2022 Ohio 1118
Ohio Ct. App.2022Background
- Home Loan Savings Bank sued on a note and filed a Statement and Confession of Judgment; the trial court entered a confessed judgment on October 31, 2018 for $977,471.46 (plus interest) against Jahweh, LLC, North Pointe Fitness Institute, LLC, and Phillip F. Arthur.
- The clerk mailed notice of the confession of judgment by registered mail to the defendants; the mailings were returned unclaimed.
- On December 6, 2021 the defendants moved to void the October 31, 2018 judgment and to dismiss, arguing (among other things) that: the guaranty was not a cognovit note because the checkboxes activating confession-language were not checked; some defendants did not sign the note and/or were never served; and Home Loan failed to prove breach/damages.
- The trial court vacated the judgment as to two co‑defendants but denied relief to Jahweh, finding the guaranty contained the required cognovit language, that statutory requirements were met, and that omission of checkmarks did not negate the provision.
- Jahweh appealed; the appellate court treated Jahweh’s motion as invoking Civ.R. 60(B) principles, reviewed whether Jahweh alleged a timely motion and a meritorious defense, and focused primarily on whether the guaranty actually converted into a cognovit note given the unchecked boxes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the guaranty constituted a cognovit note despite unchecked checkboxes next to confession-language | The guaranty’s confession-language complies with R.C. 2323.13 and the form’s unchecked boxes are meaningless; the cognovit provision is enforceable. | The boxes activating confession-language were not checked, so no cognovit note was formed; judgment based on confession is void. | Reversed trial court as to Jahweh: unchecked boxes raise a genuine question about whether the cognovit language was activated; Jahweh alleged a meritorious defense. |
| Whether Jahweh’s motion to vacate was timely and whether it alleged a meritorious defense under Civ.R. 60(B) (special cognovit standard) | Home Loan pointed to other filings (outside the record) to contend Jahweh had notice; otherwise the trial court tacitly treated motion as timely and denied relief on the merits. | Jahweh argued its December 2021 motion was timely and, if true, the unchecked‑box defense is meritorious and warrants vacatur of a cognovit judgment. | The court held the motion was timely for purposes of cognovit relief and that Jahweh alleged a meritorious defense; trial court abused its discretion by refusing relief. |
| Whether lack of service/personal jurisdiction rendered the confession judgment void | Home Loan relied on other county filings (not in the record) to argue notice/service/waiver. | Jahweh argued it was never served and thus the judgment is void for lack of personal jurisdiction. | The appellate court did not resolve service/personal jurisdiction on the existing record; because it found a meritorious defense to the cognovit claim, it reversed and remanded for further proceedings. |
Key Cases Cited
- GTE Automatic Elec., Inc. v. ARC Indus., 47 Ohio St.2d 146 (1976) (sets the GTE standard for relief under Civ.R. 60(B)).
- Sutton Bank v. Progressive Polymers, L.L.C., 161 Ohio St.3d 387 (2020) (contract interpretation; give effect to all contract provisions).
- Rose Chevrolet, Inc. v. Adams, 36 Ohio St.3d 17 (1988) (movant need only allege a meritorious defense, not prove it, to obtain relief under certain circumstances).
- Meyers v. McGuire, 80 Ohio App.3d 644 (1992) (cognovit judgments present special circumstances; timely motion + meritorious defense supports relief).
- Medina Supply Co. v. Corrado, 116 Ohio App.3d 847 (1996) (recognizing cognovit‑judgment relief under Civ.R. 60(B)).