Chapter 1319: MISCELLANEOUS CREDIT TRANSACTIONS

1319.01 Liability for unauthorized use of credit card.

A cardholder who receives a credit card from an issuer, which such cardholder has not requested nor used, shall not be liable for any use made of such credit card which has not been authorized by such cardholder, unless such credit card is in replacement or renewal of a credit card previously requested or used by the cardholder.

Effective Date: 11-18-1969

1319.02 Enforcing commitment to pay attorneys' fees in commercial contract of indebtedness.

(A) As used in this section:

(1) "Contract of indebtedness" means a note, bond, mortgage, conditional sale contract, retail installment contract, lease, security agreement, or other written evidence of indebtedness, other than indebtedness incurred for purposes that are primarily personal, family, or household.

(2) "Commitment to pay attorneys' fees" means an obligation to pay attorneys' fees that arises in connection with the enforcement of a contract of indebtedness.

(3) "Maturity of the debt" includes maturity upon default or otherwise.

(B) If a contract of indebtedness includes a commitment to pay attorneys' fees, and if the contract is enforced through judicial proceedings or otherwise after maturity of the debt, a person that has the right to recover attorneys' fees under the commitment, at the option of that person, may recover attorneys' fees in accordance with the commitment, to the extent that the commitment is enforceable under divisions (C) and (D) of this section.

(C) A commitment to pay attorneys' fees is enforceable under this section only if the total amount owed on the contract of indebtedness at the time the contract was entered into exceeds one hundred thousand dollars.

(D) A commitment to pay attorneys' fees is enforceable only to the extent that it obligates payment of a reasonable amount. In determining the amount of attorneys' fees that is reasonable, all relevant factors shall be considered, including but not limited to, the nature of the services rendered, the time expended in rendering the services, the amount of money and the value of the property affected, and the professional skill and expertise of the attorney or attorneys rendering the services. Unless a court has been requested to make a determination of the amount of attorneys' fees that is reasonable and finds to the contrary by a preponderance of the evidence, the following are deemed reasonable amounts:

(1) If the commitment to pay attorneys' fees is based upon a specific percentage of the total principal, interest, and other charges owed on the contract of indebtedness, the percentage of the total so owed as specified in the contract of indebtedness;

(2) If the commitment to pay attorneys' fees is not based upon a specific percentage of the total principal, interest, and other charges owed on the contract of indebtedness, an amount equal to the attorneys' fees customarily charged by the attorney or attorneys rendering the services.

Renumbered from § 1301.21 by 129th General AssemblyFile No.9, HB 9, §1, eff. 6/29/2011.

1319.02 to 1319.05 [Repealed].

Effective Date: 07-01-1962

1319.06 Husband and wife must join in chattel mortgage on household property.

No husband or wife shall create any lien by chattel mortgage or otherwise upon any personal household property owned by either or both of them, without the joint consent of both husband and wife. No such mortgage is valid unless executed by both husband and wife.

This section does not apply to any mortgage or lien for the purchase price of such property.

Effective Date: 10-01-1953

1319.07 Definitions for RC sections 1319.07 to 1319.09.

As used in sections 1319.07 to 1319.09 of the Revised Code:

(A) "Nonrecourse carveout" means a specific exemption, if any, to the nonrecourse provisions set forth in the loan documents for a nonrecourse loan that has the effect of creating, if specified events occur, personal liability of the borrower or guarantor or other surety of the loan for all or some amounts owed to the lender.

(B) "Nonrecourse loan" means a commercial loan secured by a mortgage on real property located in this state and evidenced by loan documents that meet any of the following:

(1) Provide that the lender will not enforce the liability or obligation of the borrower by an action or proceeding in which a money judgment is sought against the borrower;

(2) Provide that any judgment in any action or proceeding on the loan is enforceable against the borrower only to the extent of the borrower's interest in the mortgaged property and other collateral security given for the loan;

(3) Provide that the lender will not seek a deficiency judgment against the borrower;

(4) Provide that there is no recourse against the borrower personally for the loan;

(5) Include any combination of divisions (B)(1) to (4) of this section or any other provisions to the effect that the loan is without personal liability to the borrower beyond the borrower's interest in the mortgaged property and other collateral security given for the loan.

(C) "Nonrecourse provisions" means one or more of the provisions described in divisions (B)(1) to (5) of this section, whether or not the loan is subject to a nonrecourse carveout or carveouts.

(D) "Postclosing solvency covenant" means any provision of the loan documents for a nonrecourse loan, whether expressed as a covenant, representation, warranty, or default, that relates solely to the solvency of the borrower, including, without limitation, a provision requiring that the borrower maintain adequate capital or have the ability to pay the borrower's debts, with respect to any period of time after the date the loan is initially funded. "Postclosing solvency covenant" does not include a covenant not to file a voluntary bankruptcy or other voluntary insolvency proceeding or not to collude in an involuntary proceeding.

Added by 129th General AssemblyFile No.201, HB 479, §1, eff. 3/27/2013.

1319.08 Use of postclosing solvency covenant.

(A) A postclosing solvency covenant shall not be used, directly or indirectly, as a nonrecourse carveout or as the basis for any claim or action against a borrower or any guarantor or other surety on a nonrecourse loan.

(B) A provision in the documents for a nonrecourse loan that does not comply with division (A) of this section is invalid and unenforceable.

Added by 129th General AssemblyFile No.201, HB 479, §1, eff. 3/27/2013.

1319.09 Loans without nonrecourse loan provisions.

Section 1319.08 of the Revised Code does not prohibit a loan that is secured by a mortgage on real property located in this state from being fully recourse to the borrower or guarantor, including, but not limited to, as a result of a postclosing solvency covenant, if the loan documents for that loan do not contain nonrecourse loan provisions.

