PC Surveillance.Net, L.L.C. v. Rika Group, Corp.
2012 Ohio 4569
Ohio Ct. App.2012Background
- PCSurveillance.net, LLC purchased PCSurveillance's business assets from Rika Group for $1,350,000; Erika Temple signed two cognovit notes ($1,000,000 and $150,000) as president of Rika Group, with Ryan and Erika also providing personal guaranties.
- Cognovit actions were filed Dec 22, 2009; trial court entered judgments Jan 15, 2010.
- Appellants moved to vacate/relieve cognovit judgments on jurisdiction/finality grounds and Civ.R. 60(B) grounds on Jan 14, 2011.
- PCSurveillance opposed on grounds of timeliness, standing, finality, and accuracy of the awarded amount; affidavits were added in support.
- August 24, 2011, the trial court denied the motions, treating them as untimely and lacking meritorious defenses, and held the cognovit judgments final appealable orders.
- Court remanded for resolution of where cognovit notes were signed and for relief from judgment under Civ.R. 60(B).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Erika and Ryan's cognovit judgments are void because the warning language was not printed near their signatures | Erika/Ryan contend no warning present; warrants void ab initio under R.C. 2323.13(D) | PCSurveillance argues documents were continuous and signatures suffice | Cognovit judgments as to Erika/Ryan void; remanded for factual venue analysis. |
| Whether the cognovit judgment against Rika Group is voidable due to improper venue/signature location under 2323.13(A) | Judgment should be voidable if not signed in the proper county | Notes may have been signed in Mahoning County; disputed where signed | Remand needed to resolve where cognovit notes were signed; judgments voidable if not proper county. |
| Whether Appellants are entitled to relief under Civ.R. 60(B) given meritorious defenses and timeliness | Relief denied; motions untimely/unsupported | There are meritorious defenses (venue, fraud, payment) and timeliness excused by circumstances | Appellants met Civ.R. 60(B) criteria; relief granted; remand for further proceedings. |
Key Cases Cited
- Patton v. Diemer, 35 Ohio St.3d 68 (1988) (void vs voidable distinction in cognovit judgments emphasized)
- Pratts v. Hurley, 102 Ohio St.3d 81 (2004) (distinguishes lack of subject-matter jurisdiction from improper exercise of jurisdiction)
- Onda, LaBuhn, Rankin & Boggs Co., L.P.A. v. Johnson, 184 Ohio App.3d 296 (2009) (cognovit note sufficiency; subject-matter jurisdiction considerations clarified)
- Milstein v. Northeast Ohio Harness, 30 Ohio App.3d 248 (1986) (discussion on finality of cognovit judgments)