The Ohio Supreme Court recently ruled on a putative class action case that is instructive for the defense of class action lawsuits in Ohio. In JNT Properties v. KeyBank National Association, 2012-Ohio-5369, the Ohio Supreme Court reversed the court of appeals and affirmed the trial court’s grant of summary judgment in favor of KeyBank on all class claims.
JNT Properties filed a putative class action, alleging that KeyBank had breached its contract by charging interest in excess of the rate stated in its promissory note. JNT claimed that KeyBank was charging more interest than was agreed to in the note by charging a rate calculated by the 365/360 method rather than an annual rate. KeyBank contended that the note fixed the interest rate according to the 365/360 method, which, by definition, results in a borrower paying more interest than when interest is calculated according to the annual 365/365 method.
KeyBank moved for summary judgment, which the trial court granted, finding that the note was clear in establishing the 365/360 method for calculating interest and that JNT presented no evidence that it had not consented to that method. The court of appeals reversed, concluding that there was a genuine issue of material fact as to which interest rate was imposed by the note.
The Ohio Supreme Court reversed the appellate court’s ruling, granting summary judgment to KeyBank, finding that the clause establishing the 365/360 method — although inartfully drafted — was not ambiguous.
This case is instructive for class action practice in that this putative class matter was decided as a matter of law. As we have previously discussed, there can be no class where there is no claim.
As in JNT Properties, early and effective motion practice can eliminate the need for — and the risks associated with — extensive class discovery. Legal defenses to class claims — including novel theories of contract interpretation — should be raised at the earliest possible point in the proceedings.