U.S. Bank, N.A. v. Graham

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[Cite as U.S. Bank, N.A. v. Graham, 2009-Ohio-6199.] IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO U.S. BANK, N.A., Plaintiff-Appellant, vs. JOHN R. GRAHAM, Defendant-Appellee. : : : APPEAL NO. C-090118 TRIAL NO. A-0702233 D E C I S I O N. : : Civil Appeal From: Hamilton County Common Pleas Court Judgment Appealed From Is: Affirmed Date of Judgment Entry on Appeal: November 25, 2009 William P. Coley, II, Jeremy S. Young, and Roetzel & Andress, L.P.A., for PlaintiffAppellant, Michael L. Gay, Jesse R. Lipcius, and Cors & Bassett, LLC, for Defendant-Appellee. Please note: This case has been removed from the accelerated calendar. OHIO FIRST DISTRICT COURT OF APPEALS W ILLIAM L. M ALLORY , Judge. {¶1} Plaintiff-appellant U.S. Bank, N.A., appeals the summary judgment favoring defendant-appellee John R. Graham. The trial court concluded that U.S. Bank s claims were untimely because they had been filed outside of the applicable limitations periods. On appeal, U.S. Bank argues that because one of its claims constituted a common-law action for unjust enrichment, the applicable limitations period was six years as provided by R.C. 2305.07. Thus we decide whether an unjust-enrichment claim arising from a Uniform Commercial Code ( UCC ) transaction must be filed within three years, under R.C. 1303.16(C), or within six years, under the more general provision in R.C. 2305.07. We hold that an unjustenrichment claim arising from a UCC transaction that has a specific limitations period must be brought within three years of its accrual and, accordingly, affirm the trial court s judgment. I. Graham s Account and Checks Returned for Insufficient Funds {¶2} This appeal arises from several banking transactions that occurred in October of 2003. At that time, Graham maintained a bank account at U.S. Bank, and on October 15, the account had an overdraft fee of $429.68. On about October 16, 17, and 18, Graham issued checks for $17,060, $5,000, $900, $300, and $41.70 on his account. {¶3} A couple of days later, on October 20, Graham deposited a $25,000 check from an individual named Tuttle. Based on that deposit, U.S. Bank honored Graham s $5,000, $900, $300, and $41.70 checks, but it rejected payment on the $17,060 check. {¶4} On October 23, U.S. Bank debited Graham s account by $25,000 because the $25,000 check that he had deposited was returned for insufficient funds. 2 OHIO FIRST DISTRICT COURT OF APPEALS {¶5} On October 27, Graham deposited another $25,000 check that had been drawn on the same account used for the October 20 $25,000 check that was returned for insufficient funds. U.S. Bank placed a hold on the deposit to verify the funds, but it curiously honored Graham s previously rejected $17,060 check when it was again presented for payment. {¶6} On the last day of the month, U.S. Bank again debited Graham s account by $25,000 when the second $25,000 deposit was also returned for insufficient funds. So by the end of October 2003, U.S. Bank had paid out $23,301.70 on Graham s overdrawn account. II. The Cause of Action and Complaint {¶7} On March 8, 2007, U.S. Bank sued Graham, and in its complaint, it alleged claims of endorser liability and unjust enrichment. The unjust-enrichment claim alleged that [Graham] ha[d] been unjustly enriched in the amount of $23,301. {¶8} Cross-motions for summary judgment were filed, and the trial court entered judgment for Graham, reasoning that both claims against him were timebarred. {¶9} In this appeal, U.S. Bank challenges only the summary judgment entered on the unjust-enrichment claim, conceding that its endorser-liability claim was filed outside of the applicable statute of limitations. III. The Applicable Statute of Limitations {¶10} U.S. Bank urges us to conclude that the statute of limitations in R.C. 2305.07 controlled its unjust-enrichment claim. Under that statute, an action on a contract not in writing, express or implied, must be brought within six years after the cause of action accrued. In support of its position, U.S. Bank cites Hambleton v. R.G. 3 OHIO FIRST DISTRICT COURT OF APPEALS Barry Corp., which held that the limitations period applicable to actions for unjust enrichment is set forth in R.C. 2305.07.1 {¶11} But Graham contends that the trial court correctly concluded that the three-year limitations period controlled. Under R.C. 1303.16(C) (UCC 3-118[C]), an action to enforce the obligation of a party to pay an unaccepted draft shall be brought within three years after dishonor of the draft. {¶12} U.S. Bank counters that its unjust-enrichment claim was a common-law claim that did not fall within the ambit of the UCC. We are not convinced. {¶13} According to the Ohio Supreme Court, the subject matter of the case is determinative, not the form under which a party chooses to bring it.2 In this case, the essence of U.S. Bank s claim sought to make Graham pay for an unaccepted check. And the time period to bring a cause of action to enforce the obligation of a party to pay an unaccepted draft is within three years after dishonor of the draft.3 The Ohio Revised Code is very specific in requiring that claims such as U.S. Bank s be filed within three years of accrual. And merely fashioning its UCC claim to enforce Graham s obligation to pay for an unaccepted draft as one for unjust enrichment did not allow U.S. Bank to circumvent the three-year limitations period in R.C. 1303.16(C). Our conclusion is buttressed by the principle that specific statutory provisions govern over general provisions.4 And in this case, the specific three-year statute of limitations under R.C. 1303.16(C) took precedence over the more general provision found in R.C. 2305.07. {¶14} U.S. Bank paid checks based on deposits that had not been cleared by the issuing bank and sought to enforce Graham s obligation to pay for one unaccepted (1984), 12 Ohio St.3d 179, 465 N.E.2d 1298. Greenspan v. Third Fed. S&L Assn., 122 Ohio St.3d 455, 2009-Ohio-3508, 912 N.E.2d 567, citing Motorists Mut. Ins. Co. v. Huron Road Hosp. (1995), 73 Ohio St.3d 391, 653 N.E.2d 235. 3 R.C. 1303.16(C). 4 R.C. 1.51; see, also, Kilgore v. Chrysler Corp., 92 Ohio St.3d 184, 2001-Ohio-166, 749 N.E.2d 267. 1 2 4 OHIO FIRST DISTRICT COURT OF APPEALS check, and we are convinced that the time within which to bring suit for this transaction was governed by R.C. 1303.16(C). {¶15} Under R.C. 1303.16(C), U.S. Bank s claim should have been brought within three years of accrual because, though fashioned as one for unjust enrichment, it was essentially a claim to enforce Graham s obligation to pay for an unaccepted check. Accordingly, the summary judgment entered in Graham s favor is affirmed. Judgment affirmed. H ILDEBRANDT , P.J., and D INKELACKER , J., concur. Please Note: The court has recorded its own entry this date. 5

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