RFC Capital Corporation v. EarthLink, Inc.
Ohio Court of Appeals
55 U.C.C. Rep. Serv. 2d 617 (2004)
In exchange for a $12 million loan, Internet Commerce & Communications, Inc. (ICC) granted to RFC Capital Corporation (RFC) (plaintiff) a security interest in ICC’s customer base. Thereafter, ICC contracted to sell its customer base to EarthLink, Inc. (EarthLink) (defendant), promising EarthLink that at least 40,000 customers would transfer to EarthLink. Despite ICC’s assurances to EarthLink that RFC had already agreed to release the collateral from RFC’s security interest, RFC had not done so. In 2001, RFC and ICC executed an amendment to their security agreement, which provided that RFC consented to the sale of ICC’s customer base and agreed to release RFC’s security interest in the purchased customer base upon ICC’s complete performance of obligations under the security agreement. However, only 25,144 customers transferred to EarthLink, and EarthLink suspended payments to ICC. RFC brought suit against EarthLink, claiming an impairment of RFC’s interest in the customer base. A jury found in RFC’s favor, and the trial court entered a judgment of $6 million against EarthLink. EarthLink appealed, arguing that RFC had released its security interest upon execution of the amendment.
Rule of Law
Holding and Reasoning (Klatt, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 174,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,000 briefs, keyed to 188 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.