Wells Fargo Fin. Leasing v. Gilliland, Unpublished Decision (5-22-2006)

2006 Ohio 2756
CourtOhio Court of Appeals
DecidedMay 22, 2006
DocketNos. 05CA2993, 05CA3006.
StatusUnpublished
Cited by4 cases

This text of 2006 Ohio 2756 (Wells Fargo Fin. Leasing v. Gilliland, Unpublished Decision (5-22-2006)) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wells Fargo Fin. Leasing v. Gilliland, Unpublished Decision (5-22-2006), 2006 Ohio 2756 (Ohio Ct. App. 2006).

Opinion

DECISION AND JUDGMENT ENTRY
{¶ 1} This is a consolidated appeal and cross-appeal from several Scioto County Common Pleas Court judgments in the action brought by Wells Fargo Financial Leasing Inc. (Wells Fargo), Assignee of Telmark LLC (Telmark), plaintiff below and appellant herein, against, inter alia, Douglas R. Gilliland and Penny Gilliland, defendants below and cross-appellants herein.

{¶ 2} Wells Fargo assigns the following errors for review and determination:

FIRST ASSIGNMENT OF ERROR:

"THE JURY'S VERDICT IS INADEQUATE AND AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE."

SECOND ASSIGNMENT OF ERROR:

"THE TRIAL COURT ERRED WHEN IT FAILED TO SUSTAIN PLAINTIFF-APPELLANT'S MOTION FOR DIRECTED VERDICT."

THIRD ASSIGNMENT OF ERROR:

"THE TRIAL COURT ERRED BY FAILING TO SUSTAIN PLAINTIFF-APPELLANT'S MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT, OR, IN THE ALTERNATIVE, A NEW TRIAL AS TO DAMAGES ONLY."

{¶ 3} Cross-appellants assign the following cross-assignment of error:

"THE TRIAL COURT ERRED IN OVERRULING APPELLEES/CROSS-APPELLANTS' MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT."

{¶ 4} The Gilliland family has farmed in Scioto County for approximately one hundred fifty years. The family farm has passed from father to son for twelve generations. Adrian Gilliland apparently received the farm in 1956, and in 1994 he transferred it to his son, Russell Gilliland. A few years later, Russell began to show symptoms of Alzheimer's disease. In 1998, Russell transferred the farm to his son, Douglas Gilliland. Russell continued to help Douglas with day-to-day farming operations.

{¶ 5} In February 2001, Russell contacted Telmark to inquire about financing a lease for a truck tractor and grain trailer.1 Glenn Watts, a Telmark field representative, drove to Minford to discuss the matter with Russell and Douglas and to obtain credit information.2 Douglas was approved for lease financing up to $25,000, but the equipment acquisition was never finalized.3

{¶ 6} Russell later contacted Watts and told him that he and his son wanted to acquire a combine. Though Watts had no further personal contact with Douglas, in order to re-work the new leasing arrangement he requested, and received, additional financial information. Telmark pre-approved $27,000 in lease financing and, on April 14, 2001, Russell successfully bid on a "Holland TR-86" combine at auction.

{¶ 7} Russell informed Watts of the acquisition and Watts, in turn, "FedExed" lease documents to Douglass for his signature. Douglas allegedly signed these documents and returned them to Telmark's corporate offices in Syracuse, along with a $2,770 advance payment. In addition to the advance payment, the lease provided for a $5,968 December payment followed by three annual $8,738 payments. The lease also contained a cognovit provision and clause which specified that if Telmark "deem[ed] itself insecure," it could accelerate the lease's terms.4

{¶ 8} Although the lease documents were finalized, the Gillilands did not take possession of the combine. In August of that year, Telmark received a letter from Douglas to inform the company that he had "no knowledge" of the lease and did not authorize anyone to sign the lease in his name. Deeming itself insecure, Telmark exercised the lease's acceleration provision and demanded $32,182 in full payment. Douglas refused to comply with this demand.

{¶ 9} Telmark commenced the instant action on September 29, 2001 and alleged that (1) Douglas had defaulted on the lease; and (2) the lease contained a "Warrant of Attorney with cognovit provisions" that authorized an attorney to appear on his behalf, waive service of process and confess judgment in Telmark's favor. Pursuant to the cognovit provision, Telmark caused to be filed on Douglas' behalf an answer that waived service of process and admitted default. A September 24, 2001 judgment awarded Telmark $32,182 in damages against Douglas Gilliland.

{¶ 10} Less than a month later, Douglas filed a motion for relief from judgment and argued that he did not execute the lease, that his father forged his name on the instrument, that his father had no authority to sign the lease, and, in any event, his father lacked capacity to enter into a contract. Douglas's affidavit in support attested that he did not execute the lease and that he did not authorize anyone to sign on his behalf.5

{¶ 11} Telmark's memorandum in opposition argued that the two men had a partnership and that Russell possessed the authority to execute the lease on his son's behalf. Watt's affidavit supported the memorandum and attested that he met both Gillilands to discuss the lease, that the discussion centered around "their" (the Gillilands) farming business, that the lease was mailed to Douglas at his last known address, and that Telmark received an executed lease.

{¶ 12} After protracted discovery over Russell's competency to give deposition testimony, the matter came on for hearing. Douglas testified that although he met with Watts and considered leasing equipment, he ultimately decided against it because it would cost too much to maintain. Douglas stated that he did not execute the combine lease, that he did not give his father authority to execute the lease, and that he and his father were not business partners.

{¶ 13} Russell admitted that he forged his son's name on the lease because he thought they "needed a combine." With respect to his Alzheimer's disease, a letter from Kevin W. Kammler, DO, revealed that Russell's mental status was evaluated in May 2000, a year before the lease was forged, and that he was diagnosed as suffering from "dementia" with profound effects on his mental status. Evidence also revealed that a guardianship was set up for Russell six months after this incident.6

{¶ 14} On September 11, 2003, the trial court granted relief from the cognovit judgment. The court based its decision on the "interests of justice," as well as the fact that Telmark knew before it filed the complaint that Douglas was challenging his signature and lease obligations. Wells Fargo appealed and we affirmed that judgment on the basis that Douglas asserted a valid defense (forgery) and was entitled to Civ.R. 60(B)(5) relief. SeeWells Fargo Financial Leasing, Inc. v. Gilliland, Scioto App. No. 03CA2916, 2004-Ohio-1755.

{¶ 15} On remand, Wells Fargo filed an amended complaint, named Russell Gilliland and his spouse, Penny, as defendants and raised five additional "claims." The new claims alleged that Russell perpetrated a fraud in signing the lease in his son's name, that the transaction unjustly enriched the Gillilands, that Russell should be estopped from denying liability under the lease, and that both Russell and Douglas made fraudulent conveyances of the family farm. These latter claims were based on the 1998 farm transfer to Douglas and the 2001 transfer to Penny (after the judgment in Telmark's favor).7 Douglas and Penny denied liability. Sarah Gilliland, Russell's wife and guardian, answered on behalf of her ward and denied liability.

{¶ 16}

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Bluebook (online)
2006 Ohio 2756, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wells-fargo-fin-leasing-v-gilliland-unpublished-decision-5-22-2006-ohioctapp-2006.