The majority opinion relies on previous cases issued by this court for its conclusion that appellee is owed eighteen percent interest on unpaid rents. Those earlier decisions were premised on R.C. 1701.68 for the argument that, as state law prohibits corporations from claiming usury in reference to their corporate obligations, there must be no maximum interest rate for corporations. R.C. 1701.68 does state that no corporate "evidence of indebtedness" shall be"set aside, impaired, or adjudged invalid by reason of anything contained in laws prohibiting usury or regulating interest rates." I would agree with the majority opinion that had the contract clearly and specifically stated that the lessor corporation was entitled to an eighteen percent interest rate, that rate could not be invalidated on the basis of R.C. 1343.03 (A). The contract does not clearly and specifically so state. The question here is not whether appellees may be charged eighteen percent interest but, rather, whether they should be so charged. *Page 609
It is clear that appellees are obligated to pay appellant interest on past due amounts called for under the lease agreement as evidenced by the following paragraph:
"26. Past-Due Rent
"If Tenant shall fail to pay, when the same is due and payable, any Minimum Rent or any Percentage Rent or other amounts or charges to be paid to Landlord by Tenant as provided in this lease, such unpaid amounts shall bear interest from the due date thereof to the date of payment at the rate which is the lesser ofeighteen percent (18%) per annum or the maximum interest ratepermitted by law." (Emphasis added.)
Ohio courts recognize the inherent contractual nature of lease agreements and apply traditional contract principles when interpreting the provisions. See Timber Ridge Investments Ltd. v.Marcus (1995), 107 Ohio App. 3d 174, 178, 667 N.E.2d 1283, 1285. The rule is well established that where there is doubt or ambiguity in the language of a contract it will be construed strictly against the party who prepared it. McKay Machine Co. v.Rodman (1967), 11 Ohio St. 2d 77, 79, 40 O.O.2d 87, 88-89,228 N.E.2d 304, 306-307; Metro. Elec., Inc. v. Jones (1986), 30 Ohio Misc.2d 9, 10, 30 OBR 220, 221-222,506 N.E.2d 950, 952-953.
R.C. 1343.03 (A) sets forth the statutory interest rate that applies to contracts:
"[W]hen money becomes due and payable upon any * * * contract * * *, the creditor is entitled to interest at the rate of ten per cent per annum, and no more, unless a written contract provides a different rate of interest in relation to the money that becomes due and payable, in which case the creditor is entitled to interest at the rate provided in the contract."
Therefore, the "maximum interest rate permitted by law" on any contract is ten percent unless clearly specified otherwise in the contract itself.
Appellant drafted all of the provisions contained in the lease. In its present form, the paragraph which specifies the interest rate to be paid on past due amounts provides an alternative. This provision is therefore ambiguous. Construing the ambiguity strictly against the party who prepared it would entitle appellant to an interest rate of ten percent per annum, ten percent obviously being less than eighteen percent and, thus, the "lesser" option specifically provided by contract.
This conclusion is inescapable due to one fact: appellant being the drafter of the contract, it would have been absurdly easy for appellant to draft the provision to require an interest rate of eighteen percent simply by deleting (or even running a line through) the latter part of the phrase. The majority opinion would have us and appellees ignore the last eight words of the last line of paragraph 26 of their contract. I do not believe that this phrase is mere surplus. I believe the *Page 610 parties contracted for an eighteen percent interest rate (which is specifically allowed by R.C. 1701.68) only when it is less than the statutory maximum. Since the Ohio statute concerning interest on contracts is currently ten percent, the parties here contracted for a ten percent rate of interest on past due amounts.