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Date: 08-05-2022
Case Style:
HARVEST LAND CO-OP, INC. v. FRANKIE J. HORA, et al.
Case Number: 26218 & 26227
Judge:
Michael L. Tucker; Presiding Judge
Christopher B. Epley
Ronald C. Lewis
concur
Court:
IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY
Civil Appeal from Common Pleas Court
Plaintiff's Attorney: MAURA J. HOFF
Defendant's Attorney:
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Description:
Dayton, Ohio - Agricultural lawyer represented defendant with appealing from a judgment finding him liable for a promissory note.
The facts relevant to this matter were previously set forth by this court in
Harvest Land Co-Op, Inc. v. Hora, 2d Dist. Montgomery No. 25068, 2012-Ohio-5915
(Hora I), wherein we stated:
Plaintiff Harvest Land Co–Op, Inc. (“Harvest Land”) is an agricultural
cooperative. 1 Defendant Frankie J. Hora is a farmer and has been a
member of the Harvest Land cooperative since 2006. Hora purchased
agricultural products and services from Harvest Land during that time, and
he maintained an account with Harvest Land for that purpose. Sometime in
2009, Hora fell into arrears in paying the account. In March of 2009, Frankie
Hora paid Harvest Land $21,089.91 on the account. Hora and his wife, Mary
D. Hora, also gave Harvest Land a promissory note for $100,000.00.
On March 16, 2010, Plaintiff Harvest Land filed a complaint alleging
1 Following a January 2021 merger, Co-Alliance Cooperative, Inc. became the
succeeding legal entity of Harvest Land Co-Op, Inc. For the sake of clarity, we will
continue to refer to the plaintiff-appellee as “Harvest Land.”
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that the Horas had defaulted on the promissory note in the amount of
$100,000.00 made payable to Harvest Land, and that the sum of
$100,787.26, plus interest, was due, owing, and unpaid. Harvest Land also
alleged that the promissory note “memorialized” a delinquent debt on an
account the Horas previously owed.
A copy of the alleged promissory note was attached to Harvest
Land's complaint. The note requires the Horas to pay the face amount of
$100,000.00, plus interest at the rate of eight percent per annum, in monthly
payments of $3,133.64, beginning May 1, 2009. The note further provides
that interest charges at the rate of 21 percent per annum will accrue after
the date of maturity until the amounts due and owing are paid in full, plus
attorney's fees and costs of collection.
After obtaining leave of court, the Horas filed an amended answer
and counterclaim. After denying certain allegations on Harvest Land's
complaint, the Horas admitted Harvest Land's allegation that their
promissory note memorialized a delinquent debt and that they failed to
make all payments due on the note, alleging that their failure was due to
Harvest Land's wrongful conduct. The Horas also admitted that Harvest
Land expected to be paid for agricultural products it sold to the Horas that
were not defective. The Horas also admitted that they failed to pay for
certain agricultural products which failed to perform as represented by
Harvest Land, but denied that they owed $100,000.00 plus interest on the
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note.
The Horas' counterclaim alleged breaches of their contracts by
Harvest Land in five separate causes of action and claims for unjust
enrichment in two causes of action. The Horas also asked for an accounting
of payments they made and services they provided Harvest Land.
The matter was referred to a magistrate. Following hearings, the
magistrate filed a decision on November 15, 2010, granting Harvest Land
summary judgment on its claim for relief on the promissory note. The
magistrate rejected the Horas' claim that their promissory note is
unenforceable for lack of consideration. The magistrate held that the
promissory note is an instrument for value, and therefore does not lack
consideration, because it was issued by the Horas as payment of, or as
security for, an antecedent claim against Frank Hora for the balance due on
his account with Harvest Land. R.C. 1303.33(A)(3). The magistrate further
found that the Horas failed to bear their burden to rebut the presumption of
the existence of consideration for a promissory note. Accordingly, the
magistrate granted judgment for Harvest Land in the amount of
$106,876.15, plus per diem interest. The magistrate further held that the
summary judgment for Harvest Land rendered moot the Horas' claims for
unjust enrichment and breach of contract.
The Horas filed objections to the magistrate's decision. Before those
objections were ruled upon by the trial court, the magistrate filed a second
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decision on January 14, 2011, granting summary judgment for Harvest Land
on the Horas' counterclaims for breach of contract and unjust enrichment.
No objections were filed to that decision, which on July 7, 2011 was adopted
by the trial court as its own order.
