COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 68670 CLIFTON PHONE SYSTEMS, INC., : : Plaintiff-Appellant : : JOURNAL ENTRY vs. : and : OPINION SUSSEX LEASING CORPORATION, : : Defendant-Appellee : DATE OF ANNOUNCEMENT OF DECISION : MARCH 21, 1996 CHARACTER OF PROCEEDING : Civil appeal from : Common Pleas Court : Case No. 180184 JUDGMENT : AFFIRMED. DATE OF JOURNALIZATION : _______________________ APPEARANCES: For plaintiff-appellant: Daniel J. Ryan Michael J. Flament 2000 Standard Building 1370 Ontario Street Cleveland, Ohio 44113 For defendant-appellee: Stewart D. Roll PERSKY, SHAPIRO, SALIM, ESPER, ARNOFF & NOLFI CO., L.P.A. 1410 Terminal Tower Cleveland, Ohio 44113 -2- NAHRA, J.: Appellant, Clifton Phone Systems, Inc. is appealing the judgment rendered in favor of appellee, Credit Alliance Corp. and the trial court's order denying appellant's motion for a new trial. Appellant contends the trial court erred in failing to give a jury instruction requested by appellant, improperly permitted the testimony of an undisclosed witness and erred in giving a jury instruction requested by appellee. Appellee filed two cross- assignments of error, to be addressed only if this court sustains appellant's appeal. For the following reasons, we affirm. Clifton Phone needed to borrow $200,000 to upgrade its switching equipment. Clifton Phone contacted Sussex Leasing Corp. to arrange a loan. Certain equipment owned by Modern Industries, Inc., a company owned by a co-owner of Clifton Phone, would be used as collateral. Sussex Leasing agreed to buy the equipment and lease it back to Clifton Phone and Modern Industries, provided that certain conditions for financing were met. Although the loan proceeds had not been paid to Clifton Phone, certain paperwork was prepared to expedite the transaction, including a promissory note and security agreement. Clifton Phone and Modern Industries promised to pay Sussex $280,080 in the promissory note. Sussex contacted Credit Alliance to arrange for Credit Alliance to buy the promissory note. There was conflicting testimony as to whether Sussex or Credit Alliance would advance the loan proceeds to Clifton Phone. Documents assigning the note to -3- Credit Alliance were prepared. Credit Alliance filed a UCC-1 financing statement with the Secretary of State on October 11, 1988. There was conflicting evidence concerning whether Clifton Phone satisfied the conditions precedent of Sussex and Credit Alliance in order for the loan to be finally approved. In their answers to interrogatories, the jury found appellant did not meet the conditions precedent. On October 10, 1988, Naum Hoolin, an owner of Clifton Phone, called Colin Rosenmeyer, a salesperson at Sussex Leasing. Mr. Rosenmeyer memorialized the conversation in a memo to Vince Drobniak, vice-president of credit and leasing at Sussex. The memo stated that Mr. Hoolin requested to withdraw the loan application and requested the liens be removed. Vince Drobniak wrote on the memo that Credit Alliance would file UCC-3 termination statements to remove the UCC-1s. This writing indicated that Drobniak had spoken to Credit Alliance and requested the filing of UCC-3s. Mr. Hoolin testified that Rosenmeyer told him the liens would be removed. Credit Alliance sent UCC-3 forms to Clifton Phone's bankers, who filed them with the Secretary of State. These forms had the wrong file numbers and were not effective. The UCC-1 notice of lien was not removed until December 17, 1990. Clifton Phone claimed it was hindered in attempting to borrow the money from a new lender because of the outstanding UCC-1 notice -4- of lien on the collateral. Clifton Phone obtained a $200,000 loan from Huntington Bank on January 28, 1989. Clifton Phone sued Sussex and Credit Alliance for breach of contract and promissory estoppel for failure to provide a loan and failure to release the UCC lien. Clifton Phone dismissed its claims against Sussex without prejudice. In the first trial of this case, the jury returned a verdict in favor of Clifton Phone. On appeal, this case was reversed and remanded for a new trial. Clifton Phone Systems, Inc. v. Sussex Leasing Corp. (Dec. 30, 1993), Cuyahoga App. No. 64548, unreported. In the second trial, the jury returned a verdict in favor of Credit Alliance. The jury found that Credit Alliance never entered into a contract to loan money to Clifton Phone. Additionally, the jury found that Clifton Phone's lost profits from failing to obtain the loan were not in the contemplation of Credit Alliance. I. Appellant's first assignment of error states: THE TRIAL COURT ERRED IN FAILING TO GIVE A JURY INSTRUCTION REQUESTED BY THE APPELLANT CLIFTON PHONE SYSTEMS, INC. Requested jury instructions should only be given if there is evidence from which reasonable minds might reach the conclusion sought by the instructions. See Murphy v. Carrollton Mfg. Co. (1991), 61 Ohio St.3d 585, 591, Sapp v. Stoney Ridge Truck Tire (1993), 86 Ohio App.3d 85. In this case, the evidence did not support the jury instruction requested by appellant. -5- The trial court refused to give the following instruction requested by appellant: If you find by a preponderance of the evidence that the Defendant failed to file a termination statement within ten days after being demanded by the plaintiff terminating the lien on the plaintiff's collateral, then you should go on to consider damages. This proposed instruction is based on R.C. 1309.41, which states: In other cases ("other cases" means non-consumer goods) whenever there is no outstanding secured obligation and no commitment to make advances, incur obligations, or otherwise give value, the secured party must on written demand from the debtor send the debtor, for each filing officer with whom the financing statement was filed, a termination statement, which shall be identified by file number.... If