Can an Ohio lawyer confess judgment on a cognovit note, and can the creditor's attorney do it or be paid by the creditor?

Plain-English summary

The Board answered three questions about confessing judgment on a cognovit note, a written instrument by which a debtor authorizes an attorney to confess judgment if the note's obligations are not met. The Board first concluded that it was proper for an attorney to sign an answer confessing judgment against a debtor at a creditor's attorney's request, provided the confession was not in violation of applicable law. It found no violation of DR 7-101 (zealous representation), reasoning that the confessing attorney acts as an officer of the court with statutory authority under R.C. 2323.13, has the debtor's written authority through the warrant, and has responsibilities limited to the act of confession the debtor consented to with knowledge of the rights relinquished.

Second, the Board concluded that it was improper for a creditor's own attorney to confess judgment under the warrant unless the warrant contained an express waiver of the conflict of interest or specified that the creditor's attorney could confess judgment, because absent that, the dual role implicates DR 5-105(A) and (B), which require DR 5-105(C) consent.

Third, the Board concluded that an attorney could not accept a legal fee from a creditor for confessing judgment unless the warrant contained the debtor's express consent, because DR 5-107(A) bars accepting compensation from someone other than the client absent the client's consent after full disclosure, and the statutory warning language does not supply that consent.

Currency note

The Ohio Board reports that this opinion was withdrawn by Opinion 2014-3 on August 8, 2014, and flags it as a "CPR Opinion" that interprets the former Ohio Code of Professional Responsibility. Because it has been withdrawn, it is indexed here as research only and is not current guidance.

This opinion issued in 1993, before Ohio's adoption of the Ohio Rules of Professional Conduct, which superseded the former Code of Professional Responsibility effective February 1, 2007. Subsequent rule amendments and the 2014 withdrawal may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current Ohio Rules of Professional Conduct and applicable statutes before relying on any specific rule mentioned here.

Common questions

Q: Could a lawyer confess judgment on a cognovit note for a debtor he never met?

A: Under the opinion, yes. The Board found no DR 7-101 violation because the confessing attorney acts as an officer of the court with statutory authority under R.C. 2323.13 and the debtor's written warrant, provided the confession is not in violation of applicable law.

Q: Could the creditor's own attorney confess judgment?

A: Only if the warrant of attorney contained an express waiver of the conflict of interest or specified that the creditor's attorney could confess judgment. Otherwise the conflict under DR 5-105(A) and (B) applied, requiring DR 5-105(C) consent.

Q: Could the confessing attorney accept a fee from the creditor?

A: Only if the warrant contained the debtor's express consent. The Board concluded DR 5-107(A) bars accepting compensation from someone other than the client without consent after full disclosure, and the statutory warning language does not provide that consent.

Background and rules framework

The opinion interprets former Ohio Code of Professional Responsibility DR 7-101 (zealous representation), DR 5-105 (declining or continuing employment where interests conflict, with the DR 5-105(C) consent exception), and DR 5-107(A) (compensation from one other than the client), against the statutory framework for cognovit notes in R.C. 2323.13, which validates such notes outside consumer and residential contexts and requires the warning language and production of the warrant of attorney.

Citations and references

Rules of Professional Conduct:

• Former Ohio Code of Professional Responsibility DR 7-101, DR 5-105(A), (B), (C), DR 5-107(A)

Statutes:

• Ohio Rev. Code Ann. Section 2323.13 (Baldwin 1990); Section 1345.23(D) (Baldwin 1988); Section 5321.13(B) (Baldwin Supp. 1992)

Cases:

• D.H. Overmyer Co. v. Frick Co., 405 U.S. 174 (1972), waiver of pre-judgment notice and hearing in a cognovit note
• First Nat'l Bank of Findlay v. Trout, 58 Ohio St. 347 (1898); Patton v. Diemer, 35 Ohio St. 3d 68 (1988); Shore West Constr. Co. v. Sroka, 61 Ohio St. 3d 45 (1991)
• Northern Ohio Tractor, Inc. v. Richardson, 8 Ohio App. 3d 171 (Ct. App. Summit County 1982); Hadden v. Rumsey Products, Inc., 196 F.2d 92 (2d Cir. 1952); Fogg v. Friesner, 55 Ohio App. 3d 139 (Ct. App. Wood County 1988)

Other opinions cited:

• Illinois State Bar Ass'n, Op. 88-1 (1988): lawyer acting in a confession-of-judgment proceeding

See also

• Ohio BPC Op. 1993-007: Spouses as Prosecutor and Defense Counsel
• Ohio BPC Op. 1993-010: Conflicts Between Divisions of a Legal Aid Society
• Ohio BPC Op. 1989-005: Office-Sharing Lawyers on Opposing Sides of a Divorce

Source

• Landing page: https://ohioadvop.org/advisory-opinion-index/
• Original PDF: https://www.ohioadvop.org/wp-content/uploads/2017/03/Op-93-003.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

The Supreme Court of Ohio
BOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE
41 SOUTH HIGH STREET-SUITE 3370, COLUMBUS, OH 43215-6105
(614) 644-5800 FAX: (614) 644-5804

OFFICE OF SECRETARY

OPINION 93-3
Issued April 16, 1993

WITHDRAWN BY OPINION 2014-3 ON AUGUST 8, 2014

[CPR Opinion-provides advice under the Ohio Code of Professional Responsibility which is superseded by the Ohio
Rules of Professional Conduct, eff. 2/1/2007.]

