[Cite as ABL Wholesale Distribs., Inc. v. Gas, 2014-Ohio-2268.]

Court of Appeals of Ohio

 EIGHTH APPELLATE DISTRICT 

 COUNTY OF CUYAHOGA 

 JOURNAL ENTRY AND OPINION

 No. 100256 

ABL WHOLESALE DISTRIBUTORS, INC. 

PLAINTIFF-APPELLEE

vs.

CLARK GAS, ET AL.

DEFENDANTS-APPELLANTS 

JUDGMENT:

REVERSED AND REMANDED

Criminal Appeal from the 

Cuyahoga County Court of Common Pleas 

Case No. CV-11-746774 

BEFORE: Kilbane, J., Keough, P.J., and Blackmon, J. 

RELEASED AND JOURNALIZED: May 29, 2014
ATTORNEY FOR APPELLANTS

Nate N. Malek 

Law Office of Nate N. Malek, L.L.C. 

29025 Bolingbrook Road 

Cleveland, Ohio 44124 

ATTORNEYS FOR APPELLEE

Robert N. Lurie 

Mark Brncik 

Hilary Michael 

James Oh 

Javitch, Block & Rathbone 

1100 Superior Avenue, 19th Floor 

Cleveland, Ohio 44114 
MARY EILEEN KILBANE, J.: 

{¶1} Defendants-appellants, Clark Gas and Hamid Sarkis (“Sarkis”) (collectively 

referred to as “defendants”), appeal from trial court’s order that denied their motion for 

relief from a cognovit judgment obtained by plaintiff-appellee, ABL Wholesale 

Distributors, Inc. (“ABL Wholesale”). For the reasons set forth below, we reverse and 

remand. 

{¶2} On January 25, 2011, ABL Wholesale filed a complaint on a credit 

application against Clark Gas and Sarkis alleging that $97,756.73 is due on an account for 

merchandise. According to ABL Wholesale, Sarkis, as individual guarantor of Clark 

Gas, completed a credit application that provided for the creation of an open account 

promissory note with cognovit provisions “such that if the applicant fails to pay pursuant 

to the terms thereof, [Sarkis] authorizes an attorney to appear * * * in an action to 

collect upon such amount past due, to waive issuance of service of process, and to confess 

judgment in favor of ABL Wholesale Distributors, Inc.” This document also contained a 

cognovit warning that if he failed to repay the account as required, judgment could be 

obtained against him without notice or a trial. In support of the complaint, ABL 

Wholesale attached the affidavit of its credit manager, Kevin Johnson (“Johnson”), who 

averred that defendants owe ABL Wholesale $97,756.73 on the account. 

{¶3} On January 25, 2011, an answer confessing judgment was filed on behalf of 

defendants, in accordance with the cognovit terms of the account, and the trial court 
entered judgment in favor of ABL Wholesale for $97,756.73, plus 4 percent interest and 

costs. 

{¶4} On March 8, 2012, defendants filed a motion for relief from the judgment. 

In support of this motion, Sarkis averred that he did not sign the open account promissory 

note document at issue, and that he “cannot speak or understand, * * * read or write in 

English.” Defendants therefore maintained that the cognovit warning on the note did not 

satisfy R.C. 2323.13(D). Defendants also argued that the cognovit judgment was invalid 

because it did not contain a warrant of attorney authorizing an attorney to appear and 

confess judgment as required under R.C. 2323.13(A). The trial court denied defendants’ 

motion for relief from judgment on April 3, 2012. 

{¶5} ABL Wholesale filed pleadings in aid of execution of its judgment on May 

3, 2012. At about that same time, Sarkis appeared for a debtor’s examination in another 

matter involving an open account promissory note, with cognovit provisions that ABL 

Wholesale issued at another service station owned by Sarkis. See generally ABL 

Wholesale Distribs., Inc. v. Quick Shop, 8th Dist. Cuyahoga No. 97897, 2012-Ohio-3576 

(“ABL Wholesale Distribs. I”). On August 9, 2012, this court released its decision in the 

other matter. Id. In that case, this court stated: 

[D]efendants maintained that the credit application that provided for the 

creation of an open account promissory note failed to meet the requirements 

for cognovit notes set forth in R.C. 2323.13 and, more specifically, did not 

contain a warrant of attorney. Sarkis also averred that he did not sign the 

note, that he does not read or write in the English language, and that he 

could not understand the provisions of the document at issue, including the 

cognovit language. We find that Sarkis’s affidavit and allegations set forth 

operative facts involving improper conduct in obtaining the debtor’s 
signature and therefore challenge the integrity and validity of the cognovit 

note. Accordingly, we conclude that defendants provided sufficient 

operative facts that would support a meritorious defense to the judgment, 

and therefore, entitled defendants to a hearing to take evidence and verify 

the facts before ruling upon the motion. As a result, the trial court abused 

its discretion when it failed to conduct a hearing before denying the motion 

for relief from judgment filed by defendants. 

