fifth District Court of Appeals agreed with the Plaintiff. The appellate court remanded the matter back to the trial court for disposition consistent with the appellate court’s decision.