Huntington wins Ohio Supreme Court decision clarifying lender disclosure obligations and allowing enforcement of $77 million personal guaranty

Client(s) Huntington National Bank

On behalf of Huntington National Bank, Jones Day secured an Ohio Supreme Court decision holding that lenders are not required to disclose information about the potential risks associated with a debt to other parties unless they have established a "relationship of special trust or confidence." When a borrower's financial condition began to decline, Huntington National Bank sought to enforce a $77 million personal loan guaranty from the borrower's principal securing a commercial real estate loan. The Ohio trial court ruled in Huntington's favor, but the state appellate court reversed that decision and held that Huntington was required to disclose facts about the guarantor's own business and his co-guarantors that allegedly increased the guarantor's risk.

Jones Day stepped in at that point and persuaded the Ohio Supreme Court to accept Huntington's discretionary appeal. After briefing and argument, the Ohio Supreme Court held 6 to 1 that "a lender has [no] duty to disclose facts that materially increase risk" and declined to adopt the appellate court's view of the law. Simply put, "absent an established relationship of special trust or confidence, there is no duty between the parties to disclose facts that materially increase risk to one another."

This was a significant win for not only Huntington, but also the entire banking and credit industry, as demonstrated by amicus support from the Ohio Chamber of Commerce, the Ohio Bankers League, the American Bankers Association, and America's Credit Unions.

Huntington National Bank v. Schneider, No. 2024-0208 (Ohio)