COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 69465 : ACCELERATED DOCKET RETAIL CREDIT CORPORATION : : JOURNAL ENTRY Plaintiff-Appellant : : and -vs- : : OPINION : DARRELL AND ANGELA SHORTERAGE : PER CURIAM ET AL. : : Defendants-Appellees : : DATE OF ANNOUNCEMENT APRIL 25, 1996 OF DECISION: CHARACTER OF PROCEEDING: Civil appeal from Bedford Municipal Court Case No. 95-CVI-01242 JUDGMENT: Modified, and Affirmed as Modified. DATE OF JOURNALIZATION: __________________________ APPEARANCES: For Plaintiff-Appellant: For Defendants-Appellees: WILLIAM L. MILLER, ESQ. DARRELL & ANGELA SHORTERAGE, Pro 859 Alpha Drive Se Highland Hts., Ohio 44143 28700 Orange Meadow Lane Orange Village, Ohio 44022 -3- PER CURIAM: In this accelerated appeal, plaintiff-appellant Retail Credit Corporation appeals a judgment in its favor against defendants-appellees, Darrell and Angela Shorterage, and it assigns as error the trial court's decision to award 10% post- judgment interest as opposed to 23.99% as the contract required. For the reasons set forth below, we modify the judgment of the trial court and affirm it as modified. Retail filed a complaint in small claims court against the Shorterages and alleged they defaulted on a loan for the purchase of a sofa from Furniture Land. Retail sought $2,000 plus 23.99% post-judgment interest. The loan agreement was attached to the complaint and provided for an annual percentage rate of 23.99%. It also provided, "In the event of default by Buyer wherein Seller or Assignee sues and obtains a judgment based on this Retail Installment Contract the post-judgment rate shall be the same as the Annual Percentage Rate provided for herein." The case was set for hearing and a default judgment was entered against the Shorterages in the amount of $2,000 plus 10% from the date of judgment. Retail filed objections to the referee's recommendation and argued it should be granted 23.99% post-judgment interest under the terms of the contract. The trial court overruled the objections, adopted the referee's recommendation and held the interest rate of 23.99% was unconscionable. This appeal followed. -4- The sole issue on appeal is whether the clause in the contract between the parties providing for a post-judgment interest rate of 23.99% was unconscionable. Whether a contract or a clause of a contract is unconscionable is a question of law for the court to determine. R.C. 1302.15 (UCC 2-302). "Unconscionability is generally recognized to include an absence of meaningful choice on the part of one of the parties to a contract, combined with contract terms that are unreasonably favorable to the other party." Collins v. Click Camera & Video, Inc. (1993), 86 Ohio App.3d 826, 834. See, also, Orlett v. Suburban Propane (1989), 54 Ohio App.3d 127. Thus, two factors must be present in order to establish a contract provision is unconscionable: (1) the terms of the contract are unfair and unreasonable, i.e., "substantive unconscionability," and (2) the individualized circumstances of the parties were such that no voluntary meeting of the minds was possible, i.e., "procedural unconscionability." Id. In determining whether the post-judgment interest rate in this case demonstrated substantive unconscionability, this court must consider the interest rates which have been held to be "commercially reasonable." Accord Collins at 834-835 (held consideration in contract commercially reasonable). The General Assembly provided a bright line test for what was considered commercially reasonable when it permitted retail sellers and small loan licensees to contract for and receive finance charges or interest at any rate or rates agreed upon or consented to by -5- the parties to the agreement, so long as the rate did not exceed 1 an annual percentage rate of twenty-five per cent. R.C. 1317.061 (repealed effective 1-1-96) and 1321.131 (repealed effective 1-1-96). In a written agreement executed on November 7, 1992, the parties in this case agreed to an annual percentage rate and post-judgment interest rate of 23.99%. Because the post-judgment rate agreed to by the parties is less than annual percentage rate of twenty-five per cent, we find it was commercially reasonable at the time the parties entered into their agreement. Accordingly, the post-judgment interest rate clause in the agreement of parties does not establish substantive unconscionability. Absent evidence of both substantive and procedural unconscionability, a contract is not as a matter of law unconscionable. See Collins at 834. Having determined the record in this case fails to demonstrate substantive unconscionability, we need not consider the issue of procedural unconscionability. Because the record in this case did not establish substantive unconscionability, this court finds neither the contract nor the post-judgment interest clause was unconscionable as a matter of law. Accordingly, the judgment of 1 Although R.C. 1317.061 and 1321.131 were repealed, they were both in effect at the time the parties in this case entered into their agreement. Thus, whether an annual percentage rate of twenty-five percent is commercially reasonable for contracts entered into after January 1, 1996 is subject to further debate. -6- the trial court is modified to reflect judgment in the amount of $2,000 plus interest at 23.99% from the date of judgment. -7- Judgment modified, and affirmed as modified. It is ordered that Appellees recover of Appellant their 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 Bedford Municipal 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. PATRICIA ANN BLACKMON, PRESIDING JUDGE JAMES M. PORTER, JUDGE TIMOTHY E. MCMONAGLE, 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 journaliza- .