SYLLABUS: It is proper under Ohio's Code of Professional Responsibility for an attorney to sign
an answer confessing judgment against a debtor pursuant to a warranty of attorney in a cognovit
note when requested to do so by a creditor's attorney provided that the confession of judgment is
not in violation of applicable law.

It is improper under Ohio's Code of Professional Responsibility for a creditor's attorney to confess
judgment pursuant to a warranty of attorney in a cognovit note, unless the warrant of attorney
contains an express waiver of conflict of interest or specifies that the creditor's attorney may
confess judgment.

It is improper under Ohio's Code of Professional Responsibility for an attorney to accept a legal fee
from a creditor for confessing judgment pursuant to a warranty of attorney contained within a
cognovit note, unless the warrant of attorney contains express consent by the debtor that the
confessing attorney may receive a legal fee from the creditor.

OPINION: This opinion addresses the propriety of an attorney confessing judgment pursuant to a
warrant of attorney in a cognovit note. The questions are set forth below.

1. Is it proper under Ohio's Code of Professional Responsibility for an attorney to
   sign an answer confessing judgment against a debtor pursuant to a warranty of
   attorney in a cognovit note when requested to do so by a creditor’s attorney?

2. Is it proper under Ohio's Code of Professional Responsibility for a creditor's
   attorney to confess judgment pursuant to a warranty of attorney in a cognovit note?

3. Is it proper under Ohio's Code of Professional Responsibility for an attorney to
   accept a legal fee from a creditor for confessing judgment pursuant to a warranty of
   attorney contained within a cognovit note?

Question One

A cognovit note is a written instrument signed by a debtor authorizing an attorney to confess
judgment against the debtor if the obligations within the note are not met. By signing a cognovit
note containing a warranty of attorney to confess judgment, a debtor consents in advance to a
creditor obtaining a judgment against the debtor without notice or hearing.

The validity of such extraordinary notes is acknowledged by Ohio statute. See Ohio Rev. Code
Ann. § 2323.13 (Baldwin 1990). However, the Ohio legislature prohibits the use of cognovit notes
in consumer loans or consumer transactions, in rental agreements, and in home solicitation sales
contracts. See Ohio Rev. Code Ann. § 2323.13 (E) (Baldwin 1990), § 1345.23 (D) (Baldwin
1988), § 5321.13 (B) (Baldwin Supp. 1992). The use of cognovit notes is also acknowledged by
past and present case law. See First National Bank of Findlay v. Trout, 58 Ohio St. 347, 353
(1898) (stating that the use of judgment notes in Ohio is inveterate), Patton v. Diemer, 35 Ohio St.
3d 68 (1988) [interpreting Ohio Rev. Code 2323.13 (A) and (E)], Shore West Construction Co., v.
Sroka, 61,Ohio St. 3d 45 (1991) [interpreting Ohio Rev. Code 2323.13(E)].

The constitutionality of a cognovit note as authorized by Ohio Revised Code §2323.13 was
challenged as to due process, but was upheld by the Supreme Court in D.H. Overmyer Co. v. Frick
Co., 405 U.S. 174 (1972). In Overmyer, the Supreme Court held that the debtor in the execution
and delivery to the creditor of the note containing a cognovit provision, "voluntarily, intelligently,
and knowingly waived the rights it otherwise possessed to pre-judgment notice and hearing, and
that it did so with full awareness of the legal consequences." Id. at 187. An Ohio appeals court has
held that a local court rule requiring notice and hearing is in conflict with Ohio Rev. Code
§2323.13. Fogg v. Friesner, 55 Ohio App. 3d 139, 140 (Ct. of App. Wood County 1988).

Section 2323.13 (A) (Baldwin 1990) of the Ohio Revised Code requires that “[a]n attorney who
confesses judgment in a case, at the time of making such confession, must produce the warrant of
attorney for making it to the court before which he makes the confession." Under Section 2323.13
(D) (Baldwin 1990) courts are without authority to render judgment based upon such a warrant
unless the warrant of attorney contains the following language:

Warning--By signing this paper you give up your right to notice
and court trial. If you do not pay on time a court judgment may be
taken against you without your prior knowledge and the powers of
a court can be used to collect from you regardless of any claims
you may have against the creditor whether for returned goods,
faulty goods, failure on his part to comply with the agreement, or
any other cause.