Id. at ¶ 14. 

{¶6} On June 26, 2013, subsequent to this court’s decision in ABL Wholesale 

Distribs. I, defendants filed a renewed motion for relief from judgment in the instant 

matter. Defendants renewed their assertion that Sarkis cannot read, write, or understand 

English, and that he did not sign the open account promissory note. They also urged the 

trial court to apply this court’s holding in ABL Wholesale Distribs. I and to vacate the 

cognovit judgment.1

 

{¶7} In opposition, ABL Wholesale argued that the renewed motion for relief 

from judgment involved the same issues as defendants’ March 8, 2012 motion that the 

trial court had previously denied. ABL Wholesale also argued that the renewed motion 

was not filed within a “reasonable time,” as required by Civ.R. 60(B). 

{¶8} On August 2, 2013, the trial court determined that the defendants’ renewed 

motion for relief from judgment was untimely and denied it. Defendants now appeal and 

assign the following errors for our review: 

 1The docket in ABL Wholesale Distribs. I further reflects that after this court 

remanded the matter, the trial court held an evidentiary hearing, with an 

interpreter for Sarkis. The trial court vacated the cognovit judgment on December 

5, 2012. On September 17, 2013, the trial court awarded ABL Wholesale summary 

judgment, and on February 26, 2014, the matter was settled. 
Assignment of Error One 

The trial court erred when it denied Defendants’ Motion for Relief. 

Assignment of Error Two 

The trial court erred when it failed to hold an oral hearing on Defendants’ 

Motion for Relief. 

{¶9} Cognovit notes contain provisions designed to cut off defenses available to 

a debtor in the event of default. Huntington Natl. Bank v. Royal Mt. Sterling Corp., 10th 

Dist. Franklin No. 12AP-174, 2012-Ohio-4514, ¶ 11. Cognovit judgments are subject to 

Civ.R. 60(B) relief from judgment, however. Id. at ¶ 12. We review a judgment 

regarding Civ.R. 60(B) relief for an abuse of discretion. Benesh, Friedlander, Coplan & 

Aronoff, L.L.P. v. Software, Inc., 8th Dist. Cuyahoga No. 91708, 2009-Ohio-1617, ¶ 13. 

{¶10} Civ.R. 60(B) provides in relevant part: 

On motion and upon such terms as are just, the court may relieve a party or 

his legal representative from a final judgment, order or proceeding for the 

following reasons: (1) mistake, inadvertence, surprise or excusable neglect; 

(2) newly discovered evidence which by due diligence could not have been 

discovered in time to move for a new trial under Rule 59(B); (3) fraud 

(whether heretofore denominated intrinsic or extrinsic), misrepresentation 

or other misconduct of an adverse party; (4) the judgment has been 

satisfied, released or discharged, or a prior judgment upon which it is based 

has been reversed or otherwise vacated, or it is no longer equitable that the 
judgment should have prospective application; or (5) any other reason 

justifying relief from the judgment. * * * 

{¶11} In GTE Automatic Elec., Inc. v. ARC Indus., Inc., 47 Ohio St.2d 146, 351 

N.E.2d 113 (1976), paragraph two of the syllabus, the Ohio Supreme Court held that to 

prevail on a Civ.R. 60(B) motion, the movant must demonstrate that: 

(1) the party has a meritorious defense or claim to present if relief is 

granted; (2) the party is entitled to relief under one of the grounds stated in 

Civ.R. 60(B)(1) through (5); and (3) the motion is made within a reasonable 

time, and, where the grounds of relief are Civ.R. 60(B)(1), (2) or (3), not 

more than one year after the judgment, order or proceeding was entered or 

taken. 

GTE Automatic Elec., Inc. v. ARC Indus., Inc., 47 Ohio St.2d 146, 351 N.E.2d 113 

(1976), paragraph two of the syllabus. 

{¶12} In the instant case, ABL Wholesale insists that defendants’ renewed motion 

for relief from judgment was not timely since it was filed nine and one-half months after 

this court’s decision in ABL Wholesale Distribs. I, and there was no explanation for the 

delay. ABL Wholesale additionally claims that the renewed motion for relief from 

judgment was properly denied by operation of res judicata because the trial court denied 

the first motion for relief from judgment on April 2, 2013. 

{¶13} With regard to the timeliness of the motion, we note that in general, a party 

may file a motion to vacate a judgment up to one year after the entry of judgment, but the 

motion is also subject to the “reasonable time” provision of Civ.R. 60(B). Adomeit v. 