the affected secured party fails to file such a termination statement as required by this division or to send such a termination statement ten days after the proper demand thereof, he shall be liable to the debtor for one hundred dollars, and in addition for any loss caused to the debtor by such failure. The statute clearly requires that the debtor make written demand on the secured party before the secured party has any obligation to file a termination statement. In this case there was no evidence Clifton Phone made a written demand upon Credit Alliance. Appellant contends the internal memo written by Sussex employee Rosenmeyer to Sussex employee Drobniak, constituted written demand. We believe that reasonable minds cannot conclude that the internal memo between the Sussex employees constituted written demand by Clifton Phone. Reasonable minds could not conclude that Credit Alliance owed Clifton Phone damages pursuant to R.C. 1309.41, as requested by the proposed instruction. The trial court did not err in refusing to give the requested instruction. -6- Accordingly, this assignment of error is overruled. II. Appellant's second assignment of error states: THE TRIAL COURT ABUSED ITS DISCRETION IN PERMITTING THE TESTIMONY OF AN UNDISCLOSED WITNESS. At trial, appellee called Phillip Nye, a representative of Huntington Bank, to testify. Appellant did not object to Mr. Nye testifying. Appellant asserts that Phillip Nye was not included on appellee's witness list seven days prior to the final pre-trial date as required by Loc.R. 21.1 of the Court of Common Pleas of Cuyahoga County, General Division. Appellant also contends the testimony of Phillip Nye violates the trial judge's pre-trial order that witness lists must be exchanged ten days prior to trial. Appellee's supplemental trial brief, filed October 7, 1994, listed Phillip Nye as a witness. The final pre-trial was held on October 11, 1994. Appellee filed a supplemental witness list on January 10, 1995 listing Phillip Nye as a witness. On January 20, 1995 the trial commenced. No objection was made to Nye's testifying, so reversal can only be had if plain error occurred. See Schade v. Carnegie Body Co. (1982), 70 Ohio St.2d 207, 209. We find that no prejudicial error occurred, so plain error could not have occurred. The purpose of Loc.R. 21.1 is to afford a party the opportunity to depose an opposing party's witness before trial and avoid surprise. See Clifton Phone Systems, Inc. v. Sussex Leasing -7- Corp. (Dec. 30, 1993), Cuyahoga App. No. 64548, unreported. Appellant had ample opportunity to depose Mr. Nye before the trial on January 20, 1995, because he was disclosed as a witness on October 11, 1994. Appellant was not prejudiced by appellee's filing the supplemental witness list four days prior to pre-trial, instead of seven days as required by Loc.R. 21.1. This court cannot reverse on the basis of a violation of Loc.R. 21.1 unless prejudice occurred. David v. Schwarzwald (1992), 79 Ohio App.3d 786, 795, Universal Medical Systems, Inc. v. Duke (Feb. 23, 1995), Cuyahoga App. No. 66941, 66974, unreported. Appellee did provide a witness list ten days prior to trial, and did not violate the trial judge's pre-trial order. Accordingly, this assignment of error is overruled. III. Appellant's third assignment of error states: THE TRIAL COURT ERRED IN GIVING A JURY INSTRUCTION REQUESTED BY APPELLEE CREDIT ALLIANCE WHICH HAD NOT BEEN PROVIDED IN CONFORMITY WITH THE TRIAL JUDGE'S PRE-TRIAL ORDER. The pre-trial order issued by the trial judge ordered the parties to file proposed jury instructions ten days before trial. The fifth day of the trial, appellee filed its proposed jury instructions. The instruction to which appellant now objects essentially stated that a financing statement may be filed before a security agreement is made and a financing statement notifies another potential creditor of a possible security interest in the collateral. Clifton Phone did not object to this instruction at -8- trial. Additionally, on September 29, 1994, appellee filed proposed jury instructions, which included an instruction that filing a financing statement does not by itself create a lien on property. Appellant waived any error in giving this instruction, because appellant failed to object before the jury retired. Civ.R. 51(A). Furthermore, if any error occurred it was not plain error or prejudicial error. Appellant concedes that the jury instruction is the correct statement of the law. See R.C. 1309.39(A), 1309.14, National Bank of Fulton County v. Haupricht Bros. (1988), 55 Ohio App.3d 249 (financing statement gives notice that another party may have a security interest). Appellant had notice that appellee would request this instruction, because of appellee's proposed instructions filed on September 29, 1994. Appellant was not prejudiced by the jury instruction, so the instruction cannot constitute reversible error. See Civ.R. 61. Accordingly, this assignment of error is overruled. IV. Appellee's cross-assignments of error state: I. THE TRIAL COURT ABUSED ITS DISCRETION IN DENYING APPELLEE'S MOTIONS TO AMEND ITS ANSWER TO ASSERT A STATUTE OF FRAUDS DEFENSE. II. THE TRIAL COURT ABUSED ITS DISCRETION IN DENYING APPELLEE'S MOTION FOR LEAVE TO FILE A MOTION FOR SUMMARY JUDGMENT. These assignments of error are moot, given our disposition of appellant's assignments of error. -9- Accordingly, appellee's assignments of error are overruled as moot. The decision of the trial court is affirmed. -10- It is ordered that appellee recover of appellant its costs herein taxed. The court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this court directing the Common Pleas Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. HARPER, P.J., and McMONAGLE, TIMOTHY E., J., CONCUR. JOSEPH J. NAHRA JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time .