Thus, in Ohio a confessing attorney must produce a warrant of attorney in order to confess
judgment on a cognovit note. The warranty of attorney must include a warning as to the rights
being relinquished.

The Board notes that the Illinois State Bar Association has advised that "A lawyer may act as
attorney of record in a confession of judgment proceeding without consulting the debtor, providing

the confession of judgment is not in violation of applicable law." Illinois State Bar Ass'n, Op. 88-1
(1988). The Illinois opinion was affirmed by the Illinois State Bar Association Board of Governors
in January 1991.

The requester is concerned with whether the confessing attorney fails to fulfill his or her duty to
represent a client zealously under Disciplinary Rule 7-101 of the Code of Professional
Responsibility by confessing judgment against a debtor whom the attorney may never have met.
The Board acknowledges the uniqueness of the act of confessing judgment pursuant to a warrant of
attorney in a cognovit note, but does not find such act to be a violation of Disciplinary Rule 7-101
for several reasons. The confessing attorney is serving as an officer of the court with statutory
authority to confess judgment. The confessing attorney through the warrant of attorney has the
written authority of the debtor to confess judgment. The warranty of attorney limits the attorney's
responsibilities to the act of confession which was consented to and authorized by the debtor with
knowledge of the rights being relinquished.

In conclusion, it is the Board's advice that it is proper under Ohio's Code of Professional
Responsibility for an attorney to sign an answer confessing judgment against a debtor pursuant to a
warranty of attorney in a cognovit note when requested to do so by a creditor's attorney provided
that the confession of judgment is not in violation of applicable law.

Question 2

In considering the question of whether it is proper under Ohio's Code of Professional Responsibility
for a creditor's attorney to confess judgment pursuant to a warranty of attorney in a cognovit note
this Board notes that several courts have not found fault with such practice. See Northern Ohio
Tractor, Inc. v. Richardson, 8 App 3d. 171, 173-74, (Ct. App. Summit County 1982) (plaintiff's
attorney may confess judgment on behalf of the defendants), Hadden v. Rumsey Products, Inc., 196
F. 2d 92, 96 (2d Cir. 1952) (construing Ohio statute--the fact that the holder's attorney confessed
judgment without informing the court that the signers had asserted defenses was not a fraud on
court).

It can be argued that when a creditor's attorney confesses judgment on behalf of a debtor there is a
conflict of interest that would be prohibited under Disciplinary Rule 5-105 (A) and

(B). However, under Disciplinary Rule 5-105 (A) and (B) conflict of interest may be waived if the
requirements of Disciplinary Rule 5-105 (C) are met. Disciplinary Rule 5-105 (C) provides that
“[i]n the situations, covered by DR 5-105 (A) and (B), a lawyer may represent multiple clients if it
is obvious that he [she] can adequately represent the interest of each and if each consents to the
representation after full disclosure of the possible effect of such representation on the exercise of
his [her] independent professional judgment on behalf of each." Thus, this Board advises that it is
improper under Ohio's Code of Professional Responsibility for a creditor's attorney to confess
judgment pursuant to a warranty of attorney in a cognovit note, unless the warrant of attorney
contains an express waiver of conflict of interest or specifies that the creditor's attorney may
confess judgment.

Question 3

The final question is whether it is proper for an attorney to accept a legal fee from a creditor for
confessing judgment pursuant to a warranty of attorney contained within a cognovit note.
Disciplinary Rule 5-107 (A) (1) and (2) of the Code of Professional Responsibility places
restrictions upon a lawyer accepting compensation from one other than the client.

DR 5-107(A) Except with the consent of his [her] client after full disclosure, a
lawyer shall not:

(1) Accept compensation for his [her] legal services from one other
than his [her] client.

(2) Accept from one other than his [her] client anything of value
related to his [her] representation of or his [her] employment by his
[her] client.

A lawyer should not accept legal fees from a creditor for confessing judgment on behalf of a debtor
without the consent of the debtor. The statutory warning language in a warrant of attorney does not
contain a consent by a debtor for a confessing lawyer to accept a legal fee from a creditor. In
conclusion, the Board's opinion is that it is improper under Ohio's Code of Professional
Responsibility for an attorney to accept a legal fee from a creditor for confessing judgment
pursuant to a warranty of attorney contained within a cognovit note, unless the warrant of attorney
contains express consent by the debtor that the confessing attorney may receive a legal fee from the
creditor.

Advisory Opinions of the Board of Commissioners on Grievances and Discipline are
informal, nonbinding opinions in response to prospective or hypothetical questions regarding
the application of the Supreme Court Rules for the Government of the Bar of Ohio, the
Supreme Court Rules for the Government of the Judiciary, the Code of Professional
Responsibility, the Code of Judicial Conduct, and the Attorney's Oath of Office.