Baltimore, 39 Ohio App.2d 97, 102, 316 N.E.2d 469 (8th Dist.1974). The 

reasonableness of the time period is dependent upon the facts and circumstances of the 
particular case. Simmons v. Simmons, 8th Dist. Cuyahoga No. 97975, 2012-Ohio-4164, ¶ 

8. The movant bears the burden of submitting factual material that demonstrates the 

timeliness of the motion. Adomeit at 103; Youssefi v. Youssefi, 81 Ohio App.3d 49, 610 

N.E.2d 455 (9th Dist.1991). When a movant is aware that there are grounds for relief and 

delays filing the motion, the movant must provide a reasonable explanation for the delay. 

Blue Durham Props., L.L.C. v. Krantz, 8th Dist. Cuyahoga No. 99201, 2013-Ohio-2098, ¶ 

15; Kaczur v. Decara, 8th Dist. Cuyahoga No. 67546, 1995 Ohio App. LEXIS 3038 (July 

20, 1995) (Civ.R. 60(B) motion deemed untimely filed when movant offered no 

reasonable explanation for a nine-month delay in filing the motion). 

{¶14} We note, however, that a trial court’s jurisdiction over cognovit notes is 

governed by R.C. 2323.12 and 2323.13, and these statutory requirements must be met in 

order for a valid judgment to be granted upon a cognovit note, or for a court to have 

subject matter jurisdiction over it. Park View Fed. Sav. Bank v. Village Builders Ltd., 

8th Dist. Cuyahoga Nos. 98554, 98555, and 98556, 2013-Ohio-2994, ¶ 10, citing 

Klosterman v. Turnkey-Ohio, L.L.C., 182 Ohio App.3d 515, 2009-Ohio-2508, 913 N.E.2d 

993 (10th Dist.), Buehler v. Mallo, 10th Dist. Franklin No. 10AP-84, 2010-Ohio-6349. 

Our review of the issue of subject matter jurisdiction is de novo. Id. 

{¶15} In Solomon v. Vizurraga, 8th Dist. Cuyahoga No. 87160, 2006-Ohio-3841, 

this court allowed a Civ.R. 60(B) challenge to a cognovit judgment under the present 

grounds despite a nearly four-year gap between the judgment and the motion to vacate. 

This court explained: 
[l]ack of subject matter jurisdiction can never be waived, and it can be 

raised at any point in the proceedings. Subject matter jurisdiction does not 

relate to the rights of the parties (which a party can either affirmatively 

waive, or constructively waive, as in laches) but rather relates to the power 

of the court to hear and decide a controversy. The parties by their action, 

or inaction, cannot create a power in a court that is not there. 

See also Agarwal v. Matthews, 8th Dist. Cuyahoga No. 96950, 2012-Ohio-161, ¶ 9. Id. at 

¶ 12. 

{¶16} Further, claims involving subject matter jurisdiction are not barred by the 

doctrine of res judicata because subject matter jurisdiction cannot be waived. State v. 

Lomax, 96 Ohio St.3d 318, 2002-Ohio-4453, 774 N.E.2d 249, ¶ 17. 

{¶17} In this matter, defendants filed the renewed motion for relief from judgment 

on June 26, 2013, or nine and a one-half months after this court issued its ruling in ABL 

Wholesale Distribs. I. No specific explanation was offered for the delay, but the record 

indicates that the renewed motion was filed several months after the completion of 

litigation in ABL Wholesale Distribs. I. Moreover the renewed motion for relief from 

judgment challenged, inter alia, the absence of a warrant of attorney as required under 

R.C. 2323.13(A), and therefore challenged the subject matter jurisdiction to enter a 

cognovit judgment. As such, the motion was timely under Solomon. We therefore 

conclude that the trial court erred in denying defendants’ renewed motion for relief from 

judgment as untimely. 

{¶18} In addition, we conclude, as we previously found in ABL Wholesale 

Distribs. I, that “Sarkis’s affidavit and allegations set forth operative facts involving 
improper conduct in obtaining the debtor’s signature and therefore challenge the integrity 

and validity of the cognovit note.” Id. at ¶ 14. Accordingly, we conclude that the 

defendants provided sufficient operative facts that would support a meritorious defense to 

the judgment, and therefore, entitled the defendants to a hearing to take evidence and 

verify the facts before ruling upon the motion. 

{¶19} The second assignment of error is well taken. 

{¶20} In light of our disposition of the second assignment of error, we overrule the 

first assignment of error as moot. See App.R. 12(A)(1)(c). 

{¶21} The judgment is reversed and the matter is remanded for further proceedings 

consistent with this opinion. 

It is ordered that appellants recover from appellee costs herein taxed. 

The court finds there were reasonable grounds for this appeal. 

It is ordered that a special mandate be sent to said court to carry this judgment into 

execution. 

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of 

the Rules of Appellate Procedure. 

 

 

MARY EILEEN KILBANE, JUDGE 

KATHLEEN ANN KEOUGH, P.J., and 

PATRICIA A. BLACKMON, J., CONCUR