On August 1, 2011, the magistrate filed a third decision, awarding
Harvest Land a judgment for $25,062.50 on its claim for attorney's fees.
Objections to that decision were filed by both Harvest Land and the Horas.
On February 6, 2012, the trial court overruled the objections the
Horas filed to the summary judgment for Harvest Land in the amount of
$106,876.15, plus interest, and the court adopted the magistrate's decision
on that matter as the court's order. The court also overruled the objections
the parties filed to the magistrate's decision with respect to attorneys’ fees
for lack of a transcript.2
On March 9, 2012, the Horas filed a notice of appeal from the trial
court's final order of February 6, 2012. Harvest Land filed a notice of crossappeal from that same final order.
(Footnotes added.) Id. at ¶ 2-11.
{¶ 3} On December 14, 2012, we reversed the trial court’s decision denying the
Horas’ counterclaim for an accounting. The matter was remanded solely for further
proceedings on the claim for an accounting. The trial court’s decision was affirmed in all
2 Of relevance hereto, but not mentioned in Hora I, following the filing of the judgment in
its favor, Harvest Land caused an R.C. 2329.02 certificate of judgment lien to be filed with
the Clerk of Courts of Montgomery County, Ohio. See 2012 CJ 183311.
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other respects. Id. at ¶ 96.
{¶ 4} On remand, the Horas filed a motion for leave to amend their counterclaim
to assert a claim for fraud. The motion was overruled on August 20, 2013. A trial on
the accounting was conducted in September 2013. On December 2, 2013, the
magistrate entered a decision in which it reduced the amount due on the promissory note
to $89,307.15 due to a mistake in the account charges as well as an error related to the
interest charged on the account. The magistrate also noted that the Horas were entitled
to a credit of $3,433.64 for payments made on the promissory note.
{¶ 5} Hora filed objections to the magistrate’s decision. They also filed a Civ.R.
60(B) motion for relief from the magistrate’s original 2010 decision. On April 11, 2014,
the trial court overruled the objections to the magistrate’s decision. On April 15, 2014,
the trial court overruled the motion for Civ.R. 60(B) relief from judgment. Thereafter, the
previously filed certificate of judgment was amended to reflect the reduction in the
judgment amount.
{¶ 6} Hora filed separate, timely notices of appeal from each decision. The
appeals were consolidated in July 2014. In August 2014, Hora, acting pro se, filed his
appellate brief. Harvest Land then filed its brief. Thereafter, Hora retained counsel who
filed a motion seeking to amend Hora’s previously-filed brief. In the motion, counsel
indicated it was necessary to properly format the brief and that the arguments required
clarification and consolidation. The motion was granted, and an amended brief was filed
on December 17, 2014.
{¶ 7} In March 2015, Hora and his wife filed for bankruptcy protection. Thereafter,
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this court filed an order staying the appeal pending the completion of the bankruptcy
action. The stay was lifted on September 8, 2021, following notification that the
bankruptcy action had been resolved. On October 14, 2021, we ordered the parties to
file supplemental briefing regarding the sole issue of whether the discharge in the
bankruptcy case rendered this appeal moot.
{¶ 8} On November 15, 2021, Hora filed a document entitled “Amended Brief of
Appellant Frankie J. Hora.” At the beginning of the document, Hora set forth a one-page
statement of his basis for claiming this appeal is not moot. However, the remaining 34
pages of the document appear to be a restatement of the appellate brief filed by Hora in
August 2014 prior to retaining counsel.
{¶ 9} On February 24, 2022, this court entered an order requiring Harvest Land to
file its supplemental brief addressing the issue of mootness. Hora filed an objection to
that order which was subsequently overruled. In the interim, it was discovered that
counsel for Harvest Land had passed away during the bankruptcy stay, but all postbankruptcy filings had continued to be mailed to counsel. It was further discovered that
Harvest Land had merged with another company. Notice was provided to the new
corporate entity. On March 10, 2022, Harvest Land, through new counsel, filed a motion
for enlargement of time in which to file its supplemental brief. The motion was granted,
and Harvest Land filed a supplemental brief on April 5, 2022. Hora filed a motion to strike
the brief. The motion was overruled, but Hora was permitted to file a responsive brief,
which he filed on April 20, 2022. This matter is now ripe for review.
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II. Discharge in Bankruptcy Renders Appeal Moot
{¶ 10} Before we address the merits of the arguments raised in Hora’s appellate
brief, we must determine whether this matter has been rendered moot by the discharge
in the bankruptcy action.