Added by 129th General AssemblyFile No.201, HB 479, §1, eff. 3/27/2013.

1319.10 [Repealed].

Effective Date: 07-01-1962

1319.11 Joining or separating claims of creditors.

(A) Two or more creditors of a debtor or co-debtors may join their respective claims together for the purpose of commencing litigation against the debtor or co-debtors.

(B) If a debtor or co-debtor raises a good faith dispute concerning any accounts, bills, or other evidences of indebtedness that have been joined together for litigation pursuant to this section, the court shall separate the disputed account, bill, or other evidence of indebtedness from the action and hear the disputed account, bill, or other evidence of indebtedness on its own merits in a separate action. The court shall charge the filing fee of the separate action to the losing party.

Effective Date: 09-17-1996

1319.12 Taking assignment of debts.

(A)

(1) As used in this section, "collection agency" means any person who, for compensation, contingent or otherwise, or for other valuable consideration, offers services to collect an alleged debt asserted to be owed to another.

(2) "Collection agency" does not mean a person whose collection activities are confined to and directly related to the operation of another business, including, but not limited to, the following:

(a) Any bank, including the trust department of a bank, trust company, savings and loan association, savings bank, credit union, or fiduciary as defined in section 5815.04 of the Revised Code, except those that own or operate a collection agency;

(b) Any real estate broker or real estate salesperson, as defined in section 4735.01 of the Revised Code;

(c) Any retail seller collecting its own accounts;

(d) Any insurance company authorized to do business in this state under Title XXXIX of the Revised Code or a health insuring corporation authorized to operate in this state under Chapter 1751. of the Revised Code;

(e) Any public officer or judicial officer acting under order of a court;

(f) Any licensee as defined either in section 1321.01 or 1321.71 of the Revised Code, or any registrant as defined in section 1321.51 of the Revised Code;

(g) Any public utility;

(h) Any person registered to sell interment rights under section 4767.031 of the Revised Code.

(B) A collection agency with a place of business in this state may take assignment of another person's accounts, bills, or other evidences of indebtedness in its own name for the purpose of billing, collecting, or filing suit in its own name as the real party in interest.

(C) No collection agency shall commence litigation for the collection of an assigned account, bill, or other evidence of indebtedness unless it has taken the assignment in accordance with all of the following requirements:

(1) The assignment was voluntary, properly executed, and acknowledged by the person transferring title to the collection agency.

(2) The collection agency did not require the assignment as a condition to listing the account, bill, or other evidence of indebtedness with the collection agency for collection.

(3) The assignment was manifested by a written agreement separate from and in addition to any document intended for the purpose of listing the account, bill, or other evidence of indebtedness with the collection agency. The written agreement shall state the effective date of the assignment and the consideration paid or given, if any, for the assignment and shall expressly authorize the collection agency to refer the assigned account, bill, or other evidence of indebtedness to an attorney admitted to the practice of law in this state for the commencement of litigation. The written agreement also shall disclose that the collection agency may consolidate, for purposes of filing an action, the assigned account, bill, or other evidence of indebtedness with those of other creditors against an individual debtor or co-debtors.

(4) Upon the effective date of the assignment to the collection agency, the creditor's account maintained by the collection agency in connection with the assigned account, bill, or other evidence of indebtedness was canceled.

(D) A collection agency shall commence litigation for the collection of an assigned account, bill, or other evidence of indebtedness in a court of competent jurisdiction located in the county in which the debtor resides, or in the case of co-debtors, a county in which at least one of the co-debtors resides.

(E) No collection agency shall commence any litigation authorized by this section unless the agency appears by an attorney admitted to the practice of law in this state.

(F) This section does not affect the powers and duties of any person described in division (A)(2) of this section.

(G) Nothing in this section relieves a collection agency from complying with the "Fair Debt Collection Practices Act," 91 Stat. 874 (1977), 15 U.S.C. 1692 , as amended, or deprives any debtor of the right to assert defenses as provided in section 1317.031 of the Revised Code and 16 C.F.R. 433 , as amended.

(H) For purposes of filing an action, a collection agency that has taken an assignment or assignments pursuant to this section may consolidate the assigned accounts, bills, or other evidences of indebtedness of one or more creditors against an individual debtor or co-debtors. Each separate assigned account, bill, or evidence of indebtedness must be separately identified and pled in any consolidated action authorized by this section. If a debtor or co-debtor raises a good faith dispute concerning any account, bill, or other evidence of indebtedness, the court shall separate each disputed account, bill, or other evidence of indebtedness from the action and hear the disputed account, bill, or other evidence of indebtedness on its own merits in a separate action. The court shall charge the filing fee of the separate action to the losing party.

Effective Date: 10-20-1999; 01-01-2007

1319.13 to 1319.15 [Repealed].

Effective Date: 07-01-1962

1319.16 Check collection charges.

(A) If a collection agency has been designated to collect on a check, negotiable order of withdrawal, share draft, or other negotiable instrument that has been returned or dishonored for any reason, the collection agency may charge and receive check collection charges of not more than thirty dollars or ten per cent of the face amount of the instrument, whichever is greater, and may charge and receive any charge imposed by a financial institution upon the holder of the check, negotiable order of withdrawal, share draft, or other negotiable instrument that has been returned or dishonored for any reason.

(B) A collection agency that imposes a check collection charge pursuant to division (A) of this section shall send written notice by regular mail to the debtor at the debtor's last known address or at the address shown on the check or other instrument. The notice shall provide the amount of the check collection charge that has been imposed, and shall state that the debtor is responsible for paying the check collection charge as well as the value of the check or other instrument.

Effective Date: 08-28-2002

1319.17 to 1319.19, 1319.99 [Repealed].

Effective Date: 07-01-1962