Court Opinion

ID: 6698968
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:03:44.040202+00
Date Added: 2024-06-11T16:01:20.937916
License: Public Domain

Kline, Presiding Judge,
concurring in judgment only.
{¶ 17} I concur in judgment only, because I respectfully disagree that the cognovit note is facially insufficient to support the cognovit judgment. Instead, I believe that the cognovit judgment is invalid because the appellee (hereinafter “Onda LaBuhn”) did not submit its books and records along with the cognovit note.
{¶ 18} Numerous Ohio courts have upheld cognovit judgments for amounts that cannot be determined solely by referring to the notes in question. See, e.g., Santora v. Kiss, Cuyahoga App. No. 91303, 2008-Ohio-6287, 2008 WL 5096972 (affirming award of $117,084.54 plus interest; the balance due on $145,000 cognovit note); Classic Bar & Billiards, Inc. v. Fouad Samaan, Franklin App. No. 08AP-210, 2008-Ohio-5759, 2008 WL 4817453 (affirming award of $138,611.94; the alleged balance due on $150,000 cognovit note, plus interest, attorney fees, and costs); World Tire Corp. v. Webb, Knox App. No. 06CA10, 2007-Ohio-5135, 2007 WL 2812946 (affirming award of $44,259.54 plus interest on $60,150 cognovit note); Bates v. Midland Title of Ashtabula Cty., Inc., Lake App. No. 2003-L-127, 2004-Ohio-6325, 2004 WL 2694923 (affirming award of $377,564.21 plus interest on $583,010.26 cognovit note); Dovi Interests, Ltd. v. Somerset Point Ltd. Partnership, Cuyahoga App. No. 82507, 2003-Ohio-3968, 2003 WL 21714977, at ¶ 2 (affirming award of $680,559.32, plus interest and costs on a cognovit note “permitting [debtor] to borrow up to $700,000, ‘or such lesser amount as shall actually have been borrowed by [debtor] from [creditor] hereunder or pursuant to the lease, or both’ ”); Second Natl. Bank of Warren v. Sorice, Mahoning App. No. 01 CA 63, 2002-Ohio-3204, 2002 WL 1396815 (affirming award of $99,493.29 in debt, $1,843.38 in interest, and $50.41 in late charges on a $100,000 cognovit note).
{¶ 19} In each of these cases, courts had to consider the amounts repaid by the debtor — additional evidence — in order to calculate the various amounts owed.
{¶ 20} Here, the promissory-note-modification agreement states that the amount advanced to the Johnsons by Onda LaBuhn is “evidenced by the books and records of the Secured Party and Debtors.” And “[i]f the note refers to other documents that are necessary in understanding the material terms of the note, the supporting documents must be submitted in order to obtain a valid cognovit judgment.” Richfield Purchasing, Inc. v. Highpoint Truck Terminals, *303Inc., 8th Dist. No. 86056, 2005-Ohio-6348, 2005 WL 3219721, at ¶ 11. See also Bank One, N.A. v. DeVillers, Franklin App. No. 01AP-1258, 2002-Ohio-5079, 2002 WL 31123863, at ¶ 40.
{¶ 21} Onda LaBuhn did not submit its books and records along with the cognovit note. Instead, Onda LaBuhn alleged in its complaint that the Johnsons owed them $65,361.17. Additionally, Onda LaBuhn submitted multiple affidavits that purportedly state the amounts actually owed by the Johnsons. But an allegation in a complaint and multiple affidavits are not the “books and records” referred to in the note. Furthermore, Onda LaBuhn filed these affidavits after the cognovit judgment was entered against the Johnsons.
{¶ 22} In DeVillers, the court found a cognovit judgment void ab initio because the secured party failed to submit a necessary affidavit along with the cognovit note. The court held that “Bank One’s failure to submit the affidavit of one of its officers prior to obtaining the cognovit judgment voids the judgment. Because the cognovit judgment here was void ab initio, Bank One’s subsequent filing of the * * * affidavit was of no effect.” Id. at ¶ 40.
{¶ 23} Therefore, I would find the cognovit judgment invalid, and therefore void, because (1) Onda LaBuhn did not submit its books and records along with the cognovit note and (2) Onda LaBuhn’s books and records were necessary to determine the amount owed by the Johnsons.
{¶ 24} Accordingly, I concur in judgment only.