{¶ 11} The doctrine of mootness is founded upon the “long and well established
[premise] that it is the duty of every judicial tribunal to decide actual controversies between
parties legitimately affected by specific facts and to render judgments which can be
carried into effect.” State v. Muwwakkil, 2d Dist. Clark No. 2018-CA-37, 2018-Ohio4443, ¶ 6, quoting Fortner v. Thomas, 22 Ohio St.2d 13, 14, 257 N.E.2d 371 (1970).
Courts have no duty “to decide purely academic or abstract questions.” James A. Keller,
Inc. v. Flaherty, 74 Ohio App.3d 788, 791, 600 N.E.2d 736 (10th Dist.1991), citing Miner
v. Witt, 82 Ohio St. 237, 92 N.E. 21 (1910). Thus, a court “will not decide * * * cases in
which there is no longer any actual controversy.” Heartland of Urbana, OH, L.L.C. v.
McHugh Fuller Law Group, P.L.L.C., 2016-Ohio-6959, 72 N.E.3d 23, ¶ 36, citing In re
A.G., 139 Ohio St.3d 572, 2014-Ohio-2597, 13 N.E.3d 1146, ¶ 37, quoting Black's Law
Dictionary 1100 (9th Ed.2009).
{¶ 12} Hora filed for bankruptcy protection under the auspices of Chapter 12 of the
United States Bankruptcy Code, which “was enacted in November 26, 1986 to provide
family farmers with regular annual income to stay in possession of the farm while
obtaining court approval of a debt readjustment plan. Chapter 12 combines elements of
Chapter 11 reorganizations and Chapter 13 Wage Earner Plans with a number of
provisions unique to farm bankruptcies.” Mercer Sav. Bank v. Fullenkamp, 116 Ohio
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App.3d 647, 649, 688 N.E.2d 1111, fn. 6 (3d Dist.1996). There is no dispute that Harvest
Land filed a timely proof of claim in which it asserted that it held secured creditor status
based upon the lien created by the certificate of judgment filed with the Montgomery
County Clerk of Court. In its filings with the bankruptcy court, Harvest Land claimed it
was owed $146,759.02. However, only $50,000, plus interest, was allowed under the
bankruptcy plan. Ultimately, the bankruptcy trustee paid Harvest Land $59,126. An
order of discharge was granted to the Horas and filed of record on May 13, 2021.
Harvest Land asserts that the order of discharge specifically states that the certificate of
judgment, recorded at 2012 CJ 183311, “shall be deemed satisfied and released of
record.”
{¶ 13} Hora does not dispute that the debt and certificate of judgment were
discharged in the bankruptcy action, and he does not dispute that he no longer owes any
monies to Harvest Land. Instead, he claims that this appeal is not moot and should be
decided under the exceptions to the mootness doctrine.
{¶ 14} We recognize that the mootness doctrine does have limited exceptions that,
when present, allow review. One such exception involves issues that are “capable of
repetition, yet evading review.” State ex rel. Plain Dealer Pub. Co. v. Barnes, 38 Ohio
St.3d 165, 527 N.E.2d 807 (1988), paragraph one of the syllabus. “This exception
applies only in exceptional circumstances in which the following two factors are both
present: (1) the challenged action is too short in its duration to be fully litigated before its
cessation or expiration, and (2) there is a reasonable expectation that the same
complaining party will be subject to the same action again.” Lund v. Portsmouth Local
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Air Agency, 10th Dist. Franklin No. 14AP-60, 2014-Ohio-2741, ¶ 8, quoting State ex rel.
Calvary v. Upper Arlington, 89 Ohio St.3d 229, 231, 729 N.E.2d 1182 (2000). “[T]here
must be more than a theoretical possibility that the action will arise again.” Id., citing
Robinson v. Indus. Comm., 10th Dist. Franklin No. 04AP-1010, 2005-Ohio-2290, ¶ 8,
quoting James A. Keller, Inc., 74 Ohio App.3d 788, 792, 600 N.E.2d 736. “An injury is
not deemed capable of repetition merely because someone, at sometime [sic], might
suffer the same harm; there must be a reasonable chance that it will happen again to the
complaining party.” Heartland of Urbana OH, L.L.C., 2016-Ohio-6959, 72 N.E.3d 23,
¶ 39, quoting Village of W. Unity ex rel. Beltz v. Merillat, 6th Dist. Williams No. WM-03-
016, 2004-Ohio-2682, ¶ 16, citing Weinstein v. Bradford, 423 U.S. 147, 149, 96 S.Ct. 347,
