Mattlin Holdings LLC v. First City Bank, 2010 Ohio 3700 (Ohio App. 10th Dist. 2010)
Dinsmore & Shohl handled the defense on behalf of Defendants, Fifth Third Bank ("Fifth Third") and JP Morgan Chase ("Chase"). This is an important precedent for the banking industry in Ohio in that the appellate court refused to extend the discovery rule to toll the statute of limitations under O.R.C. § 1303.16(G) for a UCC conversion claim against two banks. In particular, the Appellants asserted a UCC conversion claim pursuant to O.R.C. § 1303.60 against both Fifth Third and Chase for the alleged conversion of a check in the amount of $795,486.00. Appellants’ conversion claims, however, were filed over four and one-half years after the alleged conversion by both Fifth Third and Chase. The Appellants argued, among others, that the discovery rule should toll the statute of limitations because Appellants did not discover the alleged conversion until after the statute of limitations had expired and because the Appellants had asserted fraud-based claims against other defendants, but not against Fifth Third or Chase. In response, Firth Third and Chase argued that the discovery rule does toll the statute of limitations and that even in cases where fraud-based claims are asserted, the UCC claims against other defendants cannot be coupled with such fraud-based claims for purposes of tolling the statute of limitations.
The Tenth District Court of Appeals upheld the trial court's dismissal of Fifth Third and Chase and held that the three-year statute of limitations for conversion under Section 1303.16(G) is not tolled by the discovery rule. Both the appellate court and trial court cited to and relied upon the holding of the U.S. District Court from the Northern District of Ohio in Metz v. Unizan Bank, (N.D. Ohio 2006), 416 F. Supp. 2d 568, 579. Both courts also cited to the holding in Loyd v. Huntington Nat'l Bank (N.D. Ohio 2009), 2009 U.S. Dist. LEXIS 51858.
Click HERE to view the Tenth District Court of Appeals decision.