Background
Hilliard Lending filed a complaint on a cognovit promissory note against H-9, LLC and Hilliard Partnership, LLC. A cognovit note — an Ohio-authorized instrument by which the debtor pre-authorizes an attorney to confess judgment without prior notice or hearing — allowed the trial court to enter immediate judgment for $1.7 million in principal plus $1.29 million in accrued interest, with additional interest accruing at 16.46% per annum.
H-9 and HP filed a joint motion for reconsideration under Civ.R. 54(B), or alternatively for relief from judgment under Civ.R. 60(B), asserting meritorious defenses. The trial court denied both, noting that because the original judgment did not specify attorney fees, it was not yet a final order. After Hilliard Lending waived its attorney-fees claim, the trial court entered final judgment, and the defendants appealed.
The Court’s Holding
The Ninth District affirmed on both assignments of error. On the Civ.R. 54(B) motion, the court found the trial court did not abuse its discretion in denying reconsideration. While Civ.R. 54(B) permits revision of non-final orders, the trial court has broad discretion in deciding whether to reconsider. The court held that the trial court properly weighed the arguments and concluded reconsideration was unwarranted.
On the Civ.R. 60(B) motion, the court held that relief from judgment under that rule was unavailable because the original March 2023 order was not a “final judgment” at the time the motion was filed, since attorney fees remained unresolved. Civ.R. 60(B) by its terms applies only to “final judgment[s], order[s], or proceeding[s].” The court also held that an evidentiary hearing on the 60(B) motion was not required because the motion was not properly before the court.
Key Takeaways
- Civ.R. 60(B) relief is available only from final judgments; a judgment that awards attorney fees without specifying an amount is not final and thus not subject to 60(B) relief.
- Cognovit judgments in Ohio are difficult to challenge post-entry; debtors who sign cognovit notes effectively waive their right to pre-judgment notice and hearing.
- A trial court has broad discretion under Civ.R. 54(B) to deny reconsideration of non-final orders, and an evidentiary hearing is not required for a Civ.R. 60(B) motion that is not properly before the court.
Why It Matters
This case underscores the severe consequences of signing cognovit promissory notes under Ohio law. For creditors, it confirms the enforceability and speed of cognovit remedies. For debtors and their counsel, the decision highlights the extremely narrow avenues for relief once a cognovit judgment is entered — particularly the timing trap where a judgment may not be “final” enough for 60(B) relief yet cannot be reconsidered under 54(B) either. Practitioners should carefully evaluate finality before selecting their procedural remedy.