46 L.Ed.2d 350 (1975).
{¶ 15} Hora does not suggest that this type of action -- a complaint to enforce a
promissory note -- is by its nature too short in duration to be fully litigated before its
cessation. Indeed, notwithstanding the time on appeal and the bankruptcy stay, this
action was pending in the trial court for over four years. Thus, we cannot conclude this
debt collection action has been of too short a duration to fully litigate the issues raised
therein. Also, there is no evidence, and Hora has not demonstrated, that there is any
reasonable expectation that he will be subject to the same action again. There is no
evidence that Hora remains a member or utilizes the services of Harvest Land. And
there is no evidence that Harvest Land maintains the same business practices it had
before it merged with another company. Thus, we cannot say there is a reasonable
chance that the same sequence of events that occurred in this case will occur again.
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Therefore, we find no merit in Hora’s claim that the “capable of repetition yet evading
review” exception is applicable.
{¶ 16} In reference to other exceptions to the mootness doctrine, we note that “[an
appellate] court may hear the appeal where there remains a debatable constitutional
question to resolve, or where the matter appealed is one of great public or general
interest.” State ex rel. White v. Kilbane Koch, 96 Ohio St.3d 395, 2002-Ohio-4848, 775
N.E.2d 508, ¶ 16, quoting from Franchise Developers, Inc. v. Cincinnati, 30 Ohio St.3d
28, 505 N.E.2d 966 (1987). However, this record is devoid of anything to suggest either
of these exceptions are applicable to this case.
{¶ 17} Finally, Hora argues that the appeal is not moot because the failure to
determine the merits of the case will result in secondary legal consequences. In support,
he claims that Harvest Land will continue to make fraudulent charges and impose
improper interest rates if this appeal is not decided on the merits.
{¶ 18} We presume that Hora refers to the “collateral consequences” exception,
which the Supreme Court of Ohio has recognized as existing in civil and criminal cases
where “the collateral consequence is imposed as a matter of law.” Cyran v. Cyran, 152
Ohio St.3d 484, 2018-Ohio-24, 97 N.E.3d 487, ¶ 9. However, the court also stated in
Cyran that “[s]peculation is insufficient to establish a legally cognizable interest for which
a court can order relief using the collateral-consequences exception to the mootness
doctrine.” Id. at ¶ 11. Likewise, this court has stated, “[a] collateral disability must be a
substantial, individualized impairment, and a purely hypothetical statement, about what
might occur in the future is not sufficient to give viability to an otherwise moot appeal.”
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Cyran v. Cyran, 2016-Ohio-7323, 63 N.E.3d 187, ¶ 7-8 (2d Dist.), aff'd, 152 Ohio St.3d
484, 2018-Ohio-24, 97 N.E.3d 487, ¶ 7-8. Hora fails to identify any collateral
consequences which will occur by operation of law. Further, the claims that the company
will make future fraudulent charges and/or impose improper interest charges are purely
speculative, and thus insufficient to overcome the mootness doctrine.
{¶ 19} Finally, although not raised in the context of collateral legal consequences,
Hora claims he was denied a loan due to the existence of the certificate of judgment lien.
However, he has submitted no evidence to support a finding that the lien was the basis
for the denial of the loan. It is just as likely the loan was denied due to the bankruptcy
filing or to a lack of sufficient collateral. In any event, we will not speculate as to the
possibility that the certificate of judgment may result in the denial of future loan requests.
Further, given the resolution of the bankruptcy case, Hora has the ability to petition the
trial court for a notice of satisfaction and release regarding the certificate of judgment. In
other words, any claim that the certificate of judgment will cause collateral consequences
is without merit as Hora has a mechanism for voiding the lien.
{¶ 20} We conclude that any issues of whether the trial court properly denied
Hora’s motion for Civ.R. 60(B) relief and whether it correctly determined the issue of the
accounting on the subject promissory note have been rendered moot because Hora’s
debt, memorialized by the promissory note, was discharged in the federal bankruptcy
court proceedings. Hora has failed to dispute that discharge and has failed to
demonstrate the applicability of any of the exceptions to the mootness doctrine.
Therefore, we need not address the issues raised in his appellate brief.
Outcome: Because Hora’s claims on appeal are moot, this appeal is dismissed.
Plaintiff's Experts:
Defendant's Experts:
Comments: